Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2016
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from         to        
Commission file number.  001-32876
Wyndham Worldwide Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware
 
20-0052541
(State or Other Jurisdiction
of Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
22 Sylvan Way
 
07054
Parsippany, New Jersey
 
(Zip Code)
(Address of Principal Executive Offices)
 
 
(973) 753-6000
(Registrant’s Telephone Number, Including Area Code)
None
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
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  þ      No  o
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  þ      No  o
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
þ
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
o
 
 
 
 
(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  o      No  þ
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date:
111,951,682 shares of common stock outstanding as of March 31, 2016 .



Table of Contents

Table of Contents

 
 
Page
PART I
FINANCIAL INFORMATION
 
Item 1.
 
 
 
 
 
 
 
Item 2.
 
Item 3.
Item 4.
PART II
OTHER INFORMATION
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 



Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements (Unaudited).

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Wyndham Worldwide Corporation

We have reviewed the accompanying consolidated balance sheet of Wyndham Worldwide Corporation and subsidiaries (the "Company") as of March 31, 2016, and the related consolidated statements of income, comprehensive income, cash flows and equity for the three-month periods ended March 31, 2016 and 2015. These interim financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should be made to such consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Company as of December 31, 2015, and the related consolidated statements of income, comprehensive income, equity and cash flows for the year then ended prior to retrospective adjustment for a change in the Company’s method of presentation of debt issuance costs (not presented herein); and in our report dated February 12, 2016, we expressed an unqualified opinion on those consolidated financial statements. We also audited the adjustments described in Note 1 that were applied to retrospectively adjust the December 31, 2015 consolidated balance sheet of Wyndham Worldwide Corporation and subsidiaries (not presented herein). In our opinion, such adjustments are appropriate and have been properly applied to the previously issued consolidated balance sheet in deriving the accompanying retrospectively adjusted consolidated balance sheet as of December 31, 2015.





/s/ Deloitte & Touche LLP
Parsippany, New Jersey
April 26, 2016




WYNDHAM WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)


 
Three Months Ended
 
March 31,
 
2016
 
2015
Net revenues
 
 
 
Service and membership fees
$
634

 
$
599

Vacation ownership interest sales
342

 
336

Franchise fees
138

 
147

Consumer financing
107

 
104

Other
82

 
76

Net revenues
1,303

 
1,262


Expenses
 
 
 
Operating
613

 
564

Cost of vacation ownership interests
37

 
33

Consumer financing interest
18

 
18

Marketing and reservation
192

 
195

General and administrative
186

 
181

Restructuring

 
(1
)
Depreciation and amortization
62

 
56

Total expenses
1,108

 
1,046


Operating income
195

 
216

Other (income)/expense, net
(10
)
 
(5
)
Interest expense
33

 
26

Early extinguishment of debt
11

 

Interest income
(2
)
 
(3
)
Income before income taxes
163

 
198

Provision for income taxes
67

 
76

Net income
$
96

 
$
122


Earnings per share
 
 
 
Basic
$
0.85

 
$
1.01

Diluted
0.84

 
1.00

 
 
 
 
Cash dividends declared per share
$
0.50

 
$
0.42



See Notes to Consolidated Financial Statements.
2

WYNDHAM WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
( In millions )
( Unaudited )


 
Three Months Ended
 
March 31,
 
2016
 
2015
Net income
$
96

 
$
122

Other comprehensive income/(loss), net of tax
 
 
 
Foreign currency translation adjustments
36

 
(80
)
Unrealized gains/(losses) on cash flow hedges
1

 
(4
)
Defined benefit pension plans
(1
)
 

Other comprehensive income/(loss), net of tax
36

 
(84
)
Comprehensive income
$
132

 
$
38



See Notes to Consolidated Financial Statements.
3

WYNDHAM WORLDWIDE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)



 
March 31,
2016
 
December 31,
2015
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
318

 
$
171

Trade receivables, net
810

 
586

Vacation ownership contract receivables, net
270

 
272

Inventory
293

 
295

Prepaid expenses
177

 
153

Deferred income taxes
144

 
126

Other current assets
337

 
266

Total current assets
2,349

 
1,869

Long-term vacation ownership contract receivables, net
2,430

 
2,438

Non-current inventory
961

 
964

Property and equipment, net
1,403

 
1,399

Goodwill
1,564

 
1,563

Trademarks, net
726

 
726

Franchise agreements and other intangibles, net
389

 
397

Other non-current assets
343

 
333

Total assets
$
10,165

 
$
9,689

Liabilities and Equity
 
 
 
Current liabilities:
 
 
 
Securitized vacation ownership debt
$
207

 
$
209

Current portion of long-term debt
45

 
44

Accounts payable
634

 
394

Deferred income
596

 
483

Accrued expenses and other current liabilities
774

 
827

Total current liabilities
2,256

 
1,957

Long-term securitized vacation ownership debt
1,919

 
1,897

Long-term debt
3,261

 
3,031

Deferred income taxes
1,306

 
1,252

Deferred income
198

 
198

Other non-current liabilities
385

 
401

Total liabilities
9,325

 
8,736

Commitments and contingencies (Note 10)

 

Stockholders’ equity:
 
 
 
Preferred stock, $.01 par value, authorized 6,000,000 shares, none issued and outstanding

 

Common stock, $.01 par value, authorized 600,000,000 shares, issued 218,109,675 shares in 2016 and 217,534,615 shares in 2015
2

 
2

Treasury stock, at cost – 106,248,706 shares in 2016 and 103,730,568 shares in 2015
(4,668
)
 
(4,493
)
Additional paid-in capital
3,913

 
3,923

Retained earnings
1,628

 
1,592

Accumulated other comprehensive loss
(38
)
 
(74
)
Total stockholders’ equity
837

 
950

Noncontrolling interest
3

 
3

Total equity
840

 
953

Total liabilities and equity
$
10,165

 
$
9,689


See Notes to Consolidated Financial Statements.
4

WYNDHAM WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)


 
Three Months Ended
 
March 31,
 
2016
 
2015
Operating Activities
 
 
 
Net income
$
96

 
$
122

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
62

 
56

Provision for loan losses
63

 
46

Deferred income taxes
41

 
27

Stock-based compensation
14

 
15

Excess tax benefits from stock-based compensation
(6
)
 
(17
)
Loss on early extinguishment of debt
11

 

Non-cash interest
5

 
6

Net change in assets and liabilities, excluding the impact of acquisitions:
 
 
 
Trade receivables
(219
)
 
(224
)
Vacation ownership contract receivables
(43
)
 
(14
)
Inventory
(1
)
 
(1
)
Prepaid expenses
(24
)
 
(31
)
Other current assets
(27
)
 
(1
)
Accounts payable, accrued expenses and other current liabilities
178

 
190

Deferred income
105

 
91

Other, net
6

 
(12
)
Net cash provided by operating activities
261

 
253

Investing Activities
 
 
 
Property and equipment additions
(43
)
 
(56
)
Net assets acquired, net of cash acquired

 
(60
)
Payments of development advance notes
(2
)
 
(3
)
Proceeds from development advance notes

 
4

Equity investments and loans
(6
)
 
(8
)
Proceeds from asset sales

 
4

Increase in securitization restricted cash
(22
)
 
(19
)
Increase in escrow deposit restricted cash
(17
)
 
(10
)
Other, net

 
(1
)
Net cash used in investing activities
(90
)
 
(149
)
Financing Activities
 
 
 
Proceeds from securitized borrowings
643

 
514

Principal payments on securitized borrowings
(620
)
 
(491
)
Proceeds from long-term debt
25

 
31

Principal payments on long-term debt
(42
)
 
(60
)
Proceeds from commercial paper, net
234

 
158

Proceeds from term loan
325

 

Repurchases of notes
(327
)
 

Proceeds from vacation ownership inventory arrangements
1

 

Repayments of vacation ownership inventory arrangements
(5
)
 

Dividends to shareholders
(60
)
 
(54
)
Repurchase of common stock
(168
)
 
(154
)
Excess tax benefits from stock-based compensation
6

 
17

Debt issuance costs
(7
)
 
(9
)
Net share settlement of incentive equity awards
(30
)
 
(41
)
Other, net
(2
)
 
(2
)
Net cash used in financing activities
(27
)
 
(91
)
Effect of changes in exchange rates on cash and cash equivalents
3

 
(16
)
Net increase/(decrease) in cash and cash equivalents
147

 
(3
)
Cash and cash equivalents, beginning of period
171

 
183

Cash and cash equivalents, end of period
$
318

 
$
180


See Notes to Consolidated Financial Statements.
5

WYNDHAM WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY
(In millions)
(Unaudited)


 
Common Shares Outstanding
 
Common Stock
 
Treasury Stock
 
Additional Paid-in Capital
 
Retained Earnings
 
Accumulated Other Comprehensive (Loss)/ Income
 
Non-controlling Interest
 
Total Equity
Balance as of December 31, 2015
114

 
$
2

 
$
(4,493
)
 
$
3,923

 
$
1,592

 
$
(74
)
 
$
3

 
$
953

Net income

 

 

 

 
96

 

 

 
96

Other comprehensive income

 

 

 

 

 
36

 

 
36

Issuance of shares for RSU vesting
1

 

 

 

 

 

 

 

Net share settlement of incentive equity awards

 

 

 
(30
)
 

 

 

 
(30
)
Change in deferred compensation

 

 

 
14

 

 

 

 
14

Repurchase of common stock
(3
)
 

 
(175
)
 

 

 

 

 
(175
)
Change in excess tax benefit on equity awards

 

 

 
6

 

 

 

 
6

Dividends

 

 

 

 
(60
)
 

 

 
(60
)
Balance as of March 31, 2016
112


$
2


$
(4,668
)

$
3,913


$
1,628


$
(38
)

$
3

 
$
840



 
Common Shares Outstanding
 
Common Stock
 
Treasury Stock
 
Additional Paid-in Capital
 
Retained Earnings
 
Accumulated Other Comprehensive Income/(Loss)
 
Non-controlling Interest
 
Total Equity
Balance as of December 31, 2014
121

 
$
2

 
$
(3,843
)
 
$
3,889

 
$
1,183

 
$
24

 
$
2

 
$
1,257

Net income

 

 

 

 
122

 

 

 
122

Other comprehensive loss

 

 

 

 

 
(84
)
 

 
(84
)
Issuance of shares for RSU vesting
1

 

 

 

 

 

 

 

Net share settlement of incentive equity awards

 

 

 
(41
)
 

 

 

 
(41
)
Change in deferred compensation

 

 

 
15

 

 

 

 
15

Repurchase of common stock
(2
)
 

 
(150
)
 

 

 

 

 
(150
)
Change in excess tax benefit on equity awards

 

 

 
17

 

 

 

 
17

Dividends

 

 

 

 
(53
)
 

 

 
(53
)
Other

 

 

 
1

 

 

 

 
1

Balance as of March 31, 2015
120

 
$
2

 
$
(3,993
)
 
$
3,881

 
$
1,252

 
$
(60
)
 
$
2

 
$
1,084



See Notes to Consolidated Financial Statements.
6


WYNDHAM WORLDWIDE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise noted, all amounts are in millions, except share and per share amounts)
(Unaudited)

1.
Basis of Presentation
Wyndham Worldwide Corporation (“Wyndham” or the “Company”) is a global provider of hospitality services and products. The accompanying Consolidated Financial Statements include the accounts and transactions of Wyndham, as well as the entities in which Wyndham directly or indirectly has a controlling financial interest. The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. All intercompany balances and transactions have been eliminated in the Consolidated Financial Statements.

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 from those estimates. In management’s opinion, the Consolidated Financial Statements contain all normal recurring adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These financial statements should be read in conjunction with the Company’s 2015 Consolidated Financial Statements included in its Annual Report filed on Form 10-K with the Securities and Exchange Commission on February 12, 2016 .

Business Description
The Company operates in the following business segments:
Hotel Group —primarily franchises hotels in the upscale, upper midscale, midscale, economy and extended stay segments and provides hotel management services for full-service and select limited-service hotels.
Destination Network —provides vacation exchange services and products to owners of intervals of vacation ownership interests (“VOIs”) and manages and markets vacation rental properties primarily on behalf of independent owners.
Vacation Ownership —develops, markets and sells VOIs to individual consumers, provides consumer financing in connection with the sale of VOIs and provides property management services at resorts.

Recently Issued Accounting Pronouncements
Revenue from Contracts with Customers . In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance on revenue from contracts with customers. The guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance was effective for fiscal years beginning after December 15, 2016 and for interim periods within those fiscal years. In re-deliberations, the FASB approved a one-year deferral of the effective date of this guidance, such that it will be effective on January 1, 2018. The Company is currently evaluating the impact of the adoption of this guidance on the Consolidated Financial Statements.
Consolidation. In February 2015, the FASB issued guidance related to management’s evaluation of consolidation for certain legal entities. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. The Company adopted the guidance on January 1, 2016, as required. There was no material impact on the Consolidated Financial Statements resulting from the adoption.
Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . In April 2015, the FASB issued guidance on determining whether a cloud computing arrangement contains a software license that should be accounted for as internal-use software. If a cloud computing arrangement does not contain a software license, it should be accounted for as a service contract. This guidance is effective for fiscal years beginning after December 15, 2015 and for interim periods within those fiscal years, with early adoption permitted. The Company adopted the guidance on January 1, 2016, as required. There was no material impact on the Consolidated Financial Statements resulting from the adoption.
Simplifying the Presentation of Debt Issuance Costs. In April 2015, the FASB issued guidance on the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. In August 2015, the FASB further clarified its issued guidance by stating that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred issuance costs ratably over the term of the line-of-credit arrangements. This guidance required retrospective application and is effective for fiscal years

7


beginning after December 15, 2015 and for interim periods within those fiscal years, with early adoption permitted. The Company adopted the guidance on January 1, 2016, as required. See Note 5 - Long-Term Debt and Borrowing Arrangements for additional information regarding the adoption of the new guidance.
Simplifying the Measurement of Inventory. In July 2015, the FASB issued guidance related to simplifying the measurement of inventory. This guidance requires an entity to measure inventory at the lower of cost or net realizable value, which consists of the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal, and transportation. This guidance is effective prospectively for fiscal years beginning after December 15, 2016 and for interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on the Consolidated Financial Statements.
Simplifying the Accounting for Measurement-Period Adjustments. In September 2015, the FASB issued guidance simplifying the accounting for measurement-period adjustments related to a business combination. The guidance requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This guidance is effective for fiscal years beginning after December 15, 2015 and for interim periods within those fiscal years, with early adoption permitted. The Company adopted the guidance on January 1, 2016, as required. There was no material impact on the Consolidated Financial Statements resulting from the adoption.
Income Taxes. In November 2015, the FASB issued guidance on the balance sheet classification of deferred taxes. The guidance requires deferred tax assets and liabilities to be classified as noncurrent in the Consolidated Balance Sheet. The guidance is effective for fiscal years beginning after December 15, 2016 and for interim periods within those fiscal years, with early adoption permitted. This guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company had $1,252 million of noncurrent deferred tax liabilities and $126 million of current deferred tax assets as of December 31, 2015. Upon adoption of this guidance, the Company will retrospectively apply it to the 2015 Consolidated Balance Sheet by reclassifying current deferred tax assets of approximately $74 million to noncurrent deferred tax assets and approximately $52 million to noncurrent deferred tax liabilities.
Leases. In February 2016, the FASB issued guidance which requires companies to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. This guidance is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on the Consolidated Financial Statements .
Compensation - Stock Compensation. In March 2016, the FASB issued guidance which is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2016 and for interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on the Consolidated Financial Statements .


8


2.
Earnings Per Share
The computation of basic and diluted earnings per share (“EPS”) is based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares, respectively.

The following table sets forth the computation of basic and diluted EPS (in millions, except per share data):
 
Three Months Ended
 
March 31,
 
2016
 
2015
Net income
$
96

 
$
122

Basic weighted average shares outstanding
113

 
121

SSARs (a) , RSUs (b)  and PSUs (c)
1

 
1

Diluted weighted average shares outstanding
114

 
122

Earnings per share:
 
 
 
Basic
$
0.85

 
$
1.01

Diluted
0.84

 
1.00

Dividends:
 
 
 
Aggregate dividends paid to shareholders
$
60

 
$
54


(a)  
Excludes stock-settled appreciation rights (“SSARs”) that would have been anti-dilutive to EPS.
(b)  
Includes unvested dilutive restricted stock units (“RSUs”) which are subject to future forfeitures.
(c)  
Excludes 0.6 million performance vested restricted stock units (“PSUs”) for both the three months ended March 31, 2016 and 2015 , as the Company has not met the required performance metrics.

Stock Repurchase Program

The following table summarizes stock repurchase activity under the current stock repurchase program (in millions, except per share data):
 
Shares
 
Cost
 
 Average Price Per Share
As of December 31, 2015
79.2

 
$
3,712

 
$
46.85

For the three months ended March 31, 2016
2.5

 
175

 
69.48

As of March 31, 2016
81.7

 
$
3,887

 
47.55


The Company had $1.2 billion of remaining availability under its program as of March 31, 2016 . The total capacity of the program was increased by proceeds received from stock option exercises.


9


3.
Vacation Ownership Contract Receivables
The Company generates vacation ownership contract receivables by extending financing to the purchasers of its VOIs. Current and long-term vacation ownership contract receivables, net consisted of:
 
March 31,
2016
 
December 31,
2015
Current vacation ownership contract receivables:
 
 
 
Securitized
$
242

 
$
248

Non-securitized
83

 
81

Current vacation ownership receivables, gross
325

 
329

Less: Allowance for loan losses
55

 
57

Current vacation ownership contract receivables, net
$
270

 
$
272

Long-term vacation ownership contract receivables:
 
 
 
Securitized
$
2,170

 
$
2,214

Non-securitized
774

 
748

Long-term vacation ownership receivables, gross
2,944

 
2,962

Less: Allowance for loan losses
514

 
524

Long-term vacation ownership contract receivables, net
$
2,430

 
$
2,438


The Company’s securitized vacation ownership contract receivables generated interest income of $82 million during both the three months ended March 31, 2016 and 2015 . Such interest income is included within consumer financing on the Consolidated Statements of Income.

Principal payments that are contractually due on the Company’s vacation ownership contract receivables during the next twelve months are classified as current on the Consolidated Balance Sheets. During the three months ended March 31, 2016 and 2015 , the Company originated vacation ownership contract receivables of $245 million and $220 million , respectively, and received principal collections of $202 million and $206 million , respectively. The weighted average interest rate on outstanding vacation ownership contract receivables was 13.8% as of both March 31, 2016 and December 31, 2015 .

The activity in the allowance for loan losses on vacation ownership contract receivables was as follows:
 
Amount
Allowance for loan losses as of December 31, 2015
$
581

Provision for loan losses
63

Contract receivables write-offs, net
(75
)
Allowance for loan losses as of March 31, 2016
$
569

 
Amount
Allowance for loan losses as of December 31, 2014
$
581

Provision for loan losses
46

Contract receivables write-offs, net
(62
)
Allowance for loan losses as of March 31, 2015
$
565

In accordance with the guidance for accounting for real estate time-sharing transactions, the Company recorded a provision for loan losses of $63 million and $46 million as a reduction of net revenues during the three months ended March 31, 2016 and 2015 , respectively.

Credit Quality for Financed Receivables and the Allowance for Credit Losses
The basis of the differentiation within the identified class of financed VOI contract receivables is the consumer’s FICO score. A FICO score is a branded version of a consumer credit score widely used within the U.S. by the largest banks and lending institutions. FICO scores range from 300 850 and are calculated based on information obtained from one or more of the three major U.S. credit reporting agencies that compile and report on a consumer’s credit history. The Company updates its records for all active VOI contract receivables with a balance due on a rolling monthly basis to ensure that all

10


VOI contract receivables are scored at least every six months. The Company groups all VOI contract receivables into five different categories: FICO scores ranging from 700 to 850, 600 to 699, Below 600, No Score (primarily comprised of consumers for whom a score is not readily available, including consumers declining access to FICO scores and non U.S. residents) and Asia Pacific (comprised of receivables in the Company’s Wyndham Vacation Resort Asia Pacific business for which scores are not readily available).

The following table details an aged analysis of financing receivables using the most recently updated FICO scores (based on the policy described above):
 
As of March 31, 2016
 
700+
 
600-699
 
<600
 
No Score
 
Asia Pacific
 
Total
Current
$
1,609

 
$
1,009

 
$
169

 
$
116

 
$
239

 
$
3,142

31 - 60 days
15

 
22

 
15

 
5

 
3

 
60

61 - 90 days
10

 
13

 
10

 
3

 
2

 
38

91 - 120 days
5

 
11

 
10

 
2

 
1

 
29

Total
$
1,639

 
$
1,055

 
$
204

 
$
126

 
$
245

 
$
3,269

 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2015
 
700+
 
600-699
 
<600
 
No Score
 
Asia Pacific
 
Total
Current
$
1,623

 
$
1,023

 
$
163

 
$
115

 
$
231

 
$
3,155

31 - 60 days
16

 
25

 
17

 
5

 
2

 
65

61 - 90 days
10

 
14

 
11

 
3

 
1

 
39

91 - 120 days
7

 
11

 
11

 
2

 
1

 
32

Total
$
1,656

 
$
1,073

 
$
202

 
$
125

 
$
235

 
$
3,291

The Company ceases to accrue interest on VOI contract receivables once the contract has remained delinquent for greater than 90 days. At greater than 120 days, the VOI contract receivable is written off to the allowance for loan losses. In accordance with its policy, the Company assesses the allowance for loan losses using a static pool methodology and thus does not assess individual loans for impairment separate from the pool.

11


4.
Inventory
Inventory consisted of:
 
March 31,
2016
 
December 31,
2015
Land held for VOI development
$
137

 
$
136

VOI construction in process
67

 
62

Inventory sold subject to conditional repurchase
144

 
155

Completed VOI inventory
609

 
604

Estimated recoveries
239

 
242

Destination network vacation credits and other
58

 
60

Total inventory
1,254

 
1,259

Less: Current portion (*)
293

 
295

Non-current inventory
$
961

 
$
964

 
(*)  
Represents inventory that the Company expects to sell within the next 12 months.

During the three months ended March 31, 2016 and 2015 , the Company transferred $6 million and $15 million , respectively, from property and equipment to VOI inventory. In addition to the inventory obligations listed below, as of March 31, 2016 , the Company had $20 million of inventory accruals of which $10 million was included in accrued expenses and other current liabilities and $10 million was included in accounts payable on the Consolidated Balance Sheet. As of December 31, 2015 , the Company had $27 million of inventory accruals of which $20 million was included in accrued expenses and other current liabilities and $7 million was included in accounts payable on the Consolidated Balance Sheet.

Inventory Sale Transactions
During 2015 , the Company sold real property located in St. Thomas, U.S. Virgin Islands (“St. Thomas”) to a third-party developer, consisting of $80 million of vacation ownership inventory, in exchange for $70 million in cash consideration and a $10 million receivable which is expected to be paid in 2016. During 2013, the Company sold real property located in Las Vegas, Nevada and Avon, Colorado to a third-party developer, consisting of vacation ownership inventory and property and equipment.

The Company recognized no gain or loss on these sales transactions. In accordance with the agreements with the third-party developers, the Company has conditional rights and conditional obligations to repurchase the completed properties from the developers subject to the properties conforming to the Company's vacation ownership resort standards and provided that the third-party developers have not sold the properties to another party. Under the sale of real estate accounting guidance, the conditional rights and obligations of the Company constitute continuing involvement and thus the Company was unable to account for these transactions as a sale.

During 2014 , the Company acquired the property located in Avon, Colorado from the third-party developer. In connection with this acquisition, the Company had an outstanding obligation of $32 million as of both March 31, 2016 and December 31, 2015 , of which $11 million was included within accrued expenses and other current liabilities and $21 million was included within other non-current liabilities on the Consolidated Balance Sheets.

In connection with the Las Vegas, Nevada and St. Thomas properties, the Company had outstanding obligations of $146 million as of March 31, 2016 , of which $40 million were included within accrued expenses and other current liabilities and $106 million were included within other non-current liabilities on the Consolidated Balance Sheet. During the first quarter of 2016 , the Company paid $13 million to the third-party developer, of which $6 million was for vacation ownership inventory located in Las Vegas, Nevada, $5 million was for its obligation under the vacation ownership inventory arrangements and $2 million was accrued interest. As of December 31, 2015 , the Company had an outstanding obligation related to the Las Vegas property of $157 million , of which $33 million was included within accrued expenses and other current liabilities and $124 million was included within other non-current liabilities on the Consolidated Balance Sheet.


12


The Company has guaranteed to repurchase the completed properties located in Las Vegas, Nevada and St. Thomas from the third-party developers subject to the properties meeting the Company’s vacation ownership resort standards and provided that the third-party developers have not sold the properties to another party. The maximum potential future payments that the Company could be required to make under these commitments was $294 million as of March 31, 2016 .

5.
Long-Term Debt and Borrowing Arrangements
The Company’s indebtedness consisted of:
 
March 31,
2016
 
December 31,
2015
Securitized vacation ownership debt : (a)
 
 
 
Term notes (b)
$
2,005

 
$
1,867

Bank conduit facility (due August 2017)
121

 
239

Total securitized vacation ownership debt
2,126

 
2,106

Less: Current portion of securitized vacation ownership debt
207

 
209

Long-term securitized vacation ownership debt
$
1,919

 
$
1,897

Long-term debt : (c)
 
 
 
Revolving credit facility (due July 2020)
$
10

 
$
7

Commercial paper
343

 
109

Term loan (due March 2021)
323

 

$315 million 6.00% senior unsecured notes (due December 2016) (d)

 
316

$300 million 2.95% senior unsecured notes (due March 2017)
299

 
299

$14 million 5.75% senior unsecured notes (due February 2018)
14

 
14

$450 million 2.50% senior unsecured notes (due March 2018)
448

 
448

$40 million 7.375% senior unsecured notes (due March 2020)
40

 
40

$250 million 5.625% senior unsecured notes (due March 2021)
247

 
247

$650 million 4.25% senior unsecured notes (due March 2022) (e)
648

 
648

$400 million 3.90% senior unsecured notes (due March 2023) (f)
408

 
408

$350 million 5.10% senior unsecured notes (due October 2025) (g)
337

 
337

Capital leases
158

 
153

Other
31

 
49

Total long-term debt
3,306

 
3,075

Less: Current portion of long-term debt
45

 
44

Long-term debt
$
3,261

 
$
3,031

 
(a)  
Represents non-recourse debt that is securitized through bankruptcy-remote special purpose entities (“SPEs”), the creditors of which have no recourse to the Company for principal and interest. These outstanding borrowings (which legally are not liabilities of the Company) are collateralized by $2,548 million and $2,576 million of underlying gross vacation ownership contract receivables and related assets (which legally are not assets of the Company) as of March 31, 2016 and December 31, 2015 , respectively.
(b)
The carrying amounts of the term notes are net of debt issuance costs aggregating $26 million and $24 million as of March 31, 2016 and December 31, 2015 , respectively.
(c)  
The carrying amounts of the senior unsecured notes and term loan are net of unamortized discounts of $13 million and $14 million as of March 31, 2016 and December 31, 2015 , respectively. The carrying amounts of the senior unsecured notes and term loan are net of debt issuance costs of $5 million and $3 million as of March 31, 2016 and December 31, 2015 , respectively.
(d)  
Includes $1 million of unamortized gains from the settlement of a derivative as of December 31, 2015 .
(e)  
Includes $2 million of unamortized gains from the settlement of a derivative as of both March 31, 2016 and December 31, 2015 .
(f)  
Includes $10 million and $11 million of unamortized gains from the settlement of a derivative as of March 31, 2016 and December 31, 2015 , respectively.
(g)  
Includes $10 million of unamortized losses from the settlement of a derivative as of both March 31, 2016 and December 31, 2015 .


13


Long-Term Debt
The $300 million 2.95% senior unsecured notes due in March 2017 are classified as long-term as the Company has the intent to refinance such debt on a long-term basis and the ability to do so with its revolving credit facility.

Debt Issuances
Sierra Timeshare 2016-1 Receivables Funding, LLC. During March 2016, the Company closed a series of term notes payable, Sierra Timeshare 2016-1 Receivables Funding, LLC, with an initial principal amount of $425 million , which are secured by vacation ownership contract receivables and bear interest at a weighted average coupon rate of 3.20% . The advance rate for this transaction was 88.85% . As of March 31, 2016 , the Company had outstanding borrowings under these term notes of $419 million , net of debt issuance costs.

Term Loan. During March 2016, the Company entered into a five-year $325 million term loan agreement which matures on March 24, 2021. The term loan currently bears interest at LIBOR plus a spread. As of March 31, 2016, the term loan had a weighted average interest rate of 1.89% . The term loan can be paid at the Company’s option in whole or part at any time prior to maturity. The interest on the term loan will be subject to adjustments from time to time if there are downgrades to the Company’s credit ratings. The term loan requires principal payments, payable in equal quarterly installments, of 5% per annum of the original loan balance, commencing with the third anniversary of the loan, and 10% per annum of the original loan balance commencing with the fourth anniversary of the loan, with the remaining balance payable at maturity.

Commercial Paper
The Company maintains U.S. and European commercial paper programs with a total capacity of $750 million and $500 million , respectively. As of March 31, 2016 , the Company had outstanding borrowings of $343 million at a weighted average interest rate of 1.07% , all of which were under its U.S. commercial paper program. As of December 31, 2015 , the Company had outstanding borrowings of $109 million at a weighted average interest rate of 1.07% , all of which were under its U.S. commercial paper program. The Company considers outstanding borrowings under its commercial paper programs to be a reduction of available capacity on its revolving credit facility.

Fair Value Hedges
During 2013, the Company entered into fixed to variable interest rate swap agreements (the “Swaps”) on its 3.90% and 4.25% senior unsecured notes (the “Senior Notes”) with notional amounts of $400 million and $100 million , respectively. The fixed interest rates on these notes were effectively modified to a variable LIBOR-based index. During May 2015, the Company terminated the Swaps and received $17 million of cash which was included within other, net in operating activities on the Consolidated Statement of Cash Flows. The Company had $12 million and $13 million of deferred gains as of March 31, 2016 and December 31, 2015 , respectively. Such gains were included within long-term debt on the Consolidated Balance Sheets. Such gains will be recognized within interest expense on the Consolidated Statements of Income over the remaining life of the Senior Notes.

Deferred Financing Costs
The Company adopted the guidance on the presentation of debt issuance costs on January 1, 2016, as required. As a result, the Company retrospectively applied the guidance to the 2015 Consolidated Balance Sheet by reclassifying $27 million of debt issuance costs previously classified within other non-current assets of which $24 million was for securitized vacation ownership debt and $3 million was for long-term debt. In addition, the Company has elected to continue to classify debt issuance costs related to the revolving credit facility and the bank conduit facility within other non-current assets on the Consolidated Balance Sheet. Such debt issuance costs were $14 million and $15 million as of March 31, 2016 and December 31, 2015, respectively.


14


Maturities and Capacity
The Company’s outstanding debt as of March 31, 2016 matures as follows:
 
Securitized Vacation Ownership Debt
 
Long-Term Debt
 
Total
Within 1 year
$
207

 
$
344

(*)  
$
551

Between 1 and 2 years
210

 
478

 
688

Between 2 and 3 years
291

 
18

 
309

Between 3 and 4 years
213

 
74

 
287

Between 4 and 5 years
227

 
912

 
1,139

Thereafter
978

 
1,480

 
2,458

 
$
2,126

 
$
3,306

 
$
5,432

 
( * )      Includes $299 million of senior unsecured notes that the Company classified as long-term debt as it has the intent to refinance such debt on a long-
term basis and the ability to do so with its revolving credit facility.

Debt maturities of the securitized vacation ownership debt are based on the contractual payment terms of the underlying vacation ownership contract receivables. As such, actual maturities may differ as a result of prepayments by the vacation ownership contract receivable obligors.

As of March 31, 2016 , available capacity under the Company’s borrowing arrangements was as follows:
 
Securitized Bank
Conduit Facility
(a)
 
Revolving
Credit Facility
 
Total Capacity
$
650

 
$
1,500

 
Less: Outstanding Borrowings
121

 
10

 
          Letters of credit

 
1

 
          Commercial paper borrowings

 
343

(b)  
Available Capacity
$
529

 
$
1,146

 
 
(a)  
The capacity of this facility is subject to the Company’s ability to provide additional assets to collateralize additional securitized borrowings.
(b)  
The Company considers outstanding borrowings under its commercial paper programs to be a reduction of the available capacity of its revolving credit facility.

Early Extinguishment of Debt
During the first quarter of 2016, the Company redeemed the remaining portion of its 6.00%  senior unsecured notes for a total of $327 million . As a result, the Company incurred a loss of  $11 million  during the three months ended  March 31, 2016 , which is included within early extinguishment of debt on the Consolidated Statement of Income.

Interest Expense
During the three months ended March 31, 2016 , the Company incurred non-securitized interest expense of $33 million , which primarily consisted of $34 million of interest on long-term debt, partially offset by $1 million of capitalized interest. Such amounts are included within interest expense on the Consolidated Statement of Income. Cash paid related to interest on the Company’s non-securitized debt was $53 million during the three months ended March 31, 2016 .

During the three months ended March 31, 2015 , the Company incurred non-securitized interest expense of $26 million , which primarily consisted of $29 million of interest on long-term debt, partially offset by $2 million of capitalized interest and $1 million of gains resulting from the ineffectiveness of fair value hedges. Such amounts are included within interest expense on the Consolidated Statement of Income. Cash paid related to interest on the Company’s non-securitized debt was $43 million during the three months ended March 31, 2015 .

Interest expense incurred in connection with the Company’s securitized vacation ownership debt was $18 million during both the three months ended March 31, 2016 and 2015 , and is recorded within consumer financing interest on the Consolidated Statements of Income. Cash paid related to such interest was $12 million and $14 million during the three months ended March 31, 2016 and 2015 , respectively.


15


6.
Variable Interest Entities
In accordance with the applicable accounting guidance for the consolidation of a variable interest entity (“VIE”), the Company analyzes its variable interests, including loans, guarantees, SPEs and equity investments to determine if an entity in which the Company has a variable interest is a VIE. If the entity is considered to be a VIE, the Company determines whether it would be considered the entity’s primary beneficiary. The Company consolidates into its financial statements those VIEs for which it has determined that it is the primary beneficiary.

Vacation Ownership Contract Receivables Securitizations
The Company pools qualifying vacation ownership contract receivables and sells them to bankruptcy-remote entities. Vacation ownership contract receivables qualify for securitization based primarily on the credit strength of the VOI purchaser to whom financing has been extended. Vacation ownership contract receivables are securitized through bankruptcy-remote SPEs that are consolidated within the Consolidated Financial Statements. As a result, the Company does not recognize gains or losses resulting from these securitizations at the time of sale to the SPEs. Interest income is recognized when earned over the contractual life of the vacation ownership contract receivables. The Company services the securitized vacation ownership contract receivables pursuant to servicing agreements negotiated on an arms-length basis based on market conditions. The activities of these SPEs are limited to (i) purchasing vacation ownership contract receivables from the Company’s vacation ownership subsidiaries, (ii) issuing debt securities and/or borrowing under a conduit facility to fund such purchases and (iii) entering into derivatives to hedge interest rate exposure. The bankruptcy- remote SPEs are legally separate from the Company. The receivables held by the bankruptcy-remote SPEs are not available to creditors of the Company and legally are not assets of the Company. Additionally, the non-recourse debt that is securitized through the SPEs is legally not a liability of the Company and thus, the creditors have no recourse to the Company for principal and interest.

The assets and liabilities of these vacation ownership SPEs are as follows:
 
March 31,
2016
 
December 31,
2015
Securitized contract receivables, gross (a)
$
2,412

 
$
2,462

Securitized restricted cash (b)
115

 
92

Interest receivables on securitized contract receivables (c)
20

 
20

Other assets (d)
4

 
5

Total SPE assets
2,551

 
2,579

Securitized term notes (e) (f)
2,005

 
1,867

Securitized conduit facilities (e)
121

 
239

Other liabilities (g)
2

 
2

Total SPE liabilities
2,128

 
2,108

SPE assets in excess of SPE liabilities
$
423

 
$
471

 
(a)  
Included in current ( $242 million and $248 million as of March 31, 2016 and December 31, 2015 , respectively) and non-current ( $2,170 million and $2,214 million as of March 31, 2016 and December 31, 2015 , respectively) vacation ownership contract receivables on the Consolidated Balance Sheets.
(b)  
Included in other current assets ( $92 million and $73 million as of March 31, 2016 and December 31, 2015 , respectively) and other non-current assets ( $23 million and $19 million as of March 31, 2016 and December 31, 2015 , respectively) on the Consolidated Balance Sheets.
(c)  
Included in trade receivables, net on the Consolidated Balance Sheets.
(d)  
Primarily includes deferred financing costs for the bank conduit facility and a security investment asset, which is included in other non-current assets on the Consolidated Balance Sheets.
(e)  
Included in current ( $207 million and $209 million as of March 31, 2016 and December 31, 2015 , respectively) and long-term ( $1,919 million and $1,897 million as of March 31, 2016 and December 31, 2015 , respectively) securitized vacation ownership debt on the Consolidated Balance Sheets.
(f)  
Includes deferred financing costs of $26 million and $24 million as of March 31, 2016 and December 31, 2015 , respectively, related to securitized debt.
(g)  
Primarily includes accrued interest on securitized debt, which is included in accrued expenses and other current liabilities on the Consolidated Balance Sheets.


