Document:

Exhibit 4.1 PNC Amendment No 9

Exhibit 4.1
AMENDMENT NO. 9 TO 
REVOLVING CREDIT AND SECURITY AGREEMENT
THIS AMENDMENT NO. 9 (this “Amendment”) is entered into as of July 29, 2015, by and among TECUMSEH PRODUCTS COMPANY, a corporation organized under the laws of the State of Michigan (“Tecumseh Products”), TECUMSEH COMPRESSOR COMPANY, a corporation organized under the laws of the State of Delaware (“Tecumseh Compressor”), TECUMSEH PRODUCTS OF CANADA, LIMITED, a Canadian corporation (“Tecumseh Products Canada”), and EVERGY, INC., a corporation organized under the laws of the State of Delaware (“Evergy”) (Tecumseh Products, Tecumseh Compressor, Tecumseh Products Canada, and Evergy are each a “Borrower”, and collectively “Borrowers”), PNC BANK, NATIONAL ASSOCIATION (“PNC”), the various financial institutions named in the Loan Agreement (as defined below) or which hereafter become a party thereto (together with PNC, collectively, “Lenders”) and PNC, as agent for the Lenders (in such capacity, “Agent”).
BACKGROUND
A.Borrowers, Agent and Lenders are parties to a Revolving Credit and Security Agreement dated as of April 21, 2011, as amended by Amendment No. 1 to Revolving Credit and Security Agreement dated December 30, 2011, as amended by Amendment No. 2 to Revolving Credit and Security Agreement dated November 6, 2013, as amended by Amendment No. 3 to Revolving Credit and Security Agreement dated as of December 11, 2013, as amended by Amendment No. 4 to Revolving Credit and Security Agreement dated as of December 31, 2013, as amended by Amendment No. 5 to Revolving Credit and Security Agreement dated as of January 22, 2014, as amended by Amendment No. 6 to Revolving Credit and Security Agreement dated as of March 20, 2014, as amended by Amendment No. 7 to Revolving Credit and Security Agreement dated as of August 28, 2014, and as amended by Amendment No. 8 to Revolving Credit and Security Agreement dated as of October 9, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”) pursuant to which Agent and Lenders provide Borrowers with certain financial accommodations.
B.    The Borrowers have requested that Agent and Lenders amend certain provisions of the Loan Agreement, and Agent and Lenders are willing to do so on the terms and conditions in this Amendment.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1.    Definitions.  All capitalized terms not otherwise defined herein shall have the meanings given to them in the Loan Agreement.

2.    Amendments to Loan Agreement.
(a)    Section 1.2 is amended to add and redefine the following defined terms:
“Amendment No. 9” means Amendment No. 9 to Revolving Credit and Security Agreement among Agent, Lenders, and Borrowers dated as of July 29, 2015.
“Amendment No. 9 Closing Date” means July 29, 2015.
“Applicable Margin” means, for Revolving Advances and the Term Loan, as of the Amendment No.9 Closing Date through the first Adjustment Date, the applicable percentage specified below:
	
				
	APPLICABLE MARGINS FOR DOMESTIC RATE LOANS
	APPLICABLE MARGINS FOR EURODOLLAR RATE LOANS

	Revolving Advances
	Term Loan
	Revolving Advances
	Term Loan

	1.25%
	2%
	2.25%
	3%

	 
	 
	 
	 

Thereafter, effective as of the first Business Day following receipt by Agent of the Average Undrawn Availability Report for the previous fiscal quarter (each day of such delivery, an “Adjustment Date”), the Applicable Margin for each type of Advance shall be adjusted, if necessary, to the applicable percent per annum set forth in the pricing table set forth below corresponding to the Average Undrawn Availability for the calendar quarter period ending on the last day of the most recently completed calendar quarter prior to the applicable Adjustment Date (each such period, a “Calculation Period”):
	
						
	TIER
	AVERAGE UNDRAWN AVAILABILITY
	APPLICABLE MARGINS FOR DOMESTIC RATE LOANS
	APPLICABLE MARGINS FOR EURODOLLAR RATE LOANS

	 
	 
