EX-10.1






Exhibit 10.1




EXECUTION VERSION




Credit Suisse Capital LLC

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, NY 10010




	 	 	 
	
To: Wyndham Worldwide Corporation

	 	May 13, 2009







	 	 	 
	22 Sylvan Way
	Parsippany, NY 07054
	Attention:

	 	Vice President, Treasury
	Telephone No.:

	 	(973) 753-7703
	Facsimile No.:

	 	(973) 753-6730






Re: Call Option Transaction




     The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the call option transaction entered into between Credit Suisse Capital LLC
(“Dealer”), represented by Credit Suisse Securities (USA) LLC (“Agent”) as its agent, and Wyndham
Worldwide Corporation (“Counterparty”) as of the Trade Date specified below (the “Transaction”).
This letter agreement constitutes a “Confirmation” as referred to in the Agreement specified below.
This Confirmation shall replace any previous agreements and serve as the final documentation for
this Transaction.



     The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
"Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”) are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms
used herein have the meanings assigned to them in the Indenture dated as of November 20, 2008 (the
“Base Indenture”), as supplemented by a Second Supplemental Indenture thereto (the “Supplemental
Indenture”) to be dated May 19, 2009, between Counterparty and U.S. Bank National Association, as
trustee (as so supplemented, the “Indenture”) relating to the USD 200,000,000 principal amount of
Convertible Senior Notes due 2012, (the “Convertible Notes” and each USD 1,000 principal amount of
Convertible Notes, a “Convertible Note”) issued by Counterparty. In the event of any inconsistency
between the terms defined in the Indenture and this Confirmation, this Confirmation shall govern.
The parties acknowledge that this Confirmation is entered into on the date hereof with the
understanding that (i) definitions set forth in the Indenture that are also defined herein by
reference to the Indenture and (ii) sections of the Indenture that are referred to herein will
conform to the descriptions thereof in the Prospectus dated November 25, 2008, as supplemented by
the Prospectus Supplement dated May 13, 2009 (as so supplemented, the “Prospectus”) relating to the
Convertible Notes. If any such definitions in the Indenture or any such sections of the Indenture
differ from the descriptions thereof in the Prospectus, the descriptions thereof in the Prospectus
will govern for purposes of this Confirmation. The parties further acknowledge that the
Supplemental Indenture section numbers used herein are based on the draft of the Supplemental
Indenture last reviewed by Dealer as of the date of this Confirmation, and if any such section
numbers are changed in the Supplemental Indenture as executed, the parties will amend this
Confirmation in good faith to preserve the intent of the parties. For the avoidance of doubt,
references to the Indenture herein are references to the Indenture as in effect on the date of its
execution and if the Indenture is amended following its execution, any such amendment will be
disregarded for purposes of this Confirmation unless the parties agree otherwise in writing.



     Each party is hereby advised, and each such party acknowledges, that the other party has
engaged in, or refrained from engaging in, substantial financial transactions and has taken other
material actions in reliance upon the parties’ entry into the Transaction to which this
Confirmation relates on the terms and conditions set forth below.


1. This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as
to the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Counterparty had executed an agreement in such form
(but without any Schedule except for


 









 






the election of the laws of the State of New York as the governing law) on the Trade Date. In the event of
any inconsistency between provisions of that Agreement and this Confirmation, this Confirmation
will prevail for the purpose of the Transaction to which this Confirmation relates. The parties
hereby agree that no Transaction other than the Transaction to which this Confirmation relates
shall be governed by the Agreement.



2. The terms of the particular Transaction to which this Confirmation relates are as follows:




	 	 	 
	General Terms:
	 	 
	 
	 	 
	Trade Date:

	 	May 13, 2009 
	 
	 	 
	Effective Date:

	 	The third Exchange Business Day immediately prior to the
Premium Payment Date.
	 
	 	 
	Option Style:

	 	“Modified American”, as described under “Procedures for
Exercise” below
	 
	 	 
	Option Type:

	 	Call
	 
	 	 
	Buyer:

	 	Counterparty
	 
	 	 
	Seller:

	 	Dealer
	 
	 	 
	Shares:

	 	The common stock of Counterparty, par value USD 0.01 per
Share (Exchange symbol “WYN”)
	 
	 	 
	Number of Options:

	 	200,000; provided that the Number of Options shall be
automatically increased as of the date of exercise by
Credit Suisse Securities (USA) LLC, J.P. Morgan
Securities Inc., Citigroup Global Markets Inc. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
“Representatives”), as representatives of the
Underwriters (as defined in the Underwriting Agreement),
of their option pursuant to Section 2(b) of the
Underwriting Agreement (the “Underwriting Agreement”)
dated as of May 13, 2009 between Counterparty and the
Representatives, by a number of Options (the “Additional
Options”) equal to the aggregate principal amount of
Convertible Notes issued pursuant to such exercise (such
Convertible Notes, the “Additional Convertible Notes”)
divided by USD 1,000. For the avoidance of doubt, the
Number of Options outstanding shall be reduced by each
exercise of Options hereunder. In no event will the
Number of Options be less than zero.
	 
	 	 
	Applicable Percentage:

	 	30% 
	 
	 	 
	Option Entitlement:

	 	As of any date, a number equal to the Applicable
Percentage multiplied by the Conversion Rate as of such
date (as defined in the Supplemental Indenture, but
without regard to any adjustments to the Conversion Rate
pursuant to Section 4.05(g) or (h) or to Section 4.07 of
the Supplemental Indenture), for each Convertible Note.
	 
	 	 
	Strike Price:

	 	USD 12.7320






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	Premium:

	 	USD 10,860,000 (Premium per Option USD 181.0000);
provided that if the Number of Options is increased
pursuant to the proviso to the definition of “Number of
Options” above, an additional Premium equal to the
product of the number of Additional Options and the
Premium per Option shall be paid on the Additional
Premium Payment Date.
	 
	 	 
	Premium Payment Date:

	 	May 19, 2009
	 
	 	 
	Additional Premium
Payment Date:

	 	The closing date for the purchase and sale of the
Additional Convertible Notes.
	 
	 	 
	Exchange:

	 	The New York Stock Exchange
	 
	 	 
	Related Exchange(s):

	 	All Exchanges
	 
	 	 
	Procedures for Exercise:
	 	 
	 
	 	 
	Exercise Period(s):

	 	Notwithstanding anything to the contrary in the Equity
Definitions, an Exercise Period shall occur with respect
to an Option hereunder only if such Option is an
Exercisable Option (as defined below) and the Exercise
Period shall be, in respect of any Exercisable Option,
the period commencing on, and including, the relevant
Conversion Date and ending on, and including, the
Scheduled Valid Day immediately preceding the first day
of the relevant Settlement Averaging Period in respect
of such Conversion Date; provided that in respect of
Exercisable Options relating to Convertible Notes for
which the relevant Conversion Date occurs on or after
February 1, 2012, the final day of the Exercise Period
shall be the Scheduled Valid Day immediately preceding
the Expiration Date.
	 