16


In addition, the Company has vacation ownership contract receivables that have not been securitized through bankruptcy-remote SPEs. Such gross receivables were $857 million and $829 million as of March 31, 2016 and December 31, 2015 , respectively. A summary of total vacation ownership receivables and other securitized assets, net of securitized liabilities and the allowance for loan losses, is as follows:
 
March 31,
2016
 
December 31,
2015
SPE assets in excess of SPE liabilities
$
423

 
$
471

Non-securitized contract receivables
857

 
829

Less: Allowance for loan losses
569

 
581

Total, net
$
711

 
$
719


In addition to restricted cash related to securitizations, the Company had $76 million and $59 million of restricted cash related to escrow deposits as of March 31, 2016 and December 31, 2015 , respectively, which are recorded within other current assets on the Consolidated Balance Sheets.

Midtown 45, NYC Property
During 2013, the Company entered into an agreement with a third-party partner whereby the partner acquired the Midtown 45 property in New York City through an SPE. The Company is managing and operating the property for rental purposes while the Company converts it into VOI inventory. The SPE financed the acquisition and planned renovations with a four-year mortgage note and mandatorily redeemable equity provided by related parties of such partner. At the time of the agreement, the Company committed to purchase such VOI inventory from the SPE over a four-year period which will be used to repay the four-year mortgage note and the mandatorily redeemable equity of the SPE. The Company is considered to be the primary beneficiary of the SPE and therefore, the Company consolidated the SPE within its financial statements.

The assets and liabilities of the SPE are as follows:
 
March 31,
2016
 
December 31,
2015
Receivable for leased property and equipment (a)
$
29

 
$
47

Total SPE assets
29

 
47

Accrued expenses and other current liabilities

 
1

Long-term debt (b)
30

 
46

Total SPE liabilities
30

 
47

SPE deficit
$
(1
)
 
$

 
(a)  
Represents a receivable for assets leased to the Company which are reported within property and equipment, net on the Company’s Consolidated Balance Sheets.
(b)  
As of March 31, 2016 , included $27 million relating to a mortgage note due in 2017 and $3 million of mandatorily redeemable equity which are included in current portion of long-term debt on the Consolidated Balance Sheet. As of December 31, 2015 , included $42 million relating to a mortgage note due in 2017 and $4 million of mandatorily redeemable equity; $29 million was included in current portion of long-term debt on the Consolidated Balance Sheet.

During 2016 , the SPE conveyed $15 million of property and equipment to the Company.


17


7.
Fair Value
The Company measures its financial assets and liabilities at fair value on a recurring basis and utilizes the fair value hierarchy to determine such fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

Level 1: Quoted prices for identical instruments in active markets.

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value driver is observable.

Level 3: Unobservable inputs used when little or no market data is available. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement falls has been determined based on the lowest level input (closest to Level 3) that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

As of March 31, 2016 , the Company had foreign exchange contracts resulting in $5 million of assets which are included within other current assets and $1 million of liabilities which are included within accrued expenses and other current liabilities on the Consolidated Balance Sheet. As of December 31, 2015 , the Company had foreign exchange contracts resulting in $2 million of assets which are included within other current assets and $3 million of liabilities which are included within accrued expenses and other current liabilities on the Consolidated Balance Sheet. On a recurring basis, such assets and liabilities are remeasured at estimated fair value (all of which are Level 2) and thus is equal to the carrying value.

The Company’s derivative instruments primarily consist of pay-fixed/receive-variable interest rate swaps, pay-variable/receive-fixed interest rate swaps, interest rate caps, foreign exchange forward contracts and foreign exchange average rate forward contracts. For assets and liabilities that are measured using quoted prices in active markets, the fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using other significant observable inputs are valued by reference to similar assets and liabilities. For these items, a significant portion of fair value is derived by reference to quoted prices of similar assets and liabilities in active markets. For assets and liabilities that are measured using significant unobservable inputs, fair value is primarily derived using a fair value model, such as a discounted cash flow model.

The fair value of financial instruments is generally determined by reference to market values resulting from trading on a national securities exchange or in an over-the-counter market. 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 carrying amounts of cash and cash equivalents, restricted cash, trade receivables, accounts payable and accrued expenses and other current liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The carrying amounts and estimated fair values of all other financial instruments are as follows:
 
March 31, 2016
 
December 31, 2015
 
Carrying
Amount
 
Estimated Fair Value
 
Carrying
 Amount
 
Estimated Fair Value
Assets
 
 
 
 
 
 
 
Vacation ownership contract receivables, net
$
2,700

 
$
3,261

 
$
2,710

 
$
3,272

Debt
 
 
 
 
 
 
 
Total debt
5,432

 
5,490

 
5,181

 
5,234


The Company estimates the fair value of its vacation ownership contract receivables using a discounted cash flow model which it believes is comparable to the model that an independent third-party would use in the current market. The model uses Level 3 inputs consisting of default rates, prepayment rates, coupon rates and loan terms for the contract receivables portfolio as key drivers of risk and relative value that, when applied in combination with pricing parameters, determines the fair value of the underlying contract receivables.

The Company estimates the fair value of its securitized vacation ownership debt by obtaining Level 2 inputs comprised of indicative bids from investment banks that actively issue and facilitate the secondary market for timeshare securities. The Company determines the fair value of its other long-term debt, excluding capital leases, using Level 2 inputs based on

18


indicative bids from investment banks and determines the fair value of its senior notes using quoted market prices (such senior notes are not actively traded).

8.
Derivative Instruments and Hedging Activities
Foreign Currency Risk

The Company has foreign currency rate exposure to exchange rate fluctuations worldwide with particular exposure to the British pound, Euro, Canadian and Australian dollar. The Company uses freestanding foreign currency forward contracts to manage a portion of its exposure to changes in foreign currency exchange rates associated with its foreign currency denominated receivables, payables and forecasted earnings of foreign subsidiaries. Additionally, the Company uses foreign currency forward contracts designated as cash flow hedges to manage a portion of its exposure to changes in forecasted foreign currency denominated vendor payments. Gains and losses relating to freestanding foreign currency contracts are included in operating expenses on the Company’s Consolidated Statements of Income and are substantially offset by the earnings effect from the underlying items that were economically hedged. The freestanding foreign currency contracts resulted in losses of $4 million and $12 million during the three months ended March 31, 2016 and 2015 , respectively. The amount of gains or losses relating to contracts designated as cash flow hedges that the Company expects to reclassify from accumulated other comprehensive income (“AOCI”) to earnings over the next 12 months is not material.

Interest Rate Risk

A portion of the debt used to finance the Company’s operations is exposed to interest rate fluctuations. The Company uses various hedging strategies and derivative financial instruments to create a desired mix of fixed and floating rate assets and liabilities. Derivative instruments currently used in these hedging strategies include swaps and interest rate caps. The derivatives used to manage the risk associated with the Company’s floating rate debt include freestanding derivatives and derivatives designated as cash flow hedges. The Company also uses swaps to convert specific fixed-rate debt into variable-rate debt (i.e., fair value hedges) to manage the overall interest cost. For relationships designated as fair value hedges, changes in the fair value of the derivatives are recorded in income with offsetting adjustments to the carrying amount of the hedged debt. The amount of gains or losses that the Company expects to reclassify from AOCI to earnings during the next 12 months is not material.

Gains or losses recognized in AOCI for the three months ended March 31, 2016 and 2015 were not material.

9.
Income Taxes
The Company files income tax returns in U.S. federal and state jurisdictions, as well as in foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for years prior to 2012. In addition, with few exceptions, the Company is no longer subject to state and local or foreign income tax examinations for years prior to 2008.

The Company’s effective tax rate increased from 38.4% during the three months ended March 31, 2015 to 41.1% during the three months ended March 31, 2016 primarily due to the lack of a tax benefit on the Venezuelan foreign exchange devaluation loss of $24 million incurred during the first quarter of 2016, partially offset by activity related to unrecognized tax benefits.

The Company made cash income tax payments, net of refunds, of $16 million and $17 million during the three months ended March 31, 2016 and 2015 , respectively.

10.
Commitments and Contingencies
The Company is involved in claims, legal and regulatory proceedings and governmental inquiries related to the Company’s business.

Wyndham Worldwide Corporation Litigation
The Company is involved in claims, legal and regulatory proceedings and governmental inquiries arising in the ordinary course of its business including but not limited to: for its hotel group business-breach of contract, fraud and bad faith claims between franchisors and franchisees in connection with franchise agreements and with owners in connection with management contracts, negligence, breach of contract, fraud, employment, consumer protection and other statutory claims asserted in connection with alleged acts or occurrences at owned, franchised or managed properties or in relation to guest reservations and bookings; for its destination network business-breach of contract, fraud and bad faith claims by affiliates and customers in connection with their respective agreements, negligence, breach of contract, fraud, consumer protection and other statutory claims asserted by members and guests for alleged injuries sustained at or acts or occurrences related to

19


affiliated resorts and vacation rental properties and consumer protection and other statutory claims asserted by consumers; for its vacation ownership business-breach of contract, bad faith, conflict of interest, fraud, consumer protection and other statutory claims by property owners’ associations, owners and prospective owners in connection with the sale or use of VOIs or land, or the management of vacation ownership resorts, construction defect claims relating to vacation ownership units or resorts, and negligence, breach of contract, fraud, consumer protection and other statutory claims by guests for alleged injuries sustained at or acts or occurrences related to vacation ownership units or resorts; and for each of its businesses, bankruptcy proceedings involving efforts to collect receivables from a debtor in bankruptcy, employment matters which may include claims of retaliation, discrimination, harassment and wage and hour claims, claims of infringement upon third parties’ intellectual property rights, claims relating to information security, privacy and consumer protection, tax claims and environmental claims.

The Company records an accrual for legal contingencies when it determines, after consultation with outside counsel, that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In making such determinations, the Company evaluates, among other things, the degree of probability of an unfavorable outcome and, when it is probable that a liability has been incurred, the Company’s ability to make a reasonable estimate of loss. The Company reviews these accruals each reporting period and makes revisions based on changes in facts and circumstances including changes to its strategy in dealing with these matters.

The Company believes that it has adequately accrued for such matters wit h reserves of $30 million a nd $29 million as of March 31, 2016 and December 31, 2015 , respectively. Such reserves are exclusive of matters relating to the Company’s separation from Cendant (“Separation”). For matters not requiring accrual, the Company believes that such matters will not have a material effect on its results of operations, financial position or cash flows based on information currently available. However, litigation is inherently unpredictable and, although the Company believes that its accruals are adequate and/or that it has valid defenses in these matters, unfavorable results could occur. As such, an adverse outcome from such proceedings for which claims are awarded in excess of the amounts accrued, if any, could be material to the Company with respect to earnings and/or cash flows in any given reporting period. As of March 31, 2016 , the potential exposure resulting from adverse outcomes of such legal proceedings could, in the aggregate, range up to $59 million in excess of recorded accruals. However, the Company does not believe that the impact of such litigation should result in a material liability to the Company in relation to its consolidated financial position or liquidity.

Other Guarantees/Indemnifications
Hotel Group
From time to time, the Company may enter into a hotel management agreement that provides the hotel owner with a guarantee of a certain level of profitability based upon various metrics. Under such an agreement, the Company would be required to compensate such hotel owner for any profitability shortfall over the life of the management agreement up to a specified aggregate amount. For certain agreements, the Company may be able to recapture all or a portion of the shortfall payments in the event that future operating results exceed targets. The terms of the Company’s existing guarantees range from 8 to 10 years and provide for early termination provisions under certain circumstances. As of March 31, 2016 , the maximum potential amount of future payments that may be made under these guarantees was $125 million with a combined annual cap of $45 million . These guarantees have a remaining weighted average life of approximately 7 years . As of March 31, 2016 , the Company also had a conditional guarantee with a hotel that will become effective when all the necessary conditions are satisfied by the hotel owner. At the effective date, the maximum potential amount of future payments that may be made under this conditional guarantee is $45 million .

In connection with such performance guarantees, as of March 31, 2016 , the Company maintained a liability of $24 million , of which $19 million was included in other non-current liabilities and $5 million was included in accrued expenses and other current liabilities on its Consolidated Balance Sheet. As of March 31, 2016 , the Company also had a corresponding $34 million asset related to these guarantees, of which $30 million was included in other non-current assets and $4 million was included in other current assets on its Consolidated Balance Sheet. As of December 31, 2015 , the Company maintained a liability of $25 million , of which $24 million was included in other non-current liabilities and $1 million was included in accrued expenses and other current liabilities on its Consolidated Balance Sheet. As of December 31, 2015 , the Company also had a corresponding $35 million asset related to the guarantees, of which $31 million was included in other non-current assets and $4 million was included in other current assets on its Consolidated Balance Sheet. Such assets are being amortized on a straight-line basis over the life of the agreements. The amortization expense for the performance guarantees noted above was $1 million for both the three months ended March 31, 2016 and 2015 .

For guarantees subject to recapture provisions, the Company had a receivable of $38 million as of March 31, 2016 , of which $6 million was included in other current assets and $32 million was included in other non-current assets on its

20


Consolidated Balance Sheet. As of December 31, 2015 , the Company had a receivable of $32 million , of which $1 million was included in other current assets and $31 million was included in other non-current assets on its Consolidated Balance Sheet. Such receivable was the result of payments made to date which are subject to recapture and which the Company believes will be recoverable from future operating performance.

Vacation Ownership
The Company has guaranteed to repurchase completed properties located in Las Vegas, Nevada and St. Thomas from third-party developers subject to the properties meeting the Company’s vacation ownership resort standards and provided that the third-party developers have not sold the properties to another party (see Note 4 - Inventory).

Cendant Litigation
Under the Separation agreement, the Company agreed to be responsible for 37.5% of certain of Cendant’s contingent and other corporate liabilities and associated costs, including certain contingent litigation. Since the Separation, Cendant settled the majority of the lawsuits pending on the date of the Sepa ration. See Note 15 - Separation Adjustments and Transactions with Former Parent and Subsidiaries regarding contingent litigation liabilities resulting from the Separation.

11.
Accumulated Other Comprehensive (Loss)/Income
The components of AOCI are as follows:
 
Foreign
 
Unrealized
 
Defined
 
 
 
Currency
 
Gains on
 
Benefit
 
 
 
Translation
 
Cash Flow
 
Pension
 
 
Pretax
Adjustments
 
Hedges
 
Plans
 
AOCI
 Balance, December 31, 2015
$
(139
)
 
$

 
$
(9
)
 
$
(148
)
 Period change
30

 
1

 
(1
)
 
30

 Balance, March 31, 2016
$
(109
)
 
$
1

 
$
(10
)
 
$
(118
)

 
Foreign
 
Unrealized
 
Defined
 
 
 
Currency
 
Gains on
 
Benefit
 
 
 
Translation
 
Cash Flow
 
Pension
 
 
Tax
Adjustments
 
Hedges
 
Plans
 
AOCI
 Balance, December 31, 2015
$
70

 
$
1

 
$
3

 
$
74

 Period change
6

 

 

 
6

 Balance, March 31, 2016
$
76

 
$
1

 
$
3

 
$
80


 
Foreign
 
Unrealized
 
Defined
 
 
 
Currency
 
Gains on
 
Benefit
 
 
 
Translation
 
Cash Flow
 
Pension
 
 
Net of Tax
Adjustments
 
Hedges
 
Plans
 
AOCI
 Balance, December 31, 2015
$
(69
)
 
$
1

 
$
(6
)
 
$
(74
)
 Period change
36

 
1

 
(1
)
 
36

 Balance, March 31, 2016
$
(33
)
 
$
2

 
$
(7
)
 
$
(38
)

Currency translation adjustments exclude income taxes related to investments in foreign subsidiaries where the Company intends to reinvest the undistributed earnings indefinitely in those foreign operations.


21


12.  
Stock-Based Compensation
The Company has a stock-based compensation plan available to grant RSUs, PSUs, SSARs and other stock-based awards to key employees, non-employee directors, advisors and consultants. Under the Wyndham Worldwide Corporation 2006 Equity and Incentive Plan, as amended, a maximum of 36.7 million shares of common stock may be awarded. As of March 31, 2016 , 15.6 million shares remained available.

Incentive Equity Awards Granted by the Company
The activity related to incentive equity awards granted by the Company for the three months ended March 31, 2016 consisted of the following:
 
RSUs
 
PSUs
 
SSARs
 
Number of RSUs
 
Weighted Average Grant Price
 
Number of PSUs
 
Weighted Average Grant Price
 
Number of SSARs
 
Weighted Average Exercise Price
Balance as of December 31, 2015
1.6

 
$
73.75

 
0.6

 
$
73.60

 
0.8

 
$
46.45

Granted (a)
0.8

 
71.65

 
0.2

 
71.65

 
0.1

 
71.65

Vested
(0.7
)
 
72.84

 
(0.2
)
 
72.84

 
(0.1
)
 
22.84

Balance as of March 31, 2016
1.7

(b) (c)  
75.87

 
0.6

(d)  
77.84

 
0.8

(b) (e)  
55.05

 
(a)  
Represents awards granted by the Company on February 25, 2016 .
(b)  
Aggregate unrecognized compensation expense related to RSUs and SSARs was $138 million as of March 31, 2016 , which is expected to be recognized over a weighted average period of 3.1 years .
(c)  
Approximately 1.7 million RSUs outstanding as of March 31, 2016 are expected to vest over time.
(d)  
Maximum aggregate unrecognized compensation expense was $38 million as of March 31, 2016 , which is expected to be recognized over a weighted average period of 2.2 years .
(e)  
Approximately 0.5 million SSARs are exercisable as of March 31, 2016 . The Company assumes that all unvested SSARs are expected to vest over time. SSARs outstanding as of March 31, 2016 had an intrinsic value of $19 million and have a weighted average remaining contractual life of 2.8 years .

On February 25, 2016 , the Company granted incentive equity awards totaling $63 million to key employees and senior officers of Wyndham in the form of RSUs and SSARs. These awards will vest ratably over a period of four years. In addition, on February 25, 2016 , the Company approved a grant of incentive equity awards totaling $17 million to key employees and senior officers of Wyndham in the form of PSUs. These awards cliff vest on the third anniversary of the grant date, contingent upon the Company achieving certain performance metrics.

The fair value of SSARs granted by the Company on February 25, 2016 was estimated on the date of the grant using the Black-Scholes option-pricing model with the relevant weighted average assumptions outlined in the table below. Expected volatility is based on both historical and implied volatilities of the Company’s stock over the estimated expected life of the SSARs. The expected life represents the period of time the SSARs are expected to be outstanding and is based on historical experience given consideration to the contractual terms and vesting periods of the SSARs. The risk free interest rate is based on yields on U.S. Treasury strips with a maturity similar to the estimated expected life of the SSARs. The projected dividend yield was based on the Company’s anticipated annual dividend divided by the price of the Company’s stock on the date of the grant.
 
SSARs Issued on
 
February 25, 2016
Grant date fair value
$
13.70

Grant date strike price
$
71.65

Expected volatility
27.81
%
Expected life
5.2 years

Risk free interest rate
1.33
%
Projected dividend yield
2.79
%


22


Stock-Based Compensation Expense
The Company recorded stock-based compensation expense of $14 million and $15 million during the three months ended March 31, 2016 and 2015 , respectively, related to the incentive equity awards granted to key employees and senior officers by the Company. During the three months ended March 31, 2016 , the Company increased its pool of excess tax benefits available to absorb tax deficiencies (“APIC Pool”) by $6 million due to the vesting of RSUs and PSUs, as well as the exercise of SSARs. As of March 31, 2016 , the Company’s APIC Pool balance was $135 million .

The Company paid $30 million and $41 million of taxes for the net share settlement of incentive equity awards during the three months ended March 31, 2016 and 2015 , respectively. Such amounts are included within financing activities on the Consolidated Statements of Cash Flows.

13.
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 net revenues and “EBITDA”, which is defined as net income before depreciation and amortization, interest expense (excluding consumer financing interest), early extinguishment of debt, interest income (excluding consumer financing revenues) and income taxes, each of which is presented on the Consolidated Statements of Income. The Company believes that EBITDA is a useful measure of performance for its industry segments which, when considered with GAAP measures, the Company believes gives a more complete understanding of its operating performance. The Company’s presentation of EBITDA may not be comparable to similarly-titled measures used by other companies.

 
Three Months Ended March 31,
 
2016
 
2015
 
Net Revenues
 
EBITDA
 
Net Revenues
 
EBITDA
Hotel Group
$
295

(b)
$
84

 
$
292

(d)
$
76

Destination Network
385

(c)
81

 
369

 
105

Vacation Ownership
641

 
136

 
617

 
130

Total Reportable Segments
1,321

 
301

 
1,278

 
311

Corporate and Other (a)
(18
)
 
(34
)
 
(16
)
 
(34
)
Total Company
$
1,303

 
$
267

 
$
1,262

 
$
277

 
 
 
 
 
 
 
 
Reconciliation of EBITDA to Net income
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
 
2016
 
 
 
2015
EBITDA
 
 
$
267

 
 
 
$
277

Depreciation and amortization
 
 
62

 
 
 
56

Interest expense
 
 
33

 
 
 
26

Early extinguishment of debt
 
 
11

 
 
 

Interest income
 
 
(2
)
 
 
 
(3
)
Income before income taxes
 
 
163

 

 
198

Provision for income taxes
 
 
67

 
 
 
76

Net income
 
 
$
96

 
 
 
$
122

 
(a)  
Includes the elimination of transactions between segments.
(b)  
Includes $16 million of intercompany segment revenues in the Company’s Hotel Group segment comprised of (i) $13 million of intersegment licensing fees for use of the Wyndham trade name, (ii) $2 million of other fees primarily associated with the Wyndham Rewards program and (iii) $1 million of room revenues at a Company owned hotel. Such revenues are offset in expenses at the Company’s Vacation Ownership segment.

23


(c)  
Includes $2 million of intercompany segment revenues in the Company’s Destination Network segment comprised of call center operations and support services provided to the Company’s Hotel Group segment.
(d)  
Includes $16 million of intercompany segment revenues in the Company’s Hotel Group segment comprised of (i) $12 million of intersegment licensing fees for use of the Wyndham trade name, (ii) $2 million of other fees primarily associated with the Wyndham Rewards program and (iii) $2 million of room revenues at a Company owned hotel. Such revenues are offset in expenses at the Company’s Vacation Ownership segment.

14.
Restructuring and Other Charge
2015 Restructuring Plans

During 2015 , the Company recorded $8 million of restructuring charges resulting from a realignment of brand services and call center operations within its hotel group business, a rationalization of international operations within its destination network business and a reorganization of the sales function within its vacation ownership business. In connection with these initiatives, the Company recorded $7 million of personnel-related costs and a $1 million non-cash asset impairment charge associated with a facility. The Company subsequently reversed $2 million of previously recorded personnel-related costs and reduced its liability with $2 million of cash payments. During the three months ended March 31, 2016 , the Company reduced its liability with $1 million of cash payments. The remaining liability of $2 million as of March 31, 2016 , all of which is comprised of personnel-related costs, is expected to be paid in cash by the end of 2016.

The Company has additional restructuring plans which were implemented prior to 2015 . The remaining liability of $2 million as of March 31, 2016 , all of which is related to leased facilities, is expected to be paid by 2020.

The activity associated with the Company’s restructuring plans is summarized by category as follows:
 
Liability as of
 
 
 
Liability as of
 
December 31, 2015
 
Cash Payments
 
March 31, 2016
Personnel-related
$
3

 
$
(1
)
 
$
2

Facility-related
2

 

 
2

 
$
5

 
$
(1
)
 
$
4


Other Charge

During the three months ended March 31, 2016 , the Company incurred a $24 million foreign exchange loss, primarily impacting cash, resulting from the Venezuelan government’s decision to devalue the exchange rate of its currency. Such loss is recorded within operating expenses on the Consolidated Statement of Income.

15.
Separation Adjustments and Transactions with Former Parent and Subsidiaries
Transfer of Cendant Corporate Liabilities and Issuance of Guarantees to Cendant and Affiliates
Pursuant to the Separation and Distribution Agreement, upon the distribution of the Company’s common stock to Cendant shareholders, the Company entered into certain guarantee commitments with Cendant (pursuant to the assumption of certain liabilities and the obligation to indemnify Cendant, Realogy and Travelport for such liabilities) and guarantee commitments related to deferred compensation arrangements with each of Cendant and Realogy. These guarantee arrangements primarily relate to certain contingent litigation liabilities, contingent tax liabilities, and Cendant contingent and other corporate liabilities, of which the Company assumed and is responsible for 37.5% while Realogy is responsible for the remaining 62.5% . The remaining amount of liabilities which were assumed by the Company in connection with the Separation was $34 million as of both March 31, 2016 and December 31, 2015 . These amounts were comprised of certain Cendant corporate liabilities which were recorded on the books of Cendant as well as additional liabilities which were established for guarantees issued at the date of Separation, related to unresolved contingent matters and 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(s). The Company also provided a default guarantee related to certain deferred compensation arrangements related to certain current and former senior officers and directors of Cendant, Realogy and Travelport. These arrangements were valued upon the Separation in accordance with the guidance for guarantees and recorded as liabilities on the Consolidated Balance Sheets. To the extent such recorded liabilities are not adequate to cover the ultimate payment amounts, such excess will be reflected as an expense to the results of operations in future periods.


24


As a result of the sale of Realogy on April 10, 2007, Realogy was required to post a letter of credit in an amount acceptable to the Company and Avis Budget Group (formerly known as Cendant) to satisfy its obligations for the Cendant legacy contingent liabilities. As of March 31, 2016 , the letter of credit was $53 million .

As of March 31, 2016 , the $34 million of Separation related liabilities is comprised of $30 million for tax liabilities, $1 million for liabilities of previously sold businesses of Cendant, $1 million for other contingent and corporate liabilities and $2 million of liabilities where the calculated guarantee amount exceeded the contingent liability assumed at the Separation Date. In connection with these liabilities, as of March 31, 2016 , $19 million is recorded in accrued expenses and other current liabilities and $15 million is recorded in other non-current liabilities on the Consolidated Balance Sheet. The Company will indemnify Cendant for these contingent liabilities and therefore any payments made to the third-party would be through the former Parent. The actual timing of payments relating to these liabilities is dependent on a variety of factors beyond the Company’s control. In addition, the Company had $1 million of receivables due from former Parent and subsidiaries primarily relating to income taxes, as of both March 31, 2016 and December 31, 2015 , which is included within other current assets on the Consolidated Balance Sheets.


25


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

FORWARD-LOOKING STATEMENTS
This report includes “forward-looking” statements, as that term is defined by the Securities and Exchange Commission (“SEC”) in its rules, regulations and releases. Forward-looking statements are any statements other than statements of historical fact, including statements regarding our expectations, beliefs, hopes, intentions or strategies regarding the future. In some cases, forward-looking statements can be identified by the use of words such as “may,” “expects,” “should,” “believes,” “plans,” “anticipates,” “estimates,” “predicts,” “potential,” “continue,” or other words of similar meaning. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in, or implied by, the forward-looking statements. Factors that might cause such a difference include, but are not limited to, general economic conditions, our financial and business prospects, our capital requirements, our financing prospects, our relationships with associates, and those disclosed as risks under “Risk Factors” in Part II, Item 1A of this report. We caution readers that any such statements are based on currently available operational, financial and competitive information, and they should not place undue reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which they were made. Except as required by law, we disclaim any obligation to review or update these forward-looking statements to reflect events or circumstances as they occur.

BUSINESS AND OVERVIEW
We are a global provider of hospitality services and products and operate our business in the following three segments:
Hotel Group —primarily franchises hotels in the upscale, upper midscale, midscale, economy and extended stay segments and provides hotel management services for full-service and select limited-service hotels.
Destination Network —provides vacation exchange services and products to owners of intervals of vacation ownership interests (“VOIs”) and manages and markets vacation rental properties primarily on behalf of independent owners.
Vacation Ownership —develops, markets and sells VOIs to individual consumers, provides consumer financing in connection with the sale of VOIs and provides property management services at resorts.

RESULTS OF OPERATIONS
Discussed below are our key operating statistics, 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 discrete financial information is available and which is utilized on a regular basis by our chief operating decision maker to assess performance and to allocate resources. In identifying our reportable segments, we also consider the nature of services provided by our operating segments. Management evaluates the operating results of each of our reportable segments and corporate and other based upon net revenues and “EBITDA”, which is defined as net income before depreciation and amortization, interest expense (excluding consumer financing interest), early extinguishment of debt, interest income (excluding consumer financing revenues) and income taxes, each of which is presented on the Consolidated Statements of Income. We believe that EBITDA is a useful measure of performance for our industry segments and, when considered with GAAP measures, gives a more complete understanding of our operating performance. Our presentation of EBITDA may not be comparable to similarly-titled measures used by other companies.

26

Table of Contents

OPERATING STATISTICS
The table below presents our operating statistics for the three months ended March 31, 2016 and 2015 . These operating statistics are the drivers of our revenues and therefore provide an enhanced understanding of our businesses. Refer to the Results of Operations section for a discussion as to how these operating statistics affected our business for the periods presented.
 
Three Months Ended March 31,
 
2016
 
2015
 
% Change
Hotel Group (a)
 
 
 
 
 
Number of rooms (b)
679,100

 
667,400

 
1.8
RevPAR (c)
$
31.59

 
$
32.84

 
(3.8)
Destination Network
 
 
 
 
 
Average number of members (in 000s) (d)
3,841

 
3,822

 
0.5
Exchange revenue per member (e)
$
189.78

 
$
194.06

 
(2.2)
Vacation rental transactions (in 000s) (a) (f)
500

 
459

 
8.9
Average net price per vacation rental (a) (g)
$
366.08

 
$
361.20

 
1.4
Vacation Ownership
 
 
 
 
 
Gross VOI sales (in 000s) (h) (i)
$
428,000

 
$
390,000

 
9.7
Tours (in 000s) (j)
179

 
168

 
6.5
Volume Per Guest (“VPG”) (k)
$
2,244

 
$
2,177

 
3.1
 
(a)  
Includes the impact from acquisitions from the acquisition dates forward. Therefore, such operating statistics for 2016 are not presented on a comparable basis to the 2015 operating statistics.
(b)  
Represents the number of rooms at hotel group properties at the end of the period which are under franchise and/or management agreements, or are company owned.
(c)  
Represents revenue per available room and is calculated by multiplying the percentage of available rooms occupied during the period by the average rate charged for renting a hotel room for one day.
(d)  
Represents members in our vacation exchange programs who paid annual membership dues as of the end of the period or who are within the allowed grace period.
(e)  
Represents total annualized revenues generated from fees associated with memberships, exchange transactions, member-related rentals and other servicing for the period divided by the average number of vacation exchange members during the period.
(f)  
Represents the number of transactions that are generated during the period in connection with customers booking their vacation rental stays through us. One rental transaction is recorded for each standard one-week rental.
(g)  
Represents the net rental price generated from renting vacation properties to customers and other related rental servicing fees during the period divided by the number of vacation rental transactions during the period.
(h)  
Represents total sales of VOIs, including sales under the Wyndham Asset Affiliation Model (“WAAM”) Fee-for-Service, before the net effect of percentage-of-completion (“POC”) accounting and loan loss provisions. We believe that Gross VOI sales provide an enhanced understanding of the performance of our vacation ownership business because it directly measures the sales volume of this business during a given reporting period.
(i)  
The following table provides a reconciliation of Gross VOI sales to vacation ownership interest sales for the three months ended March 31(in millions):
 
2016
 
2015
Gross VOI sales
$
428

 
$
390

Less: WAAM Fee-for-Service sales (*)
(23
)
 
(21
)
Gross VOI sales, net of WAAM Fee-for-Service sales
405

 
369

Less: Loan loss provision
(63
)
 
(46
)
Plus: Impact of POC accounting

 
13

Vacation ownership interest sales
$
342

 
$
336

 
(*)  
Represents total sales of VOIs through our WAAM Fee-for-Service sales model designed to offer turn-key solutions for developers or banks in possession of newly developed inventory, which we will sell for a commission fee through our extensive sales and marketing channels. WAAM Fee-for-Service commission revenues were $17 million and $12 million for the three months ended March 31, 2016 and 2015 , respectively.
(j)  
Represents the number of tours taken by guests in our efforts to sell VOIs.


27

Table of Contents

(k)  
VPG is calculated by dividing Gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) by the number of tours. Tele-sales upgrades were $25 million and $24 million during the three months ended March 31, 2016 and 2015 , respectively. We have excluded tele-sales upgrades in the calculation of VPG because tele-sales upgrades are generated by a different marketing channel. We believe that VPG provides an enhanced understanding of the performance of our vacation ownership business because it directly measures the efficiency of this business’s tour selling efforts during a given reporting period.

THREE MONTHS ENDED MARCH 31, 2016 VS. THREE MONTHS ENDED MARCH 31, 2015
Our consolidated results are as follows:
 
Three Months Ended March 31,
 
2016
 
2015
 
Favorable/(Unfavorable)
Net revenues
$
1,303

 
$
1,262

 
$
41

Expenses
1,108

 
1,046

 
(62
)
Operating income
195

 
216

 
(21
)
Other income, net
(10
)
 
(5
)
 
5

Interest expense
33

 
26

 
(7
)
Early extinguishment of debt
11

 

 
(11
)
Interest (income)/expense, net
(2
)
 
(3
)
 
(1
)
Income before income taxes
163

 
198

 
(35
)
Provision for income taxes
67

 
76

 
9

Net income
$
96

 
$
122

 
$
(26
)

Net revenues increased $41 million (3.2%) for the three months ended March 31, 2016 compared with the same period last year primarily from:
$28 million of higher revenues at our vacation ownership business primarily resulting from higher property management revenues and net VOI sales;
$17 million of higher revenues at our destination network business primarily from stronger volume and yield on rental transactions; and
$16 million of incremental revenues (inclusive of $8 million at our hotel group related to reimbursable fees, which have no impact on EBITDA) resulting from acquisitions during 2015 at our hotel group and destination network businesses.

Such increases were partially offset by a $5 million reduction of revenues at our hotel group business primarily from the absence of $9 million of global conference fees during 2015 and a $15 million unfavorable impact from foreign currency.

Expenses increased $62 million (5.9%) for the three months ended March 31, 2016 compared with the same period last year primarily from:
$27 million of higher expenses from operations primarily related to the revenue increases;
a $24 million foreign exchange loss related to the devaluation of the Venezuela exchange rate;
$14 million of incremental expenses related to acquisitions at our hotel group and destination network businesses; and
a $6 million increase in depreciation and amortization resulting from the impact of property and equipment additions made during 2015.

Such increases were partially offset by a $9 million favorable impact on expenses from foreign currency.

Other income, net increased $5 million for the three months ended March 31, 2016 compared with the same period last year primarily from settlements of business interruption claims received principally at our vacation ownership business.

Interest expense increased $7 million for the three months ended March 31, 2016 compared with the same period last year primarily due to a higher average effective interest rate resulting from the termination of interest rate swaps during the second quarter of 2015 and the impact of the 5.10% senior unsecured notes issued in September 2015.

During the three months ended March 31, 2016, we incurred $11 million of expenses resulting from the early repurchase of the remaining portion of our 6.00% senior unsecured notes.


28

Table of Contents

Our effective tax rate increased from 38.4% during the three months ended March 31, 2015 to 41.1% during the three months ended March 31, 2016 primarily due to the lack of a tax benefit on the Venezuelan foreign exchange devaluation loss of $24 million incurred during the first quarter of 2016, partially offset by activity related to unrecognized tax benefits.

As a result of these items, net income decreased $26 million (21.3%) as compared with first quarter of 2015.

