Document:

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).

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	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 OfficerEX-10.2

Exhibit 10.2

EXECUTION VERSION

Credit Suisse Capital LLC

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, NY 10010

May 13, 2009

To: Wyndham Worldwide Corporation

22 Sylvan Way

Parsippany, NY 07054

Attention:           Vice President, Treasury

Telephone No.:   (973) 753-7703

Facsimile No.:    (973) 753-6730

Re: Warrants

     The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the Warrants issued by Wyndham Worldwide Corporation (“Company”) to Credit Suisse
Capital LLC (“Dealer”), represented by Credit Suisse Securities (USA) LLC (“Agent”) as its agent,
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. This Transaction shall
be deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.

     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 Company 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 Company 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 Transaction is a Warrant Transaction, which shall be considered a Share Option
Transaction for purposes of the Equity Definitions. 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
	 
	 	 	 	 
	 

	 	Warrants:
	 	Equity call warrants, each giving the holder the right to purchase one Share at the
Strike Price, subject to the Settlement Terms set forth below. For the purposes of the
Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference
to a Call Option.
	 
	 	 	 	 
	 

	 	Warrant Style:
	 	European
	 
	 	 	 	 
	 

	 	Seller:
	 	Company
	 
	 	 	 	 
	 

	 	Buyer:
	 	Dealer
	 
	 	 	 	 
	 

	 	Shares:
	 	The common stock of Company, par value USD 0.01 per Share (Exchange symbol “WYN”)
	 
	 	 	 	 
	 

	 	Number of Warrants:
	 	4,712,538, subject to adjustment as provided herein.
	 
	 	 	 	 
	 

	 	Warrant Entitlement:
	 	One Share per Warrant
	 
	 	 	 	 
	 

	 	Strike Price:
	 	USD 20.1590
	 
	 	 	 	 
	 

	 	Premium:
	 	USD 2,685,000
	 
	 	 	 	 
	 

	 	Premium Payment Date:
	 	May 19, 2009
	 
	 	 	 	 
	 

	 	Exchange:
	 	The New York Stock Exchange
	 
	 	 	 	 
	 

	 	Related Exchange(s):
	 	All Exchanges

Procedures for Exercise:

	 	 	 	 	 
	 

	 	Expiration Time:
	 	The Valuation Time
	 
	 	 	 	 
	 

	 	Expiration Date(s):
	 	Each Scheduled Trading Day during the period from and including the First
Expiration Date and to and including the fortieth (40th) Scheduled Trading
Day following the First Expiration Date shall be an “Expiration Date” for a number of
Warrants equal to the Daily Number of Warrants on such date; provided that,
notwithstanding anything to the contrary in the Equity Definitions, if any such date is
a Disrupted Day, the Calculation Agent shall make adjustments, if applicable, to the
Daily Number of Warrants for which such day shall be an Expiration Date (or shall reduce
such Daily Number of Warrants to zero) and shall designate a Scheduled Trading Day or a
number of Scheduled Trading Days as the Expiration Date(s) for the remaining Daily
Number of Warrants or a portion thereof for the originally scheduled Expiration Date;
and provided further that if such Expiration Date has not occurred pursuant to this
clause as of the eighth Scheduled Trading Day following the last scheduled

2

 

	 	 	 	 	 
	 

	 	 	 	Expiration Date under this Transaction, the Calculation
Agent shall have the right to declare such Scheduled
Trading Day to be the final Expiration Date and the
Calculation Agent shall determine its good faith
estimate of the fair market value for the Shares as of
the Valuation Time on that eighth Scheduled Trading Day
or on any subsequent Scheduled Trading Day, as the
Calculation Agent shall determine using commercially
reasonable means. Any day on which the Exchange is
scheduled to close prior to its normal closing time
shall be considered a Disrupted Day in whole.
	 
	 	 	 	 
	 

	 	First Expiration Date:
	 	July 30, 2012 (or if such day is not a Scheduled Trading Day, the
next following Scheduled Trading Day), subject to Market Disruption Event below.
	 
	 	 	 	 
	 

	 	Daily Number of Warrants:
	 	For any Expiration Date, the Number of Warrants that have not
expired or been exercised as of such day, divided by the remaining number of Expiration
Dates (including such day), rounded down to the nearest whole number, subject to
adjustment pursuant to the provisos to “Expiration Date(s)”.
	 
	 

	 	Automatic Exercise:
	 	Applicable; and means that for each Expiration Date, a number of Warrants
equal to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for such
Expiration Date will be deemed to be automatically exercised.
	 
	 	 	 	 
	 

	 	Market Disruption Event:
	 	Section 6.3(a)(ii) of the Equity Definitions is hereby amended by
replacing clause (ii) in its entirety with “(ii) an Exchange Disruption,” and inserting
immediately following clause (iii) the phrase “or (iv) a Regulatory Disruption; in each
case that the Calculation Agent determines is material.”
	 
	 	 	 	 
	 

	 	Regulatory Disruption:
	 	Any event that Dealer, in its commercially reasonable discretion based
on advice of counsel, determines makes it appropriate with regard to any legal,
regulatory or self-regulatory requirements or related policies and procedures (whether or
not such requirements, policies or procedures are imposed by law or have been voluntarily
adopted by Dealer, and including without limitation Rule 10b-18 and Regulation 14E under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation M),
for Dealer to refrain from or decrease any market activity in connection with the
Transaction. Dealer shall notify Company as soon as reasonably practicable that a
Regulatory Disruption has occurred and the Expiration Dates affected by it.

Valuation:

	 	 	 	 	 
	 

	 	Valuation Time:
	 	Scheduled Closing Time; provided that if the principal trading session is
extended, the Calculation Agent shall determine the Valuation Time in its reasonable
discretion.
	 
	 	 	 	 
	 

	 	Valuation Date:
	 	Each Exercise Date.

3

 

	 	 	 	 	 
	 

	 	Settlement Terms:	 	 
	 
	 	 	 	 
	 

	 	Settlement Method Election:
	 	Applicable; provided that (i) references to “Physical Settlement”
in Section 7.1 of the Equity Definitions shall be replaced by references to “Net Share
Settlement”; (ii) Company may elect Cash Settlement only if Company represents and
warrants to Dealer in writing on the date of such election that (A) Company is not in
possession of any material non-public information regarding Company or the Shares, (B)
Company is electing Cash Settlement in good faith and not as part of a plan or scheme to
evade compliance with the federal securities laws, and (C) the assets of Company at their
fair valuation exceed the liabilities of Company (including contingent liabilities), the
capital of Company is adequate to conduct the business of Company, and Company has the
ability to pay its debts and obligations as such debts mature and does not intend to, or
does not believe that it will, incur debt beyond its ability to pay as such debts mature;
and (iii) the same election of settlement method shall apply to all Expiration Dates
hereunder (and under any additional warrants issued as contemplated in Section 9(v)
hereof).
	 