	 	 
	Conversion Date:

	 	With respect to any conversion of Convertible Notes, the
date on which the Holder (as such term is defined in the
Supplemental Indenture) of such Convertible Notes
satisfies all of the requirements for conversion thereof
as set forth in Section 4.02(b) of the Supplemental
Indenture; provided that in no event shall a Conversion
Date be deemed to occur hereunder (and no Option shall
be deemed to be an Exercisable Option) with respect to
any Convertible Note surrendered for conversion in
respect of which Counterparty elects to designate a
financial institution for exchange in lieu of conversion
pursuant to Section 4.04 of the Supplemental Indenture,
and such financial accepts such Convertible Note
(regardless of whether such financial institution
delivers any amounts due in respect of such Convertible
Note, or whether such Convertible Note is resubmitted to
Counterparty for conversion following a failure by such
financial institution to deliver any such amounts or
otherwise).






3









 






	 	 	 
	Exercisable Options:

	 	In respect of any Exercise Period, the number of
Convertible Notes surrendered to Counterparty for
conversion on the first day of such Exercise Period (the
“Related Convertible Notes” for such Exercisable
Options). Notwithstanding the foregoing, in no event
shall the number of Exercisable Options exceed the
Number of Options.
	 
	 	 
	Expiration Time:

	 	The Valuation Time
	 
	 	 
	Expiration Date:

	 	May 1, 2012, subject to earlier exercise.
	 
	 	 
	Multiple Exercise:

	 	Applicable, as described under Exercisable Options above.
	 
	 	 
	Automatic Exercise:

	 	Applicable; and means that in respect of an Exercise
Period, a number of Options not previously exercised
hereunder equal to the number of Exercisable Options
shall be deemed to be exercised on the final day of such
Exercise Period for such Exercisable Options; provided
that such Options shall be deemed exercised only to the
extent that Counterparty has provided a Notice of
Exercise to Dealer.
	 
	 	 
	Notice of Exercise:

	 	Notwithstanding anything to the contrary in the Equity
Definitions, in order to exercise any Exercisable
Options, Counterparty must notify Dealer in writing
before 5:00 p.m. (New York City time) on the Scheduled
Valid Day prior to the scheduled first day of the
Settlement Averaging Period for the Exercisable Options
being exercised of (i) the number of such Options, and
(ii) the scheduled first day of the Settlement Averaging
Period and the scheduled Settlement Date; provided that
in respect of Exercisable Options with Related
Convertible Notes with a Conversion Date occurring on or
after February 1, 2012, such notice may be given on or
prior to the Scheduled Valid Day immediately preceding
the Expiration Date and need only specify the number of
such Exercisable Options.
	 
	 	 
	Valuation Time:

	 	At the close of trading of the regular trading session
on the Exchange; provided that if the principal trading
session is extended, the Calculation Agent shall
determine the Valuation Time in its reasonable
discretion.
	 
	 	 
	Market Disruption Event:

	 	Section 6.3(a) of the Equity Definitions is hereby
replaced in its entirety by the following:
	 
	 	 
	 

	 	“‘Market Disruption Event’ means in respect of a Share,
(i) a failure by the primary United States national or
regional securities exchange or market on which Shares
are listed or admitted to trading to open for trading
during its regular trading session or (ii) the
occurrence or existence prior to 1:00 p.m. (New York
City time) on any Scheduled Valid Day for the Shares for
more than one half-hour period in the aggregate during
regular






4









 






	 	 	 
	 

	 	trading hours of any suspension or limitation
imposed on trading (by reason of movements in price
exceeding limits permitted by the relevant stock
exchange or otherwise) in the Shares or in any options,
contracts or future contracts relating to the Shares.”
	 
	 	 
	Settlement Terms:
	 	 
	 
	 	 
	Settlement Method:

	 	Cash Settlement
	 
	 	 
	Cash Settlement:

	 	In respect of any Exercisable Option exercised or deemed
exercised hereunder, in lieu of Section 8.1 of the
Equity Definitions, Dealer will pay to Counterparty, on
the relevant Settlement Date, the Option Cash Settlement
Amount in respect of such Exercisable Option. In no
event will the Option Cash Settlement Amount be less
than zero.
	 
	 	 
	Option Cash Settlement
Amount:

	 	In respect of any Exercisable Option exercised or deemed
exercised, an amount in cash equal to the sum of the
quotients, for each Valid Day during the Settlement
Averaging Period for such Exercisable Option, of (A) (x)
the Option Entitlement on such Valid Day multiplied by
(y) the Relevant Price on such Valid Day less the Strike
Price, divided by (B) the number of Valid Days in the
Settlement Averaging Period; provided that if the
calculation contained in clause (y) above results in a
negative number, such number shall be replaced with the
number “zero”.
	 
	 	 
	Valid Day:

	 	A day on which (i) trading in the Shares generally
occurs on the Exchange or, if the Shares are not then
listed on the Exchange, on the principal other United
States national or regional securities exchange on which
the Shares are then listed or, if the Shares are not
then listed on a United States national or regional
securities exchange, on the principal other market on
which the Shares are then traded and (ii) there is no
Market Disruption Event. If the Shares are not so
listed or traded, “Valid Day” means a Business Day.
	 
	 	 
	Scheduled Valid Day:

	 	A day on which trading in the Shares is scheduled to
occur on the principal United States national or
regional securities exchange or market on which the
Shares are listed or admitted for trading. If the
Shares are not so listed or admitted for trading,
“Scheduled Valid Day” means a Business Day.
	 
	 	 
	Business Day:

	 	Any day other than a Saturday, a Sunday or a day on
which the Federal Reserve Bank of New York is authorized
or required by law or executive order to close or be
closed.
	 
	 	 
	Relevant Price:

	 	On any Valid Day, the per Share volume-weighted average
price as displayed under the heading “Bloomberg VWAP” on
Bloomberg page WYN.N <equity> AQR (or any
successor thereto) in respect of






5









 






	 	 	 
	 

	 	the period from the
scheduled opening time of the Exchange to the Scheduled
Closing Time of the Exchange on such Valid Day (or if
such volume-weighted average price is unavailable, the
market value of one Share on such Valid Day, as
determined by the Calculation Agent using a
volume-weighted method).
	 