Following is a discussion of the results of each of our segments and Corporate and Other for the three months ended March 31, 2016 compared to March 31, 2015 :
 
Net Revenues
 
EBITDA
 
2016
 
2015
 
%
Change
 
2016
 
2015
 
%
Change
Hotel Group
$
295

 
$
292

 
1.0
 
$
84

 
$
76

(e)  
10.5
Destination Network
385

 
369

 
4.3
 
81

(b)  
105

(f)  
(22.9)
Vacation Ownership
641

 
617

 
3.9
 
136

 
130

 
4.6
Total Reportable Segments
1,321

 
1,278

 
3.4
 
301

 
311

 
(3.2)
Corporate and Other  (a)
(18
)
 
(16
)
 
(12.5)
 
(34
)
(c)  
(34
)
(c)  
Total Company
$
1,303

 
$
1,262

 
3.2
 
$
267

 
$
277

 
(3.6)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of EBITDA to Net income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016
 
2015
 
 
EBITDA
 
 
 
 
 
 
$
267

 
$
277

 
 
Depreciation and amortization
 
 
 
 
 
 
62

 
56

 
 
Interest expense
 
 
 
 
 
 
33

 
26

 
 
Early extinguishment of debt
 
 
 
 
 
 
11

(d)  

 
 
Interest income
 
 
 
 
 
 
(2
)
 
(3
)
 
 
Income before income taxes
 
 
 
 
 
 
163

 
198

 
 
Provision for income taxes
 
 
 
 
 
 
67

 
76

 
 
Net income
 
 
 
 
 
 
$
96

 
$
122

 
 
 
(a)  
Includes the elimination of transactions between segments.
(b)  
Includes a $24 million foreign currency loss related to the devaluation of the exchange rate of Venezuela.
(c)  
Includes $34 million of corporate costs during both the three months ended March 31, 2016 and 2015 .
(d)  
Represents costs incurred for the early repurchase of our 6.00% senior unsecured notes.
(e)  
Includes $3 million of costs incurred in connection with the Dolce Hotels and Resorts (“Dolce”) acquisition.
(f)  
Includes a $1 million reversal of a portion of the restructuring reserve established during the fourth quarter of 2014.

Hotel Group
Net revenues increased $3 million (1.0%) and EBITDA increased $8 million (10.5%) during the three months ended March 31, 2016 compared with the same period during 2015. Foreign currency translation unfavorably impacted both revenues and EBITDA by $1 million.

Net revenues from royalty, marketing and reservation fees (inclusive of Wyndham Rewards) was flat compared to the prior year. Royalty and marketing revenues were favorably impacted by $1 million of incremental revenues from the Dolce acquisition and unfavorably impacted by $1 million from foreign currency translation. Excluding foreign currency and Dolce, a 1.8% decrease in global RevPAR was offset by a 1.8% increase in global system size. Domestic RevPAR (excluding Dolce) was flat resulting from a 2.6% increase in ADR offset by a 3.0% decrease in occupancy. International RevPAR (excluding Dolce) decreased by 10.4% principally due to unfavorable currency translation and the impact of room growth in lower RevPAR markets, specifically China.


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Hotel management reimbursable revenues increased $7 million primarily resulting from $8 million of incremental revenues from the Dolce acquisition. Such increases in revenues had no impact on EBITDA. Revenues were also unfavorably impacted by the absence of $9 million of fees charged for our global conference during 2015 which were fully offset by conference expenses.

Revenues and EBITDA both increased $2 million from our owned hotels compared to the prior year. The increases were primarily the result of higher RevPAR and favorable food and beverage sales.

Revenues and EBITDA from other franchise fees increased $1 million. Ancillary services contributed an additional $2 million of revenues and EBITDA primarily from growth in our co-branded credit card program.

EBITDA was also favorably impacted by the absence of $3 million of Dolce integration and deal costs incurred during 2015.

As of March 31, 2016, we had approximately 7,830 properties and approximately 679,100 rooms in our system. Additionally, our hotel development pipeline included approximately 1,020 hotels and over 124,100 rooms, of which 61% were international and 65% were new construction.

Destination Network
Net revenues increased $16 million (4.3%) and EBITDA decreased $24 million (22.9%) during the three months ended March 31, 2016 compared with the same period during 2015. Foreign currency translation unfavorably impacted net revenues and EBITDA by $10 million and $3 million, respectively. EBITDA also reflected a $24 million foreign exchange loss related to the devaluation of the exchange rate of Venezuela during the first quarter of 2016.

Our acquisitions of vacation rentals brands contributed $7 million of incremental revenues (inclusive of $1 million of ancillary revenues) and $2 million of incremental EBITDA during the first quarter of 2016.

Net revenues generated from rental transactions and related services increased $17 million. Excluding $6 million of incremental vacation rental revenues from acquisitions and an unfavorable foreign currency translation impact of $5 million, net revenues generated from rental transactions and related services increased $16 million principally due to a 7.0% increase in rental transaction volume and a 2.3% increase in average net price per vacation rental. The increase in volume was driven by growth across our Denmark-based Novasol brand, our Netherlands-based Landal GreenParks brand and our U.K. cottage and parks brands. The increase in average net price per vacation rental was driven by higher average fees at our Landal brand.

Exchange and related service revenues, which principally consist of fees generated from memberships, exchange transactions, member-related rentals and other member servicing decreased $3 million. Excluding an unfavorable foreign currency translation impact of $5 million, exchange and related service revenues increased $2 million primarily due to a 0.5% increase in the average number of members principally resulting from new member growth in North America and Latin America and a 0.3% increase in exchange revenue per member resulting from increased pricing for exchange and other related fees, partially offset by the impact of growth in club memberships in North America where there is a lower propensity to transact.

In addition, EBITDA was unfavorably impacted by:
$12 million of higher costs resulting from revenue increases across our vacation rentals brands; and
the absence of a $4 million benefit from a reserve reversal for value-added taxes resulting from a favorable ruling during the first quarter of 2015.

EBITDA also included $3 million of business disruption claims received during both 2016 and 2015 related to the Gulf of Mexico oil spill in 2010.


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Vacation Ownership
Net revenues and EBITDA increased $24 million (3.9%) and $6 million (4.6%), respectively, during the three months ended March 31, 2016 compared with the same period of 2015. Foreign currency translation unfavorably impacted net revenues and EBITDA by $4 million and $1 million, respectively.

Net VOI revenues increased $6 million compared to the same period last year. Excluding foreign currency translation, net VOI revenues increased $9 million primarily due to $39 million of higher gross VOI sales (excluding WAAM Fee-for-service sales) partially offset by (i) a $17 million increase in our provision for loan losses principally attributable to a new effort by third-parties to encourage customers to default on their timeshare loans as well as higher VOI sales and (ii) the absence of $13 million of VOI revenues recognized under percentage-of-completion accounting during the same period of 2015.

Gross VOI sales (including WAAM Fee-for-service sales) increased $38 million (9.7%) or $41 million (10.5%) excluding foreign currency translation compared to the same period last year. Such increase was due to (i) a 3.1% increase in VPG principally attributable to higher average transaction sizes and improved close rates and (ii) a 6.5% increase in tours resulting from our continued focus on targeting new owner generation.

Commission revenues and EBITDA generated from WAAM Fee-for-Service increased $5 million and $3 million, respectively, compared to the prior year, primarily resulting from an increase in WAAM Fee-for-service VOI sales and higher commission rates earned on such sales.

Consumer financing revenues and EBITDA both increased $3 million compared to the same period last year. Excluding an unfavorable foreign currency translation impact of $1 million, revenues and EBITDA both increased $4 million due to a higher weighted average interest rate earned on contract receivables and a higher average portfolio balance. EBITDA was also impacted by higher interest expense resulting from an increase in the weighted average interest rate on our securitized debt to 3.6% from 3.5% partially offset by a lower average securitized debt balance. Our net interest income margin increased to 83.6% compared to 82.9% during 2015.

Property management revenues increased by $11 million compared to the prior year primarily as a result of higher reimbursable revenues and management fees. EBITDA increased $5 million primarily due to the increase in management fees.

In addition, EBITDA was unfavorably impacted by:
$7 million of higher marketing costs associated with increased tours and higher VOI sales;
a $4 million increase in the cost of VOIs sold due to higher VOI sales and increased product costs;
$3 million of higher sales and commission expenses primarily due to higher VOI sales; and
$3 million of lower EBITDA from ancillary VOI-related activities.

Such decreases in EBITDA were partially offset by $6 million received during 2016 resulting from the settlement of two business interruption insurance claims.

Corporate and Other
Corporate and Other revenues reflect the elimination of $2 million of higher intersegment revenues charged between our business units during the three months ended March 31, 2016 compared to 2015.
Corporate and Other EBITDA remained flat during the three months ended March 31, 2016 compared to the same period during 2015.
RESTRUCTURING PLANS
During 2015 , we recorded $8 million of costs associated with restructuring activities focused on a realignment of brand services and call center operations within our hotel group business, a rationalization of international operations within our destination network business and a reorganization of the sales function within our vacation ownership business. In connection with these initiatives, we initially recorded $7 million of personnel-related costs and a $1 million non-cash asset impairment charge associated with a facility. We subsequently reversed $2 million of previously recorded personnel-related costs and reduced our liability with $2 million of cash payments. During the three months ended March 31, 2016 , we reduced our liability with $1 million of cash payments. The remaining liability of $2 million as of March 31, 2016 , all of which is comprised of personnel-related costs, is expected to be paid in cash by the end of 2016.

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We have additional restructuring plans which were implemented prior to 2015. The remaining liability of $2 million as of March 31, 2016 , all of which is related to leased facilities, is expected to be paid by 2020.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
FINANCIAL CONDITION
 
March 31,
2016
 
December 31,
2015
 
Change
Total assets
$
10,165

 
$
9,689

 
$
476

Total liabilities
9,325

 
8,736

 
589

Total equity
840

 
953

 
(113
)

Total assets increased $476 million from December 31, 2015 to March 31, 2016 primarily due to:
a $224 million increase in trade receivables, net, primarily due to the seasonality of vacation rental bookings at our destination network business in Europe;
$147 million increase in cash and cash equivalents primarily due to the seasonality of vacation rental bookings at our destination network business principally in Europe; and
a $71 million increase in other current assets primarily due to (i) increased deferred costs and escrow deposits primarily related to seasonality of advanced bookings received on vacation rental transactions and (ii) restricted cash related to our vacation ownership contract receivables securitizations.

Total liabilities increased $589 million from December 31, 2015 to March 31, 2016 primarily due to:
a $240 million increase in accounts payable primarily due to higher homeowner liabilities resulting from the seasonality of vacation rental bookings at our destination network business;
a $231 million increase in long term debt; and
a $113 million increase in deferred income primarily resulting from seasonality of advanced arrival-based vacation rental bookings at our destination network business.

Total equity decreased $113 million from December 31, 2015 to March 31, 2016 primarily due to $175 million of stock repurchases and $60 million of dividends partially offset by $96 million of net income and $36 million of foreign currency translation adjustments.

LIQUIDITY AND CAPITAL RESOURCES
Currently, our financing needs are supported by cash generated from operations and borrowings under our revolving credit facility and commercial paper programs as well as issuance of long-term unsecured debt. In addition, certain funding requirements of our vacation ownership business are met through the utilization of our bank conduit facility and the issuance of securitized debt to finance vacation ownership contract receivables. We believe that our net cash from operations, cash and cash equivalents, access to our revolving credit facility, commercial paper programs and continued access to the securitization and debt markets provide us with sufficient liquidity to meet our ongoing needs.

Our five-year revolving credit facility, which expires in July 2020, has a total capacity of $1.5 billion . As of March 31, 2016 , we had $1.1 billion of available capacity, net of letters of credit and commercial paper borrowings. We consider outstanding borrowings under our commercial paper programs to be a reduction of the available capacity under our revolving credit facility.

We maintain U.S. and European commercial paper programs under which we may issue unsecured commercial paper notes up to a maximum amount of $750 million and $500 million , respectively. As of March 31, 2016 , we had $343 million of outstanding commercial paper borrowings, all under the U.S. program.

We entered into a five-year $325 million term loan agreement which matures on March 24, 2021. The term loan requires principal payments, payable in equal quarterly installments, of 5% per annum of the original loan balance, commencing with the third anniversary of the loan, and 10% per annum of the original loan balance, commencing with the fourth anniversary of the loan, with the remaining balance payable at maturity.

Our $300 million 2.95% senior unsecured notes, with a carrying value of $299 million, are due in March 2017. Our intent is to refinance such notes on a long-term basis and we have the ability to do so with our revolving credit facility.


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Our two-year securitized vacation ownership bank conduit facility, which expires in August 2017, has a total capacity of $650 million and available capacity of $529 million as of March 31, 2016 .

We may, from time to time, depending on market conditions and other factors, repurchase our outstanding indebtedness, whether or not such indebtedness trades above or below its face amount, for cash and/or in exchange for other securities or other consideration, in each case in open market purchases and/or privately negotiated transactions.

CASH FLOW

The following table summarizes the changes in cash and cash equivalents during the three months ended March 31, 2016 and 2015 :
 
Three Months Ended March 31,
 
2016
 
2015
 
Change
Cash provided by/(used in)
 
 
 
 
 
Operating activities
$
261

 
$
253

 
$
8

Investing activities
(90
)
 
(149
)
 
59

Financing activities
(27
)
 
(91
)
 
64

Effects of changes in exchange rates on cash and cash equivalents
3

 
(16
)
 
19

Net change in cash and cash equivalents
$
147

 
$
(3
)
 
$
150


Operating Activities

Net cash provided by operating activities increased $8 million compared to the first quarter of 2015. Net income adjusted for non-cash items contributed $31 million to cash from operations. Such increase was partially offset by $23 million of higher cash utilized for working capital (net change in assets and liabilities) primarily resulting from an increase in vacation ownership contract receivable originations from higher VOI sales.

Investing Activities

Net cash used in investing activities decreased by $59 million principally reflecting the absence of $60 million of cash used for acquisitions during 2015.

Financing Activities

Net cash used in financing activities decreased by $64 million , which principally reflects $86 million of higher net borrowings on non-securitized debt, partially offset by $14 million of higher share repurchases.

Capital Deployment

We focus on optimizing cash flow and seek to deploy capital for the highest possible returns. Ultimately, our business objective is to grow our business while transforming our cash and earnings profile by managing our cash streams to derive a greater proportion of EBITDA from our fee-for-service businesses. We intend to continue to invest in select capital and technological improvements across our business. We may also seek to acquire additional franchise agreements, hotel/property management contracts and exclusive agreements for vacation rental properties on a strategic and selective basis as well as grow the business through merger and acquisition activities. In addition, we intend to return cash to shareholders through the repurchase of common stock and payment of dividends.

We expect to generate annual net cash provided by operating activities less property and equipment additions (which we also refer to as capital expenditures) of approximately $800 million during 2016 . We anticipate net cash provided by operating activities of $990 million to $1,010 million and net cash used for capital expenditures of $190 million to $210 million during 2016. Net cash provided by operating activities less capital expenditures amounted to $769 million during 2015 , which was comprised of net cash provided by operating activities of $991 million less capital expenditures of $222 million. We believe net cash provided by operating activities less capital expenditures is a useful operating performance measure to evaluate the ability of our operations to generate cash for uses other than capital expenditures and, after debt service and other obligations, our ability to grow our business through acquisitions, development advances, and equity investments, as well as our ability to return cash to shareholders through dividends and share repurchases.


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Table of Contents

During the three months ended March 31, 2016 , we spent $40 million on vacation ownership development projects (inventory). We believe that our vacation ownership business currently has adequate finished inventory on our balance sheet to support vacation ownership sales for at least the next year. During 2016 , we anticipate spending $195 million to $205 million on vacation ownership development projects. The average inventory spend on vacation ownership development projects for the five year period 2016 through 2020 is expected to be approximately $225 million annually. After factoring in the anticipated additional average annual spending, we expect to have adequate inventory to support vacation ownership sales through at least the next four to five years.

We spent $43 million on capital expenditures during the three months ended March 31, 2016 , primarily on information technology enhancement projects throughout the Company and renovations at our owned Rio Mar hotel and chalets at our Landal GreenParks business.

In connection with our focus on optimizing cash flow we are continuing our asset-light efforts in vacation ownership by seeking opportunities with financial partners whereby they make strategic investments to develop assets on our behalf. We refer to this as WAAM Just-in-Time. The partner may invest in new ground-up development projects or purchase from us, for cash, existing in-process inventory which currently resides on our balance sheet. The partner will complete the development of the project and we may purchase finished inventory at a future date as needed or as obligated under the agreement.
We expect that the majority of the expenditures that will be required to pursue our capital spending programs, strategic investments and vacation ownership development projects will be financed with cash flow generated through operations. Additional expenditures are financed with general unsecured corporate borrowings, including through the use of available capacity under our revolving credit facility and commercial paper programs.

Stock Repurchase Program

On August 20, 2007, our Board of Directors (the “Board”) authorized a stock repurchase program that enables us to purchase our common stock. The Board has since increased the capacity of the program seven times, most recently on February 8, 2016 by $1.0 billion, bringing the total authorization under the current program to $5.0 billion.

Under our current stock repurchase program, we repurchased 2.5 million shares at an average price of $69.48 for a cost of $175 million during the three months ended March 31, 2016 . From August 20, 2007 through March 31, 2016 , we repurchased 81.7 million shares at an average price of $47.55 for a cost of $3.9 billion and repurchase capacity increased $78 million from proceeds received from stock option exercises.

As of March 31, 2016 , we have repurchased under our current and prior stock repurchase programs, a total of 107 million shares at an average price of $43.96 for a cost of $4.7 billion since our separation from Cendant (“Separation”).

During the period April 1, 2016 through April 25, 2016, we repurchased an additional 0.6 million shares at an average price of $76.27 for a cost of $45 million . We currently have $1.1 billion of remaining availability in our program. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements and other factors. Repurchases may be conducted in the open market or in privately negotiated transactions.

Dividend Policy

During the three months ended March 31, 2016 and 2015 , we paid cash dividends of $0.50 and $0.42 per share ( $60 million and $54 million in aggregate), respectively.

Our ongoing dividend policy for the future is to grow our dividend at least at the rate of growth of our earnings. The declaration and payment of future dividends to holders of our common stock are at the discretion of our Board and depend upon many factors, including our financial condition, earnings, capital requirements of our business, covenants associated with certain debt obligations, legal requirements, regulatory constraints, industry practice and other factors that our Board deems relevant. There is no assurance that a payment of a dividend will occur in the future.


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Table of Contents

Financial Obligations
Long-Term Debt Covenants
The revolving credit facility and term loan are subject to covenants including the maintenance of specific financial ratios. The financial ratio covenants consist of a minimum consolidated interest coverage ratio of at least 2.5 to 1.0 as of the measurement date and a maximum consolidated leverage ratio not to exceed 4.25 to 1.0 as of the measurement date (provided that the consolidated leverage ratio may be increased for a limited period to 5.0 to 1.0 in connection with a material acquisition). The consolidated interest coverage ratio is calculated by dividing consolidated EBITDA (as defined in the credit agreement) by consolidated interest expense (as defined in the credit agreement), both as measured on a trailing 12 month basis preceding the measurement date. As of March 31, 2016 , our consolidated interest coverage ratio was 10.2 times. Consolidated interest expense excludes, among other things, interest expense on any securitization indebtedness (as defined in the credit agreement). The consolidated leverage ratio is calculated by dividing consolidated total indebtedness (as defined in the credit agreement and which excludes, among other things, securitization indebtedness) as of the measurement date by consolidated EBITDA as measured on a trailing 12 month basis preceding the measurement date. As of March 31, 2016 , our consolidated leverage ratio was 2.4 times. Covenants in the credit facility and term loan also include limitations on indebtedness of material subsidiaries; liens; mergers, consolidations, liquidations and dissolutions; and the sale of all or substantially all of our assets. Events of default in this credit facility include failure to pay interest, principal and fees when due; breach of a covenant or warranty; acceleration of or failure to pay other debt in excess of $50 million (excluding securitization indebtedness); insolvency matters; and a change of control.

All of our senior unsecured notes contain various covenants including limitations on liens, limitations on potential sale and leaseback transactions and change of control restrictions. In addition, there are limitations on mergers, consolidations and potential sale of all or substantially all of our assets. Events of default in the notes include failure to pay interest and principal when due, breach of a covenant or warranty, acceleration of other debt in excess of $50 million and insolvency matters.

As of March 31, 2016 , we were in compliance with all of the financial covenants described above.

Each of our non-recourse, securitized term notes and the bank conduit facility contain various triggers relating to the performance of the applicable loan pools. If the vacation ownership contract receivables pool that collateralizes one of our securitization notes fails to perform within the parameters established by the contractual triggers (such as higher default or delinquency rates), there are provisions pursuant to which the cash flows for that pool will be maintained in the securitization as extra collateral for the note holders or applied to accelerate the repayment of outstanding principal to the note holders. As of March 31, 2016 , all of our securitized loan pools were in compliance with applicable contractual triggers.

LIQUIDITY
Our vacation ownership business finances certain of its receivables through (i) an asset-backed bank conduit facility and (ii) periodically accessing the capital markets by issuing asset-backed securities. None of the currently outstanding asset-backed securities contain any recourse provisions to us other than interest rate risk related to swap counterparties (solely to the extent that the amount outstanding on our notes differs from the forecasted amortization schedule at the time of issuance).

We believe that our bank conduit facility, with a term through August 2017 and capacity of $650 million , combined with our ability to issue term asset-backed securities, should provide sufficient liquidity for our expected sales pace and we expect to have available liquidity to finance the sale of VOIs.

As of March 31, 2016 , we had $529 million of availability under our asset-backed bank conduit facility. Any disruption to the asset-backed market could adversely impact our ability to obtain such financings.

We maintain commercial paper programs under which we may issue unsecured commercial paper notes up to a maximum amount of $1.25 billion . We allocate a portion of our available capacity under our revolving credit facility to repay outstanding commercial paper borrowings in the event that the commercial paper market is not available to us for any reason when outstanding borrowings mature. As of March 31, 2016 , we had $343 million of outstanding borrowings and the total available capacity was $907 million under these programs.


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Table of Contents

We primarily utilize surety bonds at our vacation ownership business for sales and development transactions in order to meet regulatory requirements of certain states. In the ordinary course of our business, we have assembled commitments from twelve surety providers in the amount of $1.3 billion, of which we had $471 million outstanding as of March 31, 2016 . The availability, terms and conditions and pricing of such bonding capacity are dependent on, among other things, continued financial strength and stability of the insurance company affiliates providing the bonding capacity, general availability of such capacity and our corporate credit rating. If bonding capacity is unavailable, or alternatively, if the terms and conditions and pricing of such bonding capacity are unacceptable to us, our vacation ownership business could be negatively impacted.

Our liquidity position may also be negatively affected by unfavorable conditions in the capital markets in which we operate or if our vacation ownership contract receivables portfolios do not meet specified portfolio credit parameters. Our liquidity as it relates to our vacation ownership contract receivables securitization program could be adversely affected if we were to fail to renew or replace our conduit facility on its expiration date, or if a particular receivables pool were to fail to meet certain ratios, which could occur in certain instances if the default rates or other credit metrics of the underlying vacation ownership contract receivables deteriorate. Our ability to sell securities backed by our vacation ownership contract receivables depends on the continued ability and willingness of capital market participants to invest in such securities.

Our senior unsecured debt is rated Baa3 with a “stable outlook” by Moody’s Investors Service and BBB- with a “stable outlook” by both Standard and Poor’s and Fitch Rating Agency. A security rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal by the assigning rating organization. Reference in this report to any such credit rating is intended for the limited purpose of discussing or referring to aspects of our liquidity and of our costs of funds. Any reference to a credit rating is not intended to be any guarantee or assurance of, nor should there be any undue reliance upon, any credit rating or change in credit rating, nor is any such reference intended as any inference concerning future performance, future liquidity or any future credit rating.

SEASONALITY
We experience seasonal fluctuations in our net revenues and net income from our franchise and management fees, commission income earned from renting vacation properties, annual membership fees, exchange and member-related transaction fees and sales of VOIs. Revenues from franchise and management fees are generally higher in the second and third quarters than in the first or fourth quarters due to increased leisure travel during the spring and summer months. Revenues from vacation rentals are generally highest in the third quarter, when vacation arrivals are highest, combined with a compressed booking window. Revenues from vacation exchange fees are generally highest in the first quarter, which is generally when members of our vacation exchange business plan and book their vacations for the year. Revenues from sales of VOIs are generally higher in the third quarter than in other quarters due to increased leisure travel. The seasonality of our business may cause fluctuations in our quarterly operating results. As we expand into new markets and geographical locations, we may experience increased or different seasonality dynamics that create fluctuations in operating results different from the fluctuations we have experienced in the past.

COMMITMENTS AND CONTINGENCIES
We are involved in claims, legal and regulatory proceedings and governmental inquiries related to our business. Litigation is inherently unpredictable and, although we believe that our accruals are adequate and/or that we have valid defenses in these matters, unfavorable results could occur. As such, an adverse outcome from such proceedings for which claims are awarded in excess of the amounts accrued, if any, could be material to us with respect to earnings or cash flows in any given reporting period. As of March 31, 2016 , the potential exposure resulting from adverse outcomes of such legal proceedings could, in the aggregate, range up to $59 million in excess of recorded accruals. However, we do not believe that the impact of such litigation should result in a material liability to us in relation to our consolidated financial position or liquidity.


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Table of Contents

CONTRACTUAL OBLIGATIONS
The following table summarizes our future contractual obligations for the twelve month periods set forth below:
 
4/1/16 - 3/31/17
 
4/1/17 - 3/31/18
 
4/1/18 - 3/31/19
 
4/1/19 - 3/31/20
 
4/1/20 - 3/31/21
 
Thereafter
 
Total
Securitized debt (a)
$
207

 
$
210

 
$
291

 
$
213

 
$
227

 
$
978

 
$
2,126

Long-term debt (b)
344

 
478

 
18

 
74

 
912

 
1,480

 
3,306

Interest on debt (c)
180

 
166

 
149

 
145

 
123

 
166

 
929

Operating leases
90

 
65

 
55

 
44

 
34

 
186

 
474

Purchase commitments (d)
221

 
131

 
83

 
40

 
30

 
68

 
573

Inventory sold subject to conditional repurchase (e)
91

 
106

 
101

 
37

 
47

 
58

 
440

Separation liabilities (f)
19

 
15

 

 

 

 

 
34

Total  (g) (h)
$
1,152

 
$
1,171

 
$
697

 
$
553

 
$
1,373

 
$
2,936

 
$
7,882

 
(a)  
Represents debt that is securitized through bankruptcy-remote special purpose entities the creditors to which have no recourse to us for principal and interest.
(b)  
Includes $299 million of senior unsecured notes due during March 2017 which we intend to refinance on a long-term basis and have the ability to do so with our revolving credit facility.
(c)  
Includes interest on both securitized and long-term debt; estimated using the stated interest rates on our long-term debt and the swapped interest rates on our securitized debt.
(d)  
Includes (i) $166 million for information technology activities, (ii) $157 million for marketing related activities, and (iii) $156 million relating to the development of vacation ownership properties, of which $53 million is included within total liabilities on the Consolidated Balance Sheet.
(e)  
Represents obligations to repurchase completed vacation ownership properties from third-party developers (See Note 4 – Inventory for further detail) of which $146 million is included within total liabilities on the Consolidated Balance Sheet.
(f)  
Represents liabilities which we assumed and are responsible for pursuant to our Separation (See Note 15 – Separation Adjustments and Transactions with Former Parent and Subsidiaries for further details).
(g)  
Excludes a $36 million liability for unrecognized tax benefits associated with the guidance for uncertainty in income taxes since it is not reasonably estimable to determine the periods in which such liability would be settled with the respective tax authorities.
(h)  
Excludes other guarantees at our hotel group business as it is not reasonably estimable to determine the periods in which such commitments would be settled (See Note 10 – Commitments and Contingencies for further details).

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 impact to our consolidated results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time. These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements included in the Annual Report filed on Form 10-K with the SEC on February 12, 2016 , which includes a description of our critical accounting policies that involve subjective and complex judgments that could potentially affect reported results. While there have been no material changes to our critical accounting policies as to the methodologies or assumptions we apply under them, we continue to monitor such methodologies and assumptions.

Item 3. Quantitative and Qualitative Disclosures About Market Risks.
We assess our market risks based on changes in interest and foreign currency exchange rates utilizing a sensitivity analysis that measures the potential impact in earnings, fair values and cash flows based on a hypothetical 10% change (increase and decrease) in interest and foreign currency exchange rates. We used March 31, 2016 market rates to perform a sensitivity analysis separately for each of our market risk exposures. The estimates assume instantaneous, parallel shifts in interest rate yield curves and exchange rates. We have determined, through such analyses, that the impact of a 10% change in interest and foreign currency exchange rates and its effect on our prices, earnings, fair values and cash flows would not be material.


37

Table of Contents

Item 4. Controls and Procedures.
(a)
Disclosure Controls and Procedures.   As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive and principal financial officers, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13(a)-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on such evaluation, our principal executive and principal financial officers concluded that our disclosure controls and procedures were effective and operating to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.
(b)
Internal Control Over Financial Reporting.   There have been no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the period to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As of March 31, 2016 , we utilized the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission.



38

Table of Contents

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.
We are involved in various claims and lawsuits, none of which, in the opinion of management, is expected to have a material adverse effect on our results of operations or financial co ndition. See Note 10 to the Consolidated Financial Statements for a description of claims and legal actions applicable to our business.

Item 1A. Risk Factors.
The discussion of our business and operations should be read together with the risk factors contained in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 , filed with the Securities and Exchange Commission, which describe various risks and uncertainties to which we are or may become subject. These risks and uncertainties have the potential to affect our business, financial condition, results of operations, cash flows, strategies or prospects in a material and adverse manner. As of March 31, 2016 , there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2015 .

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
(c)
Below is a summary of our Wyndham common stock repurchases by month for the quarter ended March 31, 2016 :
ISSUER PURCHASES OF EQUITY SECURITIES
Period
Total Number of Shares Purchased
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plan
Approximate Dollar Value of Shares that May Yet Be Purchased Under Plan
January 1-31, 2016
1,528,300

$
67.01

1,528,300

$
263,531,489

February 1-29, 2016
318,218

$
67.92

318,218

$
1,241,918,696

March 1-31, 2016
673,112

$
75.81

673,112

$
1,190,887,114

Total
2,519,630

$
69.48

2,519,630

$
1,190,887,114

(*) Includes 90,713 shares purchased for which the trade date occurred during March 2016 while settlement occurred during April 2016.
On August 20, 2007, our Board of Directors authorized a stock repurchase program that enables us to purchase our common stock. The Board has since increased the program seven times, most recently on February 8, 2016 for $1.0 billion, bringing the total authorization under the program to $5.0 billion. Under our current and prior stock repurchase plans, the total authorization is $5.8 billion.
During the period April 1, 2016 through April 25, 2016, we repurchased an additional 0.6 million shares at an average price of $76.27 . We currently have $1.1 billion of remaining availability in our program. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements and other factors. Repurchases may be conducted in the open market or in privately negotiated transactions.

Item 3. Defaults Upon Senior Securities.
None.

Item 4. Mine Safety Disclosures.
Not applicable.

Item 5. Other Information.
None.


39

Table of Contents

Item 6. Exhibits.
The agreement included as an exhibit to this report contains representations and warranties by each of the parties to the applicable agreement. These representations and warranties were made solely for the benefit of the other parties to the agreement and (i) were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate, (ii) may have been qualified in the agreement by disclosures that were made to the other party in connection with the negotiation of the agreement, (iii) may apply contract standards of “materiality” that are different from “materiality” under the applicable securities laws and (iv) were made only as of the date of the agreement or such other date or dates as may be specified in the agreement. We acknowledge that, notwithstanding the inclusion of the foregoing cautionary statements, we are responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this report not misleading.
The exhibit index appears on the page immediately following the signature page of this report.