	 	 	 	 
	 

	 	Electing Party: 	 	Company
	 
	 	 	 	 
	 

	 	Settlement Method Election Date:
	 	The third Scheduled Trading Day immediately preceding the
first Expiration Date.
	 
	 	 	 	 
	 

	 	Default Settlement Method:
	 	Net Share Settlement
	 
	 	 	 	 
	 

	 	Net Share Settlement:
	 	If Net Share Settlement is applicable, then on the relevant
Settlement Date, Company shall deliver to Dealer the Share Delivery Quantity of Shares
for such Settlement Date to the account specified hereto free of payment through the
Clearance System.
	 
	 	 	 	 
	 

	 	Share Delivery Quantity:
	 	For any Settlement Date, a number of Shares, as calculated by
the Calculation Agent, equal to the Net Share Settlement Amount for such Settlement Date
divided by the Settlement Price on the Valuation Date in respect of such Settlement Date,
rounded down to the nearest whole number plus any Fractional Share Amount.
	 
	 	 	 	 
	 

	 	Net Share Settlement Amount:
	 	For any Settlement Date, an amount equal to the product of
(i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date,
(ii) the Strike Price Differential for such Settlement Date and (iii) the Warrant
Entitlement.
	 
	 	 	 	 
	 

	 	Cash Settlement:
	 	If Cash Settlement is applicable, then on the relevant Settlement Date,
Company shall pay to Dealer an amount of cash in USD equal to the Net Share Settlement
Amount for such Settlement Date.
	 
	 	 	 	 
	 

	 	Settlement Price:
	 	For any Valuation Date, 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 the period from the scheduled opening time of
the Exchange to the Scheduled Closing Time on such Valuation Date (or if such
volume-weighted average price is unavailable or is manifestly incorrect, the market value
of one Share on such Valuation Date, as determined by the Calculation

4

 

	 	 	 	 	 
	 

	 	 	 	Agent using a volume-weighted method). Notwithstanding
the foregoing, if (i) any Expiration Date is a Disrupted
Day and (ii) the Calculation Agent determines that such
Expiration Date shall be an Expiration Date for fewer
than the Daily Number of Warrants, as described above,
then the Calculation Agent may adjust the Settlement
Price for the relevant Valuation Date as it deems
appropriate using a volume-weighted methodology, taking
into account the nature and duration of the relevant
Market Disruption Event.
	 
	 	 	 	 
	 

	 	Settlement Date(s):
	 	As determined in reference to Section 9.4 of the Equity Definitions,
subject to Section 9(k)(i) hereof.

	 	 	 	 	 
	Other Applicable Provisions:	 	If Net Share Settlement is applicable, the provisions of Sections
9.1(c), 9.8, 9.9, 9.11 (as modified herein), 9.12 and 10.5 of the Equity Definitions will be
applicable as if Physical Settlement were applicable.
	 
	 	 	 	 
	Representation and Agreement:	 	Notwithstanding Section 9.11 of the Equity Definitions, the parties
acknowledge that any Shares delivered to Dealer may be, upon delivery, subject to restrictions
and limitations arising under applicable securities laws from Company’s status as issuer of
the Shares.
	 
	 	 	 	 
	3. Additional Terms applicable to the Transaction:	 	 

	 	 	 	 	 
	 

	 	Adjustments applicable to the Warrants:	 	 
	 
	 	 	 	 
	 

	 	Method of Adjustment:
	 	Calculation Agent Adjustment. For the avoidance of doubt, in making any
adjustments under the Equity Definitions, the Calculation Agent may make adjustments, if
any, to any one or more of the Strike Price, the Number of Warrants, the Daily Number of
Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or
distributions on the Shares, whether or not extraordinary, shall be governed by Section
9(f) of this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity
Definitions.

Extraordinary Events applicable to the Transaction:

	 	 	 	 	 
	 

	 	New Shares:
	 	Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting
the text in clause (i) thereof in its entirety (including the word “and” following clause
(i)) and replacing it with the phrase “publicly quoted, traded or listed (or whose
related depositary receipts are publicly quoted, traded or listed) on any of the New York
Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their
respective successors)” and (b) by inserting immediately prior to the period the phrase
“and (iii) of an entity or person organized under the laws of the United States, any
State thereof or the District of Columbia that also becomes Company under the Transaction
following such Merger Event or Tender Offer”.
	 

	 	Consequence of Merger Events:	 	 

5

 

	 	 	 	 	 
	Merger Event:	 	Applicable; provided that if an event occurs that constitutes both a Merger
Event under Section 12.1(b) of the Equity Definitions and an Additional Termination Event
under Section 9(h)(ii)(A) of this Confirmation, Dealer may elect, in its commercially
reasonable judgment, whether the provisions of Section 12.1(b) of the Equity Definitions
or Section 9(h)(ii)(A) will apply.
	 
	 	 	 	 
	 

	 	Share-for-Share:
	 	Modified Calculation Agent Adjustment
	 
	 	 	 	 
	 

	 	Share-for-Other:
	 	Cancellation and Payment (Calculation Agent Determination)
	 
	 	 	 	 
	 

	 	Share-for-Combined:
	 	Cancellation and Payment (Calculation Agent Determination); provided
that Dealer may elect, in its commercially reasonable judgment, Component
Adjustment (Calculation Agent Determination).
	 
	 	 	 	 
	Consequence of Tender Offers:	 	 
	 
	 	 	 	 
	Tender Offer:	 	Applicable; provided however that if an event occurs that constitutes both a
Tender Offer under Section 12.1(d) of the Equity Definitions and Additional Termination
Event under Section 9(h)(ii)(C) of this Confirmation, Dealer may elect, in its
commercially reasonable judgment, whether the provisions of Section 12.3 of the Equity
Definitions or Section 9(h)(ii)(C) will apply.
	 