	 	 
	Settlement Averaging
Period:

	 	For any Exercisable Option, (x) if Counterparty has
delivered, in accordance with the terms set forth above,
a Notice of Exercise to Dealer with respect to such
Exercisable Option with a Conversion Date occurring
prior to February 1, 2012, the thirty (30) consecutive
Valid Day period beginning on, and including, the second
Scheduled Valid Day immediately following such
Conversion Date, or (y) if Counterparty has delivered,
in accordance with the terms set forth above, a Notice
of Exercise to Dealer with respect to such Exercisable
Option with a Conversion Date occurring on or after
February 1, 2012, the thirty (30) consecutive Valid Day
period beginning on, and including, the thirty-second
(32nd) Scheduled Valid Day immediately prior
to the Expiration Date.
	 
	 	 
	Settlement Date:

	 	For any Exercisable Option, the date cash will be paid
under the terms of the Indenture with respect to the
conversion of the Related Convertible Notes for such
Exercisable Option, but in no event earlier than the
third Business Day immediately following the final Valid
Day of the Settlement Averaging Period.
	 
	 	 
	Settlement Currency:

	 	USD
	 
	 	 
	3. Additional Terms
applicable to the
Transaction:
	 	 
	 
	 	 
	  Adjustments applicable
to the Transaction:
	 	 
	 
	 	 
	  Potential Adjustment
Events:

	 	Notwithstanding Section 11.2(e) of the Equity
Definitions, a “Potential Adjustment Event” means an
occurrence of any event or condition, as set forth in
Section 4.05 of the Supplemental Indenture that would
result in an adjustment to the Conversion Rate of the
Convertible Notes; provided that in no event shall there
be any adjustment hereunder as a result of an adjustment
to the Conversion Rate pursuant to Section 4.05(g) or
(h) or Section 4.07 of the Supplemental Indenture.
	 
	 	 
	  Method of Adjustment:

	 	Calculation Agent Adjustment, and means that,
notwithstanding Section 11.2(c) of the Equity
Definitions, upon any adjustment to the Conversion Rate
of the Convertible Notes pursuant to the Supplemental
Indenture (other than Section 4.05(g) and (h) and
Section 4.07 of the Supplemental Indenture), the
Calculation Agent will make a corresponding adjustment
to any one or more of the Strike Price, Number of
Options, Option Entitlement and any other variable
relevant to the exercise, settlement or payment for the
Transaction.






6









 






	 	 	 
	Extraordinary Events
applicable to the
Transaction:
	 	 
	 
	 	 
	Merger Events:

	 	Applicable; provided that notwithstanding Section
12.1(b) of the Equity Definitions, a “Merger Event”
means the occurrence of any event or condition set forth
in the definition of “Merger Event” in Section 4.08 of
the Supplemental Indenture.
	 
	 	 
	Tender Offers:

	 	Applicable; provided that notwithstanding Section
12.1(d) of the Equity Definitions, a “Tender Offer”
means the occurrence of any event or condition set forth
in Section 4.05(e) of the Supplemental Indenture.
	 
	 	 
	Consequence of Merger
Events/ Tender Offers:

	 	Notwithstanding Section 12.2 and Section 12.3 of the
Equity Definitions, upon the occurrence of a Merger
Event or a Tender Offer, the Calculation Agent shall
make a corresponding adjustment in respect of any
adjustment under the Supplemental Indenture to any one
or more of the nature of the Shares, Strike Price,
Number of Options, Option Entitlement and any other
variable relevant to the exercise, settlement or payment
for the Transaction; provided, however, that such
adjustment shall be made without regard to any
adjustment to the Conversion Rate as set forth in
Section 4.07 of the Supplemental Indenture; provided
further that if, with respect to a Merger Event or a
Tender Offer, (i) the consideration for the Shares
includes (or, at the option of a holder of Shares, may
include) shares of an entity or person not organized
under the laws of the United States, any State thereof
or the District of Columbia or (ii) the Counterparty to
the Transaction following such Merger Event or Tender
Offer, will not be the Issuer following such Merger
Event or Tender Offer, then Cancellation and Payment
(Calculation Agent Determination) shall apply.
	 
	 	 
	Nationalization, Insolvency or Delisting:

	 	Cancellation and Payment (Calculation Agent
Determination); provided that, in addition to the
provisions of Section 12.6(a)(iii) of the Equity
Definitions, it will also constitute a Delisting if the
Exchange is located in the United States and the Shares
are not immediately re-listed, re-traded or re-quoted on
any of the New York Stock Exchange, The NASDAQ Global
Select Market or The NASDAQ Global Market (or their
respective successors); if the Shares are immediately
re-listed, re-traded or re-quoted on any of the New York
Stock Exchange, The NASDAQ Global Select Market or The
NASDAQ Global Market (or their respective successors),
such exchange or quotation system shall thereafter be
deemed to be the Exchange.
	 
	 	 
	Additional Disruption
Events:
	 	 
	 
	 	 
	Change in Law:

	 	Applicable; provided that Section 12.9(a)(ii)(X) of the
Equity Definitions is hereby amended by replacing the
word “Shares” with the phrase “Hedge Positions.”
	 
	 	 
	Failure to Deliver:

	 	Applicable






7









 






	 	 	 
	Hedging Party:

	 	Dealer for all applicable Additional Disruption Events
	 
	 	 
	Determining Party:

	 	For all applicable Extraordinary Events, Dealer
	 
	 	 
	Non-Reliance:

	 	Applicable
	 
	 	 
	Agreements and
Acknowledgements
Regarding Hedging Activities:

	 	Applicable
	 
	 	 
	Additional Acknowledgments:

	 	Applicable
	 
	 	 
	4. Calculation Agent:

	 	Dealer
	 
	 	 
	5. Account Details:
	 	 






	 	 	 	 	 	 	 
	 	 	(a)	 	Account for payments to Counterparty:
	 
	 	 
	 

	 	 	 	Bank:
	 	JPMorgan Chase Bank, New York, NY
	 

	 	 	 	ABA#:
	 	 021000021
	 

	 	 	 	Acct Name:
	 	WHG Hospitality, Inc.
	 

	 	 	 	Acct No.:
	 	 304656429
	 
	 	 	 	 	 	 
	 	 	(b)	 	Account for payments to Dealer:
	 
	 	 	 	 	 	 
	 	 	 	 	Citibank, N.A., New York
	 	 	 	 	ABA number: 021-000-089
	 	 	 	 	For A/C of: Credit Suisse Capital LLC
	 	 	 	 	Account Number: 30459883





6. Offices:



The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch
Party.