40

Table of Contents

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

 
 
WYNDHAM WORLDWIDE CORPORATION
 
 
 
Date: April 26, 2016
By:
/s/ Thomas G. Conforti
 
 
Thomas G. Conforti
 
 
Chief Financial Officer
 
 
 
Date: April 26, 2016
By:
/s/ Nicola Rossi
 
 
Nicola Rossi
 
 
Chief Accounting Officer


41

Table of Contents

Exhibit Index

Exhibit No.
Description
10.1*
Credit Agreement, dated as of March 24, 2016, among Wyndham Worldwide Corporation, the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as Administrative Agent and Wells Fargo Bank, National Association and Bank of America, N.A., as Co-Syndication Agents
12*
Computation of Ratio of Earnings to Fixed Charges
15*
Letter re: Unaudited Interim Financial Information
31.1*
Certification of Chairman and Chief Executive Officer Pursuant to Rule 13a-14(a) Under the Securities Exchange Act of 1934
31.2*
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) Under the Securities Exchange Act of 1934
32**
Certification of Chairman and Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350
101.INS*
XBRL Instance Document
101.SCH*
XBRL Taxonomy Extension Schema Document
101.CAL*
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
XBRL Taxonomy Extension Presentation Linkbase Document
 
*
Filed with this report
** Furnished with this report


42


Exhibit 10.1

 
Published CUSIP Number: 98310TAM7

$325,000,000

CREDIT AGREEMENT


Dated as of March 24, 2016


among


WYNDHAM WORLDWIDE CORPORATION,
as Borrower

THE LENDERS REFERRED TO HEREIN,

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent,

WELLS FARGO BANK, NATIONAL ASSOCIATION
and
BANK OF AMERICA, N.A.,
as Co-Syndication Agents,


 

JPMORGAN CHASE BANK, N.A.,
WELLS FARGO SECURITIES, LLC
and
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
as Joint Lead Arrangers and Joint Bookrunners

 




        

            

TABLE OF CONTENTS
 
 
Page
1.
DEFINITIONS
1

 
 
 
2.
LOANS AND BORROWINGS
17

 
 
 
 
SECTION 2.1. Term Loans
18

 
SECTION 2.2. Borrowings
18

 
SECTION 2.3. Borrowing Procedure
18

 
SECTION 2.4. Use of Proceeds
19

 
SECTION 2.5. [Intentionally Omitted]
19

 
SECTION 2.6. [Intentionally Omitted]
19

 
SECTION 2.7. [Intentionally Omitted]
19

 
SECTION 2.8. Interest Elections
19

 
SECTION 2.9. Fees
20

 
SECTION 2.10. Repayment of Loans; Evidence of Debt
20

 
SECTION 2.11. Interest on Loans
22

 
SECTION 2.12. Interest on Overdue Amounts
22

 
SECTION 2.13. Alternate Rate of Interest
22

 
SECTION 2.14. Termination of Commitments
23

 
SECTION 2.15. Prepayment of Loans
23

 
SECTION 2.16. Facility Increase
24

 
SECTION 2.17. Reserve Requirements; Change in Circumstances
25

 
SECTION 2.18. Change in Legality
27

 
SECTION 2.19. Reimbursement of Lenders
28

 
SECTION 2.20. Pro Rata Treatment
29

 
SECTION 2.21. Right of Setoff
29

 
SECTION 2.22. Manner of Payments
29

 
SECTION 2.23. Taxes
30

 
SECTION 2.24. Certain Pricing Adjustments
33

 
SECTION 2.25. [Intentionally Omitted]
34

 
SECTION 2.26. [Intentionally Omitted]
34

 
SECTION 2.27. [Intentionally Omitted]
34

 
SECTION 2.28. [Intentionally Omitted]
34

 
SECTION 2.29. [Intentionally Omitted]
34

 
SECTION 2.30. [Intentionally Omitted]
34

 
SECTION 2.31. Defaulting Lenders
34

 
 
 
3.
REPRESENTATIONS AND WARRANTIES OF BORROWER
35

 
 
 
 
SECTION 3.1. Corporate Existence and Power
35

    

i    
        

                




 
SECTION 3.2. Corporate Authority, No Violation and Compliance with Law
36

 
SECTION 3.3. Governmental and Other Approval and Consents
36

 
SECTION 3.4. Financial Statements of Borrower
36

 
SECTION 3.5. No Change
36

 
SECTION 3.6. Copyrights, Patents and Other Rights
36

 
SECTION 3.7. Title to Properties
37

 
SECTION 3.8. Litigation
37

 
SECTION 3.9. Federal Reserve Regulations
37

 
SECTION 3.10. Investment Company Act
37

 
SECTION 3.11. Enforceability
37

 
SECTION 3.12. Taxes
37

 
SECTION 3.13. Compliance with ERISA
38

 
SECTION 3.14. Disclosure
38

 
SECTION 3.15. Environmental Liabilities
38

 
SECTION 3.16. Material Subsidiaries
39

 
SECTION 3.17. OFAC
39

 
SECTION 3.18. FCPA
39

 
SECTION 3.19. EEA Financial Institution
39

 
 
 
4.
CONDITIONS OF LENDING
39

 
 
 
 
SECTION 4.1. Conditions Precedent to Closing
39

 
SECTION 4.2. Conditions Precedent to Each Extension of Credit
41

 
 
 
5.
AFFIRMATIVE COVENANTS
41

 
 
 
 
SECTION 5.1. Financial Statements, Reports, etc.
41

 
SECTION 5.2. Corporate Existence; Compliance with Statutes
43

 
SECTION 5.3. Insurance
44

 
SECTION 5.4. Taxes and Charges
44

 
SECTION 5.5. ERISA Compliance and Reports
44

 
SECTION 5.6. Maintenance of and Access to Books and Records; Examinations
44

 
SECTION 5.7. Maintenance of Properties
45

 
SECTION 5.8. Changes in Character of Business
45

 
SECTION 5.9. FCPA; Sanctions
45

 
 
 
6.
NEGATIVE COVENANTS
45

 
 
 
 
SECTION 6.1. Limitation on Indebtedness
45

 
SECTION 6.2. Consolidation, Merger, Sale of Assets
46

 
SECTION 6.3. Limitations on Liens
47

 
SECTION 6.4. [Intentionally Omitted]
48

 
SECTION 6.5. Consolidated Leverage Ratio
48


ii    
        

                




 
SECTION 6.6. Consolidated Interest Coverage Ratio

48

 
SECTION 6.7. Accounting Practices
48

 
SECTION 6.8. FCPA
49

 
 
 
7.
EVENTS OF DEFAULT
49

 
 
 
8.
THE ADMINISTRATIVE AGENT
51

 
 
 
 
SECTION 8.1. Administration by Administrative Agent
51

 
SECTION 8.2. Advances and Payments
51

 
SECTION 8.3. Sharing of Setoffs
52

 
SECTION 8.4. Notice to the Lenders
52

 
SECTION 8.5. Liability of Administrative Agent
53

 
SECTION 8.6. Reimbursement and Indemnification
53

 
SECTION 8.7. Rights of Administrative Agent
54

 
SECTION 8.8. Independent Investigation by Lenders
54

 
SECTION 8.9. Notice of Transfer
54

 
SECTION 8.10. Successor Administrative Agent
54

 
SECTION 8.11. Agents Generally
55

 
 
 
9.
INTENTIONALLY OMITTED
55

 
 
 
10.
MISCELLANEOUS
55

 
 
 
 
SECTION 10.1. Notices
55

 
SECTION 10.2. Survival of Agreement, Representations and Warranties, etc.
57

 
SECTION 10.3. Successors and Assigns; Syndications; Loan Sales; Participations
57

 
SECTION 10.4. Expenses
60

 
SECTION 10.5. Indemnity
60

 
SECTION 10.6. CHOICE OF LAW
61

 
SECTION 10.7. No Waiver
61

 
SECTION 10.8. Extension of Maturity
61

 
SECTION 10.9. Amendments, etc.
61

 
SECTION 10.10. Severability
62

 
SECTION 10.11. SERVICE OF PROCESS; WAIVER OF JURY TRIAL
62

 
SECTION 10.12. Headings
63

 
SECTION 10.13. Execution in Counterparts
63

 
SECTION 10.14. Entire Agreement
64

 
SECTION 10.15. Confidentiality
64

 
SECTION 10.16. USA PATRIOT Act
65

 
SECTION 10.17. Replacement of Lenders
65

 
SECTION 10.18. No Advisory or Fiduciary Responsibility
65

 
SECTION 10.19. Acknowledgment and Consent to Bail-in of EEA Financial Institutions
66

 
SECTION 10.20. Electronic Execution of Assignments and Certain Other Documents
66


iii    
        

                




SCHEDULES
 
 
2.1

Commitments
 
3.16

Material Subsidiaries
 
 
 
EXHIBITS
 
 
A
Form of Opinion of Kirkland & Ellis LLP
 
B
Form of Assignment and Acceptance
 
C
Form of Compliance Certificate
 
D
Form of Borrowing Request
 
E
Form of New Lender Supplement
 
F
Form of Loan Increase Supplement
 
G
Form of Solvency Certificate
 
H
Form of U.S. Tax Compliance Certificates
 
I
Form of Interest Election Request

    



iv    
        



CREDIT AGREEMENT, dated as of March 24, 2016, among WYNDHAM WORLDWIDE CORPORATION, a Delaware corporation (the “ Borrower ”), the lenders party to this Agreement from time to time (the “ Lenders ”), WELLS FARGO BANK, NATIONAL ASSOCIATION and BANK OF AMERICA, N.A., as co-syndication agents (the “ Syndication Agents ”), and JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the “ Administrative Agent ”; and together with the Syndication Agents, the “ Agents ”) for the Lenders.
The parties hereto hereby agree as follows:
1.
DEFINITIONS
For the purposes hereof unless the context otherwise requires, the following terms shall have the meanings indicated, all accounting terms not otherwise defined herein shall have the respective meanings accorded to them under GAAP and all terms defined in the New York Uniform Commercial Code and not otherwise defined herein shall have the respective meanings accorded to them therein:
Act ” shall have the meaning assigned to such term in Section 10.16.
ABR Borrowing ” shall mean a Borrowing comprised of ABR Loans.
ABR Loan ” shall mean any Loan bearing interest at a rate determined by reference to the Alternate Base Rate in accordance with the provisions of Section 2.
Adjusted LIBO Rate ” shall mean, with respect to any Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such interest period multiplied by (b) the Statutory Reserve Rate.
Administrative Agent ” is defined in the preamble and includes each other Person appointed as the successor Administrative Agent pursuant to Section 8.10.
Affiliate ” shall mean as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, a Person shall be deemed to be “controlled by” another if such latter Person possesses, directly or indirectly, power either to (i) vote 10% or more of the securities having ordinary voting power for the election of directors of such controlled Person or (ii) direct or cause the direction of the management and policies of such controlled Person whether by contract or otherwise.
Agents ” is defined in the preamble.
Agreement ” shall mean, on any date, this Credit Agreement as originally in effect on the Closing Date and as thereafter from time to time amended, supplemented, amended and restated or otherwise modified and in effect on such date.
Alternate Base Rate ” shall mean, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a one month interest period on such day (or if such day is not a business day, the immediately preceding business day) plus 1%, provided that , the Adjusted LIBO Rate for any day shall be based on the LIBO Rate at approximately 11:00 a.m. London time on such day, subject to the interest rate floor set forth in the definition of the term “LIBO Rate.” Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO

        

2


Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate, respectively.
Applicable Law ” shall mean, with respect to any Person, all provisions of statutes, rules, regulations and orders of governmental bodies or regulatory agencies applicable to such Person, and all binding orders and decrees of all courts and arbitrators in proceedings or actions in which the Person in question is a party or is subject.
Applicable Margin ” shall mean, at any date or any period of determination, the Applicable Margin that would be in effect on such date or during such period pursuant to the applicable chart set forth in Section 2.24 based on the rating of the Borrower’s senior non-credit enhanced unsecured long-term debt.
Applicable Percentage ” shall mean, as to any Lender at any time, the percentage of the Facility represented by (i) on or prior to the Closing Date, such Lender’s Commitment at such time and (ii) thereafter, the principal amount of such Lender’s Loans at such time. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.1 or in the Assignment and Acceptance or New Lender Supplement pursuant to which such Lender becomes a party hereto, as applicable.
Assignment and Acceptance ” shall mean an agreement in substantially the form of Exhibit B hereto, executed by the assignor, assignee and the other parties as contemplated thereby or any other form (including electronic documentation generated by use of an electronic platform) approved by the Administrative Agent entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.3), and accepted by the Administrative Agent.
Bail-In Action ” shall mean the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
Bail-In Legislation ” shall mean, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
Basis Point ” shall mean 1/100th of 1%.
Board ” shall mean the Board of Governors of the Federal Reserve System.
Bookrunners ” shall mean, collectively, JPMorgan Chase Bank, N.A., Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated in their capacities as joint bookrunners.
Borrower ” is defined in the preamble.
Borrower Materials ” shall have the meaning assigned to such term in the last paragraph of Section 5.1.
Borrowing ” shall mean a group of Loans (including any Incremental Term Loans made pursuant to Section 2.16) of a single Interest Rate Type made by the Lenders on a single date and, in the case of LIBOR Loans, as to which a single Interest Period is in effect.
Borrowing Request ” shall mean a request for a Borrowing made pursuant to Section 2.3 substantially in the form of Exhibit D.



3


Business Day ” shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a LIBOR Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.
Capital Lease ” shall mean as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.
Cash Equivalents ” shall mean any of the following, to the extent acquired for investment and not with a view to achieving trading profits: (i) obligations fully backed by the full faith and credit of the United States of America maturing not in excess of twelve months from the date of acquisition, (ii) commercial paper maturing not in excess of twelve months from the date of acquisition and rated at least “P-1” by Moody’s or “A-1” by S&P on the date of such acquisition, (iii) the following obligations of any Lender or any domestic commercial bank having capital and surplus in excess of $500,000,000, which has, or the holding company of which has, a commercial paper rating meeting the requirements specified in clause (ii) above: (a) time deposits, certificates of deposit and acceptances maturing not in excess of twelve months from the date of acquisition, or (b) repurchase obligations with a term of not more than thirty days for underlying securities of the type referred to in clause (i) above, (iv) money market funds that invest exclusively in interest bearing, short-term money market instruments and adhere to the minimum credit standards established by Rule 2a-7 of the Investment Company Act of 1940 (17 C.F.R. §270.2A-7 (April 1, 2004), and (v) municipal securities: (a) for which the pricing period in effect is not more than twelve months long and (b) rated at least “P-1” by Moody’s or “A-1” by S&P. Notwithstanding the foregoing, auction rate securities shall not constitute Cash Equivalents.
Cendant ” shall mean Cendant Corporation, a Delaware corporation.
Change in Control ” shall mean (i) the acquisition by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the Closing Date), directly or indirectly, beneficially or of record, of ownership or control of in excess of 35% of the voting common stock of the Borrower on a fully diluted basis at any time or (ii) if at any time, individuals who on the Closing Date constituted the Board of Directors of the Borrower (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Borrower, as the case may be, was approved by a vote of the majority of the directors then still in office who were either directors on the Closing Date or whose election or a nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Borrower then in office.
Closing Date ” shall mean the date on which the conditions precedent set forth in Section 4.1 have been satisfied or waived.



4


Code ” shall mean the Internal Revenue Code of 1986, as amended.
Commitment ” shall mean with respect to any Lender, the commitment of such Lender to make a Term Loan on the Closing Date in an amount not to exceed the amount set forth under the heading “Commitment” opposite such Lender’s name on Schedule 2.1 hereto.
Confidential Information ” shall mean information concerning the Borrower, its Subsidiaries or its Affiliates which is non-public, confidential or proprietary in nature, or any information that is marked or designated confidential by or on behalf of the Borrower, which is furnished to any Lender by the Borrower or any of its Affiliates directly or through the Administrative Agent in connection with this Agreement or the transactions contemplated hereby (at any time on, before or after the date hereof), together with all analyses, compilations or other materials prepared by such Lender or its respective directors, officers, employees, agents, auditors, attorneys, consultants or advisors which contain or otherwise reflect such information.
Consolidated Assets ” shall mean, at any date of determination, the total assets of the Borrower and its Consolidated Subsidiaries determined in accordance with GAAP.
Consolidated Audited Financial Statements ” shall have the meaning assigned to such term in Section 3.4.
Consolidated EBITDA ” shall mean, without duplication, for any period for which such amount is being determined, the sum of the amounts for such period of (i) Consolidated Net Income, (ii) provision for taxes based on income, (iii) depreciation expense, (iv) Consolidated Interest Expense, (v) amortization expense, (vi) payments in an aggregate amount not to exceed $35,000,000 during any Rolling Period that arise out of or in connection with the Spin-Off including those made in respect of legacy Cendant expense reimbursement obligations, (vii) cash restructuring charges in an aggregate amount not to exceed $35,000,000 after the Closing Date taken in connection with publicly announced business and operation restructurings provided that any such restructuring charges taken in any fiscal quarter shall, for purposes of calculating Consolidated EBITDA, be deemed to be taken 25% in such fiscal quarter and 25% in each of the following three fiscal quarters and (viii) other non-cash items reducing Consolidated Net Income, minus (plus) (ix) any non-recurring gains (losses) on business exit activities outside the ordinary course of business if such gains (losses) are included in Consolidated Net Income) minus (x) any cash expenditures during such period in excess of $25,000,000 to the extent such cash expenditures (A) did not reduce Consolidated Net Income for such period and (B) were applied against reserves that constituted non-cash items which reduced Consolidated Net Income during prior periods (including reserves established upon the consummation of the Spin-Off), all as determined on a consolidated basis for the Borrower and its Consolidated Subsidiaries in accordance with GAAP; provided that to the extent the aggregate amount of cash expenditures referred to in clause (x) above exceeds $50,000,000 in any period of measurement, such amounts may be spread ratably over the period being measured and the periods of measurement for the subsequent three fiscal years, provided , however , that in any annual measurement period the maximum amount being spread may not exceed $100,000,000 and any excess over that amount must be reflected fully in the relevant measurement period. Notwithstanding the foregoing, in calculating Consolidated EBITDA pro forma effect shall be given to each (1) acquisition of a Consolidated Subsidiary or any other entity acquired by the Borrower or any of its Consolidated Subsidiaries in a merger, where the purchase price or merger consideration exceeds $25,000,000 during such period and (2) disposition property by the Borrower and its Consolidated Subsidiaries yielding gross profits in excess of $25,000,000 during such period as if such acquisition or disposition had been made on the first day of such period.



5


Consolidated Interest Coverage Ratio ” shall mean, for any period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for such period.
Consolidated Interest Expense ” shall mean for any period for which such amount is being determined, total interest expense paid or payable in cash (including that properly attributable to Capital Leases in accordance with GAAP but excluding in any event (x) all capitalized interest and amortization of debt discount and debt issuance costs and (y) debt extinguishment costs) of the Borrower and its Consolidated Subsidiaries on a consolidated basis including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net cash costs (or minus net profits) under Interest Rate Protection Agreements minus , without duplication, any interest income of the Borrower and its Consolidated Subsidiaries on a consolidated basis during such period. Notwithstanding the foregoing, interest expense in respect of any Securitization Indebtedness or any Non-Recourse Indebtedness shall not be included in Consolidated Interest Expense.
Consolidated Leverage Ratio ” shall mean, as of the last day of any period, the ratio of (a) Consolidated Total Indebtedness on such day to (b) Consolidated EBITDA for such period.
Consolidated Net Income ” shall mean, for any period for which such amount is being determined, the net income (or loss) of the Borrower and its Consolidated Subsidiaries during such period determined on a consolidated basis for such period taken as a single accounting period in accordance with GAAP, provided that there shall be excluded (i) income (loss) of any Person (other than a Consolidated Subsidiary of the Borrower) in which the Borrower or any of its Consolidated Subsidiaries has any equity investment or comparable interest, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or its Consolidated Subsidiaries by such Person during such period, (ii) the income of any Consolidated Subsidiary of the Borrower to the extent that the declaration or payment of dividends or similar distributions by that Consolidated Subsidiary of the income is not at the time permitted by operation of the terms of its charter, or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Consolidated Subsidiary, (iii) any extraordinary after-tax gains and (iv) any extraordinary or unusual pretax losses (including indemnity obligations incurred or liabilities assumed in connection with the Spin-Off).
Consolidated Net Worth ” shall mean, as of any date of determination, all items which in conformity with GAAP would be included under shareholders’ equity on a consolidated balance sheet of the Borrower and its Subsidiaries at such date.
Consolidated Subsidiaries ” shall mean all Subsidiaries of the Borrower that are required to be consolidated with the Borrower for financial reporting purposes in accordance with GAAP.
Consolidated Total Indebtedness ” shall mean (i) the total amount of Indebtedness of the Borrower and its Consolidated Subsidiaries determined on a consolidated basis using GAAP principles of consolidation, which is, at the dates as of which Consolidated Total Indebtedness is to be determined, includable as liabilities on a consolidated balance sheet of the Borrower and its Subsidiaries, plus (ii) without duplication of any items included in Indebtedness pursuant to the foregoing clause (i), Indebtedness of others which the Borrower or any of its Consolidated Subsidiaries has directly or indirectly assumed or guaranteed (but only to the extent so assumed or guaranteed) or otherwise provided credit support therefor, including without limitation, Guaranty Obligations; provided that, for purposes of this definition, Indebtedness shall not include (1) Guaranty Obligations and contingent liabilities incurred or assumed in connection with the Spin-Off (including



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those determined in accordance with FIN 45 and SFAS), (2) Securitization Indebtedness, (3)  the aggregate undrawn amount of outstanding Letters of Credit (as defined in the Existing Revolving Credit Agreement), (4) Non-Recourse Indebtedness, or (5) obligations incurred under any derivatives transaction entered into in the ordinary course of business pursuant to hedging programs. In addition, for purposes of this definition, the amount of Indebtedness at any time shall be reduced (but not to less than zero) by the amount of Excess Cash.
Debtor Relief Law ” shall mean the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief laws of the United States or other applicable jurisdictions form time to time in effect and affecting the rights of creditors generally.
Default ” shall mean any event, act or condition, which with notice or lapse of time, or both, would constitute an Event of Default.
Defaulting Lender ” shall mean, subject to Section 2.31, any Lender that (a) has failed to (i) fund all or any portion of a Loan to be made by it hereunder within two Business Days of the date such Loan was required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two Business Days of the date when due, (b) has notified the Borrower or the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.31(b)) as of the date established therefor by the Administrative Agent in a written notice of such



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determination, which shall be delivered by the Administrative Agent to the Borrower and each other Lender promptly following such determination.
Disclosed Matters ” shall mean public filings with the Securities and Exchange Commission made by the Borrower or any of its Subsidiaries on Form S-4, Form 8-K, Form 10-Q, Form 10-K or Form 10 (as filed at least three days prior to the Closing Date, as applicable) or any successor form.
Dollars ” and “ $ ” shall mean lawful money of the United States of America.
EEA Financial Institution ” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent;
“EEA Member Country ” shall mean any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
EEA Resolution Authority ” shall mean any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
Eligible Assignee ” shall mean (i) any Lender, (ii) an Affiliate of any Lender and (iii) any other Person approved by the Administrative Agent and the Borrower (such approvals not to be unreasonably withheld or delayed) provided the consent of the Borrower shall not be required so long as an Event of Default has occurred and is continuing; provided that “Eligible Assignee” shall not include (a) any natural person, or (b) any Defaulting Lender or any of its Subsidiaries or any parent company thereof, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (b), (c) a company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof or (d) the Borrower or any of its Subsidiaries or controlled Affiliates.
Environmental Law ” shall mean all laws, rules, orders, regulations, statutes, ordinances, codes, decrees, judgments, injunctions, notices or requirements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters, including without limitation, the Clean Water Act also known as the Federal Water Pollution Control Act (“ FWPCA ”) 33 U.S.C. § 1251 et seq ., the Clean Air Act (“ CAA ”), 42 U.S.C. §§ 7401 et seq ., the Federal Insecticide, Fungicide and Rodenticide Act (“ FIFRA ”), 7 U.S.C. §§ 136 et seq ., the Surface Mining Control and Reclamation Act (“ SMCRA ”), 30 U.S.C. §§ 1201 et   seq ., the Comprehensive Environmental Response, Compensation and Liability Act (“ CERCLA ”), 42 U.S.C. § 9601 et seq ., the Superfund Amendment and Reauthorization Act of 1986 (“ SARA ”), Public Law 99‑499, 100 Stat. 1613, the Emergency Planning and Community Right to Know Act (“ ECPCRKA ”), 42 U.S.C. § 11001 et seq ., the Resource Conservation and Recovery Act (“ RCRA ”), 42 U.S.C. § 6901 et   seq ., the Occupational Safety and Health Act as amended (“ OSHA ”), 29 U.S.C. § 655 and § 657, together, in each case, with any amendment thereto, and the regulations adopted and binding publications promulgated thereunder and all substitutions thereof.



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Environmental Liabilities ” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as such Act may be amended from time to time, and the regulations promulgated thereunder.
ERISA Affiliate ” shall mean any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
ERISA Event ” shall mean (a) any “reportable event,” as defined in Section 4043 of ERISA or the regulations issued thereunder as in effect on the date hereof (other than an event for which the 30‑day notice period is waived pursuant to regulations as in effect on the date hereof) with respect to a Plan; (b) the failure by any Plan to satisfy the minimum funding standards (within the meaning of Sections 412 or 430 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived; (c) a determination that any Plan is, or is expected to be, in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA); (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, Insolvent, in Reorganization, or in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 305 of ERISA).
EU Bail-In Legislation Schedule ” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
Event of Default ” shall have the meaning given such term in Section 7 hereof.
Excess Cash ” shall mean all cash and Cash Equivalents of the Borrower and its Consolidated Subsidiaries at such time determined on a consolidated basis in accordance with GAAP in excess of $10,000,000.
Excluded Taxes ” shall mean, with respect to any Lender, the Administrative Agent or any other recipient of payment to be made by or on account of any obligation of the Borrower hereunder or under any Fundamental Document, (a) income taxes and franchise taxes based on (or measured by) its net income or net profits (or franchise taxes imposed in lieu of net income taxes) imposed on such Lender or other recipient as a result of a present or former connection between such Lender or such recipient and the jurisdiction of the Governmental Authority imposing such tax or any political



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subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent or such Lender having executed, delivered or performed its obligations or received a payment hereunder, or enforced, this Agreement), (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any jurisdiction described in clause (a) above, (c) any withholding tax that is imposed on amounts payable to such Lender, or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, at the time such Lender becomes a party to this Agreement (or designates a new Lending Office), except to the extent that such Lender (or its assignor, if any) was entitled, immediately prior to the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.23(a), (d) Taxes attributable to such Lender’s failure to comply with Section 2.23(e), (e) any Taxes imposed as a result of such Lender’s gross negligence or willful misconduct and (f) any U.S. federal withholding Taxes imposed pursuant to FATCA.
Existing Revolving Credit Agreement ” shall mean the Credit Agreement dated as of March 26, 2015 among the Borrower, the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as syndication agent, Compass Bank, Credit Suisse AG, Cayman Islands Branch, Deutsche Bank AG, New York Branch, SunTrust Bank, The Bank of Nova Scotia, The Royal Bank of Scotland plc, U.S. Bank National Association Wells Fargo Bank, N.A., Barclays Bank plc, Goldman Sachs Bank USA and The Bank of Tokyo Mitsubishi UFJ, Ltd., as co-documentation agents, and Bank of America, N.A., as administrative agent, as amended, supplemented, amended and restated or otherwise modified or refinanced or replaced.
Facility ” shall mean at any time, (a) on or prior to the Closing Date, the aggregate amount of the Commitments of all Lenders at such time and (b) thereafter, the aggregate outstanding principal amount of the Loans of all Lenders at such time. The Facility on the Closing Date is $325,000,000.
Facility Increase Notice ” shall have the meaning assigned to such term in Section 2.16(b).
FATCA ” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
Federal Funds Effective Rate ” shall mean, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions (as determined in such manner as the NYFRB shall set forth on its public website from time to time) and published on the next succeeding business day by the NYFRB as the federal funds effective rate.
Foreign Lender ” shall mean (a) if the Borrower is a U.S. Person, a Lender or Administrative Agent that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender or Administrative Agent that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.



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Fundamental Documents ” shall mean this Agreement, any Notes and any Compliance Certificate which is required to be executed by the Borrower pursuant to Section 5.1(c) and delivered to the Administrative Agent in connection with this Agreement.
Funding Office ” shall mean the office of the Administrative Agent specified in Section 10.1 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders.
GAAP ” shall mean generally accepted accounting principles in the United States as in effect from time to time. In the event that any “Accounting Change” (as defined below) shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then the Borrower and the Administrative Agent agree upon written request of the Borrower or Administrative Agent, as applicable, to enter into negotiations in order to amend such provisions of this Agreement so as to reflect equitably such Accounting Changes with the desired result that the criteria for evaluating the Borrower’s financial condition shall be the same after such Accounting Changes as if such Accounting Changes had not been made. If an agreement to amend cannot be made after 45 days following delivery of such written request, all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Changes had not occurred. “Accounting Changes” refers to changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or, if applicable, the Securities and Exchange Commission.
Governmental Authority ” shall mean the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
Granting Lender ” shall have the meaning assigned to such term in Section 10.3(k).
Guaranty Obligation ” shall mean any obligation, contingent or otherwise, of the Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness; provided , however , that in calculating the amount of any Guaranty Obligation for any purpose under this Agreement, the amount of such Guaranty Obligation shall be limited to the extent necessary so that such amount does not exceed the value of the assets of such Person (as reflected on a consolidated balance sheet of such Person prepared in accordance with GAAP) to which any creditor or beneficiary of such Guaranty Obligation would have recourse. Notwithstanding the foregoing definition, the term “Guaranty Obligation” shall not include any direct or indirect obligation of a Person as a general partner of a general partnership or a joint venturer of a joint venture in respect of Indebtedness of such general partnership or joint venture, to the extent such Indebtedness is contractually non‑recourse to the assets of such Person as a general partner or joint venturer (other than assets



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comprising the capital of such general partnership or joint venture). The term “Guaranty Obligation” shall not include endorsements for collection or deposit in the ordinary course of business.
Hazardous Materials ” shall mean all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
Impacted Interest Period ” shall have the meaning assigned to such term in the definition of “LIBO Rate.”
Increase Effective Date ” shall have the meaning assigned to such term in Section 2.16(c).
Incremental Term Loan ” shall have the meaning assigned to such term in Section 2.16(c).
Indebtedness ” shall mean (without double counting), at any time and with respect to any Person, (i) indebtedness of such Person for borrowed money (whether by loan or the issuance and sale of debt securities) or for the deferred purchase price of property or services purchased (other than amounts constituting account payables arising in the ordinary course and payable within 180 days); (ii) indebtedness of others of the type described in clause (i), (iii), (iv) or (v) of this definition of Indebtedness, which such Person has directly or indirectly assumed or guaranteed (but only to the extent so assumed or guaranteed) or otherwise provided credit support therefor, including without limitation, Guaranty Obligations; (iii) indebtedness of others secured by a Lien on assets of such Person, whether or not such Person shall have assumed such indebtedness (but only to the extent of the fair market value of such assets); (iv) obligations of such Person in respect of letters of credit, acceptance facilities, or drafts or similar instruments issued or accepted by banks and other financial institutions for the account of such Person (other than account payables arising in the ordinary course and payable within 180 days); or (v) obligations of such Person under Capital Leases.
Indemnified Party ” shall have the meaning assigned to such term in Section 10.5.
Indemnified Taxes ” shall mean (a) Taxes, other than Excluded Taxes and (b) to the extent not otherwise described in clause (a), Other Taxes.
Insolvent ” shall mean, with respect to any Multiemployer Plan, the condition that such plan is insolvent within the meaning of Section 4245 of ERISA.
Interest Election Request ” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.8.
Interest Payment Date ” shall mean, (a) with respect to any ABR Loan, the last day of each March, June, September and December and (b) with respect to any LIBOR Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a LIBOR Loan with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.



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Interest Period ” shall mean, as to any LIBOR Borrowing, the period commencing on the date of such Borrowing, and ending on the numerically corresponding day (or, if there is no numerically corresponding day or if the date of the LIBOR Borrowing is the last day of any month, on the last day) in the calendar month that is 1, 2, 3, 6 or, subject to each Lender’s approval, 12 months thereafter, as the Borrower may elect; provided that, for any LIBOR Borrowing made on the Closing Date, the Borrower may elect a period that is one week, commencing on the Closing Date and ending on March 31, 2016; provided , however , that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a LIBOR Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.
Interest Rate Protection Agreement ” shall mean any interest rate swap agreement, interest rate cap agreement or other similar financial agreement or arrangement.
Interest Rate Type ” when used in respect of any Loan or Borrowing, shall refer to the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, “Rate” shall include the Adjusted LIBO Rate and the Alternate Base Rate.
Interpolated Rate ” shall mean, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period (for which the LIBO Screen Rate is available for Dollars) that is shorter than the Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest period (for which that LIBO Screen Rate is available for Dollars) that exceeds the Impacted Interest Period, in each case, at such time.
IRS ” shall mean the United States Internal Revenue Service.
Lender and “ Lenders ” is defined in the preamble and includes any assignee of a Lender permitted pursuant to Section 10.3(b).
Lending Office ” shall mean, with respect to any of the Lenders, the domestic or foreign branch or branches (or affiliate or affiliates) from which any such Lender’s LIBOR Loans or ABR Loans, as the case may be, are made or maintained and for the account of which all payments of principal of, and interest on, such Lender’s LIBOR Loans or ABR Loans are made, as notified to the Administrative Agent from time to time.
LIBO Rate ” shall mean, with respect to any LIBOR Loan for any Interest Period, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for Dollars for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its



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reasonable discretion; in each case the “ LIBO Screen Rate ”) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period; provided that if the LIBO Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided further that if the LIBO Screen Rate shall not be available at such time for such Interest Period (an “ Impacted Interest Period ”) then the LIBO Rate shall be the Interpolated Rate; provided that if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes hereof.
LIBO Screen Rate ” shall have the meaning assigned to such term in the definition of “LIBO Rate.”
LIBOR Borrowing ” shall mean a Borrowing comprised of LIBOR Loans.
LIBOR Loan ” shall mean any Loan bearing interest at a rate determined by reference to the Adjusted LIBO Rate in accordance with the provisions of Section 2.
Lien ” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset.
Loan ” shall mean any loan made by a Lender to the Borrower under Article II in the form of a Term Loan or an Incremental Term Loan.
Margin Stock ” shall be as defined in Regulation U of the Board.
Material Acquisition ” shall mean an acquisition (consummated in one transaction or a series of transactions) by Borrower or a Consolidated Subsidiary of assets of, or constituting, a Person that is not an Affiliate of Borrower (whether by purchase of such assets, purchase of Person(s) owning such assets or some combination thereof) with a minimum aggregate gross purchase price of $1,000,000,000.
Material Adverse Effect ” shall mean a material adverse effect on, or material adverse change in, the business, assets, operations or condition, financial or otherwise, of the Borrower and its Subsidiaries, taken as a whole, other than any change, effect or circumstance to the extent resulting from disruptions in, or the inability of companies engaged in businesses similar to those engaged in by the Borrower and its Subsidiaries to consummate financings in, the asset backed securities or conduit market.
Material Subsidiary ” shall mean any Subsidiary (other than a Securitization Entity) of the Borrower which, together with its Subsidiaries (other than Securitization Entities) at the time of determination hold, or, solely with respect to Sections 7(f) and 7(g), any group of Subsidiaries which, if merged into each other at the time of determination would hold, assets constituting 15% or more of Consolidated Assets or accounts for 15% or more of Consolidated EBITDA for the Rolling Period immediately preceding the date of determination.



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Maturity Date ” shall mean March 24, 2021.
Moody’s ” shall mean Moody’s Investors Service, Inc. and any successor thereof.
Multiemployer Plan ” shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
New Lender ” shall have the meaning assigned to such term in Section 2.16(d).
New Lender Supplement ” shall have the meaning assigned to such term in Section 2.16(d).
Non-Consenting Lender ” shall have the meaning assigned to such term in Section 10.17.
Non-Recourse Indebtedness ” shall mean a transaction or series of transactions pursuant to which the Borrower or any other Person (i) issues Indebtedness secured by, payable from or representing beneficial interests in assets of such Person for which neither the Borrower nor any of its Material Subsidiaries is liable in any way other than pursuant to Standard Securitization Undertakings (unless such liability of the Borrower or such Material Subsidiary is otherwise permitted to be incurred hereunder by the Borrower or such Material Subsidiary) or (ii) transfers or grants a security interest in assets of such Person to any Person that finances the acquisition of such assets through the issuance of securities or the incurrence of Indebtedness or issues obligations secured by such assets.
Notes ” shall mean any promissory notes evidencing Loans.
NYFRB ” shall mean the Federal Reserve Bank of New York.
NYFRB Rate ” shall mean, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a banking day, for the immediately preceding banking day); provided that if none of such rates are published for any day that is a business day, the term “NYFRB Rate” shall mean the rate for a federal funds transaction quoted at 11:00 a.m. on such day received to the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided , further , that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes hereof.
Obligations ” shall mean the obligation of the Borrower to make due and punctual payment of principal of, and interest on, the Loans and all other monetary obligations of the Borrower to the Administrative Agent or any Lender under this Agreement or the Fundamental Documents.
OFAC ” shall mean the Office of Foreign Assets Control of the United States Department of the Treasury.
Offered Increase Amount ” shall have the meaning assigned to such term in Section 2.16(b).
Other Taxes ” shall mean any and all present or future stamp or documentary taxes, assessments or charges made by any Governmental Authority by reason of the execution and delivery of this Agreement or any Fundamental Document.



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Overnight Bank Funding Rate ” shall mean, for any day, the rate comprised of both overnight federal funds and overnight LIBOR borrowings by U.S.-managed banking offices of depository institutions (as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time) and published on the next succeeding business day by the NYFRB as an overnight bank funding rate.
Participant ” shall have the meaning assigned to such term in Section 10.3(g).
Participant Register ” shall have the meaning assigned to such term in Section 10.3(g).
PBGC ” shall mean the Pension Benefit Guaranty Corporation or any successor thereto.
Permitted Encumbrances ” shall mean Liens permitted under Section 6.3 hereof.
Person ” shall mean any natural person, corporation, division of a corporation, partnership, limited liability company, trust, joint venture, company, estate, unincorporated organization or government or any agency or political subdivision thereof.
Plan ” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
Platform ” shall have the meaning assigned to such term in the last paragraph of Section 5.1.
Prime Rate ” shall mean the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its office located at 270 Park Avenue, New York, New York; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.
Pro Forma Basis ” shall mean in connection with any transaction for which a determination on a Pro Forma Basis is required to be made hereunder, that such determination shall be made (i) after giving effect to any issuance of Indebtedness, any acquisition, any disposition or any other transaction (as applicable) and (ii) assuming that the issuance of Indebtedness, acquisition, disposition or other transaction and, if applicable, the application of any proceeds therefrom, occurred at the beginning of the most recent Rolling Period ending at least thirty days prior to the date on which such issuance of Indebtedness, acquisition, disposition or other transaction occurred.
Register ” shall have the meaning assigned to such term in Section 10.3(e).
Related Parties ” shall mean, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.
Reorganization ” shall mean, with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.



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Responsible Officer ” shall mean the chief executive officer, president, chief accounting officer, chief financial officer, treasurer or assistant treasurer of the Borrower and, solely for purposes of the delivery of the certificates pursuant to Section 4.1(d) , the secretary or assistant secretary of the Borrower, and, solely for purposes of notices given pursuant to Section 2, any other officer of the Borrower so designated by any of the foregoing officers in a notice to the Administrative Agent or any other officer or employee of the Borrower designated in or pursuant to an agreement between the Borrower and the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower.
Required Lenders ” shall mean at any time, the holders of more than 50% of the Facility. The portion of the Facility attributable to any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.
Rolling Period ” shall mean with respect to any fiscal quarter, such fiscal quarter and the three immediately preceding fiscal quarters considered as a single accounting period.
Sanction(s) ” shall mean any international economic sanction administered or enforced by the United States Government, including without limitation, OFAC, the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.
S&P ” shall mean Standard & Poor’s Financial Services LLC, a subsidiary of McGraw-Hill Financial, Inc. and any successor thereof.
Securitization Entity ” shall mean any Subsidiary or other Person engaged solely in the business of effecting asset securitization transactions and related activities.
Securitization Indebtedness ” shall mean (i) Indebtedness incurred by a Securitization Entity that does not permit or provide for recourse for principal and interest (other than Standard Securitization Undertakings) to the Borrower or any Subsidiary of the Borrower (other than a Securitization Entity) or any property or asset of the Borrower or any Subsidiary of the Borrower (other than the property or assets of, or any equity interests or other securities issued by, a Securitization Entity) and (ii) Indebtedness incurred by the Borrower or a Material Subsidiary that does not permit or provide for recourse for principal and interest (other than Standard Securitization Undertakings) to the Borrower or any Subsidiary of the Borrower except for recourse to the specific assets securing such Indebtedness.
Solvency Certificate ” shall mean a Solvency Certificate of a Responsible Officer of the Borrower substantially in the form of Exhibit G .
SPC ” shall have the meaning assigned to such term in Section 10.3(k).
Spin-Off ” shall mean the distribution to the shareholders of Cendant of all of the common stock of the Borrower and the transactions related thereto.
Standard Securitization Undertakings ” shall mean representations, warranties (and any related repurchase obligations), servicer obligations, guaranties, repurchase obligations, covenants and indemnities entered into by the Borrower or any Subsidiary of the Borrower of a type that are reasonably customary in securitizations.