	 	 	 	 
	 

	 	Share-for-Share:
	 	Modified Calculation Agent Adjustment
	 
	 	 	 	 
	 

	 	Share-for-Other:
	 	Modified Calculation Agent Adjustment
	 
	 	 	 	 
	 

	 	Share-for-Combined:
	 	Modified Calculation Agent Adjustment
	 
	 	 	 	 
	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:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	Insolvency Filing:
	 	Applicable
	 
	 	 	 	 
	 

	 	Hedging Disruption:
	 	Applicable; provided that Section 12.9(a)(v) of the Equity
Definitions is hereby replaced in its entirety by the following:

6

 

	 	 	 	 	 
	 

	 	 	 	“‘Hedging Disruption’ means that the Hedging Party is
unable, after using commercially reasonable efforts, to
(A) acquire, establish, re-establish, substitute,
maintain, unwind or dispose of any transaction(s) or
asset(s) it deems necessary to hedge the equity price
risk of entering into and performing its obligations
with respect to the relevant Transaction, or (B)
realize, recover or remit the proceeds of any such
transaction(s) or asset(s). For the avoidance of doubt,
the term “equity price risk” shall be deemed to include,
but shall not be limited to, stock price and volatility
risk. And, for the further avoidance of doubt, such
transactions or assets referred to in phrases (A) or (B)
above must be available on commercially reasonable
pricing terms (considered in the aggregate across all
such transactions).”
	 
	 	 	 	 
	 

	 	Increased Cost of Hedging:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	Loss of Stock Borrow:
	 	Applicable
	 
	 	 	 	 
	 

	 	     Maximum Stock Loan Rate:
	 	200 basis points
	 
	 	 	 	 
	 

	 	Increased Cost of Stock Borrow:
	 	Applicable
	 
	 	 	 	 
	 

	 	      Initial Stock Loan Rate:
	 	25 basis points
	 
	 	 	 	 
	Hedging Party:	 	Dealer for all applicable Additional Disruption Events
	 
	 	 	 	 
	Determining Party:	 	Dealer for all applicable Extraordinary Events
	 
	 	 	 	 
	Non-Reliance:	 	Applicable
	 
	 	 	 	 
	Agreements and Acknowledgments	 	 
	 
	 	 	 	 
	Regarding Hedging Activities:	 	Applicable
	 
	 	 	 	 
	Additional Acknowledgments:	 	Applicable
	 
	 	 	 	 
	4. Calculation Agent: Dealer	 	 
	 
	 	 	 	 
	5. Account Details:	 	 

	 	 	 	 	 	 	 
	 	 	(a)	 	Account for payments to Company:
	 
	 	 	 	 	 	 
	 

	 	 	 	Bank:
	 	JPMorgan Chase Bank, New York, NY
	 

	 	 	 	ABA#:
	 	021000021 
	 

	 	 	 	Acct Name:
	 	WHG Hospitality, Inc.
	 

	 	 	 	Acct No.:
	 	304656429 
	 
	 	 	 	 	 	 
	 	 	 	 	Account for delivery of Shares from Company:
	 
	 	 	 	 	 	 
	 	 	 	 	To be provided by Company.
	 
	 	 	 	 	 	 
	 	 	(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 

7

 

	 	 	 	 	 
	 

	 	 	 	Account for delivery of Shares to Dealer:
	 
	 	 	 	 
	 

	 	 	 	To be provided by Dealer.
	 
	 	 	 	 
	6. Offices:
	 
	 	 	 	 
	The Office of Company for the Transaction is: Inapplicable, Company 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 Company:
	 
	 	 	 	 
	 

	 	 	 	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:
	 
	 	 	 	 
	 

	 	 	 	Dealer notice information to follow:
	 
	 	 	 	 
	 

	 	 	 	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 

8

 

8. Representations and Warranties of Company

The representations and warranties made by Company pursuant to the Underwriting Agreement (the
“Underwriting Agreement”) dated as of May 13, 2009 between Company and Credit Suisse Securities
(USA) LLC, J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, as representatives of the Underwriters party thereto, are true and
correct and are hereby deemed to be repeated to Dealer as if set forth herein. Company hereby
further represents and warrants to Dealer that:

	 	(a)	 	Company 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 Company’s
part; and this Confirmation has been duly and validly executed and delivered by Company
and constitutes its valid and binding obligation, enforceable against Company 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 Company hereunder will conflict with or result in a
breach of the certificate of incorporation or by-laws (or any equivalent documents) of
Company, 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 Company or any of its subsidiaries is a party or by which Company or any of its
subsidiaries is bound or to which Company 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 Company 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)	 	The Shares of Company initially issuable upon exercise of the Warrant by the
net share settlement method (the “Warrant Shares”) have been reserved for issuance by
all required corporate action of Company. The Warrant Shares have been duly authorized
and, when delivered against payment therefor (which may include Net Share Settlement in
lieu of cash) and otherwise as contemplated by the terms of the Warrant following the
exercise of the Warrant in accordance with the terms and conditions of the Warrant,
will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant
Shares will not be subject to any preemptive or similar rights.
	 
	 	(e)	 	Company 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.
	 
	 	(f)	 	Company 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:
	 
	 	 	 	Company is a corporation, partnership, proprietorship, organization, trust or other
entity and:

	 	(A)	 	Company has total assets in excess of USD 10,000,000;
	 
	 	(B)	 	the obligations of Company 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

9

 

	 	 	 	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)	 	Company has a net worth in excess of USD 1,000,000 and has
entered into this Agreement in connection with the conduct of Company’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 Company in the conduct
of Company’s business.

	 	(g)	 	Company is not, on the date hereof, in possession of any material non-public
information with respect to Company.
	 
	 	(h)	 	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 Company (including without limitation any such law, regulation or order regulating
the gaming business or the consumer finance 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.

	 
	 	(i)	 	Company 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 Company 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. Company shall deliver an opinion of counsel, dated as of the
Trade Date, to Dealer with respect to the matters set forth in Sections 8(a) through
(d) of this Confirmation.
	 