The Office of Dealer for the Transaction is: New York




	 	 	 	 	 	 	 
	 	 	 	 	Credit Suisse Capital LLC

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, NY 10010





7. Notices: For purposes of this Confirmation:




	 	 	 	 	 	 	 
	 	 	(a)	 	Address for notices or communications to Counterparty:
	 	 	 	 	Wyndham Worldwide Corporation
	 	 	 	 	22 Sylvan Way

Parsippany, NY 07054
	 	 	 	 	Attention: Vice President, Treasury
	 	 	 	 	Telephone No.: (973) 753-7703
	 	 	 	 	Facsimile No.: (973) 753-6730
	 
	 	 	 	 	 	 
	 	 	(b)	 	Address for notices or communications to Dealer:
	 	 	 	 	Credit Suisse Capital LLC

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, NY 10010
	 	 	 	 	Attn: Senior Legal Officer
	 	 	 	 	Telephone: (212) 538-2616






8









 






	 	 	 	 	 	 	 
	 	 	 	 	Facsimile: (212) 325-8036
	 
	 	 	 	 	 	 
	 	 	 	 	With a copy to:
	 
	 	 	 	 	 	 
	 	 	 	 	Credit Suisse Securities (USA) LLC

One Madison Avenue, 8th Floor

New York, New York 10010
	 
	 	 	 	 	 	 
	 	 	 	 	For payments and deliveries:

Attn: Debbye Turnbull-Philip

Telephone: (212) 538-3604

Facsimile: (212) 325-8175
	 
	 	 	 	 	 	 
	 	 	 	 	For all other communications:

Attn: Equity Derivatives Documentation

Telephone: (212) 538-6040

Facsimile: (917) 326-2660






8. Representations and Warranties of Counterparty



The representations and warranties made by Counterparty pursuant to the Underwriting Agreement are
true and correct and are hereby deemed to be repeated to Dealer as if set forth herein.
Counterparty hereby further represents and warrants to Dealer that:





	 	(a)	 	Counterparty has all necessary corporate power and authority to execute,
deliver and perform its obligations in respect of this Transaction; such execution,
delivery and performance have been duly authorized by all necessary corporate action
on Counterparty’s part; and this Confirmation has been duly and validly executed and
delivered by Counterparty and constitutes its valid and binding obligation,
enforceable against Counterparty in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditors’ rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement is
sought in a proceeding at law or in equity) and except that rights to indemnification
and contribution hereunder may be limited by federal or state securities laws or
public policy relating thereto.
	 
	 	(b)	 	Neither the execution and delivery of this Confirmation nor the incurrence or
performance of obligations of Counterparty hereunder will conflict with or result in a
breach of the certificate of incorporation or by-laws (or any equivalent documents) of
Counterparty, or any applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any agreement or
instrument to which Counterparty or any of its subsidiaries is a party or by which
Counterparty or any of its subsidiaries is bound or to which Counterparty or any of
its subsidiaries is subject, or constitute a default under, or result in the creation
of any lien under, any such agreement or instrument.
	 
	 	(c)	 	No consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required in connection with the execution,
delivery or performance by Counterparty of this Confirmation, except such as have been
obtained or made and such as may be required under the Securities Act of 1933, as
amended (the “Securities Act”) or state securities laws.
	 
	 	(d)	 	Counterparty is not and will not be required to register as an “investment
company” as such term is defined in the Investment Company Act of 1940, as amended.




9









 






	 	(e)	 	It is an “eligible contract participant” (as such term is defined in Section
1a(12) of the Commodity Exchange Act, as amended (the “CEA”)) because one or more of
the following is true:
	 
	 	 	 	Counterparty is a corporation, partnership, proprietorship, organization, trust or
other entity and:






	 	(A)	 	Counterparty has total assets in excess of USD 10,000,000;
	 
	 	(B)	 	the obligations of Counterparty hereunder are guaranteed, or
otherwise supported by a letter of credit or keepwell, support or other
agreement, by an entity of the type described in Section 1a(12)(A)(i) through
(iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or 1a(12)(C) of the CEA; or
	 
	 	(C)	 	Counterparty has a net worth in excess of USD 1,000,000 and
has entered into this Agreement in connection with the conduct of
Counterparty’s business or to manage the risk associated with an asset or
liability owned or incurred or reasonably likely to be owned or incurred by
Counterparty in the conduct of Counterparty’s business.






	 	(f)	 	Counterparty is not, on the date hereof, in possession of any material
non-public information with respect to Counterparty.
	 
	 	(g)	 	No state or local (including, for the avoidance of doubt, jurisdictions
outside the United States) law, rule, regulation or regulatory order applicable to the
Shares or Counterparty (including without limitation any such law, regulation or order
regulating the gaming business or the consumer financing business, but excluding
Federal securities laws) (“Applicable State Share Ownership Law”) would give rise to
any reporting or registration obligations or other requirements on Dealer or its
affiliates (including obtaining prior approval from any person or entity), or would
result in an adverse effect on Dealer or its affiliates, (each, an “Ownership
Obligation”), as a consequence of Dealer and its affiliates collectively holding the
power to vote Shares in excess of any threshold amount that is less than 10% of the
number of Shares outstanding; and no Applicable State Share Ownership Law imposes any
Ownership Obligation by any method other than counting the number of Shares which a
person holds the power to vote.
	 
	 	(h)	 	Counterparty does not hold any license to operate a gaming business in any
jurisdiction (including without limitation any jurisdiction outside the United States)
other than Puerto Rico, and Counterparty is not subject to regulation under any law,
rule, regulation or regulatory order relating to the gaming business of any
jurisdiction (including without limitation jurisdictions outside the United States)
other than under the gaming regulations issued by the Commonwealth of Puerto Rico
Tourism Company.





9. Other Provisions:





	 	(a)	 	Opinions. Counterparty shall deliver to Dealer an opinion of
counsel, dated as of the Trade Date, with respect to the matters set forth in Sections
8(a) through (c) of this Confirmation.
	 