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Statutory Reserve Rate ” shall mean a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentage (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board of Governors of the Federal Reserve System of the United States of America). Such reserve percentage shall include those imposed pursuant to such Regulation D. LIBOR Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
Subsidiary ” shall mean with respect to any Person, any corporation, association, joint venture, partnership or other business entity (whether now existing or hereafter organized) of which at least a majority of the voting stock or other ownership interests having ordinary voting power for the election of directors (or the equivalent) is, at the time as of which any determination is being made, owned or controlled by such Person or one or more subsidiaries of such Person or by such Person and one or more subsidiaries of such Person.
Syndication Agents ” is defined in the preamble.
Taxes ” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.
Term Loan ” means a loan made by a Lender on the Closing Date pursuant to Section 2.1.
U.S. Person ” shall mean any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
U.S. Tax Compliance Certificate ” has the meaning specified in Section 2.23(e)(ii)(B)(III).
Withdrawal Liability ” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
Write-Down and Conversion Powers ” shall mean, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.



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2.
LOANS AND BORROWINGS
SECTION 2.1.     Term Loans .
Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, each Lender agrees, severally and not jointly, to make a single term loan to the Borrower in Dollars on the Closing Date in an amount equal to such Lender’s Commitment.
SECTION 2.2.     Borrowings .
(a)    The Term Loans made by the Lenders on the Closing Date shall consist of a single Borrowing made simultaneously by the Lenders. All Incremental Term Loans made on any Increase Effective Date pursuant to Section 2.16 in connection with an increase in the Facility shall consist of a single Borrowing made simultaneously by the Lenders that participate in such increase. The failure of any Lender to make any Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Loan required to be made by such other Lender).
(b)    Subject to Section 2.3, each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by making funds available at the Funding Office no later than 1:00 P.M. New York City time (3:00 P.M. New York City time, in the case of an ABR Borrowing) in federal or other immediately available funds. Upon receipt of the funds to be made available by the Lenders to fund any Borrowing hereunder, the Administrative Agent shall disburse such funds by depositing them into an account of the Borrower maintained with the Administrative Agent.
(c)    Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, all or any portion of any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.
SECTION 2.3.     Borrowing Procedure .
In order to effect a Borrowing, the Borrower shall deliver to the Administrative Agent a Borrowing Request or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower (a) in the case of a LIBOR Borrowing, not later than 12:00 Noon, New York City time, three Business Days before a proposed Borrowing, and (b) in the case of an ABR Borrowing, not later than 11:00 A.M., New York City time, on the day of a proposed Borrowing. Such Borrowing Request shall be irrevocable and shall in each case specify (a) whether the Borrowing then being requested is to be a LIBOR Borrowing or an ABR Borrowing, (b) the date of such Borrowing (which shall be a Business Day) and the amount thereof and (c) if such Borrowing is to be a LIBOR Borrowing, the Interest Period with respect thereto. If no election as to the Interest Rate Type of a Borrowing is specified in any such Borrowing Request, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period with respect to any LIBOR Borrowing is specified in any such Borrowing Request, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. The Administrative Agent shall promptly advise the applicable Lenders of any Borrowing Request given pursuant to this Section 2.3 and of each Lender’s portion of the requested Borrowing.



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SECTION 2.4.     Use of Proceeds .
The proceeds of each Loan shall be used for working capital and general corporate purposes of the Borrower and its Subsidiaries. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations U and X of the Board. The Borrower shall not request any Loan, and the Borrower shall not use and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Loan (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or other applicable anti-corruption laws, (b) for the purpose of directly or, to the Borrower’s knowledge, indirectly funding, financing or facilitating any activities, business or transaction of or with any individual or entity that, at the time of such funding, financing or facilitating, is the subject or target of any Sanctions or is included on OFAC’s List of Specially Designated nationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or in any country or territory to the extent that such country or territory itself is the subject of any Sanction, or (c) in any manner that would result in the violation of any Sanctions applicable to any party hereto, except where such violation, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
SECTION 2.5.     [Intentionally Omitted] .
SECTION 2.6.     [Intentionally Omitted] .
SECTION 2.7.     [Intentionally Omitted] .
SECTION 2.8.     Interest Elections .
(a)    Each Borrowing initially shall be of the Interest Rate Type specified in the applicable Borrowing Request and, in the case of a LIBOR Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Interest Rate Type or to continue such Borrowing and, in the case of a LIBOR Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.
(b)    To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.3 if the Borrower were requesting a Borrowing of the Interest Rate Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request, in substantially the form of Exhibit I, signed by the Borrower.
(c)    Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.2:
(i)    the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);



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(ii)    the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii)    whether the resulting Borrowing is to be an ABR Borrowing or a LIBOR Borrowing; and
(iv)    if the resulting Borrowing is a LIBOR Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.
If any such Interest Election Request requests a LIBOR Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.
(d)    Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.
(e)    If the Borrower fails to deliver a timely Interest Election Request with respect to a LIBOR Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be continued as a LIBOR Borrowing with an Interest Period of one month’s duration. Notwithstanding any contrary provision hereof, at any time after the occurrence, and during the continuation, of a Default or an Event of Default, no Borrowing or portion thereof may be converted to or continued as a LIBOR Borrowing without the consent of the Required Lenders. If a Default or an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a LIBOR Borrowing and (ii) unless repaid, each LIBOR Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.
SECTION 2.9.     Fees .
(a)    The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.
(b)    The Borrower agrees to pay the Administrative Agent the fees in the amounts and on the dates as set forth in any written and executed fee agreements with the Administrative Agent.
(c)    All fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, if and as appropriate, among the Lenders. Once paid, none of the fees shall be refundable under any circumstances.
SECTION 2.10.     Repayment of Loans; Evidence of Debt .
(a)    The Borrower shall repay the aggregate outstanding principal amount of the Loans in accordance with the following table (which amounts shall be (i) adjusted as a result of the application of prepayments in accordance with Section 2.15 and (ii) increased on each Increase Effective Date by an amount equal to the percentage set forth below for the applicable Installment Date multiplied by the aggregate principal amount of Incremental Term Loans made on such Increase Effective Date):



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Installment Date
Installment Amount
March 29, 2019
1.25% of the Facility as in effect on the Closing Date
June 28, 2019
1.25% of the Facility as in effect on the Closing Date
September 30, 2019
1.25% of the Facility as in effect on the Closing Date
December 31, 2019
1.25% of the Facility as in effect on the Closing Date
March 31, 2020
2.50% of the Facility as in effect on the Closing Date
June 30, 2020
2.50% of the Facility as in effect on the Closing Date
September 30, 2020
2.50% of the Facility as in effect on the Closing Date
December 31, 2020
2.50% of the Facility as in effect on the Closing Date
Maturity Date
(or such earlier date on which the Loans become due and payable pursuant to Section 7)
100% of the Facility as in effect on such date
The Borrower hereby further agrees to pay interest on the unpaid principal amount of the Loans made to the Borrower from time to time outstanding from the Closing Date until payment in full thereof at the rates per annum, and on the dates, set forth in Section 2.11.
(b)    Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement. Upon the request of any Lender to the Borrower made through the Administrative Agent or the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans to the Borrower in addition to such account or accounts.
(c)    The Administrative Agent shall maintain the Register pursuant to Section 10.3(e), and a subaccount therein for each Lender, in which shall be recorded (i) the amount of each Loan made hereunder, the Interest Rate Type thereof and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) both the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Lender’s share thereof.
(d)    The entries made in the Register and the accounts of each Lender maintained pursuant to this Section 2.10 shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided , however , that the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender in accordance with the terms of this Agreement.



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SECTION 2.11.     Interest on Loans .
(a)    Subject to the provisions of Section 2.12, the Loans comprising each LIBOR Borrowing shall bear interest at a rate per annum equal to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin for LIBOR Loans from time to time in effect pursuant to Section 2.24.
(b)    Subject to the provisions of Section 2.12, the Loans comprising each ABR Borrowing shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin, if any, for ABR Loans from time to time in effect pursuant to Section 2.24.
(c)    Interest on each Loan shall be payable in arrears on each Interest Payment Date applicable to such Loan and on the Maturity Date; provided that (i) interest accrued pursuant to Section 2.12 shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any LIBOR Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.
(d)    All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The Adjusted LIBO Rate or LIBO Rate for each Interest Period or day within an Interest Period and the Alternate Base Rate for each day shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.
(e)    The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability with respect to the administration, submission or any other matter related to the rates in the definition of “LIBO Rate” or with respect to any comparable or successor rate thereto (except such as shall result from the gross negligence or willful misconduct of the Administrative Agent as determined by a final and non-appealable judgment of a court of competent jurisdiction).
SECTION 2.12.     Interest on Overdue Amounts .
If the Borrower shall default in the payment of the principal of, or interest on, any Loan or any other amount becoming due hereunder, the Borrower shall, at the request of the Required Lenders, from time to time pay interest, to the extent permitted by Applicable Law, on such defaulted amount up to (but not including) the date of actual payment (after as well as before a judgment) at a rate equal to (a) in the case of the remainder of the then current Interest Period for any LIBOR Loan, the rate applicable to such Loan under Section 2.11 plus 2% per annum and (b) in the case of any other Loan or amount, the rate that would at the time be applicable to an ABR Loan under Section 2.11 plus 2% per annum.
SECTION 2.13.     Alternate Rate of Interest .
If in connection with any request for a LIBOR Loan or a conversion to or continuation thereof, (a) the Administrative Agent determines that (i) deposits in Dollars are not being offered to banks in the London interbank market for the applicable amount and Interest Period of such LIBOR Loan, or (ii) adequate and reasonable means do not exist for determining the Adjusted LIBO Rate or the LIBO Rate for any requested Interest Period with respect to a proposed LIBOR Loan or in connection with an existing or proposed ABR Loan, or (b) the Required Lenders determine that for any reason the Adjusted LIBO Rate for any requested Interest Period with respect to a proposed LIBOR Loan does not adequately and fairly



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reflect the cost to such Lenders of funding such LIBOR Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain LIBOR Loans shall be suspended (to the extent of the affected LIBOR Loans or Interest Periods), and (y) in the event of a determination described in the preceding sentence with respect to the Adjusted LIBO Rate component of the Alternate Base Rate, the utilization of the Adjusted LIBO Rate component in determining the Alternate Base Rate shall be suspended, in each case until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of LIBOR Loans (to the extent of the affected LIBOR Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a Borrowing of ABR Loans in the amount specified therein. Notwithstanding the foregoing, in the case of a pending request for a LIBOR Loan or a conversion or continuation as to which the Administrative Agent has made the determination described in clause (a) of the first sentence of this paragraph, the Administrative Agent, in consultation with the Borrower and the Lenders, may establish an alternative interest rate that reflects the all-in-cost of funds to the Administrative Agent for funding Loans in the amount and with the same Interest Period as the LIBOR Loan requested to be made, converted or continued, as the case may be (the “ Impacted Loans ”), in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (x) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (a) of the first sentence of this paragraph, (y) the Required Lenders notify the Administrative Agent and the Borrower that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted Loans, or (z) any Lender determines that any Applicable Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Borrower written notice thereof.
In the event of any such determination, until the Administrative Agent shall have determined that circumstances giving rise to such notice no longer exist, any request by the Borrower for a LIBOR Borrowing pursuant to Section 2.3 shall be deemed to be a request for an ABR Loan. Each determination by the Administrative Agent hereunder shall be conclusive absent manifest error.
SECTION 2.14.     Termination of Commitments .
The Commitments of all Lenders shall terminate automatically on the Closing Date, immediately following the initial Borrowing hereunder. No portion of any Loan repaid or prepaid may be reborrowed.
SECTION 2.15.     Prepayment of Loans .
(a)    Prior to the Maturity Date, the Borrower shall have the right at any time to prepay any Borrowing, in whole or in part, subject to the requirements of Section 2.19 but otherwise without premium or penalty, upon prior written notice to the Administrative Agent before 12:00 Noon, New York City, time at least one Business Day before such prepayment in the case of an ABR Loan and at least three Business Days before such prepayment in the case of a LIBOR Loan; provided , however , that each such partial prepayment shall be (i) in an integral multiple of $1,000,000 and in a minimum aggregate principal amount of $5,000,000, and (ii) applied to reduce the subsequent scheduled and outstanding repayments of the Borrowings to be made pursuant to Section 2.10 as directed by the Borrower (and absent such direction in direct order of maturity).



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(b)    Each notice of prepayment pursuant to Section 2.15(a) must be in a form acceptable to the Administrative Agent and shall specify the specific Borrowing(s), the prepayment date and the aggregate principal amount of each Borrowing to be prepaid, shall be irrevocable and shall commit the Borrower to prepay such Borrowing(s) by the amount stated therein; provided that a notice of prepayment may state that such notice is conditional upon the effectiveness of other credit facilities or the receipt of the proceeds from the issuance of other Indebtedness or the occurrence of some other identifiable event or condition, in which case such notice of prepayment may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified date of prepayment) if such condition is not satisfied. All prepayments under this Section 2.15 shall be accompanied by accrued interest on the principal amount being prepaid, to the date of prepayment.
SECTION 2.16.     Facility Increase .
(a)    If the Borrower wishes to increase the Facility at any time, and no Default or Event of Default has occurred and is then continuing, the Borrower shall notify the Administrative Agent in writing of the amount (the “ Offered Increase Amount ”) of such proposed increase (such notice, a “ Facility Increase Notice ”), and the Administrative Agent shall notify each Lender of such proposed increase and provide such additional information regarding such proposed increase as any Lender may reasonably request. The Borrower may, at its election, (i) offer one or more of the Lenders the opportunity to participate in all or a portion of the Offered Increase Amount and/or (ii) offer one or more additional banks, financial institutions or other entities the opportunity to participate in all or a portion of the Offered Increase Amount; provided , that any Lender or bank, financial institution or other entity that is offered the opportunity to participate in all or any portion of the Offered Increase Amount shall be consented to in writing by the Administrative Agent to the extent the Administrative Agent would have a right under this Agreement to consent to an assignment of all or any portion of any Lender’s Loans to such Lender or bank, financial institution or other entity. Each Facility Increase Notice shall specify which Lenders and/or banks, financial institutions or other entities the Borrower desires to participate in such Offered Increase Amount. The Borrower or, if requested by the Borrower, the Administrative Agent, will notify such Lenders and/or banks, financial institutions or other entities of such offer.
(b)    If the Facility is increased in accordance with this Section 2.16, the Administrative Agent and the Borrower shall determine the effective date (each an “ Increase Effective Date ”) and the final allocation of such increase among the Lenders (including for this purpose, any Eligible Assignees that provides a portion of such increase) selected by the Borrower to participate in the Offered Increase Amount. Any increase in the Facility pursuant to this Section 2.16 shall be in the form of one or more additional term loans made to the Borrower (any such term loan being referred to herein as an “ Incremental Term Loan ”).
(c)    Any Eligible Assignee which the Borrower selects to offer participation in the Offered Increase Amount and which elects to become a party to this Agreement and provide a portion of the Offered Increase Amount in an amount so offered and accepted by it pursuant to Section 2.16(b)(ii) shall execute a New Lender Supplement with the Borrower and the Administrative Agent, substantially in the form of Exhibit E (a “ New Lender Supplement ”), whereupon such bank, financial institution or other Person (herein called a “ New Lender ”) shall become a Lender for all purposes and to the same extent as if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement; provided that the Incremental Term Loan of any such New Lender shall be in an amount not less than $5,000,000. The Borrower shall provide a Note to any New Lender, if requested.
(d)    Any Lender which accepts an offer to it by the Borrower to provide a portion of the Offered Increase Amount pursuant to Section 2.16(b)(i) shall, in each case, execute a Loan Increase Supplement



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with the Borrower and the Administrative Agent, substantially in the form of Exhibit F (a “ Loan Increase Supplement ”), whereupon such Lender shall be bound by and entitled to the benefits of this Agreement with respect to the full amount of its Loans as so increased.
(e)    On each Increase Effective Date, (i) the Administrative Agent shall notify the Lenders of the Facility increase, the Incremental Term Loans to be made on such Increase Effective Date and the Applicable Percentage of each Lender after giving effect thereto and (ii) subject to satisfaction of the conditions precedent set forth in this Agreement, each Lender (including each New Lender) participating in such Facility increase shall make an Incremental Term Loan to the Borrower equal to its allocated portion of the applicable Offered Increase Amount.
(f)    Notwithstanding anything to the contrary in this Section 2.16, (i) each Offered Increase Amount shall be in a minimum amount of $35,000,000 or such other amount agreed to by the Borrower and the Administrative Agent, (ii) in no event shall any transaction effected pursuant to this Section 2.16 cause the Facility to exceed $500,000,000 and (iii) no Lender shall have any obligation to provide any portion of the Offered Increase Amount unless it agrees to do so in its sole discretion.
(g)    This Section 2.16 shall supersede any provisions in Section 10.9 to the contrary.
(h)    The Borrower shall pay such fees to the Administrative Agent, for its own account and for the benefit of the Lenders providing a portion of the Offered Increase Amount, as are agreed mutually at the time such Offered Increase Amount is established.
SECTION 2.17.     Reserve Requirements; Change in Circumstances .
(a)    Except with respect to Indemnified Taxes and Other Taxes, which shall be governed solely and exclusively by Section 2.23, or Excluded Taxes if (i) after the Closing Date any change in Applicable Law or regulation or in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law), (ii) the Dodd-Frank Wall Street Reform and Consumer Protection Act or the compliance with any requests, rules, guidelines or directives thereunder or issued in connection therewith, regardless of the date enacted, adopted or issued or (iii) the compliance with any requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, regardless of the date enacted, adopted or issued (x) shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender, (y) shall impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or any LIBOR Loan made by such Lender or (z) shall subject any Lender to any tax of any kind whatsoever with respect to this Agreement or any LIBOR Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof, and the result of any of the foregoing shall be to increase the cost (other than, except as provided in clause (z), the amount of Taxes, if any) to such Lender of making, converting to, continuing or maintaining any LIBOR Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or to reduce the amount (other than a reduction resulting from an increase in Taxes, if any) of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise) in respect thereof by an amount deemed in good faith by such Lender to be material, then the Borrower shall pay such additional amount or amounts as will compensate such Lender for such increase or reduction to such Lender.
(b)    Except with respect to Indemnified Taxes and Other Taxes, which shall be governed solely and exclusively by Section 2.23, or Excluded Taxes if (i) after the Closing Date, any Lender shall have



26


determined in good faith that the adoption after the Closing Date of any applicable law, rule, regulation or guideline regarding capital adequacy or liquidity requirements, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or any Lending Office of such Lender or such Lender’s holding company, if any) with any request or directive regarding capital adequacy or liquidity (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, (ii) the Dodd-Frank Wall Street Reform and Consumer Protection Act or the compliance with any requests, rules, guidelines or directives thereunder or issued in connection therewith, regardless of the date enacted, adopted or issued or (iii) the compliance with any requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, regardless of the date enacted, adopted or issued, has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of its obligations hereunder to a level below that which such Lender (or such Lender’s holding company) could have achieved but for the items referenced in clauses (i)-(iii) of this sentence (taking into consideration such Lender’s policies or the policies of such Lender’s holding company, as the case may be, with respect to capital adequacy and liquidity) by an amount deemed by such Lender to be material, then, from time to time, the Borrower shall pay to the Administrative Agent for the account of such Lender such additional amount or amounts as will compensate such Lender for such reduction upon demand by such Lender.
(c)    A certificate of a Lender setting forth in reasonable detail (i) such amount or amounts as shall be necessary to compensate such Lender as specified in paragraph (a) or (b) above, as the case may be, and (ii) the calculation of such amount or amounts referred to in the preceding clause (i), shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay the Administrative Agent for the account of such Lender the amount shown as due on any such certificate within 10 Business Days after its receipt of the same.
(d)    Failure on the part of any Lender to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital with respect to any Interest Period shall not constitute a waiver of such Lender’s rights to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital with respect to such Interest Period or any other Interest Period. The protection of this Section 2.17 shall be available to each Lender regardless of any possible contention of invalidity or inapplicability of the law, regulation or condition which shall have been imposed.
(e)    Each Lender may make any Borrowing to the Borrower through any Lending Office, provided that the exercise of this option shall not affect the obligation of the Borrower to repay the Borrowing in accordance with the terms of this Agreement. Each Lender agrees that, as promptly as practicable after it becomes aware of the occurrence of an event or the existence of a condition that (i) would cause it to incur any increased cost under this Section 2.17, Section 2.18, or Section 2.23 or (ii) would require the Borrower to pay an increased amount under this Section 2.17, Section 2.18 or Section 2.23, it will notify the Borrower of such event or condition and, to the extent not inconsistent with such Lender’s internal policies, will use its reasonable efforts to make, fund or maintain the affected Loans of such Lender through another Lending Office of such Lender if as a result thereof the additional monies which would otherwise be required to be paid or the reduction of amounts receivable by such Lender thereunder in respect of such Loans would be materially reduced, or any inability to perform would cease to exist, or the increased costs which would otherwise be required to be paid in respect of such Loans pursuant to this Section 2.17, Section 2.18 or Section 2.23 would be materially reduced or the Taxes payable under Section 2.23, or other amounts



27


otherwise payable under this Section 2.17, or Section 2.18 would be materially reduced, and if, as determined by such Lender, in its sole discretion, the making, funding or maintaining of such Loans through such other Lending Office would not otherwise materially adversely affect such Loans or such Lender. For the avoidance of doubt, nothing in this Section shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 2.23. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(f)    In the event any Lender shall have delivered to the Borrower a notice that LIBOR Loans are no longer available from such Lender pursuant to Section 2.18, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.23, the Borrower may (but subject in any such case to the payments required by Section 2.18), upon at least five Business Days’ prior written notice to such Lender and the Administrative Agent, identify to the Administrative Agent a lending institution reasonably acceptable to the Administrative Agent which will purchase the amount of outstanding Loans from the Lender providing such notice and such Lender shall thereupon assign any Loans owing to such Lender to such replacement lending institution pursuant to Section 10.3. Such notice shall specify an effective date for such assignment and at the time thereof, the Borrower shall pay all accrued interest and all other amounts (including without limitation all amounts payable under this Section) owing hereunder to such Lender as at such effective date for such assignment.
SECTION 2.18.     Change in Legality .
(a)    Notwithstanding anything to the contrary herein contained, if, after the Closing Date, any change in any law or regulation or in the interpretation thereof by any Governmental Authority charged with the administration or interpretation thereof shall make it unlawful for any Lender to make, maintain or fund or charge interest with respect to any Borrowing or to give effect to its obligations as contemplated hereby, or to determine or charge interest rates based upon the Adjusted LIBO Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, by written notice to the Borrower and to the Administrative Agent:
(i)    (x) any obligation of such Lender to issue, make, maintain, fund or charge interest with respect to any such Loan or to make or continue LIBOR Loans or to convert ABR Loans to LIBOR Loans, shall be suspended, whereupon the Borrower shall be prohibited from requesting LIBOR Loans from such Lender hereunder unless such notice is subsequently withdrawn and (y) if such notice asserts the illegality of such Lender making or maintaining ABR Loans the interest rate on which is determined by reference to the Adjusted LIBO Rate component of the Alternate Base Rate, such Lender may request that the interest rate on which ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Adjusted LIBO Rate component of the Alternate Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exists; and
(ii)     (x) such Lender may demand the Borrower prepay or convert all LIBOR Loans of such Lender to ABR Loans (the interest rate on which ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Adjusted LIBO Rate component of the Alternate Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such LIBOR Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates



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based upon the Adjusted LIBO Rate, such Lender may request that the Administrative Agent, during the period of such suspension, compute the Alternate Base Rate applicable to such Lender without reference to the Adjusted LIBO Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Adjusted LIBO Rate.
(b)    For purposes of this Section 2.18, a notice to the Borrower by any Lender pursuant to Section 2.18(a) shall be effective on the date of receipt thereof by the Borrower.
SECTION 2.19.     Reimbursement of Lenders .
(a)    The Borrower shall reimburse each Lender on demand (with a copy to the Administrative Agent) for any loss, cost or expense incurred or to be incurred by it in the reemployment of the funds released (i) by any payment or prepayment (for any reason, whether voluntary, mandatory, automatic, by reason of acceleration or otherwise, including an assignment by a Lender contemplated under Section 10.17), or conversion or continuation, of any LIBOR Loan if such Loan is repaid other than on the last day of the applicable Interest Period for such Loan or (ii) in the event that after the Borrower delivers a notice of borrowing under Section 2.3 in respect of LIBOR Loans the applicable Loan is not made on the first day of the Interest Period specified by the Borrower for any reason other than (I) a suspension or limitation under Section 2.18 of the right of the Borrower to select a LIBOR Loan or (II) a breach by a Lender of its obligations hereunder. In the case of such failure to borrow, such loss shall be the amount as reasonably determined by such Lender as the excess, if any of (A) the amount of interest which would have accrued to such Lender on the amount not borrowed, at a rate of interest equal to the interest rate applicable to such Loan pursuant to Section 2.11, for the period from the date of such failure to borrow, to the last day of the Interest Period for such Loan which would have commenced on the date of such failure to borrow, over (B) the amount realized by such Lender in reemploying the funds not advanced during the period referred to above. In the case of a payment other than on the last day of the Interest Period for a Loan, such loss shall be the amount as reasonably determined by the Administrative Agent as the excess, if any, of (A) the amount of interest which would have accrued on the amount so paid at a rate of interest equal to the interest rate applicable to such Loan pursuant to Section 2.11, for the period from the date of such payment to the last day of the then current daily Interest Period for such Loan, over (B) the amount equal to the product of (x) the amount of the Loan so paid times (y) the current daily yield on U.S. Treasury Securities (at such date of determination) with maturities approximately equal to the remaining Interest Period for such Loan times (z) the number of days remaining in the Interest Period for such Loan. Each Lender shall deliver to the Borrower from time to time one or more certificates setting forth the amount of such loss (and in reasonable detail the manner of computation thereof) as determined by such Lender, which certificates shall be conclusive absent manifest error. The Borrower shall pay to the Administrative Agent for the account of each Lender the amount shown as due on any certificate within thirty days after its receipt of the same.
(b)    In the event the Borrower (i) fails to prepay any Borrowing on the date specified in any prepayment notice delivered pursuant to Section 2.15(a), or (ii) converts or continues any Borrowing (other than an ABR Borrowing) other than on the date or in the amount notified by the Borrower in accordance with the terms of this Agreement, the Borrower on demand by any Lender shall pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for any loss incurred by such Lender as a result of such failure to prepay, including, without limitation, any loss, cost or expenses incurred by reason of the acquisition of deposits or other funds by such Lender to fulfill deposit obligations incurred in anticipation of such prepayment. Each Lender shall deliver to the Borrower and the Administrative Agent from time to time one or more certificates setting forth the amount of such loss (and



29


in reasonable detail the manner of computation thereof) as determined by such Lender, which certificates shall be conclusive absent manifest error.
(c)    For purposes of calculating amounts payable under this Section 2.19, each Lender shall be deemed to have funded each LIBOR Loan made by it at the Adjusted LIBO Rate for such Loan by a matching Dollar deposit or other borrowing in the London interbank market for a comparable amount and for a comparable period, whether or not such LIBOR Loan was in fact so funded.
SECTION 2.20.     Pro Rata Treatment .
(a)    Except as permitted under Sections 2.17, 2.18, 2.19, or 2.31 or as set forth anywhere else in this Agreement or any other Fundamental Document, each Borrowing, each payment or prepayment of principal of any Borrowing, each payment of interest on the Loans and each refinancing, conversion or continuation of any Borrowing shall be allocated pro rata among the Lenders in accordance with their respective Applicable Percentages, in each case with respect to such Lender’s respective tranche of Loans.
(b)    Each Lender agrees that in computing such Lender’s portion of any Borrowing to be made hereunder, the Administrative Agent may, in its discretion, round each Lender’s percentage of such Borrowing computed in accordance with Section 2.1, to the next higher or lower whole dollar amount.
SECTION 2.21.     Right of Setoff .
If any Event of Default shall have occurred and be continuing and the Required Lenders shall have directed the Administrative Agent to declare the Loans immediately due and payable pursuant to Section 7, each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by such Lender and any other indebtedness at any time owing by such Lender to, or for the credit or the account of, the Borrower, against any of and all the obligations of the Borrower now or hereafter existing under this Agreement and the Loans to the Borrower held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or such Loans and although such Obligations may be unmatured. Each Lender agrees promptly to notify the Borrower after any such setoff and application made by such Lender, but the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Lender under this Section 2.21 are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.
SECTION 2.22.     Manner of Payments .
(a)    All payments by the Borrower hereunder shall be made in Dollars in Federal or other immediately available funds without deduction, setoff or counterclaim at the Funding Office no later than 1:00 P.M., New York City time, on the date on which such payment shall be due. Interest in respect of any Loan hereunder shall accrue from and including the date of such Loan to, but excluding, the date on which such Loan is paid or refinanced with a Loan of a different Interest Rate Type.
(b)    Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any LIBOR Borrowing (or, in the case of any ABR Borrowing, prior to 2:00 P.M., New York City time, on the date of such ABR Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.2 (or, in the case of an ABR Borrowing, that such Lender has made such share available in accordance with and at the time required by Section 2.2) and may, in reliance upon such assumption, make available to the Borrower a



30


corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in Dollars, in Federal or other immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the Overnight Bank Funding Rate, plus the fee customarily charged by the Administrative Agent (and subject to the IFSA interbank compensation rules from time to time) in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to ABR Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.
SECTION 2.23.     Taxes .
(a)    Any and all payments by or on account of any obligation of the Borrower hereunder or under any Fundamental Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the Borrower shall make such deductions, (ii) the Borrower shall pay such amounts to the relevant Governmental Authority in accordance with Applicable Law, and (iii) the sum payable by the Borrower shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.23) the Administrative Agent or Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made.
(b)    Without duplication of any amounts already paid under Section 2.23(a) or (c) the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.
(c)    If the United States Internal Revenue Service or other Governmental Authority of the United States of America or other jurisdiction asserts a claim against the Administrative Agent or a Lender that the full amount of Indemnified Taxes or Other Taxes has not been paid (including where such Indemnified Taxes or Other Taxes are imposed directly on the Administrative Agent or any Lender), without duplication of any amounts already paid under Section 2.23(a) or (b), the Borrower shall indemnify the Administrative Agent and each Lender within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.23) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority (other than those resulting from the Administrative Agent or Lender’s gross negligence or willful misconduct). A certificate (along with a copy of the applicable documents from the United States Internal Revenue Service or other Governmental Authority of the United States of America or other jurisdiction that asserts such claim) as to the amount of such payment or liability and setting forth in reasonable detail the calculation and basis for such payment or liability delivered to the Borrower by a Lender or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.



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(d)    As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e)    (i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent) (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased), at the time such Lender becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation) and at any other time or times reasonably requested by the Borrower, such properly completed and executed documentation prescribed by Applicable Law or reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if the Lender is not legally entitled to deliver such documentation.
(ii)    Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,
(A)    Each Lender and Administrative Agent that is a United States Person, as defined in Section 7701(a)(30) of the Code, shall deliver on or prior to the date on which it becomes a party to this Agreement and at the time(s) prescribed by Applicable Law, and in the manner(s) prescribed by Applicable Law, to the Borrower and the Administrative Agent (as applicable), a properly completed and duly executed copy of United States Internal Revenue Form W-9, or any successor form, certifying that such Person is exempt from United States backup withholding Tax on payments made hereunder.
(B)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(I)    in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Fundamental Document, executed copies of IRS Form W-8BENE (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Fundamental Document, IRS Form W-8BENE (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(II)    executed copies of IRS Form W-8ECI;



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(III)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit H-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BENE (or W-8BEN, as applicable); or
(IV)    to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BENE (or W-8BEN, as applicable), a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-2 or Exhibit H-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-4 on behalf of each such direct and indirect partner;
(C)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D)    if a payment made to a Lender or to the Administrative Agent under any Fundamental Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender or the Administrative Agent were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender or the Administrative Agent shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(iii)    Each Lender and the Administrative Agent agrees that if any form or certification it previously delivered pursuant to this Section 2.23 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.



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(f)    If the Administrative Agent or a Lender determines, in its sole good-faith discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid amounts pursuant to this Section 2.23, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or amounts paid, by the Borrower under this Section 2.23 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This Section 2.23 shall not be construed to require the Administrative Agent or any Lender to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the Borrower or any other Person.
(g)    Each Lender agrees (i) that as between it and the Borrower or the Administrative Agent, it shall be the Person to deduct and withhold Taxes, and to the extent required by law it shall deduct and withhold Taxes, on amounts that such Lender may remit to any other Person(s) by reason of any undisclosed transfer or assignment of an interest in this Agreement to such other Person(s) pursuant to paragraph (g) of Section 10.3 and (ii) to indemnify the Borrower and the Administrative Agent and any officers, directors, agents, or employees of the Borrower or the Administrative Agent against, and to hold them harmless from, any Tax, interest, additions to Tax, penalties, reasonable counsel and accountants’ fees, disbursements or payments arising from the assertion by any appropriate Governmental Authority of any claim against them relating to a failure to withhold Taxes as required by Applicable Law with respect to amounts described in clause (i) of this paragraph (g).
(h)    Each assignee of a Lender’s interest in this Agreement in conformity with Section 10.3 shall be bound by this Section 2.23, so that such assignee will have all of the obligations and provide all of the forms and statements and all indemnities, representations and warranties required to be given under this Section 2.23.
SECTION 2.24.     Certain Pricing Adjustments .
The Applicable Margin for Loans in effect from time to time shall be determined in accordance with the following table:
Moody’s/S&P
Rating Equivalent
Applicable Margin
LIBOR Loans
(in Basis Points)
Applicable Margin
ABR Loans
(in Basis Points)
 
 
 
>   A3/A-
90.0
0.0
Baa1/BBB+
100.0
0.0
Baa2/BBB
115.0
15.0
Baa3/BBB-
145.0
45.0
< Baa3/BBB-
175.0
75.0
In the event that S&P and Moody’s ratings on the Borrower’s senior non-credit enhanced unsecured long-term debt are not equivalent to each other, the higher rating of S&P or Moody’s will determine the Applicable Margin, unless the ratings are more than one level apart, in which case the rating one level below the higher rating of S&P or Moody’s will be determinative. In the event that (a) the



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Borrower’s senior non-credit enhanced unsecured long-term debt is not rated by both of S&P or Moody’s (for any reason, including if S&P or Moody’s shall cease to be in the business of rating corporate debt obligations) or (b) if the rating system of any of S&P or Moody’s shall change, then an amendment shall be negotiated in good faith to the references to specific ratings in the table above to reflect such changed rating system or the unavailability of ratings from such rating agency (including an amendment to provide for the substitution of an equivalent or successor ratings agency). In the event that the Borrower’s senior unsecured long-term debt is not rated by either of S&P or Moody’s, then the Applicable Margin shall be deemed to be calculated as if the lowest rating category set forth above applied until such time as an amendment to the table above shall be agreed to. Any increase in the Applicable Margin determined in accordance with the foregoing table shall become effective on the date of announcement or publication by the Borrower or the applicable rating agency of a reduction in such rating or, in the absence of such announcement or publication, on the effective date of such decreased rating, or on the date of any request by the Borrower to the applicable rating agency not to rate its senior unsecured long-term debt or on the date any of such rating agencies announces it shall no longer rate the Borrower’s senior unsecured long-term debt. Any decrease in the Applicable Margin shall be effective on the date of announcement or publication by any of such rating agencies of an increase in rating or in the absence of announcement or publication on the effective date of such increase in rating.
SECTION 2.25.     [Intentionally Omitted] .
SECTION 2.26.     [Intentionally Omitted] .
SECTION 2.27.     [Intentionally Omitted] .
SECTION 2.28.     [Intentionally Omitted] .
SECTION 2.29.     [Intentionally Omitted] .
SECTION 2.30.     [Intentionally Omitted] .
SECTION 2.31.     Defaulting Lenders .
(a)    Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:
(i) Waivers and Amendments . That Defaulting Lender's right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 10.9.
(ii) Reallocation of Payments . Any payment of principal, interest, fees or other amounts received by the Administrative Agent hereunder for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity or otherwise), including any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to Section 8.3, shall be applied at such time or times as may be determined by the Administrative Agent as follows: first , to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; second , as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third if so determined by the Administrative Agent and the Borrower, to be held in escrow in a non-interest bearing deposit account and released pro-rata in order to satisfy obligations of that Defaulting Lender to



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fund Loans under this Agreement; fourth , to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against that Defaulting Lender as a result of that Defaulting Lender's breach of its obligations under this Agreement; fifth, so long as no Default or Event of Default exists, to the payment of amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and sixth , to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which that Defaulting Lender has not fully funded its appropriate share and (y) such Loans were made at a time when the conditions set forth in Section 4.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and reimbursement obligations owed to all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of that Defaulting Lender. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or placed in escrow) to pay amounts owed by a Defaulting Lender shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.
(b)     Defaulting Lender Cure . If the Borrower and the Administrative Agent agree in writing in their reasonable discretion that a Lender no longer falls within the definition of “Defaulting Lender”, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages, whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees or commissions accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender's having been a Defaulting Lender.
3.
REPRESENTATIONS AND WARRANTIES OF BORROWER
In order to induce the Lenders to enter into this Agreement and to make the Loans provided for herein, the Borrower makes the following representations and warranties to the Administrative Agent and the Lenders, all of which shall survive the execution and delivery of this Agreement and the making of the Loans:
SECTION 3.1.     Corporate Existence and Power .
(d)    The Borrower is duly organized and validly existing in good standing under the laws of its jurisdiction of organization and is in good standing or has applied for authority to operate as a foreign corporation or other organization in all jurisdictions where the nature of its properties or business so requires it and where a failure to be in good standing as a foreign corporation or other organization would reasonably be expected to have Material Adverse Effect. The Borrower has the corporate power to execute, deliver and perform its obligations under this Agreement and the other Fundamental Documents and other documents contemplated hereby and to borrow hereunder.
(e)    The Subsidiaries of the Borrower are duly organized and are validly existing in good standing under the laws of their respective jurisdictions of organization and are in good standing or have applied for authority to operate as a foreign corporation or other organization in all jurisdictions where the



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nature of their properties or business so requires it and where a failure to be in good standing as a foreign corporation or other organization would reasonably be expected to have Material Adverse Effect.
SECTION 3.2.     Corporate Authority, No Violation and Compliance with Law .
The execution, delivery and performance of this Agreement and the other Fundamental Documents and the borrowings hereunder (a) have been duly authorized by all necessary corporate action on the part of the Borrower, (b) will not violate any provision of any Applicable Law (including any laws related to franchising) applicable to the Borrower or any of its Subsidiaries or any of their respective properties or assets, (c) will not violate any provision of the certificate of incorporation or by-laws or other organizational documents of the Borrower or any of its Subsidiaries, (d) will not violate or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, any material indenture, bond, note, instrument or any other material agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries or any of their respective properties or assets are bound and (e) will not result in the creation or imposition of any Lien upon any property or assets of the Borrower or any of its Subsidiaries other than (i) pursuant to this Agreement or any other Fundamental Document or (ii) which is a Permitted Encumbrance, which in the case of clauses (b) and (d), individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
SECTION 3.3.     Governmental and Other Approval and Consents .
No action, consent or approval of, or registration or filing with, or any other action by, any governmental agency, bureau, commission or court is required in connection with the execution, delivery and performance by the Borrower of this Agreement or the other Fundamental Documents, except such as have been obtained or made and are in full force and effect or where the failure to take such action or obtain such consent or approval would not reasonably be expected to have a Material Adverse Effect.
SECTION 3.4.     Financial Statements of Borrower .
The audited balance sheet of the Borrower and its Consolidated Subsidiaries as at December 31, 2013, December 31, 2014 and December 31, 2015, and the related consolidated statements of income and of cash flows for the fiscal years ended on such date (the “ Consolidated Audited Financial Statements ”), fairly present the financial condition of the Borrower and its Consolidated Subsidiaries as of the dates indicated and the results of operations and cash flows for the periods indicated in conformity with GAAP.
SECTION 3.5.     No Change .
As of the Closing Date, except for Disclosed Matters, since the date of the most recent audited financial statements referred to in Section 3.4, there has been no development or event that has had or would reasonably be expected to have a Material Adverse Effect.
SECTION 3.6.     Copyrights, Patents and Other Rights .
Each of the Borrower and its Subsidiaries (a) owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect and (b) to their knowledge, the use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except, in each case, as would not reasonably be expected to have a Material Adverse Effect for any such infringements that, individually or in the aggregate, would not reasonably be expected to have Material Adverse Effect.