	(b)	 	Repurchase Notices. Company shall, on any day on which Company 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 on such day, subject to any adjustments provided herein, 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. Company agrees to indemnify and hold harmless Dealer and its affiliates and
their respective officers, directors, employees, affiliates, advisors, agents and
controlling persons (each, an “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 actually may become subject, as a result of Company’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, such Indemnified Person shall
promptly notify Company in writing, and Company, upon request of the Indemnified
Person, shall retain counsel reasonably satisfactory to

10

 

	 	 	the Indemnified Person to represent the Indemnified Person and any others Company
may designate in such proceeding and shall pay the fees and expenses of such counsel
related to such proceeding. Company shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such consent or
if there be a final judgment for the plaintiff, Company agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Company shall not, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened proceeding 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 Company under
such paragraph, 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 are not exclusive and shall not limit any rights or remedies that may
otherwise be available to any Indemnified Person 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; Company Purchases. (i) During the period starting on the
first Expiration Date and ending on the last Expiration Date (the “Settlement Period”),
the Shares or securities that are convertible into, or exchangeable or exercisable for
Shares, are not, and shall not be, subject to a “restricted period,” as such term is
defined in Regulation M under the Exchange Act (“Regulation M”), and Company shall not
engage in any “distribution,” as such term is defined in Regulation M, other than a
distribution meeting the requirements of the exceptions set forth in sections
101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day
immediately following the Settlement Period, unless in either case Company has provided
written notice to Dealer of the relevant restricted period not later than 7:00 a.m.
(New York City time) on the first day of such restricted period. Company acknowledges
that any such notice may cause a Disrupted Day to occur pursuant to Regulatory
Disruption; accordingly, Company acknowledges that its delivery of such notice must be
made in good faith and not as part of a plan or scheme to evade the prohibitions of
Rule 10b-5 of the Exchange Act.
	 
	 	 	(ii) During the Settlement Period, neither Company 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) 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, except through Dealer.
	 
	 	 	(iii) Company (A) shall not during the Settlement Period make, or permit to be
made, any public announcement (as defined in Rule 165(f) under the Securities Act)
of any Merger Transaction or potential Merger Transaction unless such public
announcement is made prior to the opening or after the close of the regular trading
session on the Exchange; (B) shall promptly (but in any event prior to the next
opening of the regular trading session on the Exchange) provide Dealer with written
notice specifying (I) Company’s average daily Rule 10b-18 purchases (as defined in
Rule 10b-18) during the three full calendar months immediately preceding the
announcement date that were not effected through Dealer or its affiliates and (II)
the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under
the Exchange Act for the three full calendar months preceding the announcement date.
In addition, Company shall promptly notify Dealer of the earlier to occur of the
completion of such transaction and the completion of the vote by target
shareholders. “Merger Transaction” means any merger, acquisition or similar
transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv)
under the Exchange Act.

11

 

	(d)	 	No Manipulation. Company 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. Company may not transfer any of its rights or
obligations under this Transaction without the prior written consent of Dealer. Dealer
may, without Company’s consent, transfer or assign all or any part of its rights or
obligations under this Transaction to any third party that is a financial institution
that regularly enters into OTC derivatives. If after Dealer’s 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 Warrants to reduce (i) the Section 16 Percentage to
8.0% or less, (ii) the Warrant Equity Percentage to 14.5% or less, or (iii) 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 (i) the Section 16 Percentage following such partial
termination will be equal to or less than 8.0% (but not less than 7%), (ii) the Warrant
Equity Percentage following such partial termination will be equal to or less than
14.5% (but not less than 13.5%) and (iii) 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 (i) an Early
Termination Date had been designated in respect of a Transaction having terms identical
to this Transaction and a Number of Warrants equal to the Terminated Portion, (ii)
Company shall be the sole Affected Party with respect to such partial termination and
(iii) such Transaction shall be the only Terminated Transaction (and, for the avoidance
of doubt, the provisions of paragraph 9(j) shall apply to any amount that is payable by
Company to Dealer pursuant to this sentence). 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 or Section
16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of
which is the number of Shares outstanding. The “Warrant 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 Warrants and the Warrant Entitlement and (y) the
aggregate number of Shares underlying any other warrants purchased by Dealer from
Company, 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) 1% of the number of Shares
outstanding. 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 to or from Company, Dealer may designate any of its affiliates to purchase,
sell, receive or deliver such Shares or other securities 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 Company to the
extent of any such performance.

12

 

	(f)	 	Dividends. If at any time during the period from and including the
Effective Date, to and including the Expiration Date, (i) an ex-dividend date for a
cash dividend occurs with respect to the Shares (an “Ex-Dividend Date”), and that
dividend differs from the Regular Dividend on a per Share basis or (ii) if no
Ex-Dividend Date for a cash dividend occurs with respect to the Shares in any quarterly
dividend period of Company, then the Calculation Agent will adjust any of the Strike
Price, Number of Warrants and/or Daily Number of Warrants to preserve the fair value of
the Warrants to Dealer after taking into account such dividend or lack thereof.
“Regular Dividend” shall mean for any calendar quarter, USD 0.04 for the first cash
dividend or distribution on the Shares for which the Ex-Dividend Date falls within such
calendar quarter, and zero for any subsequent dividend or distribution on the Shares
for which the Ex-Dividend Date falls within the same calendar quarter.
	 
	(g)	 	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 statements to Dealer and Company, (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 Company,
receiving, delivering, and safeguarding Company’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 Company pursuant to instructions from Dealer and Company.
Agent shall have no responsibility or personal liability to Dealer or Company
arising from any failure by Dealer or Company to pay or perform any obligations
hereunder, or to monitor or enforce compliance by Dealer or Company with any
obligation hereunder, including, without limitation, any obligations to maintain
collateral. Each of Dealer and Company 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 Company 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

13

 

(iii) The date and time of the Transaction evidenced hereby will be furnished by
the Agent to Dealer and Company upon written request.

(iv) The Agent will furnish to Company 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 Company 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.

	 	(h)	 	Additional Provisions.

     (i) Amendments to the Equity Definitions:

(A) Section 11.2(a) of the Equity Definitions is hereby amended by deleting the
words “a diluting or concentrative” and replacing them with the words “an”; and
adding the phrase “or Warrants” at the end of the sentence.

(B) Section 11.2(c) of the Equity Definitions is hereby amended by (x)
replacing the words “a diluting or concentrative” with “an”, (y) adding the
phrase “or Warrants” after the words “the relevant Shares” in the same sentence
and (z) deleting the phrase “(provided that no adjustments will be made to
account solely for changes in volatility, expected dividends, stock loan rate
or liquidity relative to the relevant Shares)” and replacing it with the phrase
“(and, for the avoidance of doubt, adjustments may be made to account solely
for changes in volatility, expected dividends, stock loan rate or liquidity
relative to the relevant Shares).”

(C) Section 11.2(e)(vii) of the Equity Definitions is hereby amended by
deleting the words “a diluting or concentrative” and replacing them with the
word “a material”; and adding the phrase “or Warrants” at the end of the
sentence.

(D) 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.”

(E) Section 12.9(b)(iv) of the Equity Definitions is hereby amended by:

(x) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)”
following subsection (A) and (3) the phrase “in each case” in subsection
(B); and

(y) deleting the phrase “neither the Non-Hedging Party nor the Lending
Party lends Shares in the amount of the Hedging Shares or” in the
penultimate sentence.