	Revolving Advances
	Term Loan
	Revolving Advances
	Term Loan

	I
	Greater than $17,500,000
	1%
	2%
	2%
	3%

	II
	Greater than $7,500,000 but less than or equal to $17,500,000
	1.25%
	2%
	2.25%
	3%

	III
	Less than or equal to $7,500,000
	1.50%
	2%
	2.50%
	3%

	 
	 
	 
	 
	 
	 

If the Borrowers do not timely deliver the Average Undrawn Availability Report, each Applicable Margin shall be conclusively presumed to equal the highest Applicable Margin specified in the pricing table set forth above until the date of delivery of the Average Undrawn Availability 

Report, at which time the rate will be adjusted based upon Average Undrawn Availability reflected in the Average Undrawn Availability Report.
If, as a result of any restatement of, or other adjustment to, the financial statements of Borrowers on a Consolidated Basis or for any other reason, the Agent determines that (a) the Average Undrawn Availability as previously calculated as of any applicable date was inaccurate, and (b) a proper calculation of Average Undrawn Availability would have resulted in different pricing for any period, then (i) if the proper calculation of the Average Undrawn Availability would have resulted in higher pricing for such period, the Borrowers shall automatically and retroactively be obligated to pay to the Agent, promptly upon demand by the Agent, an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period; and (ii) if the proper calculation of the Average Undrawn Availability would have resulted in lower pricing for such period, Lenders shall automatically and retroactively be obligated to pay to the Borrowers, promptly upon demand by the Borrowers, an amount equal to the excess of the amount of interest and fees that was actually paid for such period over the amount of interest and fees that should have been paid for such period; provided, that, if as a result of any restatement or other event a proper calculation of the Average Undrawn Availability would have resulted in higher pricing for one or more periods and lower pricing for one or more other periods (due to the shifting of income or expenses from one period to another period or any similar reason), then the amount payable by the Borrowers pursuant to clause (i) above shall be based upon the excess, if any, of the amount of interest and fees that should have been paid for all applicable periods over the amounts of interest and fees actually paid for such periods, and the amount payable by the Lenders pursuant to clause (ii) above shall be based upon the excess, if any, of the amount of interest and fees that was actually paid for all applicable periods over the amounts of interest and fees that should have been paid for such periods.
“Cash Dominion Triggering Event” means (a) the occurrence of an Event of Default that is continuing, or (b) that Undrawn Availability is less than or equal to $5,000,000 on any Business Day.
“Eligible Insured Foreign Receivable or Receivables” means any Receivables that satisfy the requirements set forth under the definition of Eligible Receivables, with the exception of clause (f) of such definition; provided that such Receivables are credit insured, with the insurance carrier, insurance amount and terms of such insurance being reasonably acceptable to Agent and naming the Agent as beneficiary or loss payee, as applicable.  As of the Amendment No. 9 Closing Date, (i) Euler Hermes, (ii) Compagnie Française d'Assurance pour le Commerce Extérieur (Coface), and (iii) Atradius are all acceptable insurance carriers to Agent.
“Eurodollar Rate” shall mean for any Eurodollar Rate Loan for the then current Interest Period relating thereto the interest rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by Agent by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which US dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by Agent as an authorized information vendor for the purpose of displaying rates at which US dollar deposits are offered by leading banks in the London interbank 