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SECTION 3.7.     Title to Properties .
Subject to Section 3.6, each of the Borrower or its Subsidiaries has good title or valid leasehold interests to each of the properties and assets reflected on the most recent balance sheet referred to in Section 3.4 (other than properties or assets owned by a Person that is consolidated with the Borrower or any of its Subsidiaries under GAAP but is not a Subsidiary of the Borrower ), except for defects in title or interests that would not reasonably be expected to have Material Adverse Effect, and all such properties and assets are free and clear of Liens, except Permitted Encumbrances.
SECTION 3.8.     Litigation .
Except for Disclosed Matters, there are no lawsuits or other proceedings pending (including, but not limited to, matters relating to Environmental Law and Environmental Liabilities), or, to the knowledge of the Borrower, threatened, against or affecting the Borrower or any of its Subsidiaries or any of their respective properties, by or before any Governmental Authority or arbitrator, which would reasonably be expected to have Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries is in default with respect to any order, writ, injunction, decree, rule or regulation of any Governmental Authority, which default would reasonably be expected to have Material Adverse Effect.
SECTION 3.9.     Federal Reserve Regulations .
Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the Loans will be used, whether immediately, incidentally or ultimately, for any purpose violative of or inconsistent with any of the provisions of Regulation U or X of the Board.
SECTION 3.10.     Investment Company Act .
The Borrower is not, and will not during the term of this Agreement be, an “investment company” subject to regulation under the Investment Company Act of 1940, as amended.
SECTION 3.11.     Enforceability .
This Agreement and the other Fundamental Documents when executed by all parties hereto and thereto will constitute legal, valid and binding obligations of the Borrower (enforceable in accordance with its terms subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law).
SECTION 3.12.     Taxes .
Each of the Borrower and each of its Subsidiaries has filed or caused to be filed all federal, state and local Tax returns which are required to be filed, and has paid or has caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves in conformity with GAAP or (b) to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect.



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SECTION 3.13.     Compliance with ERISA .
Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect: (a) no ERISA Event has occurred or is reasonably expected to occur; (b) the Borrower, each of its Material Subsidiaries and each of its ERISA Affiliates is in compliance with the provisions of ERISA and the Code applicable to Plans, and the regulations and published interpretations thereunder applicable to such entity in connection therewith, if any; (c) neither the Borrower nor any of its Subsidiaries has engaged in a transaction which would result in the incurrence of liability under Section 4069 of ERISA; and (d) the present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such underfunded Plans.
SECTION 3.14.     Disclosure .
As of the Closing Date, neither this Agreement nor any factual information set forth in the Confidential Information Memorandum (excluding projections, other forward looking information and information of a general economic or industry nature) dated March 4, 2016, when taken as a whole contained any untrue statement of a material fact or omitted to state a material fact, under the circumstances under which it was made, necessary in order to make the statements contained herein or therein not materially misleading in light of the circumstances under which such statements were made. At the Closing Date, there is no fact known to the Borrower which has not been disclosed to the Lenders and which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. The Borrower has delivered to the Administrative Agent certain projections relating to the Borrower and its Consolidated Subsidiaries. Such projections are based on good faith estimates and assumptions believed to be reasonable at the time made, provided , however , that the Borrower makes no representation or warranty that such assumptions will prove in the future to be accurate or that the Borrower and its Subsidiaries will achieve the financial results reflected in such projections (it being understood that such Projections are not to be viewed as facts and are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, that no assurance can be given that any particular Projections will be realized and that actual results may differ and that such differences may be material).
SECTION 3.15.     Environmental Liabilities .
Except for the Disclosed Matters and except with respect to any matters, that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has received notice of any claim with respect to any Environmental Liabilities or (iii) knows of any circumstances that are reasonably likely to become the basis for any claim of Environmental Liabilities against the Borrower or any of its Subsidiaries.



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SECTION 3.16.     Material Subsidiaries .
The Material Subsidiaries existing on the Closing Date (calculated as of December 31, 2015) are listed on Schedule 3.16.
SECTION 3.17.     OFAC .
Neither the Borrower, nor any of its Subsidiaries, nor, to the knowledge of the Borrower and its Subsidiaries, any director, officer, employee, agent, affiliate or representative thereof, is an individual or entity currently the subject of any Sanctions. The Borrower, its Subsidiaries, and, to the knowledge of the Borrower and its Subsidiaries, their respective directors, officers, employees, agents, affiliates and representatives are in compliance with applicable Sanctions, except where the failure to comply, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
SECTION 3.18.     FCPA .
No proceeds of any Borrowing will be used directly, or to the knowledge of the Borrower indirectly, by the Borrower or any Subsidiary for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or other applicable anti-corruption laws. The Borrower, its Subsidiaries, and, to the knowledge of the Borrower and its Subsidiaries, their respective directors, officers, employees, agents, affiliates and representatives are in compliance with the United States Foreign Corrupt Practices Act of 1977, as amended, and other applicable anti-corruption laws, except where the failure to comply, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
SECTION 3.19.     EEA Financial Institution .
The Borrower is not an EEA Financial Institution.
4.
CONDITIONS OF LENDING
SECTION 4.1.     Conditions Precedent to Closing .
The agreement of each Lender to make the initial extension of credit requested to be made by it is subject to the satisfaction or waiver, prior to or concurrently with the making of such extension of credit on the Closing Date, of the following conditions precedent:
(a)     Fundamental Documents . The Administrative Agent shall have received this Agreement and any Notes requested in writing at least three Business Days prior to the Closing Date, each executed and delivered by a duly authorized officer of the Borrower.
(b)     Financial Statements . The Lenders shall have received (i) the Consolidated Audited Financial Statements for 2013, 2014 and 2015, which shall be deemed delivered to the Lenders upon filing of the Borrower’s Form 10-K with the Securities and Exchange Commission containing such financial statements and (ii) the unaudited consolidated balance sheet of the Borrower and its Consolidated Subsidiaries, as at the end of, and the related unaudited consolidated statements of income (or changes in financial position) for each quarter ended subsequent to December 31, 2015 for which unaudited consolidated financial statements are available, and for the period from the beginning of such fiscal year to the end of such fiscal quarter.



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(c)     Payment of Fees . The Lenders and the Administrative Agent shall have received all fees required to be paid, and all expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel), at least three Business Days before the Closing Date.
(d)     Corporate Documents for the Borrower . The Administrative Agent shall have received a certificate of a Responsible Officer dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of the certificate of incorporation and by‑laws of the Borrower as in effect on the date of such certification; (B) that attached thereto is a true and complete copy of resolutions adopted by the Board of Directors of the Borrower authorizing the borrowings hereunder and the execution, delivery and performance in accordance with their respective terms of the Fundamental Documents and any other documents required or contemplated hereunder; (C) as to the incumbency and specimen signature of each Responsible Officer executing the Fundamental Documents or any other document delivered by the Borrower in connection herewith (such certificate to contain a certification by another Responsible Officer as to the incumbency and signature of the Responsible Officer signing the certificate referred to in this paragraph (d)); and (D) that attached thereto are true and complete copies of such documents and certifications evidencing that the Borrower is validly existing, in good standing and qualified to engage in business in its jurisdiction of organization and each other jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.
(e)     Opinions of Counsel . The Administrative Agent shall have received the executed written opinion, dated the date of the Closing Date and addressed to the Administrative Agent and the Lenders, of Kirkland & Ellis LLP, counsel to the Borrower, substantially in the form of Exhibit A.
(f)     Officer’s Certificate . The Administrative Agent shall have received a certificate of a Responsible Officer certifying, as of the Closing Date, compliance with the conditions set forth in paragraphs (b) and (c) of Section 4.2.
(g)     Projections . The Lenders shall have received projections through 2021, which may be delivered to the Lenders by delivery of the Confidential Information Memorandum referred to in Section 3.14.
(h)     Pro Forma Balance Sheet . The Lenders shall have received a pro forma consolidated balance sheet of the Borrower as at the date of the most recent balance sheet delivered pursuant to Section 4.1(b)(ii) and a pro forma statement of operations for the 12-month period ending on such date, in each case adjusted to give pro forma effect to the transactions to occur on the Closing Date, including all Loans to be made on the Closing Date as if such Loans had been funded on such date or on the first day of such period, as applicable.
(i)     Approvals . All material governmental and third party approvals necessary in connection with the continuing operations of the Borrower and the financing contemplated hereby shall have been obtained and be in full force and effect.
(j)     Material Adverse Effect . The Lenders shall be satisfied that (i) there has been no development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect since December 31, 2015 and (ii) the Borrower and its subsidiaries are not party to or subject to any litigation or proceeding which would be likely to have a Material Adverse Effect.



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(k)    [Intentionally Omitted].
(l)     Patriot Act, Etc. . The Administrative Agent and the Lenders shall have received all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Act, requested by such Person at least three Business Days prior to the Closing Date.
(m)     Solvency Certificate . The Administrative Agent shall have received a Solvency Certificate from the chief financial officer of the Borrower.
(n)     Legal Fees and Expenses . Unless waived by the Administrative Agent, the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings ( provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).
SECTION 4.2.     Conditions Precedent to Each Extension of Credit .
The obligation of the Lenders to make each Loan, including the initial extensions of credit hereunder, is subject to the following conditions precedent:
(a)     Notice . The Administrative Agent shall have received a notice with respect to such Borrowing as required by this Agreement.
(b)     Representations and Warranties . The representations and warranties set forth in Section 3 hereof and in the other Fundamental Documents shall be true and correct in all material respects on and as of the date of each Borrowing hereunder (except to the extent that such representations and warranties expressly relate to an earlier date) with the same effect as if made on and as of such date.
(c)     No Event of Default . No Event of Default or Default shall have occurred and be continuing.
Each Borrowing shall be deemed to be a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (b) and (c) of this Section.
5.
AFFIRMATIVE COVENANTS
From the date of the initial Borrowing hereunder and for so long as any amount shall remain outstanding or unpaid under this Agreement, the Borrower agrees that, unless the Required Lenders shall otherwise consent in writing, it will, and will cause each of its Subsidiaries to:
SECTION 5.1.     Financial Statements, Reports, etc.
The Borrower will furnish to the Administrative Agent and to each Lender:
(a)    Within 100 days after the end of each fiscal year of the Borrower, a copy of the audited consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as at the end of, and the related consolidated statements of income, shareholders’ equity and cash flows for such year, and the corresponding figures as at the end of, and for, the preceding fiscal year, accompanied by an opinion of Deloitte & Touche LLP or such other independent certified public accountants of recognized standing as shall be retained by the Borrower and reasonably satisfactory to the Administrative Agent, which report



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and opinion shall be prepared in accordance with generally accepted auditing standards relating to reporting and which report and opinion shall (A) be unqualified as to going concern and scope of audit and shall state that such financial statements fairly present the financial condition of the Borrower and its Consolidated Subsidiaries, as at the dates indicated and the results of the operations and cash flows for the periods indicated and (B) contain no material exceptions or qualifications except for qualifications relating to accounting changes (with which such independent public accountants concur) in response to FASB releases or other authoritative pronouncements;
(b)    Within 55 days after the end of each of the first three fiscal quarters of each fiscal year, the unaudited consolidated balance sheet of the Borrower and its Consolidated Subsidiaries, as at the end of, and the related unaudited statements of income (or changes in financial position) for such quarter and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter and the corresponding figures as at the end of, and for, the corresponding period in the preceding fiscal year, together with a certificate signed by a Responsible Officer of the Borrower to the effect that such financial statements, while not examined by independent public accountants, fairly present in all material respects the financial condition of the Borrower and its Consolidated Subsidiaries, as at the end of the fiscal quarter and portion of the fiscal year then ended and the results of their operations for the quarter and portion of the fiscal year then ended in conformity with GAAP consistently applied, subject only to year-end audit adjustments and to the absence of footnote disclosure;
(c)    Together with the delivery of the statements referred to in paragraphs (a) and (b) of this Section 5.1, a certificate of the Responsible Officer of the Borrower, substantially in the form of Exhibit C hereto (i) stating whether or not the signer has actual knowledge of any Default or Event of Default and, if so, specifying each such Default or Event of Default of which the signer has actual knowledge, the nature thereof and any action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event and (ii) demonstrating in reasonable detail compliance with the provisions of Sections 6.5 and 6.6 hereof;
(d)    With reasonable promptness, copies of such financial statements and reports that the Borrower may make to, or file with, the SEC and such other information, certificates and data with respect to the Borrower and its Subsidiaries as from time to time may be reasonably requested by the Administrative Agent or any of the Lenders;
(e)    Promptly upon any Responsible Officer of the Borrower or any of its Subsidiaries obtaining actual knowledge of the occurrence of any Default or Event of Default, a certificate of a Responsible Officer of the Borrower specifying the nature and period of existence of such Default or Event of Default and what action the Borrower has taken, is taking and proposes to take with respect thereto; and
(f)    Promptly upon any Responsible Officer of the Borrower or any of its Subsidiaries obtaining actual knowledge of (i) the institution of any action, suit, proceeding, investigation or arbitration by any Governmental Authority or other Person against or affecting the Borrower or any of its Subsidiaries or any of their assets, or (ii) any material development in any such action, suit, proceeding, investigation or arbitration (whether or not previously disclosed to the Lenders), which, in each case would reasonably be expected to have a Material Adverse Effect, the Borrower shall promptly give notice thereof to the Lenders and provide such other information as may be requested by the Administrative Agent or any Lender that is reasonably available to it (without waiver of any applicable evidentiary privilege) to enable the Lenders to evaluate such matters;



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(g)    Together with each set of financial statements required by paragraph (a) above, a certificate of the independent certified public accountants rendering the report and opinion thereon (which certificate may be limited to the extent required by accounting rules or otherwise) stating that, in connection with their audit, nothing has come to their attention that caused them to believe that the Borrower failed to comply with the terms, covenants, provisions or conditions of Sections 5.4, 5.5, 5.6, 6.1, 6.2 and 6.4 through 6.7, inclusive, or if a failure to comply has come to their attention, specifying the nature and period of existence thereof;
(h)    Information required to be delivered pursuant to paragraphs (a), (b) and (d) shall be deemed to have been delivered on the date on which the Borrower provides notice to the Administrative Agent that such information has been posted on the Borrower’s website on the internet at the website address listed on the signature pages of such notice, at www.sec.gov or at another website accessible by the Lenders without charge; provided that the Borrower shall deliver paper copies of the reports and financial statements referred to in paragraphs (a), (b) and (d) of this Section 5.1 to the Administrative Agent or any Lender who requests the Borrower to deliver such paper copies until written notice to cease delivering paper copies is given by the Administrative Agent or such Lender.
The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Bookrunners will make available to the Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “ Borrower Materials ”) by posting the Borrower Materials on IntraLinks, Syndtrak, ClearPar or a substantially similar electronic transmission system (the “ Platform ”) and (b) certain of the Lenders (each, a “ Public Lender ”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Bookrunners and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States Federal and state securities laws ( provided , however , that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.15); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and (z) the Administrative Agent and the Bookrunners shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.”
SECTION 5.2.     Corporate Existence; Compliance with Statutes .
(a)    Do or cause to be done all things necessary to preserve, renew and keep in full force and effect its corporate existence, material rights, licenses, permits and franchises and comply, except where failure to comply, either individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, with all provisions of Applicable Law, and all applicable restrictions imposed by, any Governmental Authority, including without limitation, the Federal Trade Commission’s “Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures” as amended from time to time (16 C.F.R. §§ 436.1 et seq .) and all state laws and regulations of similar import; provided , however , that mergers, dissolutions and liquidations permitted under Section 6.2 shall be permitted.



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(b)    Use, whether directly or indirectly, all Loans and the proceeds of all Loans in a manner that does not result in any violation of any Sanctions by the Borrower, any of its Subsidiaries, any Lender, any Bookrunner, any joint lead arranger or the Administrative Agent.
SECTION 5.3.     Insurance .
Maintain with financially sound and reputable insurers insurance in such amounts and against such risks as are customarily insured against by companies in similar businesses; provided, however , that (a) workmen’s 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 (b) such insurance may contain self-insurance retention and deductible levels consistent with normal industry practices.
SECTION 5.4.     Taxes and Charges .
Duly pay and discharge, or cause to be paid and discharged, before the same shall become delinquent, all federal, state or local Taxes, assessments, levies and other governmental charges, imposed upon the Borrower or any of its Subsidiaries or their respective properties, sales and activities, or any part thereof, or upon the income or profits therefrom, as well as all claims for labor, materials, or supplies which if unpaid would reasonably be expected to result in a Material Adverse Effect; provided , however , that any such Tax, assessment, charge, levy or claim need not be paid if the validity or amount thereof shall currently be contested in good faith by appropriate proceedings and if the Borrower shall have set aside on its books reserves (the presentation of which is segregated to the extent required by GAAP) adequate with respect thereto if reserves shall be deemed necessary by the Borrower in accordance with GAAP; and provided , further , that the Borrower will pay all such Taxes, assessments, levies or other governmental charges forthwith upon the commencement of proceedings to foreclose any material Lien which may have attached as security therefor (unless the same is fully bonded or otherwise effectively stayed).
SECTION 5.5.     ERISA Compliance and Reports .
Furnish to the Administrative Agent: (a) as soon as possible, and in any event within 30 days after any executive officer (as defined in Regulation C under the Securities Act of 1933) of the Borrower actually knows that any ERISA Event with respect to any Plan has occurred, a statement of a Responsible Officer of the Borrower, setting forth details as to such ERISA Event and the action which it proposes to take with respect thereto, together with a copy of the notice of such ERISA Event, if any, required to be filed with the PBGC by the Borrower or any of its Subsidiaries; (b) promptly after receipt thereof, a copy of any notice the Borrower or any of its Subsidiaries may receive from the PBGC relating to the PBGC’s intention to terminate any Plan or to appoint a trustee to administer any Plan; provided that the Borrower shall not be required to notify the Administrative Agent of the occurrence of any of the events set forth in the preceding clauses (a) and (b) unless such event, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect on the Borrower and its Subsidiaries taken as a whole; or (c) promptly upon the reasonable request of the Administrative Agent, copies of each annual and other report filed with the IRS, DOL or PBGC with respect to any Plan.
SECTION 5.6.     Maintenance of and Access to Books and Records; Examinations .
Maintain or cause to be maintained at all times true and complete in all material respects books and records of its financial operations (in accordance with GAAP) and provide the Administrative Agent and its representatives reasonable access to all such books and records and to any of their properties or assets during regular business hours and upon advance written notice ( provided that reasonable access to such books and records and to any of the Borrower’s properties or assets shall be made available to the



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Lenders if an Event of Default has occurred and is continuing), in order that the Administrative Agent may make such audits and examinations and make abstracts from such books, accounts and records (in each case subject to the Borrower or its Subsidiaries’ obligations under applicable confidentiality provisions) and may discuss the affairs, finances and accounts with, and be advised as to the same by, officers and, so long as a representative of the Borrower is present, independent accountants, all as the Administrative Agent may deem appropriate for the purpose of verifying the various reports delivered pursuant to this Agreement or for otherwise ascertaining compliance with this Agreement. Notwithstanding Section 10.4, unless any such visit or inspection is conducted after the occurrence and during the continuance of a Default or an Event of Default, the Borrower shall not be required to pay any costs or expenses incurred by the Administrative Agent, any Lender or any other Person in connection with such visit or inspection.
SECTION 5.7.     Maintenance of Properties .
Keep its properties which are material to its business in good repair, working order and condition consistent with industry practice, ordinary wear and tear excepted, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.
SECTION 5.8.     Changes in Character of Business .
Cause the Borrower and its Subsidiaries taken as a whole to be primarily engaged in the vacation ownership, vacation rental and exchange, lodging and franchising and services businesses.
SECTION 5.9.     FCPA; Sanctions .
The Borrower will maintain in effect and enforce policies and procedures designed to promote and achieve compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with the United States Foreign Corrupt Practices Act of 1977, as amended, and other applicable anti-corruption laws and with all applicable Sanctions, except where failure to maintain and enforce such policies and procedures, either individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
6.
NEGATIVE COVENANTS
From the date of the initial Borrowing hereunder and for so long as any amount shall remain outstanding or unpaid under this Agreement, unless the Required Lenders shall otherwise consent in writing, the Borrower agrees that it will not, nor will it permit any of its Subsidiaries to, directly or indirectly:
SECTION 6.1.     Limitation on Indebtedness .
Incur, assume or suffer to exist any Indebtedness of any Material Subsidiary except:
(a)    Indebtedness in existence on the Closing Date, or required to be incurred pursuant to a contractual obligation in existence on the Closing Date and any refinancing, extensions, renewals or modifications thereof, so long as such refinancing, renewals, extensions or modifications (i) do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, extended or modified (other than increases to pay fees and expenses incurred in connection therewith), and (ii) rank pari-passu with the Indebtedness being refinanced;



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(b)    Indebtedness (including Capital Leases) incurred in connection with or as a component of the purchase price of any property of any Material Subsidiary or that was existing on any property acquired by such Material Subsidiary at the time of acquisition thereof by such Material Subsidiary and assumed in connection with such acquisition (other than Indebtedness issued in connection with, or in anticipation of, such acquisitions) or otherwise incurred to finance the acquisition, construction or improvement of any property (including, without limitation, Indebtedness incurred to finance the cost of acquisition or construction of such property within 24 months after such acquisition or the completion of such improvement or construction); and any refinancing, extension or renewals of such Indebtedness as long as such refinancing, extensions, renewals or modifications (i) do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, extended or modified (other than increases to pay fees and expenses incurred in connection therewith), (ii) do not result in a change of the obligors in respect of such Indebtedness and (iii) rank pari-passu with the Indebtedness being refinanced;
(c)    Guaranty Obligations;
(d)    Indebtedness owing by any Material Subsidiary to the Borrower or any other Subsidiary;
(e)    Indebtedness of any Material Subsidiary issued and outstanding prior to the date on which such Person became a Subsidiary of the Borrower (other than Indebtedness issued in connection with, or in anticipation of, such Person becoming a Subsidiary of the Borrower); provided that immediately prior and on a Pro Forma Basis after giving effect to, such Person becoming a Subsidiary of the Borrower, no Default or Event of Default shall occur or then be continuing and the aggregate principal amount of such Indebtedness, when added to the aggregate outstanding principal amount of Indebtedness permitted by paragraphs (f) and (g) below, shall not exceed the greater of 15% of Consolidated Net Worth and $200,000,000;
(f)    any refinancing, renewal, extension or modification of Indebtedness under paragraph (e) above so long as such refinancing, renewals, extensions or modifications (i) do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, extended or modified (other than increases to pay fees and expenses incurred in connection therewith), and (ii) rank pari-passu with the Indebtedness being refinanced;
(g)    other Indebtedness of any Material Subsidiary in an aggregate principal amount which, when added to the aggregate outstanding principal amount of Indebtedness permitted by paragraphs (e) and (f) above, does not exceed the greater of 15% of Consolidated Net Worth and $200,000,000;
(h)    Securitization Indebtedness;
(i)    derivatives transactions entered into in the ordinary course of business pursuant to hedging programs;
(j)    Non-Recourse Indebtedness in an aggregate principal amount not to exceed $100,000,000;
(k)    Indebtedness of any Material Subsidiary issued and outstanding prior to the date on which such Person became a Material Subsidiary (other than Indebtedness issued in connection with, or in anticipation of, such Person becoming a Material Subsidiary) and any refinancing, renewal, extension or modification of such Indebtedness so long as such refinancing, renewals, extensions or modifications (i) do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, extended,



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or modified (other than increases to pay fees and expenses incurred in connection therewith) and (ii) rank pari-passu with the Indebtedness being refinanced; and
(l)    Indebtedness of the Borrower pursuant to any Fundamental Document.
If the Material Subsidiary’s action or event meets the criteria of more than one of the types of Indebtedness described in the clauses above, the Borrower in its sole discretion may classify such action or event in one or more clauses (including in part under one such clause and in part under another such clause).

SECTION 6.2.     Consolidation, Merger, Sale of Assets .
(a)    Neither the Borrower nor any of its Material Subsidiaries (in one transaction or series of transactions) will wind up, liquidate or dissolve its affairs, or enter into any transaction of merger or consolidation, except any merger, consolidation, dissolution or liquidation (i) in which the Borrower is the surviving entity or if the Borrower is not a party to such transaction then a Subsidiary is the surviving entity or the successor to the Borrower has unconditionally assumed in writing all of the payment and performance obligations of the Borrower under this Agreement and the other Fundamental Documents, (ii) in which the surviving entity becomes a Subsidiary of the Borrower immediately upon the effectiveness of such merger, consolidation, dissolution or liquidation, or (iii) involving a Subsidiary in connection with a transaction permitted by Section 6.2(b); provided , however , that immediately prior to and on a Pro Forma Basis after giving effect to any such transaction described in any of the preceding clauses (i), (ii) and (iii) no Default or Event of Default has occurred and is continuing.
(b)    The Borrower and its Material Subsidiaries (whether in one transaction or series of related transactions) will not sell or otherwise dispose of all or substantially all of the assets of the Borrower and its Subsidiaries, taken as a whole.
(c)    The Borrower will not reincorporate or reorganize in any jurisdiction outside a state of the United States or the District of Columbia.
SECTION 6.3.     Limitations on Liens .
Suffer any Lien on the property of the Borrower or any of the Material Subsidiaries, except:
(a)    Liens for taxes, assessments, governmental charges and other similar obligations not yet due or which are being contested in good faith by appropriate proceedings;
(b)    Liens incidental to the conduct of its business or the ownership of its assets which were not incurred in connection with the borrowing of money, and which do not in the aggregate materially detract from the value of its assets or materially impair the use thereof in the operation of its business;
(c)    Liens securing Indebtedness permitted by Section 6.1(b) if (i) such Liens secure Indebtedness in an amount no greater than cost of the acquisition, construction or improvement of such property so financed (plus fees and expenses incurred in connection therewith); (ii) such Liens do not extend to or cover any property of any Material Subsidiary other than the property so acquired, constructed or improved and, in the case of tangible assets, other property which is an improvement to or is acquired for specific use in connection with such acquired property or which is property being improved by such acquired property and (iii) such transaction does not otherwise violate this Agreement;



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(d)    Liens upon real and/or personal property, which property was acquired after the Closing Date (by purchase, construction or otherwise) by the Borrower or any of its Material Subsidiaries, each of which Liens existed on such property before the time of its acquisition and was not created in anticipation thereof; provided , however , that no such Lien shall extend to or cover any property of the Borrower or such Material Subsidiary other than the respective property so acquired and improvements thereon;
(e)    to the extent not covered by clause (b) above, Liens securing judgments which do not constitute an Event of Default;
(f)    Liens created under any Fundamental Document;
(g)    Liens existing on the Closing Date and any extensions or renewals thereof;
(h)    Liens securing (or covering property constituting the source of payment for) any Indebtedness permitted pursuant to clauses (d), (h) or (j) of Section 6.1;
(i)    to the extent not covered by clause (h) above, Liens on equity interests or other securities issued by a Securitization Entity, securing (or covering property constituting the source of payment for) Securitization Indebtedness; and
(j)    other Liens securing obligations having an aggregate principal amount not to exceed the greater of 15% of Consolidated Net Worth and $200,000,000.
If the Borrower’s or the Material Subsidiary’s action or event meets the criteria of more than one of the types of Liens described in the clauses above, the Borrower in its sole discretion may classify such action or event in one or more clauses (including in part under one such clause and in part under another such clause).
SECTION 6.4.    [Intentionally Omitted].
SECTION 6.5.     Consolidated Leverage Ratio .
Permit the Consolidated Leverage Ratio as of the last day of any Rolling Period, commencing with the Rolling Period ending March 31, 2015, to be greater than 4.25 to 1.0; provided that such maximum ratio may be increased by the Borrower to 5.0 to 1.0 for a period of twelve months after the consummation of a Material Acquisition; provided further , that the maximum Consolidated Leverage Ratio may only be increased as described above for not more than two such twelve month periods during the term of this Agreement, which periods may not be consecutive.
SECTION 6.6.     Consolidated Interest Coverage Ratio .
Permit the Consolidated Interest Coverage Ratio as of the last day of any Rolling Period, commencing with the Rolling Period ending March 31, 2015, to be less than 2.5 to 1.0.
SECTION 6.7.     Accounting Practices .
Establish a fiscal year ending on any date other than December 31, or modify or change accounting treatments or reporting practices except as otherwise required or permitted by GAAP or the SEC.