(F) Section 12.9(b)(v) of the Equity Definitions is hereby amended by:

(x) adding the word “or” immediately before subsection “(B)” and
deleting the comma at the end of subsection (A); and

(y) (1) deleting subsection (C) in its entirety, (2) deleting the word
“or” immediately preceding subsection (C) and (3) deleting the
penultimate sentence in its entirety and replacing it with the sentence
“The Hedging Party will determine the Cancellation Amount payable by one
party to the other.”

14

 

(ii) Notwithstanding anything to the contrary in this Confirmation, upon the
occurrence of one of the following events, with respect to this Transaction, (1)
Dealer shall have the right to designate such event an Additional Termination Event
and designate an Early Termination Date pursuant to Section 6(b) of the Agreement,
and (2) Company shall be deemed the sole Affected Party and the Transaction shall be
deemed the sole Affected Transaction:

(A) Consummation of (i) any recapitalization, reclassification or change of the
Shares (other than changes resulting from a subdivision or combination of the
Shares or any such recapitalization, reclassification or change that is
effected solely to change Company’s jurisdiction of incorporation and results
in a reclassification, conversion or exchange of outstanding Shares solely into shares of common stock of the surviving entity) as a result of which the Shares
would be converted into, or exchanged for, stock, other securities, other
property or assets or (ii) any share exchange, consolidation or merger of
Company pursuant to which the Shares will be converted into cash, securities or
other property or any sale, lease or other transfer in one transaction or a
series of transactions of all or substantially all of the consolidated assets
of Company and its subsidiaries, taken as a whole, to any person other than one
of Company’s subsidiaries; provided, however, that a transaction where the
holders of more than 50% of all classes of the common equity of Company
immediately prior to such transaction that is a share exchange, consolidation
or merger own, directly or indirectly, more than 50% of all classes of common
equity of the continuing or surviving corporation or transferee or the parent
thereof immediately after such event shall not be an Additional Termination
Event. Notwithstanding the foregoing, any event set forth in this clause (A)
shall not constitute an Additional Termination Event if 90% of the
consideration received or to be received by holders of the Shares in connection
with such event consists of shares of common stock traded on a national
securities exchange or that will be so traded or quoted when issued or
exchanged in connection with such event.

(B) There is an event of default by Company under the terms of any indenture,
mortgage, agreement or other instrument under which there may be outstanding,
or by which there may be secured or evidenced, any indebtedness of Company for
money borrowed in an original aggregate principal or face amount in excess of
$175 million, whether such indebtedness now exists or shall hereafter be
created, which event of default results in acceleration of such indebtedness.

(C) A “person” or “group” within the meaning of Section 13(d) of the Exchange
Act, other than Company, any of its subsidiaries and its and their employee
benefit plans, files a Schedule TO or any schedule, form or report under the
Exchange Act, disclosing that such person or group has become the direct or
indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act,
of the common equity of Company representing more than 50% of the voting power
of such common equity.

(D) If (i) the directors who were members of the board of directors of Company
on the Trade Date or (ii) the directors who become members of the board of
directors of Company subsequent to that date and whose election, appointment or
nomination for election by Company stockholders is duly approved by a majority
of the continuing directors on the board of directors of Company at the time of
such approval, either by a specific vote or by approval of the proxy statement
issued by Company on behalf of the entire board of directors of Company in
which such individual is named as nominee for director, cease to constitute at
least a majority of Company’s board of directors.

(E) Dealer, despite using commercially reasonable efforts is unable, or
reasonably determines based on the advice of counsel that it is impractical or
illegal, to hedge its exposure with respect to this Transaction in the public
market without registration under the Securities Act or as a result of any
legal or regulatory requirements or related policies and

15

 

procedures (whether or not such requirements, policies or procedures are
imposed by law or have been voluntarily adopted by Dealer).

For purposes of this Section 9(h)(ii), any transaction or event that constitutes an
Additional Termination Event under both clause (A) and clause (C) above will be
deemed to be solely an Additional Termination Event under clause (A).

	 	(i)	 	No Collateral or Setoff. Notwithstanding any provision of the
Agreement or any other agreement between the parties to the contrary, the obligations
of Company hereunder are not secured by any collateral. 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.
	 
	 	(j)	 	Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events. If, in respect of this Transaction, an amount is payable by
Company to Dealer, (i) pursuant to Section 12.7 or Section 12.9 of the Equity
Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement (a “Payment
Obligation”), Company shall have the right, in its sole discretion, to satisfy any such
Payment Obligation by the Share Termination Alternative (as defined below) (except that
Company shall not make such an election in the event of a Nationalization, Insolvency,
Merger Event or Tender Offer in which the consideration to be paid to holders of shares
consists solely of cash or an Event of Default in which Company is the Defaulting Party
or a Termination Event in which Company is the Affected Party, other than an Event of
Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the
Agreement or a Termination Event of the type described in Section 5(b) of the
Agreement, in each case that resulted from an event or events outside Company’s
control) and shall give irrevocable telephonic notice to Dealer, confirmed in writing
within one Scheduled Trading Day, no later than 12:00 p.m. New York local time on the
Merger Date, Tender Offer Date, Announcement Date (in the case of a Nationalization,
Insolvency or Delisting), Early Termination Date or date of cancellation, as
applicable; provided that if Company does not validly elect to satisfy its Payment
Obligation by the Share Termination Alternative, Dealer shall have the right to require
Company to satisfy its Payment Obligation by the Share Termination Alternative.
Notwithstanding the foregoing, Company’s or Dealer’s right to elect satisfaction of a
Payment Obligation in the Share Termination Alternative as set forth in this clause
shall only apply to Transactions under this Confirmation and, notwithstanding anything
to the contrary in the Agreement, (1) separate amounts shall be calculated with respect
to (a) Transactions hereunder and (b) all other Transactions under the Agreement, and
(2) such separate amounts shall be payable pursuant to Section 6(d)(ii) of the
Agreement, subject to, in the case of clause (a), Company’s Share Termination
Alternative right hereunder.

	 	 	 
	Share Termination Alternative:

	 	If applicable, Company shall deliver
to Dealer the Share Termination Delivery Property on the date (the “Share
Termination Payment Date”) on which the Payment Obligation would otherwise be
due pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or
Section 6(d)(ii) of the Agreement, as applicable, subject to paragraph (k)(i)
below, in satisfaction, subject to paragraph (k)(ii) below, of the Payment
Obligation in the manner reasonably requested by Dealer free of payment.
	 