deposit market (an “Alternative Source”), at approximately 11:00 a.m., London time two (2) Business Days prior to the first day of such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Agent at such time (which determination shall be conclusive absent manifest error)) for an amount comparable to such Eurodollar Rate Loan and having a borrowing date and a maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus the Reserve Percentage; provided, however, that if the Eurodollar Rate determined as provided above would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate Loan that is outstanding on the effective date of any change in the Reserve Percentage as of such effective date.  The Agent shall give prompt notice to the Borrowing Agent of the Eurodollar Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.
“Financial Covenant Triggering Event” means (a) the occurrence of an Event of Default that is continuing, or (b) that Undrawn Availability is less than or equal to $5,000,000 on any Business Day.
“Formula Amount” shall mean an amount as calculated at any time and from time to time equal to the Borrowing Base, minus such reserves as the Agent may in its reasonable discretion deem proper and necessary from time to time, including with respect to Priority Payables, the Freight and Duty Reserve, and insurance premiums for credit insurance.  But no reserves may be implemented at any time with respect to (1) Permitted Hedging Contracts that are not provided by PNC, any Lender, or any of their respective Affiliates and (2) warranty issues if total dilution (including with respect to warranty issues) is 5% or less.  Warranty issues will be reviewed monthly and with each field examination.
“Freight and Duty Reserve” means on any date, a reserve equal to Agent’s estimate of the costs and expenses associated with the importation of Eligible In-Transit Inventory as of such date, including an estimate for all customs broker fees then due or to become due with respect to Eligible In-Transit Inventory.
(b)    Subsection (f) of the definition of “Eligible Receivables” is amended to read:
(f)    the sale is to a Customer outside the continental United States of America or a province of Canada that has adopted the Personal Property Security Act of Canada, unless the sale is on letter of credit, guaranty or acceptance terms, in each case acceptable to Agent in its sole discretion or such Receivable constitutes an Eligible Insured Foreign Receivable;
(c)    Sections 2.1(a)(y)(i) and(ii) of the Loan Agreement are amended to read as follows:

(i)    up to 85%, subject to the provisions of Section 2.1(b), of Eligible Receivables, other than Eligible Insured Foreign Receivables, plus up to the lesser of (A) 85% of Eligible Insured Foreign Receivables (collectively, the “Receivables Advance Rate”) or (B) $3,000,000, plus
(ii)    up to the lesser of (A) 65%, subject to the provisions of Section 2.1(b), of the value of Eligible Inventory consisting of raw materials, work-in-process, finished goods, and Eligible In-Transit Inventory (determined on a category by category basis), or (B) 85% of the Net Orderly Liquidation Value of Eligible Inventory consisting of raw materials, work-in-process, finished goods, and Eligible In-Transit Inventory (determined on a category by category basis) (the lesser of (A) and (B) is called the “Inventory Advance Rate”).
In addition to the above limitations, after giving effect to all sublimits, (x) Revolving Advances with respect to Eligible In-Transit Inventory may not exceed $12,000,000 at any one time, and (y) Revolving Advances with respect to all Eligible Inventory, including Eligible In-Transit Inventory, may not exceed $20,000,000 in the aggregate at any one time.
The Revolving Advances shall be evidenced by one or more secured promissory notes (collectively, the “Revolving Credit Note”) substantially in the form attached to Amendment No. 3 as Exhibit D.
(d)    Section 2.4 of the Loan Agreement is amended to read as follows:
2.4    Term Loan.  The principal balance of the Term Loan on the Amendment No. 6 Closing Date upon satisfaction of the Amendment No. 6 Conditions Precedent, is $10,537,131 (the “Term Loan”).  The Term Loan shall be, with respect to principal, payable as follows, subject to acceleration upon the occurrence and during the continuance of an Event of Default under this Agreement or termination of this Agreement:  consecutive monthly installments each in the amount of $250,000 beginning on the first Business Day of the first month after the Amendment No. 6 Closing Date and continuing on the first Business Day of each month thereafter followed by a final payment of all unpaid principal, accrued and unpaid interest and all unpaid fees and expenses on not later than December 11, 2018.  The Term Loan shall be evidenced by one or more secured promissory notes 