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SECTION 6.8.     FCPA .
Use, directly or, to the knowledge of the Borrower, indirectly by the Borrower or any Subsidiary, proceeds of any Borrowing for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or other applicable anti-corruption laws.
7.
EVENTS OF DEFAULT
In the case of the happening and during the continuance of any of the following events (herein called “ Events of Default ”):
(a)    any representation or warranty made by the Borrower in this Agreement or any other Fundamental Document or in connection with this Agreement or with the Borrowings hereunder, or any statement or representation made in any report, financial statement, certificate or other document furnished by or on behalf of the Borrower or any of its Subsidiaries to the Administrative Agent or any Lender under or in connection with this Agreement, shall prove to have been false or misleading in any material respect when made or delivered;
(b)    default shall be made in the payment of any principal of or interest on any Loan or of any fees or other amounts payable by the Borrower hereunder, when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise, and (i) in the case of payments of interest, such default shall continue unremedied for five days, and (ii) in the case of payments other than of any principal amount of or interest on any Loan, such default shall continue unremedied for five days after written notice of non-payment has been received by the Borrower from the Administrative Agent;
(c)    default shall be made in the due observance or performance of any covenant, condition or agreement contained in Section 5.1(e) (with respect to notice of Default or Events of Default) or Section 6 of this Agreement;
(d)    default shall be made by (i) the Borrower in the due observance or performance of any covenant, condition or agreement contained in Section 5.2(b) and such default shall continue unremedied for thirty days after the Borrower has, or should reasonably have had, knowledge of such default or (ii) by the Borrower in the due observance or performance of any other covenant, condition or agreement to be observed or performed pursuant to the terms of this Agreement, or any other Fundamental Document and such default shall continue unremedied for thirty days after notice has been given to the Borrower by the Administrative Agent of such default;
(e)    (i) default in payment shall be made with respect to any Indebtedness of the Borrower or any of its Material Subsidiaries (other than Securitization Indebtedness) where the amount or amounts of such Indebtedness exceeds $50,000,000 in the aggregate; or (ii) default in payment or performance shall be made with respect to any Indebtedness of the Borrower or any of its Material Subsidiaries (other than Securitization Indebtedness) where the amount or amounts of such Indebtedness exceeds $50,000,000 in the aggregate, if the effect of such default is to result in the acceleration of the maturity of such Indebtedness; or (iii) any other circumstance shall arise (other than the mere passage of time) by reason of which the Borrower or any Material Subsidiary of the Borrower is required to redeem or repurchase, or offer to holders the opportunity to have redeemed or repurchased, any such Indebtedness (other than Securitization Indebtedness) where the amount or amounts of such Indebtedness exceeds $50,000,000 in the aggregate; provided that clause (iii) shall not apply to secured Indebtedness that becomes due as a result of a voluntary



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sale of the property or assets securing such Indebtedness or Indebtedness that is redeemed or repurchased at the option of the Borrower or any of its Material Subsidiaries; provided , that clauses (ii) and (iii) shall not apply to any Indebtedness of any Subsidiary issued and outstanding prior to the date such Subsidiary became a Material Subsidiary of the Borrower (other than Indebtedness issued in connection with, or in anticipation of, such Subsidiary becoming a Material Subsidiary of the Borrower) if such default or circumstance arises solely as a result of a “change of control” provision applicable to such Indebtedness which becomes operative as a result of the acquisition of such Subsidiary by the Borrower or any of its Subsidiaries; and provided , further , that in the case of any derivative transaction described in Section 6.1(i), each reference in this clause (e) to the amount of $50,000,000 shall mean the amount payable by the Borrower or any of its Material Subsidiaries in connection with a default or “other circumstance” described in clause (i), (ii) or (iii) and not to the notional amount of such derivative transaction;
(f)    the Borrower or any of its Material Subsidiaries shall generally not pay its debts as they become due or shall admit in writing its inability to pay its debts, or shall make a general assignment for the benefit of creditors; or the Borrower or any of its Material Subsidiaries shall commence any case, proceeding or other action seeking to have an order for relief entered on its behalf as debtor or to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property or shall file an answer or other pleading in any such case, proceeding or other action admitting the material allegations of any petition, complaint or similar pleading filed against it or consenting to the relief sought therein; or the Borrower or any Material Subsidiary thereof shall take any action to authorize any of the foregoing;
(g)    any involuntary case, proceeding or other action against the Borrower or any of its Material Subsidiaries shall be commenced seeking to have an order for relief entered against it as debtor or to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property, and such case, proceeding or other action (i) results in the entry of any order for relief against it or (ii) shall remain undismissed for a period of sixty days;
(h)    the occurrence of a Change in Control;
(i)    final judgment(s) for the payment of money in excess of $50,000,000 (to the extent not paid or covered by insurance) shall be rendered against the Borrower or any of its Material Subsidiaries which within thirty days from the entry of such judgment shall not have been discharged or stayed pending appeal or which shall not have been discharged within thirty days from the entry of a final order of affirmance on appeal; or
(j)    an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred (with respect to which the Borrower has a liability which has not yet been satisfied), would result in a Material Adverse Effect;
then, in every such event and at any time thereafter during the continuance of such event, the Administrative Agent may or shall, if directed by the Required Lenders, take any or all of the following actions, at the same or different times: declare the principal of and the interest on the Loans and all other amounts payable hereunder or thereunder to be forthwith due and payable, whereupon the same shall become and be forthwith due and payable, without presentment, demand, protest, notice of acceleration, notice of intent to accelerate or other notice of any kind, all of which are hereby expressly waived, anything in this Agreement to the



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contrary notwithstanding. If an Event of Default specified in paragraphs (f) or (g) above shall have occurred, the principal of and interest on the Loans and all other amounts payable hereunder or thereunder shall thereupon and concurrently become due and payable without presentment, demand, protest, notice of acceleration, notice of intent to accelerate or other notice of any kind, all of which are hereby expressly waived, anything in this Agreement to the contrary notwithstanding and any commitment of the Lenders to make Loans shall thereupon forthwith terminate.
8.
THE ADMINISTRATIVE AGENT
SECTION 8.1.     Administration by Administrative Agent .
The general administration of the Fundamental Documents and any other documents contemplated by this Agreement shall be by the Administrative Agent or its designees. Each of the Lenders hereby irrevocably authorizes the Administrative Agent, at its discretion, to take or refrain from taking such actions as agent on its behalf and to exercise or refrain from exercising such powers under the Fundamental Documents and any other documents contemplated by this Agreement as are delegated by the terms hereof or thereof, as appropriates together with all powers reasonably incidental thereto. The Administrative Agent shall have no duties or responsibilities except as set forth in the Fundamental Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.9), and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries or Affiliates that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.9) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Section 4 or elsewhere herein. Any Lender which is not the Administrative Agent (regardless of whether such Lender bears the title of any other Agent or any similar title, as indicated on the signature pages hereto) for the credit facility hereunder shall not have any duties or responsibilities except as a Lender hereunder.
SECTION 8.2.     Advances and Payments .
(a)    On the date of each Borrowing, the Administrative Agent shall be authorized (but not obligated) to advance, for the account of each of the Lenders, the amount of the Loan to be made by it in accordance with this Agreement. Each of the Lenders hereby authorizes and requests the Administrative Agent to advance for its account, pursuant to the terms hereof, the amount of the Loan to be made by it, unless with respect to any Lender, such Lender has theretofore specifically notified the Administrative



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Agent that such Lender does not intend to fund that particular Loan. Each of the Lenders agrees forthwith to reimburse the Administrative Agent in immediately available funds for the amount so advanced on its behalf by the Administrative Agent pursuant to the immediately preceding sentence. If any such reimbursement is not made in immediately available funds on the same day on which the Administrative Agent shall have made any such amount available on behalf of any Lender in accordance with this Section 8.2, such Lender shall pay interest to the Administrative Agent at a rate per annum equal to the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. Notwithstanding the preceding sentence, if such reimbursement is not made by the second Business Day following the day on which the Administrative Agent shall have made any such amount available on behalf of any Lender or such Lender has indicated that it does not intend to reimburse the Administrative Agent, the Borrower shall immediately pay such unreimbursed advance amount (plus any accrued, but unpaid interest at the rate applicable to ABR Loans) to the Administrative Agent.
(b)    Any amounts received by the Administrative Agent in connection with this Agreement the application of which is not otherwise provided for shall be applied, in accordance with each of the Lenders’ pro rata interest therein where applicable, first, to pay amounts payable to the Administrative Agent solely in its capacity as such, second, to pay accrued but unpaid interest on the Loans, third, to pay the principal balance outstanding on the Loans, and fourth to pay other amount payable to the Leaders. All amounts to be paid to any of the Lenders by the Administrative Agent shall be credited to the Lenders, promptly after collection by the Administrative Agent, in immediately available funds either by wire transfer or deposit in such Lender’s correspondent account with the Administrative Agent, or as such Lender and the Administrative Agent shall from time to time agree.
SECTION 8.3.     Sharing of Setoffs .
Each of the Lenders agrees that if it shall, through the operation of Section 2.21 hereof or the exercise of a right of bank’s lien, setoff or counterclaim against the Borrower, including, but not limited to, a secured claim under Section 506 of Title 11 of the United States Code or other security or interest arising from, or in lieu of, such secured claim and received by such Lender under any applicable bankruptcy, insolvency or other similar law, or otherwise, obtain payment in respect of its Loans as a result of which the unpaid portion of its Loans, is proportionately less than the unpaid portion of any of the other Lenders (a) it shall promptly purchase at par (and shall be deemed to have thereupon purchased) from such other Lenders a participation in the Loans of such other Lenders, so that the aggregate unpaid principal amount of each of the Lenders’ Loans and its participation in Loans of the other Lenders shall be in the same proportion to the aggregate unpaid principal amount of all Loans then outstanding as the principal amount of its Loans prior to the obtaining of such payment was to the principal amount of all Loans outstanding prior to the obtaining of such payment and (b) such other adjustments shall be made from time to time as shall be equitable to ensure that the Lenders share such payment pro rata.
SECTION 8.4.     Notice to the Lenders .
Upon receipt by the Administrative Agent from the Borrower of any communication calling for an action on the part of the Lenders, or upon notice to the Administrative Agent of any Event of Default, the Administrative Agent will in turn immediately inform the other Lenders in writing (which shall include electronic communications, if arrangements for doing so have been approved by the applicable Lender) of the nature of such communication or of the Event of Default, as the case may be.



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SECTION 8.5.     Liability of Administrative Agent .
(a)    The Administrative Agent, when acting on behalf of the Lenders may execute any of its duties under this Agreement by or through its officers, agents, or employees and neither the Administrative Agent nor its directors, officers, agents, or employees shall be liable to the Lenders or any of them for any action taken or omitted to be taken in good faith, or be responsible to the Lenders or to any of them for the consequences of any oversight or error of judgment, or for any loss, unless the same shall happen through its gross negligence or willful misconduct as determined by a final and non-appealable judgment of a court of competent jurisdiction. The Administrative Agent and its directors, officers, agents, and employees shall in no event be liable to the Lenders or to any of them for any action taken or omitted to be taken by it pursuant to instructions received by it from the Required Lenders or in reliance upon the advice of counsel selected by it. Without limiting the foregoing, neither the Administrative Agent nor any of its directors, officers, employees, or agents shall be responsible to any of the Lenders for the due execution, validity, genuineness, effectiveness, sufficiency, or enforceability of, or for any statement, warranty, or representation in, or for the perfection of any security interest contemplated by, this Agreement or any related agreement, document or order, or for the designation or failure to designate this transaction as a “Highly Leveraged Transaction” for regulatory purposes, or shall be required to ascertain or to make any inquiry concerning the performance or observance by the Borrower of any of the terms, conditions, covenants, or agreements of this Agreement or any related agreement or document.
(b)    Neither the Administrative Agent nor any of its directors, officers, employees, or agents shall have any responsibility to the Borrower on account of the failure or delay in performance or breach by any of the Lenders or the Borrower of any of their respective obligations under this Agreement or any related agreement or document or in connection herewith or therewith.
(c)    The Administrative Agent, in such capacity hereunder, shall be entitled to rely on any communication, instrument, or document reasonably believed by it to be genuine or correct and to have been signed or sent by a Person or Persons believed by it to be the proper Person or Persons, and it shall be entitled to rely on advice of legal counsel, independent public accountants, and other professional advisers and experts selected by it.
SECTION 8.6.     Reimbursement and Indemnification .
Each of the Lenders severally and not jointly agrees (to the extent not reimbursed or otherwise paid by the Borrower (pursuant to Section 10.4 or 10.5 hereof)) (i) to reimburse the Administrative Agent, the Syndication Agents and the Bookrunners in the amount of its Applicable Percentage, for any expenses and fees incurred in their respective capacities as such for the benefit of the Lenders under the Fundamental Documents, including, without limitation, counsel fees and compensation of agents and employees paid for services rendered on behalf of the Lenders, and any other expense incurred in connection with the administration or enforcement thereof; and (ii) to indemnify and hold harmless the Administrative Agent, the Syndication Agents and the Bookrunners and any of their respective directors, officers, employees, or agents, on demand, in the amount of its Applicable Percentage, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against it or any of them in their respective capacities as such in any way relating to or arising out of the Fundamental Documents or any action taken or omitted by it or any of them under the Fundamental Documents to the extent not reimbursed by the Borrower or one of its Subsidiaries (except such as shall result from the gross negligence or willful misconduct of the Person seeking indemnification as determined by a final and non-appealable judgment of a court of competent jurisdiction).



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SECTION 8.7.     Rights of Administrative Agent .
It is understood and agreed that JPMorgan Chase Bank, N.A. shall have the same rights and powers hereunder (including the right to give such instructions) as the other Lenders and may exercise such rights and powers, as well as its rights and powers under other agreements and instruments to which it is or may be party, and engage in other transactions with the Borrower or any Subsidiary or other Affiliate thereof as though it were not the Administrative Agent on behalf of the Lenders under this Agreement.
The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent; provided that no such delegation shall limit or reduce in any way the Administrative Agent’s duties and obligations to the Borrower under this Agreement. The Administrative Agent and any such sub-agent, and any Affiliate of the Administrative Agent or any such sub-agent, may perform any and all its duties and exercise its rights and powers through their respective directors, officers, employees, agents and advisors. The exculpatory provisions of Section 8.5 shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
SECTION 8.8.     Independent Investigation by Lenders .
Each of the Lenders acknowledges that it has decided to enter into this Agreement and to make the Loans hereunder, and will continue to make such decisions, based on its own analysis of the transactions contemplated hereby, based on such documents and other information as it has deemed appropriate and on the creditworthiness of the Borrower and agrees that the Administrative Agent shall not bear responsibility therefor.
SECTION 8.9.     Notice of Transfer .
The Administrative Agent may deem and treat any Lender which is a party to this Agreement as the owners of such Lender’s respective portions of the Loans for all purposes, unless and until a written notice of the assignment or transfer thereof executed by any such Lender shall have been received by the Administrative Agent and become effective pursuant to Section 10.3.
SECTION 8.10.     Successor Administrative Agent .
The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right to appoint a successor, which successor shall (i) unless an Event of Default has occurred and is continuing, be approved in writing by the Borrower and (ii) be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders (and approved by the Borrower, if applicable) and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth in clauses (i) and (ii) of the prior sentence; provided that in no event shall any such successor Administrative Agent be a Defaulting Lender; provided further that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Fundamental Documents and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided



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for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Fundamental Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Fundamental Documents, the provisions of this Section 8, Section 10.4 and Section 10.5 shall continue in effect for the benefit of such retiring Administrative Agent, its sub‑agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent
SECTION 8.11.     Agents Generally .
Except as expressly set forth herein, neither any Agent nor any joint lead arranger or joint bookrunner listed on the cover page hereof shall have any powers, duties or responsibilities hereunder or under any other Fundamental Document in its capacity as such; and shall incur no liability, under this Agreement and the other Fundamental Documents.
9.
INTENTIONALLY OMITTED
10.
MISCELLANEOUS
SECTION 10.1.     Notices .
(a)    Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (c)  below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:
(i)    if to the Administrative Agent, to JPMorgan Chase Bank, N.A., JPMorgan Loan Services, 500 Stanton Christiana Road, Ops 2, 3 rd Floor, Newark, DE, 19713, Attention of Loan and Agency Services Group (Facsimile No. 302-634-3301);
(ii)    if to the Borrower for administrative purposes, to it at 22 Sylvan Way, Parsippany, NJ 07054, Attention of Treasurer (Facsimile No. 973-753-6844; Email: Jeffrey.leuenberger@wyn.com ) or Assistant Treasurer (Facsimile No. 973-753-6730; Email: frank.sassano@wyn.com );
(iii)    if to the Borrower in connection with any notice given pursuant to Article VII, to it at 22 Sylvan Way, Parsippany, NJ 07054, Attention of Corporate Secretary (Facsimile No. 973-753-6545; Email:  jennifer.giampietro@wyn.com or steve.meetre@wyn.com ) and to the Treasurer or Assistant Treasurer as described in clause (iii) above, with a copy to Kirkland & Ellis LLP, 601 Lexington Avenue, New York, NY 10022, Attention of Jason Kanner (Facsimile No. 212-446-4900; Email: Jason.kanner@kirkland.com ); and



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(iv)    if to a Lender, to it at its address notified to the Administrative Agent (or set forth in its Assignment and Acceptance or other agreement pursuant to which it became a Lender hereunder);
or such other address as such party may from time to time designate by giving written notice to the other parties hereunder.
(b)    Any party hereto may change its address or facsimile number and other communications hereunder for notices and other communications hereunder by notice to the other parties hereto. Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (c)  below, shall be effective as provided in such subsection (c) .
(c)    Notices and other communication to the Lenders hereunder may be delivered or furnished by electronic communications (including e‑mail, FpML messaging, and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent and the Borrower may each, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
(d)    Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
(e)     The Platform . THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE ADMINISTRATIVE AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “ Agent Parties ”) have any liability to the Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials or notices through the platform, any other electronic platform or electronic messaging service, or through the Internet, In addition, in no event shall the Administrative



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Agent Party have any liability to the Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).
SECTION 10.2.     Survival of Agreement, Representations and Warranties, etc.
All warranties, representations and covenants made by the Borrower herein or in any certificate or other instrument delivered by it or on its behalf in connection with this Agreement shall be considered to have been relied upon by the Administrative Agent and the Lenders and shall survive the making of the Loans herein contemplated regardless of any investigation made by the Administrative Agent or the Lenders or on their behalf and shall continue in full force and effect so long as any amount due or to become due hereunder is outstanding and unpaid. All statements in any such certificate or other instrument shall constitute representations and warranties by the Borrower hereunder.
SECTION 10.3.     Successors and Assigns; Syndications; Loan Sales; Participations .
(a)    Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party ( provided , however , that the Borrower may not assign its rights hereunder without the prior written consent of all the Lenders), and all covenants, promises and agreements by, or on behalf of, the Borrower which are contained in this Agreement shall inure to the benefit of the successors and assigns of the Lenders.
(b)    Each of the Lenders may assign to an Eligible Assignee all or a portion of its interests, rights and obligations under this Agreement (including, without limitation, all or a portion of its Loans at the time owing to it); provided , however , that (1) the amount of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Lender) shall be in a minimum principal amount of $5,000,000 (or, if less, the remaining portion of the assigning Lender’s rights and obligations under this Agreement) unless otherwise agreed by the Borrower and the Administrative Agent, (2) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register (as defined below), an Assignment and Acceptance, together with a processing and recordation fee of $3,500 and (3) no Lender shall assign or sell participations of all or a portion of its interest in a Loan to any Person who is (A) listed on the Specially Designated Nationals and Blocked Persons List maintained by OFAC and/or on any other similar list maintained by OFAC pursuant to any authorizing statute, executive order or regulation; or (B) included within the term “designated national” as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515. Upon such execution, delivery, acceptance and recording, and from and after the effective date specified in each Assignment and Acceptance, which effective date shall be not earlier than five Business Days (or such shorter period approved by the Administrative Agent) after the date of acceptance and recording by the Administrative Agent, (x) the assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (y) the assigning Lender thereunder shall, to the extent provided in such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of the assigning Lender’s rights and obligations under this Agreement, such assigning Lender shall cease to be a party hereto).
(c)    Notwithstanding the other provisions of this Section 10.3, each Lender may at any time make an assignment of its interests, rights and obligations under this Agreement to (i) any Affiliate of such Lender or (ii) any other Lender hereunder without the consent of the Borrower provided that it meets the registration requirements in Section 10.3(b)(3).



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(d)    By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than the representation and warranty that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim, the assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in, or in connection with, this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Fundamental Documents or any other instrument or document furnished pursuant hereto or thereto; (ii) such Lender assignor makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under the Fundamental Documents; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the most recent financial statements delivered pursuant to Sections 5.1(a) and 5.1(b) (or if none of such financial statements shall have then been delivered, then copies of the financial statements referred to in Section 3.4 hereof) and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the assigning Lender, the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Fundamental Documents as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (vi) such assignee agrees that it will be bound by the provisions of this Agreement and will perform in accordance with its terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.
(e)    The Administrative Agent, on behalf of the Borrower, shall maintain at its address at which notices are to be given to it pursuant to Section 10.1, a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders and the Commitments of, and the principal and interest amounts of the Loans owing to, each Lender from time to time (the “ Register ”). The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register as the owner of a Loan or other obligation hereunder as the owner thereof for all purposes of this Agreement and the other Fundamental Documents, notwithstanding any notice to the contrary. Any assignment shall be effective only upon appropriate entries with respect thereto being made in the Register. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.
(f)    Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee and the processing and recordation fee, the Administrative Agent (subject to the right, if any, of the Borrower to require its consent thereto) shall, if such Assignment and Acceptance has been completed and is substantially in the form of Exhibit B hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt written notice thereof to the Borrower.
(g)    Each of the Lenders may, without the consent of the Borrower, the Administrative Agent, sell participations to an Eligible Assignee (a “ Participant ”) in all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment and the Loans owing to it); provided , however , that (i) any such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Participant shall not be granted any voting rights under this Agreement, except with respect to matters requiring the consent of each of the Lenders hereunder, (iii) any such Lender



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shall remain solely responsible to the other parties hereto for the performance of such obligations, (iv) the participating banks or other entities shall be entitled to the cost protection provisions of Sections 2.17, 2.19 and 2.23 hereof (and subject to the limitations and obligations thereof) but a Participant shall not be entitled to receive pursuant to such provisions an amount larger than its share of the amount to which the Lender granting such participation would have been entitled to receive; provided that a Participant shall not be entitled to the benefits of Section 2.23 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.23(e) as though it were a Lender, and (v) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Each Lender that sells a participation, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain a register in which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “ Participant Register ”). The entries in the Participant Register shall be conclusive, and such Lender, the Administrative Agent and the Borrower shall treat each Person whose name is recorded in the Participant Register pursuant to the terms hereof as the owner of such participation for purposes of this Agreement, notwithstanding notice to the contrary.
(h)    The Lenders may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 10.3, disclose to the assignee or Participant or proposed assignee or Participant, any information, including confidential information, relating to the Borrower furnished to the Administrative Agent by or on behalf of the Borrower; provided that prior to any such disclosure, each such assignee or Participant or proposed assignee or Participant agrees in writing to be bound by either the confidentiality provisions of Section 10.15 or other provisions at least as restrictive as Section 10.15.
(i)    Each Lender hereby represents that it is a commercial lender or financial institution which makes loans in the ordinary course of its business and that it will make the Loans hereunder for its own account in the ordinary course of such business; provided , however , that, subject to preceding clauses (a) through (h), the disposition of the Indebtedness held by that Lender shall at all times be within its exclusive control.
(j)    Any Lender may at any time and from time to time pledge, or otherwise grant a security interest in, all or a portion of its rights under this Agreement, including any such pledge or grant to any Federal Reserve Bank or any other central bank, and, with respect to any Lender which is a fund, to the fund’s trustee in support of its obligations to such trustee, and this Section shall not apply to any such pledge or grant; provided that no such pledge or grant shall release a Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party hereto. The Borrower shall, upon receipt of a written request from any Lender, issue a Note to facilitate such transactions.
(k)    Notwithstanding anything to the contrary contained herein, any Lender (a “ Granting Lender ”) may grant to a special purpose funding vehicle (an “ SPC ”), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to Section 2.1 or 2.8, provided that (i) nothing herein shall constitute a commitment to make any Loan by any SPC and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan or fund any other obligation required to be funded by it hereunder, the Granting Lender shall be obligated to make such Loan or fund such obligation pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall satisfy the obligation of the Granting Lenders to make Loans to the same extent, and as if, such Loan were made by the Granting Lender. Each



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party hereto hereby agrees that no SPC shall be liable for any payment under this Agreement for which a Lender would otherwise be liable, for so long as, and to the extent, the related Granting Lender makes such payment. In furtherance of the foregoing, each party hereto hereby agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any SPC, it will not institute against or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section 10.3 any SPC may (i) with notice to, but without the prior written consent of, the Borrower or the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loan to its Granting Lender or to any financial institutions providing liquidity and/or credit facilities to or for the account of such SPC to fund the Loans made by SPC or to support the securities (if any) issued by such SPC to fund such Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of a surety, guarantee or credit or liquidity enhancement to such SPC.
SECTION 10.4.     Expenses .
Whether or not the transactions hereby contemplated shall be consummated, the Borrower agrees to pay all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent, the Syndication Agents and the Bookrunners in connection with the syndication, preparation, execution, delivery and administration of this Agreement and the other Fundamental Documents (and any actual or proposed amendment, modification or waiver of this Agreement or the other Fundamental Documents), the making of the Loans, the reasonable and documented fees and disbursements of Kaye Scholer LLP, counsel to the Administrative Agent, as well as all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent, the Syndication Agents and the Lenders in connection with any restructuring or workout of this Agreement or in connection with the enforcement or protection of the rights of the Administrative Agent, the Syndication Agents and the Lenders in connection with this Agreement or any other Fundamental Document, and with respect to any action which may be instituted by any Person against the Administrative Agent, any Syndication Agent or any Lender in respect of the foregoing, or as a result of any transaction, action or nonaction arising from the foregoing, including but not limited to the reasonable and documented fees and disbursements of any counsel for the Administrative Agent, the Syndication Agents or the Lenders; provided , however , that the Borrower shall not be liable for the fees and expenses of more than one separate firm for the Lenders, unless there shall exist an actual conflict of interest among such Persons, and in such case, not more than two separate firms, in connection with any one such action or any separate but substantially similar or related actions in the same jurisdiction, nor shall the Borrower be liable for any settlement or any proceeding effected without the Borrower’s written consent. Such payments shall be made on the Closing Date and thereafter on demand. The obligations of the Borrower under this Section shall survive the termination of this Agreement and/or the payment of the Loans.
SECTION 10.5.     Indemnity .
Further, by the execution hereof, the Borrower agrees to indemnify and hold harmless the Administrative Agent, the Syndication Agents, the Bookrunners and the Lenders and their respective directors, officers, employees, advisors, Affiliates and agents (each, an “ Indemnified Party ”) from and against any and all expenses (including reasonable and documented fees and disbursements of counsel), losses, claims, damages and liabilities arising out of any claim, litigation, investigation or proceeding (regardless of whether any such Indemnified Party is a party thereto) in any way relating to the transactions contemplated hereby or the use or proposed use of the proceeds, IN ALL CASES, WHETHER OR NOT



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CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE, but excluding therefrom all expenses, losses, claims, damages, and liabilities arising out of or resulting from the gross negligence or willful misconduct of the Indemnified Party seeking indemnification or any of its Related Parties as determined by a final and nonappealable judgment of a court of competent jurisdiction, provided , however , the Borrower shall not be liable for the fees and expenses of more than one separate firm for all such Indemnified Parties (unless there shall exist an actual conflict of interest among such Indemnified Parties, and in such case, not more than two separate firms) in connection with any one such action or any separate but substantially similar or related actions in the same jurisdiction, nor shall the Borrower be liable for any settlement of any proceeding effected without the Borrower’s written consent, and provided further , however , that this Section 10.5 shall not be construed to expand the scope of the reimbursement obligations of the Borrower specified in Section 10.4. The obligations of the Borrower under this Section 10.5 shall survive the termination of this Agreement and/or payment of the Loans. No Indemnified Party shall be liable for any special, indirect, consequential or punitive damages in connection with its activities relating to this Agreement and the other Fundamental Documents.
SECTION 10.6.     CHOICE OF LAW .
THIS AGREEMENT AND THE NOTES HAVE BEEN EXECUTED AND DELIVERED IN THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE AND, IN THE CASE OF PROVISIONS RELATING TO INTEREST RATES, ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
SECTION 10.7.     No Waiver .
No failure on the part of the Administrative Agent or any Lender to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.
SECTION 10.8.     Extension of Maturity .
Except as otherwise specifically provided in Section 1 or 8 hereof, should any payment of principal, interest or any other amount due hereunder become due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day and, in the case of principal, interest shall be payable thereon at the rate herein specified during such extension.
SECTION 10.9.     Amendments, etc.
(a)    Except as expressly set forth in this Agreement (including in Section 2.16), no modification, amendment or waiver of any provision of this Agreement, and no consent to any departure by the Borrower herefrom or therefrom, shall in any event be effective unless the same shall be in writing and signed or consented to in writing by the Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given; provided , however , that no such modification or amendment shall without the written consent of each Lender affected thereby (i) increase or extend the expiration date of the Commitment of a Lender, (ii) alter the stated maturity or principal amount of any installment of any Loan or decrease the rate of interest payable thereon or extend the scheduled date of any payment thereof, (iii) waive a default under Section 7(b) hereof with respect to a scheduled principal



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installment of any Loan, or (iv) amend Section 2.20, Section 8.2(b) or Section 8.3, in each case, in a manner that would alter the pro rata sharing of payments required thereby; and provided , further that, except to the extent reasonably necessary to give effect to Section 2.16, no such modification or amendment shall without the written consent of all of the Lenders (x) amend or modify any provision of this Agreement which provides for the unanimous consent or approval of the Lenders or (y) amend this Section 10.9 or the definition of Required Lenders. No such amendment or modification may adversely affect the rights and obligations of the Administrative Agent hereunder without its prior written consent. No notice to or demand on the Borrower shall entitle the Borrower to any other or further notice or demand in the same, similar or other circumstances. Each holder of a Note shall be bound by any amendment, modification, waiver or consent authorized as provided herein, whether or not a Note shall have been marked to indicate such amendment, modification, waiver or consent and any consent by any holder of a Note shall bind any Person subsequently acquiring a Note, whether or not a Note is so marked. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.
(b)    This Agreement may be amended with the consent of the Administrative Agent, the Borrower and any other Person set forth in the applicable section in order to implement the provisions of Sections 2.16(b)-(e).
(c)    Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (a) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Fundamental Documents and (b) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders.
(d)    Further, notwithstanding anything to the contrary contained in this Section, if the Administrative Agent and Borrower shall have jointly identified an obvious error or any error or omission of a technical or immaterial nature, in each case, in any provision of the Fundamental Documents, then the Administrative Agent and Borrower shall be permitted to amend such provision and such amendment shall become effective without any further action or consent of any other party to any Fundamental Document if the same is not objected to in writing by the Required Lenders within three Business Days following receipt of notice thereof.
SECTION 10.10.     Severability .
Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.11.     SERVICE OF PROCESS; WAIVER OF JURY TRIAL .
(a)    THE ADMINISTRATIVE AGENT, EACH LENDER AND THE BORROWER HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE STATE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY AND TO THE JURISDICTION OF THE UNITED



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STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF BROUGHT BY THE ADMINISTRATIVE AGENT OR A LENDER. THE BORROWER TO THE EXTENT PERMITTED BY APPLICABLE LAW (A) HEREBY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURTS, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE ABOVE‑NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT, AND (B) HEREBY WAIVES THE RIGHT TO ASSERT IN ANY SUCH ACTION, SUIT OR PROCEEDING ANY OFFSETS OR COUNTERCLAIMS EXCEPT COUNTERCLAIMS THAT ARE COMPULSORY OR OTHERWISE ARISE FROM THE SAME SUBJECT MATTER. EACH LENDER AND THE BORROWER HEREBY CONSENTS TO SERVICE OF PROCESS BY MAIL AT ITS ADDRESS TO WHICH NOTICES ARE TO BE GIVEN PURSUANT TO SECTION 10.1 HEREOF. THE BORROWER AGREES THAT ITS SUBMISSION TO JURISDICTION AND CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE ADMINISTRATIVE AGENT AND THE LENDERS. FINAL JUDGMENT AGAINST THE BORROWER IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION (A) BY SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF INDEBTEDNESS OR LIABILITY OF THE SUBMITTING PARTY THEREIN DESCRIBED OR (B) IN ANY OTHER MANNER PROVIDED BY, OR PURSUANT TO, THE LAWS OF SUCH OTHER JURISDICTION, PROVIDED , HOWEVER , THAT THE ADMINISTRATIVE AGENT OR A LENDER MAY AT ITS OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS AGAINST THE BORROWER OR ANY OF ITS ASSETS IN ANY STATE OR FEDERAL COURT OF THE UNITED STATES OR OF ANY COUNTRY OR PLACE WHERE THE BORROWER OR SUCH ASSETS MAY BE FOUND.
(b)    TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED THAT THE PROVISIONS OF THIS SECTION 10.11(b) CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE OTHER PARTIES HAVE RELIED, ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 10.11(b) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH OTHER PARTY TO THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
SECTION 10.12.     Headings .
Section headings used herein are for convenience only and are not to affect the construction of or be taken into consideration in interpreting this Agreement.
SECTION 10.13.     Execution in Counterparts .



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This Agreement may be executed in any number of counterparts, each of which shall constitute an original, but all of which taken together shall constitute one and the same instrument.
SECTION 10.14.     Entire Agreement .
THIS AGREEMENT, THE OTHER FUNDAMENTAL DOCUMENTS, AND THE PROVISIONS OF THE LETTER AGREEMENTS ENTERED INTO FROM TIME TO TIME AMONG THE BORROWER AND ONE OR MORE OF THE BOOKRUNNERS, AGENTS AND/OR THEIR AFFILIATES RELATING TO FEES AND EXPENSES IN CONNECTION WITH THE FACILITY, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
SECTION 10.15.     Confidentiality .
Each of the Administrative Agent and the Lenders agrees that it will not use, either directly or indirectly, any of the Confidential Information except in connection with this Agreement and the transactions contemplated hereby. Neither the Administrative Agent nor any Lender shall disclose to any Person the Confidential Information, except
(a)    to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other professional advisors who need to know the Confidential Information for purposes related to this Agreement or any other Fundamental Document or any transactions contemplated thereby or reasonably incidental to the administration of this Agreement or the other Fundamental Documents (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Confidential Information and agree to keep such Confidential Information confidential in accordance with the provisions of this Section 10.15 or other provisions at least as restrictive as this Section 10.15),
(b)    to the extent requested by any regulatory authority or any self-regulatory body having or claiming jurisdiction or oversight over it or its Affiliates,
(c)    to the extent required by Applicable Law, regulations or by any subpoena or similar legal process, provided that, other than in the case of banking and audit exams, the Administrative Agent or such Lender, as the case may be, shall request confidential treatment of such Confidential Information to the extent permitted by Applicable Law and the Administrative Agent or such Lender, as the case may be, shall, to the extent permitted by Applicable Law, promptly inform the Borrower with respect thereto so that the Borrower may seek appropriate protective relief to the extent permitted by Applicable Law, provided further that in the event that such protective remedy or other remedy is not obtained, the Administrative Agent or such Lender, as the case may be, shall furnish only that portion of the Confidential Information that is legally required and shall disclose the Confidential Information in a manner reasonably designed to preserve its confidential nature,
(d)    to any other Lender party to this Agreement,
(e)    in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder,
(f)    subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its



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rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations,
(g)    with the prior written consent of the Borrower or
(h)    to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 10.15 or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrower, its Affiliates or Representatives, which source, to the reasonable knowledge of the Administrative Agent or any Lender, as may be appropriate, is not prohibited from disclosing such Confidential Information to the Administrative Agent or such Lender by a contractual, legal or fiduciary obligation, to the Borrower, the Administrative Agent or any Lender.
Neither the Administrative Agent nor any Lender shall make any public announcement, advertisement, statement or communication regarding the Borrower, its Affiliates or this Agreement or the transactions contemplated hereby without the prior written consent of the Borrower, except that the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Agents and the Lenders in connection with the administration of this Agreement, the other Fundamental Documents, and the Commitments. The obligations of the Administrative Agent and each Lender under this Section 10.15 shall survive the termination or expiration of this Agreement.
SECTION 10.16.     USA PATRIOT Act .
Each Lender and the Administrative Agent hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent to identify the Borrower in accordance with the Act. The Borrower shall promptly provide such information upon request by the Administrative Agent or any Lender to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act. In connection therewith, the Administrative Agent and each Lender hereby agrees that the confidentiality provisions set forth in Section 10.15 shall apply to any non-public information provided to it by the Borrower pursuant to this Section 10.16.
SECTION 10.17.     Replacement of Lenders .
If any Lender refuses to consent to an amendment, modification or waiver of this Agreement that is approved by the Required Lenders pursuant to Section 10.9 (a “ Non-Consenting Lender ”), if any Lender makes a claim for payment under Section 2.17 or 2.18, if any Lender is a Defaulting Lender, or under any other circumstances set forth herein expressly providing that the Borrower shall have the right to replace a Lender as a party to this Agreement, the Borrower may, upon notice to such Lender and the Administrative Agent and subject to Section 2.19, replace such Lender by causing such Lender to assign its Commitment (with the assignment fee to be paid by the Borrower in such instance) pursuant to Section 10.3 to one or more Eligible Assignees procured by the Borrower upon receipt of accrued fees and interest and all other amounts due and owing to it.
SECTION 10.18.     No Advisory or Fiduciary Responsibility .
In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Fundamental Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that:



66


(i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent , the Lenders and the other Agents are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, the Lenders and the other Agents, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Fundamental Documents; (ii) (A) the Administrative Agent, each Lender and each other Agent has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) neither the Administrative Agent nor any Lender or other Agent has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Fundamental Documents; and (iii) the Administrative Agent, the Lenders and the other Agents and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and neither the Administrative Agent nor any Lender or other Agent has any obligation to disclose any of such interests to the Borrower or its Affiliates.  The Borrower hereby agrees that it will not claim that any of the Administrative Agent, the Lenders and the other Agents has rendered advisory services of any nature or respect or owes a fiduciary duty or similar duty to the Borrower in connection with any aspect of any transaction contemplated hereby.
SECTION 10.19.     Acknowledgment and Consent to Bail-in of EEA Financial Institutions .
Notwithstanding anything to the contrary in any Fundamental Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Fundamental Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b)    the effects of any Bail-In Action on any such liability, including, if applicable:
(i)    a reduction in full or in part or cancellation of any such liability;
(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Fundamental Document; or
(iii)    the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.
SECTION 10.20.     Electronic Execution of Assignments and Certain Other Documents .
The words “execute,” “execution,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated



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hereby (including without limitation Assignment and Acceptance, amendments or other modifications, Borrowing notices, waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that notwithstanding anything contained herein to the contrary the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it.







IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and the year first above written.
WYNDHAM WORLDWIDE CORPORATION,
as Borrower

By: /s/ Jeffrey Leuenberger
Name: Jeffrey Leuenberger
Title: Senior Vice President and Treasurer

JPMORGAN CHASE BANK, N.A, as Administrative Agent and Lender

By: /s/ Nadeige Dang
Name: Nadeige Dang
Title: Vice President

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Co-Syndication Agent and Lender

By: /s/ James Travagline
Name: James Travagline
Title: Director

BANK OF AMERICA, N.A., as Co-Syndication Agent and Lender

By: /s/ Suzanne E. Pickett
Name: Suzanne E. Pickett
Title: Vice President

BRANCH BANKING AND TRUST COMPANY,
as Lender

By: /s/ Jeff Skalka
Name: Jeff Skalka
Title: Vice President

SUNTRUST BANK, as Lender

By: /s/ Johnetta Bush
Name: Johnetta Bush
Title: Vice President






AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED, as Lender

By: /s/ Robert Grillo
Name: Robert Grillo
Title: Director

COMPASS BANK, as Lender

By: /s/ Brian Tuerff
Name: Brian Tuerff
Title: Senior Vice President

THE BANK OF NOVA SCOTIA, as Lender

By: /s/ Michael Grad
Name: Michael Grad
Title: Director

U.S. BANK NATIONAL ASSOCIATION, as Lender

By: /s/ Allison Burgun
Name: Allison Burgun
Title: Vice President

COMERICA BANK, as Lender

By: /s/ Mark J. Leveille
Name: Mark J. Leveille
Title: Vice President

BANK OF HAWAII, as Lender

By: /s/ John McKenna
Name: John McKenna
Title: Senior Vice President







SIGNATURE PAGE TO CREDIT AGREEMENT     
        




Schedule 2.1

Commitments and Applicable Percentages

Lender
Commitment
Applicable Percentage
JPMorgan Chase Bank, N.A.
$46,000,000.00
14.153846154
Wells Fargo Bank, National Association
$46,000,000.00
14.153846154
Bank of America, N.A.
$46,000,000.00
14.153846154
Branch Banking and Trust Company
$35,000,000.00
10.769230769
SunTrust Bank
$35,000,000.00
10.769230769
Australia and New Zealand Banking Group Limited
$23,000,000.00
7.076923077
Compass Bank
$23,000,000.00
7.076923077
The Bank of Nova Scotia
$23,000,000.00
7.076923077
US Bank, National Association
$23,000,000.00
7.076923077
Comerica Bank
$15,000,000.00
4.615384615
Bank of Hawaii
$10,000,000.00
3.076923077
Total
$325,000,000.00
100.000000000%






Schedule 3.16

MATERIAL SUBSIDIARIES

1. Wyndham Hotel Group LLC
2. Wyndham Destination Network, Inc.
3. Wyndham Destination Network Subsidiary, LLC
4. Wyndham Vacation Ownership, Inc.
5. WER Luxembourg I SARL
6. WER Luxembourg II SARL
7. PointLux S.a.r.l
8. EMEA Holdings C. V.