	 	 
	Share Termination Delivery Property:

	 	A number of Share Termination
Delivery Units, as calculated by the Calculation Agent, equal to the Payment
Obligation divided by the Share Termination Unit Price. The Calculation Agent
shall adjust the amount of Share Termination Delivery Property by replacing any
fractional portion of a

16

 

	 	 	 
	 

	 	security therein with an amount of cash equal
to the value of such fractional security based
on the values used to calculate the Share
Termination Unit Price.
	 
	 	 
	Share Termination Unit Price:

	 	The value to Dealer of property
contained in one Share Termination Delivery Unit on the date such Share
Termination Delivery Units are to be delivered as Share Termination Delivery
Property, as determined by the Calculation Agent in its discretion by
commercially reasonable means. The Calculation Agent shall notify Company of
such Share Termination Unit Price at the time of notification of the Payment
Obligation. In the case of a Private Placement of Share Termination Delivery
Units that are Restricted Shares (as defined below), as set forth in paragraph
(k)(i) below, the Share Termination Unit Price shall be determined by the
discounted price applicable to such Share Termination Delivery Units. In the
case of a Registration Settlement of Share Termination Delivery Units that are
Restricted Shares (as defined below) as set forth in paragraph (k)(ii) below,
the Share Termination Unit Price shall be the Settlement Price on the Merger
Date, the Tender Offer Date, the Announcement Date (in the case of a
Nationalization, Insolvency or Delisting), the date of cancellation or the
Early Termination Date, as applicable.
	 
	 	 
	Share Termination Delivery Unit:

	 	In the case of a Termination Event,
Event of Default Additional Disruption Event or Delisting, one Share or, in the
case of Nationalization, Insolvency, Tender Offer or Merger Event, a unit
consisting of the number or amount of each type of property received by a
holder of one Share (without consideration of any requirement to pay cash or
other consideration in lieu of fractional amounts of any securities) in such
Nationalization, Insolvency, Tender Offer or Merger Event. If such
Nationalization, Insolvency, Tender Offer or Merger Event involves a choice of
consideration to be received by holders, such holder shall be deemed to have
elected to receive the maximum possible amount of cash.
	 
	 	 
	Failure to Deliver:

	 	Inapplicable
	 
	 	 
	Other applicable provisions:

	 	If Share Termination Alternative is
applicable, the provisions of Sections 9.8, 9.9, 9.11 (as modified herein),
9.12 and 10.5 (as modified above) of the Equity Definitions will be applicable
as if Physical Settlement were applicable.

	 	(k)	 	Registration/Private Placement Procedures. If, in the reasonable
opinion of Dealer, following any delivery of Shares or Share Termination Delivery
Property to Dealer hereunder, such Shares or Share Termination Delivery Property would
be in the hands of Dealer subject to any applicable restrictions with respect to any
registration or qualification requirement or prospectus delivery requirement for such
Shares or Share Termination Delivery Property pursuant to any applicable

17

 

	 	 	 	federal or state securities law (including, without limitation, any such requirement
arising under Section 5 of the Securities Act as a result of such Shares or Share
Termination Delivery Property being “restricted securities”, as such term is defined
in Rule 144 under the Securities Act, or as a result of the sale of such Shares or
Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under
the Securities Act) (such Shares or Share Termination Delivery Property, “Restricted
Shares”), then delivery of such Restricted Shares shall be effected pursuant to
either clause (i) or (ii) below at the election of Company, unless Dealer waives the
need for registration/private placement procedures set forth in (i) and (ii) below.
Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants
exercised or deemed exercised on any Expiration Date, Company shall elect, prior to
the first Settlement Date for the first Expiration Date, a Private Placement
Settlement or Registration Settlement for all deliveries of Restricted Shares for
all such Expiration Dates, which election shall be applicable to all Settlement
Dates for such Warrants and the procedures in clause (i) or clause (ii) below shall
apply for all such delivered Restricted Shares on an aggregate basis commencing
after the final Settlement Date for such Warrants. The Calculation Agent shall make
reasonable adjustments to settlement terms and provisions under this Confirmation to
reflect a single Private Placement or Registration Settlement for such aggregate
Restricted Shares delivered hereunder.

	 	(i)	 	If Company elects to settle the Transaction pursuant to this
clause (i) (a “Private Placement Settlement”), then delivery of Restricted
Shares by Company shall be effected in customary private placement procedures
with respect to such Restricted Shares reasonably acceptable to Dealer;
provided that Company may not elect a Private Placement Settlement if, on the
date of its election, it has taken, or caused to be taken, any action that
would make unavailable either the exemption pursuant to Section 4(2) of the
Securities Act for the sale by Company to Dealer (or any affiliate designated
by Dealer) of the Restricted Shares or the exemption pursuant to Section 4(1)
or Section 4(3) of the Securities Act for resales of the Restricted Shares by
Dealer (or any such affiliate of Dealer). The Private Placement Settlement of
such Restricted Shares shall include customary representations, covenants, blue
sky and other governmental filings and/or registrations, indemnities to Dealer,
due diligence rights (for Dealer or any designated buyer of the Restricted
Shares by Dealer), opinions and certificates, and such other documentation as
is customary for private placement agreements, all reasonably acceptable to
Dealer. In the case of a Private Placement Settlement, Dealer shall determine
the appropriate discount to the Share Termination Unit Price (in the case of
settlement of Share Termination Delivery Units pursuant to paragraph (j) above)
or any Settlement Price (in the case of settlement of Shares pursuant to
Section 2 above) applicable to such Restricted Shares in a commercially
reasonable manner and appropriately adjust the number of such Restricted Shares
to be delivered to Dealer hereunder; provided that in no event shall such
number be greater than 1.85 times the Number of Shares (the “Maximum Amount”).
Notwithstanding the Agreement or this Confirmation, the date of delivery of
such Restricted Shares shall be the Exchange Business Day following notice by
Dealer to Company, of such applicable discount and the number of Restricted
Shares to be delivered pursuant to this clause (i). For the avoidance of
doubt, delivery of Restricted Shares shall be due as set forth in the previous
sentence and not be due on the Share Termination Payment Date (in the case of
settlement of Share Termination Delivery Units pursuant to paragraph (j) above)
or on the Settlement Date for such Restricted Shares (in the case of settlement
in Shares pursuant to Section 2 above).
	 