	 	(b)	 	Repurchase Notices. Counterparty shall, on any day on which
Counterparty effects any repurchase of Shares, promptly give Dealer a written notice
of such repurchase (a “Repurchase Notice”) on such day if following such repurchase,
the number of outstanding Shares as determined on such day is (i) less than 155
million (in the case of the first such notice) or (ii) thereafter more than 19 million
less than the number of Shares included in the immediately preceding Repurchase
Notice. Counterparty agrees to indemnify and hold harmless Dealer and its affiliates
and their respective officers, directors, employees, affiliates, advisors, agents and
controlling persons (each, an






10











 






	 	 	 	“Indemnified Person”) from and against any and all losses (including losses
relating to Dealer’s hedging activities as a consequence of becoming, or of the
risk of becoming, a Section 16 “insider”, including without limitation, any
forbearance from hedging activities or cessation of hedging activities and any
losses in connection therewith with respect to this Transaction), claims, damages,
judgments, liabilities and expenses (including reasonable attorney’s fees), joint
or several, to which an Indemnified Person may become subject, as a result of
Counterparty’s failure to provide Dealer with a Repurchase Notice on the day and in
the manner specified in this paragraph, and to reimburse, within 30 days, upon
written request, each of such Indemnified Persons for any reasonable legal or other
expenses incurred in connection with investigating, preparing for, providing
testimony or other evidence in connection with or defending any of the foregoing.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against the
Indemnified Person as a result of Counterparty’s failure to provide Dealer with a
Repurchase Notice in accordance with this paragraph, such Indemnified Person shall
promptly notify Counterparty in writing, and Counterparty, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person and any others Counterparty may
designate in such proceeding and shall pay the fees and expenses of such counsel
related to such proceeding. Counterparty shall not be liable for any settlement of
any proceeding contemplated by this paragraph that is effected without its written
consent, but if settled with such consent or if there be a final judgment for the
plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. Counterparty shall
not, without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding contemplated by this paragraph
that is in respect of which any Indemnified Person is or could have been a party
and indemnity could have been sought hereunder by such Indemnified Person, unless
such settlement includes an unconditional release of such Indemnified Person from
all liability on claims that are the subject matter of such proceeding on terms
reasonably satisfactory to such Indemnified Person. If the indemnification
provided for in this paragraph is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred to
therein, then Counterparty hereunder, in lieu of indemnifying such Indemnified
Person thereunder, shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages or liabilities. The
remedies provided for in this paragraph (b) are not exclusive and shall not limit
any rights or remedies that may otherwise be available to any Indemnified Party at
law or in equity. The indemnity and contribution agreements contained in this
paragraph shall remain operative and in full force and effect regardless of the
termination of this Transaction.
	 
	 	(c)	 	Regulation M; Counterparty Purchases. (i) Counterparty is not on the
Trade Date engaged in a distribution, as such term is used in Regulation M under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of
Counterparty, other than the distribution of the Convertible Notes. Counterparty
shall not, until the second Scheduled Trading Day immediately following the Effective
Date, engage in any such distribution.
	 
	 	 	 	(ii) On the Trade Date, neither Counterparty nor any “affiliate” or “affiliated
purchaser” (each as defined in Rule 10b-18 of the Exchange Act (“Rule 10b-18”))
shall directly or indirectly (including, without limitation, by means of any
cash-settled or other derivative instrument other than the Transaction or any other
substantially similar transactions that are entered into by Counterparty
contemporaneously with the Transaction) purchase, offer to purchase, place any bid
or limit order that would effect a purchase of, or commence any tender offer
relating to, any Shares (or an equivalent interest, including a unit of beneficial
interest in a trust or limited partnership or a depository share) or any security
convertible into or exchangeable or exercisable for Shares.




11









 






	 	(d)	 	No Manipulation. Counterparty is not entering into this Transaction
to create actual or apparent trading activity in the Shares (or any security
convertible into or exchangeable for the Shares) or to raise or depress or otherwise
manipulate the price of the Shares (or any security convertible into or exchangeable
for the Shares) or otherwise in violation of the Exchange Act.
	 
	 	(e)	 	Transfer or Assignment. (i) Counterparty shall have the right to
transfer or assign its rights and obligations hereunder with respect to all, but not
less than all, of the Options hereunder (such Options, the “Transfer Options”);
provided that such transfer or assignment shall be subject to reasonable conditions
that Dealer may impose, including but not limited, to the following conditions:






(A) With respect to any Transfer Options, Counterparty shall not be released
from its notice and indemnification obligations pursuant to Section 9(b) or any
obligations under Section 9(m) or 9(q) of this Confirmation;




(B) Any Transfer Options shall only be transferred or assigned to a third party
that is a United States person (as defined in the Internal Revenue Code of
1986, as amended);




(C) Such transfer or assignment shall be effected on terms, including any
reasonable undertakings by such third party (including, but not limited to, an
undertaking with respect to compliance with applicable securities laws in a
manner that, in the reasonable judgment of Dealer, will not expose Dealer to
material risks under applicable securities laws) and execution of any
documentation and delivery of legal opinions with respect to securities laws
and other matters by such third party and Counterparty, as are requested and
reasonably satisfactory to Dealer;




(D) Dealer will not, as a result of such transfer and assignment, be required
to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of
the Agreement greater than an amount that Dealer would have been required to
pay to Counterparty in the absence of such transfer and assignment;




(E) An Event of Default, Potential Event of Default or Termination Event will
not occur as a result of such transfer and assignment;




(F) Without limiting the generality of clause (B), Counterparty shall cause the
transferee to make such Payee Tax Representations and to provide such tax
documentation as may be reasonably requested by Dealer to permit Dealer to
determine that results described in clauses (D) and (E) will not occur upon or
after such transfer and assignment; and




(G) Counterparty shall be responsible for all reasonable costs and expenses,
including reasonable counsel fees, incurred by Dealer in connection with such
transfer or assignment.




	 	 	 	(ii) If (1) the Section 16 Percentage exceeds 8.0%, (2) the Option Equity
Percentage exceeds 14.5% or (3) the Share Amount exceeds the Applicable Limit,
Dealer may, without Counterparty’s consent, transfer or assign all or any part of
its rights or obligations under the Transaction to any Qualified Third Party in
order to reduce (1) the Section 16 Percentage to equal to or less than 8.0% (but
not less than 7%), (2) the Option Equity Percentage to equal to or less than 14.5%
(but not less than 13.5%) and (3) the Share Amount to equal to or less than the
Applicable Limit (but not less than the Applicable Limit minus 1% of the number of
Shares then outstanding). “Qualified Third Party” means any third party with a
rating for its long term, unsecured and unsubordinated indebtedness equal to or
better than the lesser of (1) the credit rating of Dealer at the time of the
transfer and (2) A- by Standard and Poor’s Rating Group, Inc. or its successor
(“S&P”), or A3 by Moody’s Investor Service, Inc. (“Moody’s”) or, if either S&P or
Moody’s ceases to rate such debt, at least an equivalent rating or better by a
substitute agency rating mutually agreed by Counterparty and Dealer. If after
Dealer’s