EXHIBIT A

FORM OF
OPINION OF KIRKLAND & ELLIS LLP






March [__], 2016
To the Agents
and each of the Lenders under the
Credit Agreement (referred to below)
on the date hereof (the “
Lenders ”):
Re:
Credit Agreement dated as of the date hereof, by and among WYNDHAM WORLDWIDE CORPORATION, a Delaware corporation (the “ Borrower ”), the financial institutions from time to time party thereto as lenders (the “ Lenders ”), WELLS FARGO BANK, NATIONAL ASSOCIATION and BANK OF AMERICA, N.A., as co-syndication agents (the “ Co-Syndication Agents ”), and JPMORGAN CHASE BANK, N.A., as administrative agent (the “ Administrative Agent ”; together with the Co-Syndication Agents, the “ Agents ”) for the Lenders (such credit agreement herein referred to as the “ Credit Agreement ”)
Ladies and Gentlemen:
We are issuing this opinion letter in our capacity as counsel to and at the request of the Borrower in respect of the Credit Agreement.
The opinions expressed herein are being provided pursuant to Section   4.1(e) of the Credit Agreement. Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement (with references herein to the Credit Agreement and each document defined therein meaning the Credit Agreement and each such document as executed and delivered on the date hereof). The Lenders and the Agents are sometimes referred to in this opinion letter as “ you ”.
In connection with the preparation of this letter, we have, among other things, reviewed executed counterparts of:
(a)
the Credit Agreement; and
(b)
[the Notes delivered to the Lenders on the date hereof.]

For purposes hereof, the documents listed in items (a) and (b) above (each in the form reviewed by us for purposes of this opinion letter) are called the “ Operative Documents .” The term “ Organizational Documents ” whenever used in the letter means the certificate of incorporation of the Borrower, and the by-laws of the Borrower, as in effect on the date hereof.
Subject to the assumptions, qualifications, exclusions and other limitations which are identified in this opinion letter, we advise you, and with respect to each legal issue addressed in this opinion letter, it is our opinion, that:
1.
The Borrower is a corporation existing and in good standing under the General Corporation Law of the State of Delaware (“ DGCL ”). For purposes of this opinion, we have relied exclusively upon certificates issued by a governmental authority in the relevant jurisdiction,





and such opinions are not intended to provide any conclusion or assurance beyond that conveyed by those certificates.
2.
The Borrower has the corporate power to execute, deliver and perform its obligations under the Operative Documents.
3.
The Borrower has taken the corporate action necessary to authorize its execution, delivery and performance of the Operative Documents.
4.
Each Operative Document has been duly executed and delivered on behalf of the Borrower.
5.
Each of the Operative Documents is a valid and binding obligation of the Borrower and is enforceable against the Borrower in accordance with its terms.
6.
The execution and delivery by the Borrower of the Operative Documents, and the performance by the Borrower of the Operative Documents, will not (i) constitute a violation of the Organizational Documents of the Borrower or (ii) constitute a violation of any applicable provision of existing State of New York law or United States federal statutory law or published governmental regulation applicable to the Borrower, in each case to the extent covered by this opinion letter, or of any applicable provision of the DGCL.
7.
No consent, approval, authorization or order of, or filing with, any United States federal or New York governmental authority or body or any Delaware governmental agency or body acting pursuant to the DGCL is required in order for the Borrower to obtain the right to execute and deliver, or perform its obligations under any Operative Document, except for (i) those obtained or made prior to the date hereof, (ii) consents, approvals, authorizations, orders or filings required in connection with the ordinary course of conduct by the Borrower of its business and ownership or operation by the Borrower of its assets in the ordinary course of business (as to which we express no opinion), (iv) those that may be required under federal securities laws and regulations or state “blue sky” laws and regulations (as to which we express no opinion) or any other laws, regulations or governmental requirements which are excluded from the coverage of this opinion letter and (v) consents, approvals, authorizations, orders or filings that may be required by any banking, insurance or other regulatory statutes to which you may be subject (as to which we express no opinion).
8.
The Borrower is not an “investment company” required to be registered as such under the Investment Company Act of 1940, as amended, or the rules and regulations thereunder.
9.
Assuming application of the proceeds of the Loans as contemplated by the Credit Agreement and, for purposes of Regulation X of the Board of Governors of the Federal Reserve System, no Lender or Agent is subject to Regulation T of the Board of Governors of the Federal Reserve System, the execution and delivery of the Credit Agreement by the Borrower and the making of the Loans under the Credit Agreement will not violate Regulation U or X of the Board of Governors of the Federal Reserve System.


2




With your consent, we have assumed for purposes of this letter and the opinions herein:
(a) that each document we have reviewed for purposes of this letter is accurate and complete, each such document that is an original is authentic, each such document that is a copy conforms to an authentic original, and all signatures on each such document are genuine, and that all natural persons who have signed any document have the legal capacity to do so;
(b) that each Operative Document and every other agreement we have examined for purposes of this letter has been duly authorized, executed and delivered by the parties thereto and constitutes a valid and binding obligation of each party to that document, enforceable against each such party in accordance with its respective terms and that each such party has satisfied all legal requirements that are applicable to such party to the extent necessary to entitle such party to enforce such agreement and that each party to any Operative Document is in good standing and validly existing under the laws of its jurisdiction of organization (except that we make no such assumption in this paragraph (b) with respect to the Borrower);
(c) there are no agreements or understandings among the parties, written or oral (other than the Operative Documents), and there is no usage of trade or course of prior dealing among the parties that would, in either case, define, supplement or qualify the terms of the Operative Documents; and
(d) that the status of the Operative Documents as legally valid and binding obligations of the parties is not affected by any (i) breaches of, or defaults under, agreements or instruments, (ii) violations of statutes, rules, regulations or court or governmental orders, or (iii) failures to obtain required consents, approvals or authorizations from, or make required registrations, declarations or filings with, governmental authorities, provided that we make no such assumption to the extent we have opined as to such matters with respect to the Borrower herein.
In preparing this letter, we have relied without any independent verification upon: (i) information contained in certificates obtained from governmental authorities; (ii) factual information represented to be true in the Operative Documents; (iii) factual information provided to us in a support certificate signed by the Borrower; and (iv) factual information we have obtained from such other sources as we have deemed reasonable; and we have examined the originals or copies certified to our satisfaction, of such Organizational Documents and other corporate records of the Borrower as we deem necessary for or relevant to our opinions. We have assumed without investigation that the information upon which we have relied is accurate and does not omit disclosures necessary to prevent such information from being misleading.
The terms “ knowledge ,” “ actual knowledge ” and “ aware ” whenever used in this letter with respect to our firm mean conscious awareness at the time this letter is delivered on the date it bears by the lawyers with Kirkland & Ellis LLP at that time who spent substantial time representing the Borrower in connection with the Operative Documents (herein called our “ Designated Transaction Lawyers ”).
Each opinion (an “ enforceability opinion ”) in this letter that any particular contract is a valid and binding obligation, is enforceable in accordance with its terms is subject to: (i)


3




applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and judicially developed doctrines in this area such as substantive consolidation and equitable subordination; (ii) the effect of general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity); (iii) an implied covenant of good faith and fair dealing; and (iv) other commonly recognized statutory and judicial constraints on enforceability including statutes of limitations. “General principles of equity” include but are not limited to: principles limiting the availability of specific performance and injunctive relief; principles which limit the availability of a remedy under certain circumstances where another remedy has been elected; principles requiring reasonableness, good faith and fair dealing in the performance and enforcement of an agreement by the party seeking enforcement; principles which may permit a party to cure a material failure to perform its obligations; and principles affording equitable defenses such as waiver, laches and estoppel.
Each enforceability opinion is also subject to the qualification that certain provisions of the Operative Documents may not be enforceable in whole or in part, although the inclusion of such provisions does not render the Operative Documents invalid, and the Operative Documents and the laws of the State of New York contain adequate remedial provisions for the practical realization of the rights and benefits afforded thereby.
Each enforceability opinion is further subject to the effect of rules of law that may render guaranties or other similar instruments or agreements unenforceable under circumstances where your actions, failures to act or waivers, amendments or replacement of the Operative Documents (i) so radically change the essential nature of the terms and conditions of the guaranteed obligations and the related transactions that, in effect, a new relationship has arisen between you and the Borrower which is substantially and materially different from that presently contemplated by the Operative Documents, (ii) release the primary obligor, or (iii) impair the guarantor’s recourse against the primary obligor.
We also express no opinion regarding the enforceability of any so-called “fraudulent conveyance or fraudulent transfer savings clauses” and any similar provisions in any Operative Document, to the extent such provisions purport to limit the amount of the obligations of any party or the right to contribution of any other party with respect to such obligations.
We render no opinion with regard to usury or other laws limiting or regulating the maximum amount of interest that may be charged, collected, received or contracted for other than the internal laws of the State of New York, and without limiting the foregoing, we expressly disclaim any opinion as to the usury or other such laws of any other jurisdiction (including laws of other states made applicable through principles of Federal preemption or otherwise) which may be applicable to the transactions contemplated by the Operative Documents.
Nothing contained in this letter covers or otherwise addresses any of the following types of provisions which may be contained in the Operative Documents:
(i) provisions mandating contribution towards judgments or settlements among various parties;


4




(ii) waivers of benefits and rights to the extent they cannot be waived under applicable law;
(iii) provisions providing for penalties, liquidated damages, acceleration of future amounts due (other than principal) without appropriate discount to present value, late charges, prepayment charges, or increased interest rates upon default;
(iv) provisions which might require indemnification or contribution in violation of general principles of equity or public policy, including, without limitation, indemnification or contribution obligations which arise out of the failure to comply with applicable state or federal securities laws;
(v) agreements to submit to the jurisdiction of any particular court or other governmental authority (either as to personal or subject matter jurisdiction), except to the extent such submission to the courts of the State of New York is made in compliance with the statutory laws of the State of New York; provisions restricting access to courts; waiver of service of process requirements which would otherwise be applicable; waiver of the right to a jury trial and provisions otherwise purporting to affect the jurisdiction and venue of courts;
(vi) choice-of-law provisions, except to the extent such choice of law of New York law as the governing law is made in compliance with the statutory laws of the State of New York;
(vii) intentionally omitted;
(viii) provisions that authorize you to set off and apply any deposits at any time held, and any other indebtedness at any time owing, by you to or for the account of the Borrower, or
(ix) requirements in the Operative Documents specifying that provisions thereof may only be waived in writing.
Except as expressly otherwise set forth in this letter, our advice on every legal issue addressed in this letter is based exclusively on the internal laws of the State of New York or the Federal law of the United States which, in each case, in our experience is generally applicable both to general business organizations which are not engaged in regulated business activities and to transactions of the type contemplated in the Operative Documents between the Borrower, on the one hand, and you, on the other hand (but without our having made any special investigation as to any other laws), except that we express no opinion or advice as to any law or legal issue (a) which might be violated by any misrepresentation or omission or a fraudulent act, or (b) to which the Borrower may be subject as a result of your legal or regulatory status, your sale or transfer of the Loans or interests therein or your involvement in the transactions contemplated by the Operative Documents or the Credit Agreement.
For purposes of paragraphs 1 through 4 and 6(i) our opinions are based on the DGCL (without regard to judicial interpretation thereof or rules or regulations promulgated thereunder), as published by Aspen Publishers, Inc., as supplemented through March 1, 2016, with respect to the DGCL. We note however that we are not admitted to practice law in the State of Delaware,


5




and without limiting the forgoing we expressly disclaim any opinions regarding Delaware contract law or general Delaware law that may be incorporated expressly or by operation of law into the DGCL or into any Organizational Document entered into pursuant thereto.
None of the opinions or other advice contained in this letter considers or covers: (i) any federal or state securities (or “blue sky”) laws or regulations (other than our opinion in paragraph 8 regarding the Investment Company Act) or Federal Reserve Board margin regulations (other than our opinion in paragraph 9) or (ii) federal or state antitrust and unfair competition laws and regulations, pension and employee benefit laws and regulations, compliance with fiduciary duty requirements, federal and state environmental, land use and subdivision, tax, racketeering (e.g., RICO), health and safety (e.g., OSHA), and labor laws and regulations, federal and state laws, regulations and policies concerning national and local emergency, possible judicial deference to acts of sovereign states and criminal and civil forfeiture laws, and other federal and state statutes of general application to the extent they provide for criminal prosecution (e.g., mail fraud and wire fraud statutes).
We also express no opinion regarding any laws relating to terrorism or money laundering, including Executive Order No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) (the “Terrorism Executive Order”) or any related enabling legislation or any other similar executive order (collectively with the Terrorism Executive Order, the “Executive Orders”), the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56, the “Patriot Act”), any sanctions and regulations promulgated under authority granted by the Trading with the Enemy Act, 50 U.S.C. App. 1-44, as amended from time to time, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, as amended from time to time, the Iraqi Sanctions Act, Publ. L. No. 101-513; United Nations Participation Act, 22 U.S.C. § 287c, as amended from time to time, the International Security and Development Cooperation Act, 22 U.S.C. § 2349 aa-9, as amended from time to time, The Cuban Democracy Act, 22 U.S.C. §§ 6001-10, as amended from time to time, The Cuban Liberty and Democratic Solidarity Act, 18 U.S.C. §§ 2332d and 2339b, as amended from time to time, and The Foreign Narcotics Kingpin Designation Act, Publ. L. No. 106-120, as amended from time to time.
We express no opinion as to what law might be applied by any courts other than the courts of the State of New York to resolve any issue addressed in this letter. We advise you that issues addressed by this letter may be governed in whole or in part by other laws, but we express no opinion as to the whether any relevant difference exists between the laws upon which our opinions are based and any other laws which may actually govern.
This opinion letter speaks as of the time of its delivery on the date it bears. We do not assume any obligation to provide you with any subsequent opinion or advice by reason of any fact about which our Designated Transaction Lawyers did not have actual knowledge at that time, by reason of any change subsequent to that time in any law covered by any of our opinions, or for any other reason.
You may rely upon this letter only for the purpose served by the provision in the Credit Agreement cited in the second paragraph of this opinion letter in response to which it has been


6




delivered. Without our written consent: (i) no person other than you may rely on this opinion letter for any purpose; (ii) this opinion letter may not be cited or quoted in any financial statement, prospectus, private placement memorandum or other similar document; (iii) this opinion letter may not be cited or quoted in any other document or communication which might encourage reliance upon this opinion letter by any person or for any purpose excluded by the restrictions in this paragraph; and (iv) copies of this opinion letter may not be furnished to anyone for purposes of encouraging such reliance. Notwithstanding the foregoing, financial institutions which subsequently become Lenders in accordance with the terms of Section 10.3 of the Credit Agreement may rely on this opinion letter as of the time of its delivery on the date hereof as if this letter were addressed to them.
 
Sincerely,
 
 
 
KIRKLAND & ELLIS LLP
 
 





7




EXHIBIT B

FORM OF
ASSIGNMENT AND ACCEPTANCE

Reference is made to the Credit Agreement dated as of March 24, 2016 (as the same may be amended, supplemented or otherwise modified, renewed or replaced from time to time, the “ Credit Agreement ”), among WYNDHAM WORLDWIDE CORPORATION (the “ Borrower ”), the Lenders referred to therein, the Syndication Agents named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
The Assignor identified on Schedule l hereto (the “ Assignor ”) and the Assignee identified on Schedule l hereto (the “ Assignee ”) agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Effective Date (as defined below), the interest described in Schedule 1 hereto (the “ Assigned Interest ”) in and to the Assignor’s rights and obligations under the Credit Agreement with respect to the Loan(s) at the time owing to it as are set forth on Schedule 1 hereto in the amount(s) as are set forth on Schedule 1 hereto, provided , however , it is expressly understood and agreed that (i) the Assignor is not assigning to the Assignee and the Assignor shall retain (A) all of the Assignor’s rights under Section 2.17 of the Credit Agreement with respect to any cost, reduction or payment incurred or made prior to the Effective Date, including without limitation the rights to indemnification and to reimbursement for taxes, costs and expenses and (B) any and all amounts paid to the Assignor prior to the Effective Date and (ii) both Assignor and Assignee shall be entitled to the benefits of Sections 10.4 and 10.5 of the Credit Agreement.
2.      The Assignor (a) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or with respect to the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Fundamental Documents or any other instrument or document furnished pursuant thereto, other than that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim and (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under the Credit Agreement or any other Fundamental Document or any other instrument or document furnished pursuant hereto or thereto.
3.      The Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Sections 5.1(a)

        

2

and 5.1(b) thereof (or if none of such financial statements shall have then been delivered, then copies of the financial statements referred to in Section 3.4 thereof) and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it will, independently and without reliance upon the Assignor, the Administrative Agent or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Fundamental Documents as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender; and (f) if the Assignee is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee.
4.      Following the execution of this Assignment and Acceptance, it will be delivered to the Administrative Agent for acceptance by it and recording by the Administrative Agent pursuant to Section 10.3 of the Credit Agreement, effective as of the Effective Date (which shall not, unless otherwise agreed to by the Administrative Agent, be earlier than five Business Days after the date of acceptance and recording by the Administrative Agent) of the executed Assignment and Acceptance.
5.      Upon such acceptance and recording, from and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to the Effective Date or accrue subsequent to the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves.
6.      From and after the Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and under the other Fundamental Documents and shall be bound by the provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement.
7.      This Assignment and Acceptance shall be governed by and construed in accordance with the laws of the State of New York.
8.      This Assignment and Acceptance may be executed in counterparts, each of which shall be deemed to constitute an original, but all of which when taken together shall constitute one and the same instrument.

        

3

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed as of the date first above written by their respective duly authorized officers on Schedule 1 hereto.


        



Schedule 1
to Assignment and Acceptance with respect to
the Credit Agreement dated as of March 24, 2016, among
WYNDHAM WORLDWIDE CORPORATION (the “ Borrower ”),
the Lenders referred to therein, the Syndication Agents
named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent

Legal Name of Assignor: ______________________
Legal Name of Assignee: ______________________
Effective Date of Assignment:
________________________
 
The outstanding balance of Loans owed to Assignor (unreduced by any assignments thereof which have not yet become effective):
$________
 
 
The Loans being assigned hereby:
 
(i) Principal Amount:
$________
(ii) Interest Rate Type:
  ________
(iii) Interest Period and last day thereof:
  ________
(iv) Amount of such Loan being assigned (must be $5,000,000 or more)
$________
 
 
[Consented to and] 1 Accepted:
 
 
 
JPMORGAN CHASE BANK, N.A., as Administrative Agent
_________________________, as Assignor
 
 
By: _____________________________
By: ________________________________
Name:
Name:
Title:
Title:
 
 
 
_________________________, as Assignee
 
 
 
By: ________________________________
 
Name:
 
Title:
 
 
[Consented to:   2
 
WYNDHAM WORLDWIDE CORPORATION, as Borrower
 
 
 
By: _____________________________
 
Name:
 
Title:]
 

 
1 To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.
2 The consent of the Borrower shall not be required so long as an Event of Default has occurred and is continuing (or, at any time, if Assignee is a Lender or an Affiliate of a Lender).

        




EXHIBIT C
FORM OF
COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to Section 5.1(c) of the Credit Agreement dated as of March 24, 2016 (as the same may be amended, supplemented or otherwise modified, renewed or replaced from time to time, the “ Credit Agreement ”), among WYNDHAM WORLDWIDE CORPORATION (the “ Borrower ”), the Lenders referred to therein, the Syndication Agents named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
1. I am the duly elected, qualified and acting [chief executive officer, president, chief accounting officer, chief financial officer, treasurer or assistant treasurer] of the Borrower and as such am a Responsible Officer of the Borrower.
2.      I have reviewed and am familiar with the contents of this Compliance Certificate.
3.      I have reviewed the terms of the Credit Agreement and the Fundamental Documents and have made or caused to be made under my supervision, a review in reasonable detail of the transactions and condition of the Borrower during the accounting period covered by the financial statements attached hereto as Attachment 1 (the “ Financial Statements ”). Such review did not disclose the existence during or at the end of the accounting period covered by the Financial Statements, and I have no knowledge of the existence, as of the date of this Compliance Certificate, of any condition or event which constitutes a Default or Event of Default[, except as set forth below].
4.      Attached hereto as Attachment 2 are the computations showing compliance with the covenants set forth in Section 6.5 and 6.6 of the Credit Agreement.
The foregoing certifications, together with the computations and comparisons set forth in the attachment hereto and the financial statements attached to this Compliance Certificate in support hereof, are made and delivered this ___ day of _____________, ______ pursuant to Section 5.1(c) of the Credit Agreement.
IN WITNESS WHEREOF, I have executed this Compliance Certificate this _____ day of ____, 20___.
 
WYNDHAM WORLDWIDE CORPORATION
 
 
 
 
 
Name:
 
Title:



        




Attachment 1
to Compliance Certificate

[Attach Financial Statements]


        




Attachment 2
to Compliance Certificate

The information described herein is as of ______, ____, and pertains to the period from _________, ____ to ________________ __, ____.
[Set forth Covenant Calculations]


        




EXHIBIT D
FORM OF
BORROWING REQUEST
Date: ___________ ___, 20__


To:
JPMorgan Chase Bank, N.A.,
as Administrative Agent
500 Stanton Road, Ops 2
Third Floor
Newark, DE 19713
Facsimile No: 302-634-3301
Ladies and Gentlemen:
The undersigned, Wyndham Worldwide Corporation (the “ Borrower ”), refers to the Credit Agreement dated as of March 24, 2016 (as the same may be amended, supplemented or otherwise modified, renewed or replaced from time to time, the “ Credit Agreement ”), among Wyndham Worldwide Corporation, the Lenders referred to therein, the Syndication Agents named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. The Borrower hereby gives you notice pursuant to Section 2.3 of the Credit Agreement that it requests a Borrowing under the Credit Agreement and in that connection sets forth below the terms on which such Borrowing is requested to be made:
 (A) Date of the Borrowing (which is a Business Day)
_____________________
 
 
(B) Principal Amount of the
Borrowing
$ ___________________
 
 
(C) Interest Rate Type of the
Borrowing
1
_____________________
 
 
(D) Interest Period(s) with respect to the LIBOR Loan(s) and the last day of such Interest Period(s) 2
_____________________






 
1 LIBOR Borrowing or ABR Borrowing .
2 Shall be subject to the definition of “Interest Period” and shall not end later than the Maturity Date. [Complete only in the case where LIBOR Loan(s) are being requested.]


        


2

Upon acceptance of the Loans to be made by the Lenders in response to this request, the Borrower shall be deemed to have represented and warranted that the conditions to each Loan specified in Sections 4.2(b) and 4.2(c) of the Credit Agreement have been satisfied.
 
Very truly yours,
 
 
 
WYNDHAM WORLDWIDE CORPORATION
 
 
 
By: ________________________________________
 
Name:
 
Title:


        




EXHIBIT E

FORM OF
NEW LENDER SUPPLEMENT

Dated:    ______________ __, 20__

Reference is made to the Credit Agreement dated as of March 24, 2016 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Wyndham Worldwide Corporation (the “ Borrower ”), the Lenders referred to therein, the Syndication Agents named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
The New Lender identified on Schedule l hereto (the “ New Lender ”), the Administrative Agent and the Borrower agree as follows:
1. The New Lender hereby irrevocably agrees to make an Incremental Term Loan to the Borrower in the amount set forth on Schedule 1 hereto (its “ Incremental Loan ”) pursuant to Section 2.16 of the Credit Agreement. From and after the Effective Date (as defined below), the New Lender will be a Lender under the Credit Agreement with respect to the Incremental Loan.
2.      The Administrative Agent (a) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or with respect to the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement; and (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower, any of its Subsidiaries or any other obligor or the performance or observance by the Borrower, any of its Subsidiaries or any other obligor of any of their respective obligations under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto.
3.      The New Lender (a) represents and warrants that it is legally authorized to enter into this New Lender Supplement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1 of the Credit Agreement (or, if no such financial statements have been delivered, copies of the financial statements delivered pursuant to Section 3.4 thereof) and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this New Lender Supplement; (c) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit

        


2

Agreement or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.
4.      The effective date of this New Lender Supplement shall be the Increase Effective Date described in Schedule 1 hereto (the “ Effective Date ”). Following the execution of this New Lender Supplement by each of the New Lender and the Borrower, it will be delivered to the Administrative Agent for acceptance and recording by it pursuant to the Credit Agreement, effective as of the Effective Date.
5.      Upon such acceptance and recording, from and after the Effective Date, the Administrative Agent shall make all payments in respect of the Incremental Loan (including payments of principal, interest, fees and other amounts) to the New Lender for amounts which have accrued on and subsequent to the Effective Date.
6.      From and after the Effective Date, the New Lender shall be a party to the Credit Agreement and, to the extent provided in this New Lender Supplement, have the rights and obligations of a Lender thereunder and shall be bound by the provisions thereof.
7.      This New Lender Supplement shall be governed by and construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this New Lender Supplement to be executed as of the date first above written by their respective duly authorized officers on Schedule 1 hereto.


        




Schedule 1
to New Lender Supplement
Name of New Lender:     
Increase Effective Date 1 :     
Principal Amount of Incremental Loan: $     
Applicable Percentage of New Lender:     
[NAME OF NEW LENDER]
WYNDHAM WORLDWIDE CORPORATION
    By:______________________________
    By:______________________________
    Name:
    Name:
    Title:
    Title:
 
 
    Accepted:
 
 
 
JPMORGAN CHASE BANK, N.A., as Administrative Agent
 
 
 
    By:______________________________
 
    Name:
 
    Title:
 



















 
1 Date to be provided by the Administrative Agent upon its execution.

        




EXHIBIT F

FORM OF
LOAN INCREASE SUPPLEMENT

Dated:    ______________ __, 20__

Reference is made to the Credit Agreement dated as of March 24, 2016 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Wyndham Worldwide Corporation (the “ Borrower ”), the Lenders referred to therein, the Syndication Agents named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
The Lender identified on Schedule l hereto (the “ Increasing Lender ”), the Administrative Agent and the Borrower agree as follows:
1. The Increasing Lender hereby irrevocably agrees to make an Incremental Term Loan to the Borrower in the amount set forth on Schedule 1 hereto (the “ Incremental Loan ”) pursuant to Section 2.16 of the Credit Agreement. From and after the Effective Date (as defined below), the Increasing Lender will be a Lender under the Credit Agreement with respect to the Incremental Loan as well as its existing Term Loan.
2.      The Administrative Agent (a) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or with respect to the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement; and (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower, any of its Subsidiaries or any other obligor or the performance or observance by the Borrower, any of its Subsidiaries or any other obligor of any of their respective obligations under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto.
3.      The Increasing Lender (a) represents and warrants that it is legally authorized to enter into this Loan Increase Supplement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1 of the Credit Agreement (or, if no such financial statements have been delivered, copies of the financial statements delivered pursuant to Section 3.4 thereof) and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Loan Increase Supplement; (c) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall

    


2

deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.
4.      The effective date of this Loan Increase Supplement shall be the Increase Effective Date described in Schedule 1 hereto (the “ Effective Date ”). Following the execution of this Loan Increase Supplement by each of the Increasing Lender and the Borrower, it will be delivered to the Administrative Agent for acceptance and recording by it pursuant to the Credit Agreement, effective as of the Effective Date.
5.      Upon such acceptance and recording, from and after the Effective Date, the Administrative Agent shall make all payments in respect of the Incremental Loan (including payments of principal, interest, fees and other amounts) to the Increasing Lender for amounts which have accrued on and subsequent to the Effective Date.
6.      From and after the Effective Date, the Increasing Lender shall be a party to the Credit Agreement and, to the extent provided in this Loan Increase Supplement, have the rights and obligations of a Lender thereunder and shall be bound by the provisions thereof.
7.      This Loan Increase Supplement shall be governed by and construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Loan Increase Supplement to be executed as of the date first above written by their respective duly authorized officers on Schedule 1 hereto.


        




Schedule 1
to Loan Increase Supplement
Name of Increasing Lender:     
Increase Effective Date:     
Principal Amount of Incremental Loan:
Total Amount of Loans of Increasing Lender (including Incremental Loan):
 
 
$ ___________________________
$ ___________________________
 
 
[NAME OF INCREASING LENDER]
WYNDHAM WORLDWIDE CORPORATION
 
 
    By:______________________________
    By:______________________________
    Name:
    Name:
    Title:
    Title:
 
 
    Accepted:
 
 
 
JPMORGAN CHASE BANK, N.A., as Administrative Agent
 
 
 
    By:______________________________
 
    Name:
 
    Title:
 















 
1 Date to be provided by the Administrative Agent upon its execution





EXHIBIT G

FORM OF
SOLVENCY CERTIFICATE

I, the undersigned, [chief executive officer, president, chief accounting officer, chief financial officer, treasurer or assistant treasurer] of WYNDHAM WORLDWIDE CORPORATION, a Delaware corporation (the “ Borrower ”), DO HEREBY CERTIFY in my capacity as a Responsible Officer of the Borrower, and not in my individual capacity, on behalf of the Borrower that:
    
1.    This certificate is furnished pursuant to Section 4.1(m) of the Credit Agreement, dated as of March 24, 2016 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among the Borrower, the Lenders referred to therein, the Syndication Agents named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
2.    On the Closing Date, immediately after giving effect to the extensions of credit, if any, to occur on the Closing Date, (i) the sum of the debt (including contingent liabilities) of the Borrower and its Subsidiaries, taken as a whole, does not exceed the present fair saleable value of the present assets of the Borrower and its Subsidiaries, taken as a whole; (ii) the capital of the Borrower and its Subsidiaries, taken as a whole, is not unreasonably small in relation to the business of the Borrower or its Subsidiaries, taken as a whole, contemplated as of the date hereof; and (iii) the Borrower and its Subsidiaries, taken as a whole, do not intend to incur, or believe that they will incur, debts including current obligations beyond their ability to pay such debt as they mature in the ordinary course of business. For the purposes hereof, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

[Signature Page Follows]





IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of [_____], 2016.
 
WYNDHAM WORLDWIDE CORPORATION
 
 
 
By: ________________________________________
 
Name:
 
Title:






EXHIBIT H-1

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of March 24, 2016 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Wyndham Worldwide Corporation (the “ Borrower ”), the Lenders referred to therein, the Syndication Agents named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent.
Pursuant to the provisions of Section 2.23(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on a duly executed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]
 
By: _______________________
      Name: ______________________
      Title: _______________________
Date: ____________ __, 20___




        




EXHIBIT H-2

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of March 24, 2016 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Wyndham Worldwide Corporation (the “ Borrower ”), the Lenders referred to therein, the Syndication Agents named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent.
Pursuant to the provisions of Section 2.23(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on a duly executed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF PARTICIPANT]
 
By: _______________________
      Name: ______________________
      Title: _______________________
Date: ____________ __, 20___



        




EXHIBIT H-3

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of March 24, 2016 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Wyndham Worldwide Corporation (the “ Borrower ”), the Lenders referred to therein, the Syndication Agents named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent.
Pursuant to the provisions of Section 2.23(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) it is not and none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) a duly executed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, or (ii) a duly executed IRS Form W-8IMY accompanied by a duly executed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF PARTICIPANT]
 
By: _______________________
      Name: ______________________
      Title: _______________________
Date: ____________ __, 20___



        




EXHIBIT H-4
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of March 24, 2016 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Wyndham Worldwide Corporation (the “ Borrower ”), the Lenders referred to therein, the Co-Documentation Agents and the Syndication Agents named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent.
Pursuant to the provisions of Section 2.23(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Fundamental Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) it is not and none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) a duly executed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, or (ii) a duly executed IRS Form W-8IMY accompanied by a duly executed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF LENDER]
 
By: _______________________
      Name: ______________________
      Title: _______________________
Date: ____________ __, 20___



    




EXHIBIT I
FORM OF
INTEREST ELECTION REQUEST
Date: ___________ ___, 20__


To:
JPMorgan Chase Bank, N.A.,
as Administrative Agent
500 Stanton Road, Ops 2
Third Floor
Newark, DE 19713
Facsimile No: 302-634-3301
        
Ladies and Gentlemen:
The undersigned, Wyndham Worldwide Corporation (the “ Borrower ”), refers to the Credit Agreement dated as of March 24, 2016 (as the same may be amended, supplemented or otherwise modified, renewed or replaced from time to time, the “ Credit Agreement ”), among Wyndham Worldwide Corporation, the Lenders referred to therein, the Syndication Agents named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. The Borrower hereby gives you notice pursuant to Section 2.8 of the Credit Agreement that it requests the following conversion and/or continuation of certain Loans as specified below:
(1)
The effective date of the conversion and/or continuation (which is a Business Day) is __________________.
(2)
convert $____________ of Base Rate Loans into LIBOR Loans with an Interest Period duration of ________ month(s) and the last day of such Interest Period is ________________.
(3)
convert $____________ of LIBOR Loans into Base Rate Loans.
(4)
continue $____________ of LIBOR Loans with an Interest Period duration of ________ month(s) and the last day of such Interest Period is ________________.
[Signature Page Follows]


 
1
Shall be subject to the definition of “Interest Period” and shall not end later than the Maturity Date.
2    Shall be subject to the definition of “Interest Period” and shall not end later than the Maturity Date.

        




 
WYNDHAM WORLDWIDE CORPORATION
 
 
 
By: ________________________________________
 
Name:
 
Title:



    



Exhibit 12
WYNDHAM WORLDWIDE CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)

 
Three Months Ended March 31,
 
2016
 
2015
Earnings available to cover fixed charges:
 
 
 
Income before income taxes
$
163

 
$
198

Plus: Fixed charges
58

 
52

Amortization of capitalized interest
1

 
1

Less: Capitalized interest
1

 
2

Earnings available to cover fixed charges
$
221

 
$
249

Fixed charges (*) :
 
 
 
Interest
$
51

 
$
44

Capitalized interest
1

 
2

Interest portion of rental expense
6

 
6

Total fixed charges
$
58

 
$
52

Ratio of earnings to fixed charges
3.81x

 
4.79x

 
(*)  
Consists of interest expense on all indebtedness (including costs related to the amortization of deferred financing costs), capitalized interest and the portion of operating lease rental expense that is representative of the interest factor.

* * *




Exhibit 15


April 26, 2016

Wyndham Worldwide Corporation
22 Sylvan Way
Parsippany, New Jersey 07054

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim consolidated financial information of Wyndham Worldwide Corporation and subsidiaries for the three month periods ended March 31, 2016, and 2015, as indicated in our report dated April 26, 2016; because we did not perform an audit, we expressed no opinion on that information.
We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, is incorporated by reference in Registration Statement No. 333-136090 on Form S-8 and Registration Statement No. 333-206104 on Form S-3.
We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/ Deloitte & Touche LLP
Parsippany, New Jersey














* * *




Exhibit 31.1
CERTIFICATION
I, Stephen P. Holmes, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Wyndham Worldwide 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
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;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
a)
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: April 26, 2016
 
 
/S/ STEPHEN P. HOLMES
 
CHAIRMAN AND CHIEF EXECUTIVE OFFICER




Exhibit 31.2
CERTIFICATION
I, Thomas G. Conforti, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Wyndham Worldwide 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
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;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
a)
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: April 26, 2016
 
 
/S/ THOMAS G. CONFORTI
 
CHIEF FINANCIAL OFFICER




Exhibit 32
CERTIFICATION OF CHAIRMAN AND CEO AND CFO PURSUANT TO
18 U.S.C. SECTION 1350
In connection with the Quarterly Report of Wyndham Worldwide Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2016 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Stephen P. Holmes, as Chairman and Chief Executive Officer of the Company, and Thomas G. Conforti, 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.
/S/ STEPHEN P. HOLMES
STEPHEN P. HOLMES
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
APRIL 26, 2016
/S/ THOMAS G. CONFORTI
THOMAS G. CONFORTI
CHIEF FINANCIAL OFFICER
APRIL 26, 2016