	 	 	 	In the event Company shall not have delivered the full number of Restricted
Shares otherwise applicable as a result of the proviso above relating to the
Maximum Amount (such deficit, the “Deficit Restricted Shares”), Company
shall be continually obligated to deliver, from time to time until the full
number of Deficit Restricted Shares have been delivered pursuant to this
paragraph, Restricted Shares when, and to the extent, that (i) Shares are
repurchased, acquired or otherwise received by Company or any of its
subsidiaries after the Trade Date (whether or not in exchange for cash, fair
value or any other consideration), (ii) authorized and unissued Shares
reserved for issuance in respect of other transactions prior to such date
that prior to the relevant date become no longer so

18

 

	 	 	 	reserved and (iii) Company additionally authorizes any unissued Shares that
are not reserved for other transactions. Company shall immediately notify
Dealer of the occurrence of any of the foregoing events (including the
number of Shares subject to clause (i), (ii) or (iii) and the corresponding
number of Restricted Shares to be delivered) and promptly deliver such
Restricted Shares thereafter.
	 
	 	(ii)	 	If Company elects to settle the Transaction pursuant to this
clause (ii) (a “Registration Settlement”), then Company shall promptly (but in
any event no later than the beginning of the Resale Period) file and use its
reasonable best efforts to make effective under the Securities Act a
registration statement or supplement or amend an outstanding registration
statement in form and substance reasonably satisfactory to Dealer, to cover the
resale of such Restricted Shares in accordance with customary resale
registration procedures, including covenants, conditions, representations,
underwriting discounts (if applicable), commissions (if applicable),
indemnities due diligence rights, opinions and certificates, and such other
documentation as is customary for equity resale underwriting agreements, all
reasonably acceptable to Dealer. If Dealer, in its sole reasonable discretion,
is not satisfied with such procedures and documentation Private Placement
Settlement shall apply. If Dealer is satisfied with such procedures and
documentation, it shall sell the Restricted Shares pursuant to such
registration statement during a period (the “Resale Period”) commencing on the
Exchange Business Day following delivery of such Restricted Shares (which, for
the avoidance of doubt, shall be (x) the Share Termination Payment Date in case
of settlement in Share Termination Delivery Units pursuant to paragraph (j)
above or (y) the Settlement Date in respect of the final Expiration Date for
all Daily Number of Warrants) and ending on the earliest of (i) the Exchange
Business Day on which Dealer completes the sale of all Restricted Shares or, in
the case of settlement of Share Termination Delivery Units, a sufficient number
of Restricted Shares so that the realized net proceeds of such sales equals or
exceeds the Payment Obligation (as defined above), (ii) the date upon which all
Restricted Shares have been sold or transferred pursuant to Rule 144 (or
similar provisions then in force) or Rule 145(d)( 2) (or any similar provision
then in force) under the Securities Act and (iii) the date upon which all
Restricted Shares may be sold or transferred by a non-affiliate pursuant to
Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any
similar provision then in force) under the Securities Act. If the Payment
Obligation exceeds the realized net proceeds from such resale, Company shall
transfer to Dealer by the open of the regular trading session on the Exchange
on the Exchange Trading Day immediately following the last day of the Resale
Period the amount of such excess (the “Additional Amount”) in cash or in a
number of Shares (“Make-whole Shares”) in an amount that, based on the
Settlement Price on the last day of the Resale Period (as if such day was the
“Valuation Date” for purposes of computing such Settlement Price), has a dollar
value equal to the Additional Amount. The Resale Period shall continue to
enable the sale of the Make-whole Shares. If Company elects to pay the
Additional Amount in Shares, the requirements and provisions for Registration
Settlement shall apply. This provision shall be applied successively until the
Additional Amount is equal to zero. In no event shall Company deliver a number
of Restricted Shares greater than the Maximum Amount.
	 
	 	(iii)	 	Without limiting the generality of the foregoing, Company
agrees that any Restricted Shares delivered to Dealer, as purchaser of such
Restricted Shares, (i) may be transferred by and among Dealer and its
affiliates and Company shall effect such transfer without any further action by
Dealer and (ii) after the period of 6 months from the Trade Date (or 1 year
from the Trade Date if, at such time, informational requirements of Rule 144(c)
are not satisfied with respect to Company) has elapsed after any Settlement
Date for such Restricted Shares, Company shall promptly remove, or cause the
transfer agent for such Restricted Shares to remove, any legends referring to
any such restrictions or requirements from such Restricted Shares upon request
by Dealer (or such affiliate of Dealer) to Company or such transfer agent,
without any requirement for the delivery of any certificate, consent,
agreement, opinion of counsel, notice or any other document,

19

 

	 	 	 	any transfer tax stamps or payment of any other amount or any other action
by Dealer (or such affiliate of Dealer).

	 	 	 	If the Private Placement Settlement or the Registration Settlement shall not be
effected as set forth in clauses (i) or (ii), as applicable, then failure to effect
such Private Placement Settlement or such Registration Settlement shall constitute
an Event of Default with respect to which Company shall be the Defaulting Party.
	 
	 	(l)	 	Limit on Beneficial Ownership. Notwithstanding any other provisions
hereof, Dealer may not exercise any Warrant hereunder, have the “right to acquire”
(within the meaning of NYSE Rule 312.04(g)) Shares upon exercise of any Warrant
hereunder or be entitled to take delivery of any Shares deliverable hereunder, and
Automatic Exercise shall not apply with respect to any Warrant hereunder, to the extent
(but only to the extent) that, after such receipt of any Shares upon the exercise of
such Warrant or otherwise hereunder, (i) the Share Amount would exceed the Applicable
Limit or (ii) Dealer Group would directly or indirectly beneficially own (as such term
is defined for purposes of Section 13 or Section 16 of the Exchange Act and the rules
promulgated thereunder) in excess of the lesser of (A) 8.0% of the then outstanding
Shares or (B) 8,752,148 Shares (the “Threshold Number of Shares”). Any purported
delivery hereunder shall be void and have no effect to the extent (but only to the
extent) that, after such delivery, (i) the Share Amount would exceed the Applicable
Limit, or (ii) Dealer Group would directly or indirectly so beneficially own in excess
of the Threshold Number of Shares. If any delivery owed to Dealer hereunder is not
made, in whole or in part, as a result of this provision, Company’s obligation to make
such delivery shall not be extinguished and Company shall make such delivery as
promptly as practicable after, but in no event later than one Business Day after,
Dealer gives notice to Company that, after such delivery, (i) the Share Amount would
not exceed the Applicable Limit, and (ii) Dealer Group would not directly or indirectly
so beneficially own in excess of the Threshold Number of Shares.
	 