12









 






	 	 	 	commercially reasonable efforts, Dealer is unable to effect such a transfer or
assignment on pricing terms reasonably acceptable to Dealer and within a time
period reasonably acceptable to Dealer of a sufficient number of Options to reduce
(1) the Section 16 Percentage to 8.0% or less, (2) the Option Equity Percentage to
14.5% or less and (3) the Share Amount to the Applicable Limit or less, Dealer may
designate any Exchange Business Day as an Early Termination Date with respect to a
portion (the “Terminated Portion”) of this Transaction, such that (1) the Section
16 Percentage following such partial termination will be equal to or less than 8.0%
(but not less than 7%), (2) the Option Equity Percentage following such partial
termination will be equal to or less than 14.5% (but not less than 13.5%) and (3)
the Share Amount following such partial termination will be equal to or less than
the Applicable Limit (but not less than the Applicable Limit minus 1% of Shares
then outstanding). In the event that Dealer so designates an Early Termination
Date with respect to a portion of this Transaction, a payment shall be made
pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been
designated in respect of a Transaction having terms identical to this Transaction
and a Number of Options equal to the Terminated Portion, (2) Counterparty shall be
the sole Affected Party with respect to such partial termination and (3) such
Transaction shall be the only Terminated Transaction. The “Section 16 Percentage”
as of any day is the fraction, expressed as a percentage, (A) the numerator of
which is the number of Shares that Dealer, each person subject to aggregation of
Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules
promulgated thereunder and any “group,” as such term is defined in such Section 13
and Rules, of which Dealer or any such person is a member or may be deemed a member
(collectively, the “Dealer Group”) directly or indirectly beneficially own (as
defined under Section 13 of the Exchange Act and rules promulgated thereunder) and
(B) the denominator of which is the number of Shares outstanding. The “Option
Equity Percentage” as of any day is the fraction, expressed as a percentage, (A)
the numerator of which is the sum of (x) the product of the Number of Options and
the Option Entitlement and (y) the aggregate number of Shares underlying any other
call option transaction sold by Dealer to Counterparty, and (B) the denominator of
which is the number of Shares outstanding. The “Share Amount” as of any day is the
number of Shares that Dealer, Dealer Group or any person whose ownership position
would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer Group or
any such person, a “Dealer Person”) under Section 203 of the Delaware General
Corporation Law (the “DGCL Takeover Statute”) or under any other law, rule,
regulation or regulatory order of any jurisdiction (including without limitation
jurisdictions outside the United States) that for any reason becomes applicable to
ownership of Shares after the Trade Date (“Applicable Laws”), owns, beneficially
owns, constructively owns, controls, holds the power to vote or otherwise meets a
relevant definition of ownership of under the Applicable Laws, as determined by
Dealer in its reasonable discretion. The “Applicable Limit” means (x) the minimum
number of Shares that would give rise to reporting or registration obligations or
other requirements (including obtaining prior approval from any person or entity)
of a Dealer Person, or would result in an adverse effect on a Dealer Person, under
the Applicable Laws, as determined by Dealer in its reasonable discretion, minus
(y) 2% of the number of Shares outstanding.
	 
	 	 	 	(iii) Notwithstanding any other provision in this Confirmation to the contrary
requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or
other securities, or make or receive any payment in cash, to or from Counterparty,
Dealer may designate any of its affiliates to purchase, sell, receive or deliver
such Shares or other securities, or to make or receive any payment in cash, and
otherwise to perform Dealer’s obligations in respect of this Transaction and any
such designee may assume such obligations. Dealer shall be discharged of its
obligations to Counterparty to the extent of any such performance.
	 
	 	(f)	 	Role of Agent. Credit Suisse Securities (USA) LLC, in its capacity
as Agent, will be responsible for (A) effecting this Transaction, (B) issuing all
required confirmations and




13









 






	 	 	 	statements to Dealer and Counterparty, (C) maintaining books and records relating
to this Transaction in accordance with its standard practices and procedures and in
accordance with applicable law and (D) unless otherwise requested by Counterparty,
receiving, delivering, and safeguarding Counterparty’s funds and any securities in
connection with this Transaction, in accordance with its standard practices and
procedures and in accordance with applicable law.
	 
	 		 	(i) Agent is acting in connection with this Transaction solely in its capacity as
Agent for Dealer and Counterparty pursuant to instructions from Dealer and
Counterparty. Agent shall have no responsibility or personal liability to Dealer
or Counterparty arising from any failure by Dealer or Counterparty to pay or
perform any obligations hereunder, or to monitor or enforce compliance by Dealer or
Counterparty with any obligation hereunder, including, without limitation, any
obligations to maintain collateral. Each of Dealer and Counterparty agrees to
proceed solely against the other to collect or recover any securities or monies
owing to it in connection with or as a result of this Transaction. Agent shall
otherwise have no liability in respect of this Transaction hereunder, by guaranty,
endorsement or otherwise, except for its gross negligence or willful misconduct in
performing its duties as Agent.
	 
	 		 	(ii) Any and all notices, demands, or communications of any kind relating to this
Transaction between Dealer and Counterparty shall be transmitted exclusively
through Agent at the following address:




Credit Suisse Capital LLC

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, NY  10010

Attn: Senior Legal Officer

Telephone:  (212) 538-2616

Facsimile:  (212) 325-8036



With a copy to:

Credit Suisse Securities (USA) LLC

One Madison Avenue, 8th Floor

New York, New York 10010



For payments and deliveries:

Attn: Debbye Turnbull-Philip

Telephone:  (212) 538-3604

Facsimile:  (212) 325-8175



For all other communications:

Attn: Equity Derivatives Documentation

Telephone: (212) 538-6040

Facsimile: (917) 326-2660





	 	 	 	(iii) The date and time of the Transaction evidenced hereby will be furnished by
the Agent to Dealer and Counterparty upon written request.
	 
	 	 	 	(iv) The Agent will furnish to Counterparty upon written request a statement as to
the source and amount of any remuneration received or to be received by the Agent
in connection with the Transaction evidenced hereby.
	 
	 	 	 	(v) Dealer and Counterparty each represents and agrees (A) that this Transaction
is not unsuitable for it in the light of such party’s financial situation,
investment objectives and needs and (B) that it is entering into this Transaction
in reliance upon such tax, accounting, regulatory, legal and financial advice as it
deems necessary and not upon any view expressed by the other or the Agent.