(collectively, the “Term Note”) in substantially the form attached as Exhibit A to Amendment No. 3.
(e)    Section 3.8 of the Loan Agreement is amended to read as follows:
3.8    Basis For Determining Interest Rate Inadequate or Unfair.  In the event that Agent or any Lender shall have determined that:(a)    reasonable means do not exist for ascertaining the Eurodollar Rate applicable pursuant to Section 2.2 for any Interest Period; or
(b)    Dollar deposits in the relevant amount and for the relevant maturity are not available in the London interbank Eurodollar market, with respect to an outstanding Eurodollar Rate Loan, a proposed Eurodollar Rate Loan, or a proposed conversion of a Domestic Rate Loan into a Eurodollar Rate Loan; or
(c)    the making, maintenance or funding of any Eurodollar Rate Loan has been made impracticable or unlawful by compliance by Agent or such Lender in good faith with any Applicable Law or any interpretation or application thereof by any Governmental Body or with any request or directive of any such Governmental Body (whether or not having the force of law), or
(d)    the Eurodollar Rate will not adequately and fairly reflect the cost to such Lender of the establishment or maintenance of any Eurodollar Rate Loan,
then Agent shall give Borrowing Agent prompt written or telephonic notice of such determination.  If such notice is given, (i) any such requested Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless Borrowing Agent shall notify Agent no later than 1:00 p.m. two Business Days prior to the date of such proposed borrowing, that its request for such borrowing shall be cancelled or made as an unaffected type of Eurodollar Rate Loan, (ii) any Domestic Rate Loan or Eurodollar Rate Loan which was to have been converted to an affected type of Eurodollar Rate Loan shall be continued as or converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent, no later than 1:00 p.m. two Business Days prior to the proposed conversion, shall be maintained as an unaffected type of Eurodollar Rate Loan, and (iii) any outstanding affected Eurodollar Rate Loans shall be converted into a Domestic Rate Loan, or, if Borrowing Agent 

shall notify Agent, no later than 1:00 p.m. two Business Days prior to the last Business Day of the then current Interest Period applicable to such affected Eurodollar Rate Loan, shall be converted into an unaffected type of Eurodollar Rate Loan, on the last Business Day of the then current Interest Period for such affected Eurodollar Rate Loans (or sooner, if any Lender cannot continue to lawfully maintain such affected Eurodollar Rate Loan).  Until such notice has been withdrawn, Lenders shall have no obligation to make an affected type of Eurodollar Rate Loan or maintain outstanding affected Eurodollar Rate Loans and no Borrower shall have the right to convert a Domestic Rate Loan or an unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar Rate Loan.
(f)    Section 6.10 of the Loan Agreement is amended to read as follows:
6.10    Suspension of Financial Covenant Triggering Event.  After the occurrence of a Financial Covenant Triggering Event, so long as Undrawn Availability for the most recent 45 consecutive days has been greater than or equal to $7,500,000, upon a written request received by the Agent from an Authorized Officer of the Borrowing Agent certifying that Undrawn Availability for the most recent 45 consecutive days has been greater than or equal to $7,500,000 and requesting that the required compliance with and calculation of the Fixed Charge Coverage Ratio set forth in Section 6.5 be suspended until the next Financial Covenant Triggering Event occurs, the compliance with and calculation of the Fixed Charge Coverage Ratio contained in Section 6.5 shall be suspended until the occurrence of the next Financial Covenant Triggering Event.  Nothing contained in this Section 6.10 shall suspend compliance with or calculation of the Fixed Charge Coverage Ratio to the extent required under any Section of this Agreement other than Section 6.5 or required under any other Loan Document.
(g)    Section 6.11 of the Loan Agreement is amended to read as follows:
6.11    Suspension of Cash Dominion Triggering Event.  After the occurrence of a Cash Dominion Triggering Event, so long as (a) no Default or Event of Default has occurred and is continuing, and (b) Undrawn Availability for the most recent 45 consecutive days has been greater than or equal to $7,500,000, upon a written request received by the Agent 