	 	(m)	 	Share Deliveries. Company acknowledges and agrees that, to the extent
the holder of this Warrant is not then an affiliate and has not been an affiliate for
90 days (it being understood that Dealer will not be considered an affiliate under this
paragraph solely by reason of its receipt of Shares pursuant to this Transaction), and
otherwise satisfies all holding period and other requirements of Rule 144 of the
Securities Act applicable to it, any delivery of Shares or Share Termination Delivery
Property hereunder at any time after 6 months from the Trade Date (or 1 year from the
Trade Date if, at such time, informational requirements of Rule 144(c) are not
satisfied with respect to Company) shall be eligible for resale under Rule 144 of the
Securities Act and Company agrees to promptly remove, or cause the transfer agent for
such Shares or Share Termination Delivery Property, to remove, any legends referring to
any restrictions on resale under the Securities Act from the Shares or Share
Termination Delivery Property. Company further agrees that any delivery of Shares or
Share Termination Delivery Property prior to the date that is 6 months from the Trade
Date (or 1 year from the Trade Date if, at such time, informational requirements of
Rule 144(c) are not satisfied with respect to Company), may be transferred by and among
Dealer and its affiliates and Company shall effect such transfer without any further
action by Dealer. Notwithstanding anything to the contrary herein, Company agrees that
any delivery of Shares or Share Termination Delivery Property shall be effected by
book-entry transfer through the facilities of DTC, or any successor depositary, if at
the time of delivery, such class of Shares or class of Share Termination Delivery
Property is in book-entry form at DTC or such successor depositary. Notwithstanding
anything to the contrary herein, to the extent the provisions of Rule 144 of the
Securities Act or any successor rule are amended, or the applicable interpretation
thereof by the Securities and Exchange Commission or any court change after the Trade
Date, the agreements of Company herein shall be deemed modified to the extent
necessary, in the opinion of outside counsel of Company, to comply with Rule 144 of the
Securities Act, as in effect at the time of delivery of the relevant Shares or Share
Termination Delivery Property.
	 
	 	(n)	 	Governing Law. New York law (without reference to choice of law
doctrine).

20

 

	 	(o)	 	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 the other 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.
	 
	 	(p)	 	Tax Disclosure. Effective from the date of commencement of discussions
concerning the Transaction, Company 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 Company relating to
such tax treatment and tax structure.
	 
	 	(q)	 	Maximum Share Delivery. Notwithstanding any other provision of this
Confirmation or the Agreement, in no event will Company be required to deliver more
than the Maximum Amount of Shares in the aggregate to Dealer in connection with this
Transaction, subject to the provisions regarding Deficit Restricted Shares
	 
	 	(r)	 	Right to Extend. Dealer may postpone, in whole or in part, any
Expiration Date or any other date of valuation or delivery with respect to some or all
of the relevant Warrants (in which event the Calculation Agent shall make appropriate
adjustments to the Daily Number of Warrants with respect to one or more Expiration
Dates) if Dealer determines, in its commercially reasonable judgment, that such
extension is reasonably necessary or appropriate to preserve Dealer’s hedging or hedge
unwind activity hereunder in light of existing liquidity conditions or to enable Dealer
to effect purchases of Shares in connection with its hedging, hedge unwind or
settlement activity hereunder in a manner that would, if Dealer were Issuer or an
affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or
self-regulatory requirements, or with related policies and procedures applicable to
Dealer.
	 
	 	(s)	 	Status of Claims in Bankruptcy. Dealer acknowledges and agrees that
this Confirmation is not intended to convey to Dealer rights against Company with
respect to the Transaction that are senior to the claims of common stockholders of
Company in any United States bankruptcy proceedings of Company; provided that nothing
herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the
event of a breach by Company of its obligations and agreements with respect to the
Transaction; provided, further, that nothing herein shall limit or shall be deemed to
limit Dealer’s rights in respect of any transactions other than the Transaction.
	 
	 	(t)	 	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, securities or other property hereunder to constitute
a “margin payment” or “settlement payment” and a “transfer” as defined in the
Bankruptcy Code.
	 
	 	(u)	 	Delivery or Receipt of Cash. For the avoidance of doubt, other than
receipt of the Premium by Company, nothing in this Confirmation shall be interpreted as
requiring Company to cash settle this Transaction, except in circumstances where such
cash settlement is within Company’s control (including, without limitation, where
Company elects to deliver or receive cash, where Company fails timely to elect the
Share Termination Alternative, or where Company has made Private Placement Settlement
unavailable due to the occurrence of events within its control ) or in those
circumstances in which holders of the Shares would also receive cash.

21

 

	 	(v)	 	Amendment. If the Underwriters exercise their right to purchase some
or all of the Option Securities (as defined in the Underwriting Agreement) (“Option
Securities”) pursuant to the Underwriting Agreement, then, at the discretion of
Company, Dealer and Company will either enter into a new confirmation evidencing
additional warrants to be issued by Company to Dealer or amend this Confirmation to
evidence such additional warrants (in each case on the same pricing terms as the
Warrants hereunder) (such additional confirmation or amendment to this Confirmation to
provide for the payment by Dealer to Company of the additional premium related thereto
in an amount to be agreed between the parties).
	 
	 	(w)	 	Lock Up. Prior to the first anniversary of the Trade Date, if the
Underwriters exercise their right to purchase Option Securities pursuant to the
Underwriting Agreement and Company does not elect to issue the maximum number of
Additional Warrants as provided in Section 9(v) above, Company shall not issue or enter
into any warrant, call option, variable forward or other derivative linked to the
Shares (collectively, “Warrants”), whether cash settled and/or physically settled
and/or net share settled, without the prior written consent of Dealer which shall not
be unreasonably withheld, unless such Warrants are issued (i) pursuant to any present
or future employee, director or consultant benefit plan or program of Company or any
hedging arrangements in respect thereof, (ii) to all Company’s stockholders as a free
distribution or a distribution for less than the fair market value of such Warrants (as
determined by the Calculation Agent), (iii) as part of mandatorily convertible units in
a bona fide capital raising transaction unrelated to the convertible notes sold
pursuant to the Underwriting Agreement (the “Convertible Notes”), or (iv) as part of a
bona fide Share repurchase transaction unrelated to the Convertible Notes. “Additional
Warrants” shall equal to the product of (i) the Warrant Entitlement, (ii) the initial
conversion rate of the Convertible Notes and (iii) the aggregate principal amount of
the Option Securities divided by USD 1,000.

22

 

     Company 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 Company 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:   Vice President	 	 

	 	 	 	 	 
	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

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