14









 






	 	(g)	 	Dividends. If at any time during the period from and including the
Effective Date, to but excluding the Expiration Date, (i) an ex-dividend date for a
regular quarterly cash dividend occurs with respect to the Shares (an “Ex-Dividend
Date”), and that dividend is less than the Regular Dividend on a per Share basis or
(ii) if no Ex-Dividend date for a regular quarterly cash dividend occurs with respect
to the Shares in any quarterly dividend period of Counterparty, then the Calculation
Agent will make a corresponding adjustment to any one or more of the Strike Price,
Number of Options, Option Entitlement and/or any other variable relevant to the
exercise, settlement or payment for the Transaction to preserve the fair value of the
Options to Dealer after taking into account such dividend or lack thereof. “Regular
Dividend” shall mean USD 0.04 per Share per quarter. Upon any adjustment to the
Initial Dividend Threshold (as defined in the Supplemental Indenture) for the
Convertible Notes pursuant to Section 4.08(b) of the Supplemental Indenture, the
Calculation Agent will make a corresponding adjustment to the Regular Dividend for the
Transaction.
	 
	 	(h)	 	Additional Termination Events.
	 
	 	 	 	(i) Notwithstanding anything to the contrary in this Confirmation if an event of
default with respect to Counterparty shall occur under the terms of the Convertible
Notes as set forth in Section 5.01 of the Supplemental Indenture or Section 7.01 of
the Base Indenture (as modified by Section 5.01 of the Supplemental Indenture),
which event of default results in acceleration of Counterparty’s payment obligation
under the Convertible Notes pursuant to the terms of the Indenture, then (A) an
Additional Termination Event shall be deemed to occur with respect to the
Transaction, (B) Counterparty shall be deemed to be the sole Affected Party and the
Transaction shall be the sole Affected Transaction and (C) Dealer shall be the
party entitled to designate an Early Termination Date pursuant to Section 6(b) of
the Agreement.
	 
	 	 	 	(ii) Notwithstanding anything to the contrary in this Confirmation, if any
Convertible Notes cease to be outstanding in accordance with their terms pursuant
to Article 3 of the Supplemental Indenture, then an Additional Termination Event
shall be deemed to occur and an Early Termination Date shall be deemed to have been
designated pursuant to Section 6(b) of the Agreement with respect to a portion of
this Transaction corresponding to such Convertible Notes. In the event that such
an Early Termination is deemed to have been designated with respect to a portion of
this Transaction, a payment shall be made pursuant to Section 6 of the Agreement as
if (A) an Early Termination Date had been designated in respect of a Transaction
having terms identical to this Transaction and a Number of Options equal to the
number of such Convertible Notes, (B) Counterparty shall be the sole Affected Party
with respect to such partial termination and (C) such terminated portion of this
Transaction shall be the only Terminated Transaction.
	 
	 	 	 	(iii) Notwithstanding anything to the contrary in this Confirmation, the giving of
any Notice of Exercise shall constitute an Additional Termination Event hereunder
with respect to the number, if any, of Exercisable Options specified in such Notice
of Exercise as corresponding to a conversion of Convertible Notes pursuant to
Section 4.07 of the Supplemental Indenture. Upon receipt of any such notice,
Dealer shall designate an Exchange Business Day as an Early Termination Date, with
respect to the portion of this Transaction corresponding to the number of such
Exercisable Options so specified. Any payment hereunder with respect to such
termination shall be calculated pursuant to Section 6 of the Agreement; provided
that for the purposes of such calculation, (A) Counterparty shall be the sole
Affected Party with respect to such Additional Termination Event, (B) Dealer shall
be the party entitled to designate an Early Termination Date pursuant to Section
6(b) of the Agreement, and (C) for the avoidance of doubt, in determining the
amount payable pursuant to Section 6 of the Agreement, the Calculation Agent,
acting in a commercially reasonable manner, (i) shall take into account the time
value of this Transaction to the Expiration Date and (ii) shall not take into
account any adjustments to the Option Entitlement that result from corresponding
adjustments to the




15









 






	 	 	 	Conversion Rate pursuant to Section 4.07 of the Supplemental Indenture; provided
further that (A) in case of a partial termination, an Early Termination Date shall
be designated in respect of a Transaction having terms identical to this
Transaction and a Number of Options equal to the terminated portion and such
Transaction shall be the only Terminated Transaction; (B) any amount payable by
Dealer to Counterparty shall be satisfied solely by delivery by Dealer to
Counterparty of cash in an amount calculated pursuant to Section 6 determined by
the Calculation Agent in a commercially reasonable manner; and (C) the amount of
cash deliverable in respect of such early termination by Dealer to Counterparty
shall not be greater than the product of (x) the Applicable Percentage and (y) the
excess of (a) the Settlement Amount (as defined in the Supplemental Indenture) with
respect to the corresponding Convertible Notes (including the Cash Make-Whole
Premium (as defined in the Supplemental Indenture) resulting from any adjustment
set forth in Section 4.07 of the Supplemental Indenture) over (b) the aggregate
principal amount of the corresponding Convertible Notes, as determined by the
Calculation Agent in a commercially reasonable manner.
	 
	 	(i)	 	Amendments to Equity Definitions. (i) Section 12.6(a)(ii) of the
Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the
word “or” after the word “official” and inserting a comma therefor, and (2) deleting
the semi-colon at the end of subsection (B) thereof and inserting the following words
therefor “or (C) at Dealer’s option, the occurrence of any of the events specified in
Section 5(a)(vii)(1) through (9) of the ISDA Master Agreement with respect to that
Issuer.”
	 
	 	 	 	(ii) Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1)
replacing “either party may elect” with “Dealer may elect” and (2) replacing
“notice to the other party” with “notice to Counterparty” in the first sentence of
such section.
	 
	 	(j)	 	Setoff. Neither party shall have the right to set off any obligation
that it may have to the other party under this Transaction against any obligation such
other party may have to it, whether arising under the Agreement, this Confirmation or
any other agreement between the parties hereto, by operation of law or otherwise.
	 
	 	(k)	 	Governing Law. New York law (without reference to choice of law
doctrine).
	 
	 	(l)	 	Waiver of Jury Trial. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in respect of
any suit, action or proceeding relating to this Transaction. Each party (i) certifies
that no representative, agent or attorney of either party has represented, expressly
or otherwise, that such other party would not, in the event of such a suit, action or
proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the
other party have been induced to enter into this Transaction, as applicable, by, among
other things, the mutual waivers and certifications provided herein.
	 
	 	(m)	 	Registration. Counterparty hereby agrees that if, in the good faith
reasonable judgment of Dealer, the Shares (“Hedge Shares”) acquired by Dealer for the
purpose of hedging its obligations pursuant to this Transaction cannot be sold in the
public market by Dealer without registration under the Securities Act, Counterparty
shall, at its election, either (i) in order to allow Dealer to sell the Hedge Shares
in a registered offering, make available to Dealer an effective registration statement
under the Securities Act and enter into an agreement, in form and substance
satisfactory to Dealer, substantially in the form of an underwriting agreement for a
registered secondary offering; provided, however, that if Dealer, in its sole
reasonable discretion, is not satisfied with access to due diligence materials, the
results of its due diligence investigation, or the procedures and documentation for
the registered offering referred to above, then clause (ii) or clause (iii) of this
paragraph shall apply at the election of Counterparty, (ii) in order to allow Dealer
to sell the Hedge Shares in a private placement, enter into a private placement
agreement substantially similar to private placement purchase agreements customary for
private




16









 






	 	 	 	placements of equity securities, in form and substance satisfactory to Dealer (in
which case, the Calculation Agent shall make any adjustments to the terms of this
Transaction that are necessary, in its reasonable judgment, to compensate Dealer
for any discount from the public market price of the Shares incurred on the sale of
Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from
Dealer at the Reference Price on such Exchange Business Days, and in the amounts,
requested by Dealer.
	 
	 	(n)	 	Tax Disclosure. Effective from the date of commencement of
discussions concerning the Transaction, Counterparty and each of its employees,
representatives, or other agents may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the Transaction and all
materials of any kind (including opinions or other tax analyses) that are provided to
Counterparty relating to such tax treatment and tax structure.
	 
	 	(o)	 	Right to Extend.  Dealer may postpone, in whole or in part, any
Settlement Date or any other date of valuation or payment by Dealer or add additional
Settlement Dates or any other date of valuation or payment, with respect to some or
all of the Options hereunder, if Dealer reasonably determines, in its discretion, that
such extension is reasonably necessary or appropriate to enable Dealer to effect
purchases or sales of Shares in connection with its hedging or hedge unwind activity
hereunder in a manner that would, if Dealer were Counterparty or an agent of
Counterparty, be in compliance with applicable legal, regulatory or self-regulatory
requirements, or with related policies and procedures applicable to Dealer.
	 
	 	(p)	 	Securities Contract; Swap Agreement. The parties hereto intend for:
(a) the Transaction to be a “securities contract” and a “swap agreement” as defined in
the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and
the parties hereto to be entitled to the protections afforded by, among other
Sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the
Bankruptcy Code; (b) a party’s right to liquidate the Transaction and to exercise any
other remedies upon the occurrence of any Event of Default under the Agreement with
respect to the other party to constitute a “contractual right” as described in the
Bankruptcy Code; and (c) each payment and delivery of cash or other property hereunder
to constitute a “margin payment” or “settlement payment” and a “transfer” as defined
in the Bankruptcy Code.
	 
	 	(q)	 	Additional Provisions. As promptly as reasonably practicable
following the occurrence of any event that results in or could reasonably be expected
to result in any adjustment or adjustments pursuant to the Indenture, Counterparty
shall notify the Calculation Agent of such event; and once the adjustment or
adjustments to be made to the terms of the Indenture in respect of such event have
been determined, Counterparty shall immediately notify the Calculation Agent in
writing of the details of such adjustment or adjustments. Counterparty covenants and
agrees that, as promptly as practicable following the public announcement of any
consolidation, merger and binding share exchange to which Counterparty is a party, or
any sale of all or substantially all of Counterparty’s assets, in each case pursuant
to which the Shares will be converted into cash, securities or other property,
Counterparty shall notify Dealer in writing of the types and amounts of consideration
that holders of Shares have elected to receive upon consummation of such transaction
or event (the date of such notification, the “Consideration Notification Date”);
provided that in no event shall the Consideration Notification Date be later than the
date on which such transaction or event is consummated.
	 
	 	(r)	 	Early Unwind. In the event the sale by Counterparty of the
Convertible Notes is not consummated with the Underwriters pursuant to the
Underwriting Agreement for any reason by the close of business in New York on May 19,
2009 (or such later date as agreed upon by the parties, which in no event shall be
later than May 22, 2009) (May 19, 2009 or such later date being the “Closing Date”),
or, with respect to any Additional Convertible Notes, on the settlement date for the
Option Securities pursuant to Section 3




17









 






	 	 	 	 of the Underwriting Agreement (the “Additional Closing Date,” and the Closing Date
or the Additional Closing Date, as applicable, the “Early Unwind Date”), the
Transaction (or, with respect to any Additional Convertible Notes, the Additional
Options) shall automatically terminate (the “Early Unwind”), on the Early Unwind
Date and (i) the Transaction (or, with respect to any Additional Convertible Notes,
the Additional Options) and all of the respective rights and obligations of Dealer
and Counterparty under the Transaction or the Additional Options, as applicable,
shall be cancelled and terminated and (ii) Counterparty shall deliver to Dealer,
other than in cases involving a breach of the Underwriting Agreement by the
Underwriters, either an amount in cash equal to the aggregate amount of costs and
expenses relating to the unwinding of Dealer’s hedging activities in respect of the
Transaction or the Additional Options, as applicable, (including market losses
incurred in reselling any Shares purchased by Dealer or its affiliates in
connection with such hedging activities, unless Counterparty agrees to purchase any
such Shares at the cost at which Dealer purchased such Shares), but after giving
effect to any gains experienced by Dealer (such net amount, the “Cash Amount”).
Following such termination, cancellation and payment, each party shall be released
and discharged by the other party from and agrees not to make any claim against the
other party with respect to any obligations or liabilities of either party arising
out of and to be performed in connection with the Transaction or the Additional
Options, as applicable, either prior to or after the Early Unwind Date.




18









 











          Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon
receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm
that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the
agreement between Dealer and Counterparty with respect to the Transaction, by manually signing this
Confirmation or this page hereof as evidence of agreement to such terms and providing the other
information requested herein and immediately returning an executed copy to Credit Suisse Capital
LLC, c/o Credit Suisse Securities (USA) LLC, 11 Madison Avenue, New York, NY 10010-3629, Facsimile
No. (212) 325-8036.




	 	 	 	 	 
	 	Very truly yours,





Credit Suisse Capital LLC

 	 
	 	By:  	/s/
Bik Kwan Chung 	 
	 	 	Name:  	Bik Kwan Chung 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	Credit Suisse Securities (USA) LLC, as Agent

 	 
	 	By:  	/s/
Shui Wong 	 
	 	 	Name:  	Shui Wong 	 
	 	 	Title:  	Authorized Signatory 	 
	 



Accepted and confirmed

as of the Trade Date:




Wyndham Worldwide Corporation




	 	 	 	 	 
	By:

	 	/s/
Stephen P. Holmes
 

	 	 
	Authorized Signatory	 	 
	Name: Stephen P.
Holmes
            Chairman and Chief Executive Officer