from an Authorized Officer of the Borrowing Agent certifying that the above items (a) and (b) are true and correct and requesting that the required compliance with the cash dominion requirements set forth in Section 4.15 (d) and (h) on account of a Cash Dominion Triggering Event occurring be suspended until the next Cash Dominion Triggering Event occurs, the compliance with the cash dominion requirements set forth in Section 4.15 (d) and (h) on account of a Cash Dominion Triggering Event occurring shall be suspended until the occurrence of the next Cash Dominion Triggering Event.  Nothing contained in this Section 6.11 shall suspend compliance with the cash dominion requirements set forth in Section 4.15 (d) and (h) to the extent required under any Section of this Agreement other than Section 4.15 (d) and (h) or required under any other Loan Document.
(h)    Section 13.1 of the Loan Agreement is amended to read as follows:
13.1    Term.  This Agreement, which shall inure to the benefit of and shall be binding upon the respective successors and permitted assigns of each Borrower, Agent and each Lender, shall become effective on the date hereof and shall continue in full force and effect until July 29, 2020 (the “Term”) unless sooner terminated as herein provided.  Borrowers may terminate this Agreement at any time upon ninety (90) days’ prior written notice upon payment in full of the Obligations.  In the event the Obligations are prepaid in full prior to the last day of the Term (the date of such prepayment hereinafter referred to as the “Early Termination Date”), Borrowers shall pay to Agent for the benefit of Lenders an early termination fee in an amount equal to (w) $980,000 if the Early Termination Date occurs on or after the Amendment No. 9 Closing Date to and including the date immediately preceding the first anniversary of the Amendment No. 9 Closing Date, (x) $490,000 if the Early Termination Date occurs on or after the first anniversary of the Amendment No. 9 Closing Date to and including the date immediately preceding the second anniversary of the Amendment No. 9 Closing Date, (y) $245,000 if the Early Termination Date occurs on or after the second anniversary of the Amendment No. 9 Closing Date to and including the date immediately preceding the fourth anniversary of the Amendment No. 9 Closing Date, and (z) $0 if the Early Termination Date occurs on or after the fourth anniversary of the Closing Date.  No early termination fee, however, will be 

due and payable if the Borrowers refinance the Obligations with PNC or any of its Affiliates.
3.    Amendment No. 9 Fee.  When Borrowers execute this Amendment, they must pay Agent for the ratable benefit of the Lenders a $75,000 amendment fee (the “Amendment No. 9 Fee”).  The Amendment No. 9 Fee is fully earned and is not refundable in whole or in part.  All fees, interest, charges, and costs in this Amendment, the Loan Agreement, and the Other Documents are cumulative.
4.    Conditions of Effectiveness of Amendment.  This Amendment is not effective until each of the following conditions precedent (the “Amendment No. 9 Conditions Precedent”) have been satisfied to Agent’s satisfaction:
(a)    Agent has received fully executed originals of this Amendment.
(b)    Borrowers pay Agent the Amendment No. 9 Fee.
(c)    All loan documents, including notes, security agreements, guarantees, subordination agreements, landlord waivers, financial statements, legal opinions, evidence of insurance, and other documents, are satisfactory in form and substance to Agent and its legal counsel.
5.    Representations and Warranties.  The parties hereto represent and warrant that this Amendment and the Loan Agreement, as amended hereby, constitute legal, valid and binding obligations of the parties hereto and are enforceable against such parties in accordance with their respective terms.
6.    Effect on the Loan Agreement.
(a)    Upon the effectiveness of Section 2 hereof, each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Loan Agreement as amended hereby.
(b)    Except as specifically amended herein, the Loan Agreement, and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed.
(c)    The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Agent or Lenders, nor constitute a waiver of any provision of the Loan Agreement, or any other documents, instruments or agreements executed and/or delivered under or in connection therewith.
7.    Entire Agreement.  This Amendment, the Loan Agreement, and the Other Documents constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties with respect to the subject matter hereof.

8.    GOVERNING LAW.  THIS AMENDMENT SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN, WITHOUT REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES THERETO THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
9.    Severability.  In the event any one or more of the provisions contained in this Amendment should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein, to the fullest extent permitted by applicable law, shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
10.    Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
11.    Counterparts; Facsimile and PDF.  This Amendment may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement.  Any signature delivered by a party by facsimile transmission or electronic transmission in PDF format shall be deemed to be an original signature hereto.

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first written above.
	
			
	 
	PNC BANK, NATIONAL ASSOCIATION

	 
	as Lender and as Agent

	 
	 

	 
	By: /s/ Damion Taylor

	 
	Damion Taylor, Vice President

	 
	 

	 
	 

	ACKNOWLEDGED AND AGREED
	 

	 
	 

	TECUMSEH PRODUCTS COMPANY
	 

	TECUMSEH COMPRESSOR COMPANY
	 

	TECUMSEH PRODUCTS OF CANADA, LIMITED
	 

	EVERGY, INC.
	 

	 
	 

	By: /s/ Janice E. Stipp
	 

	Janice E. Stipp, Chief Financial Officer and Treasurer
	 

SIGNATURE PAGE TO 
AMENDMENT NO. 9 TO REVOLVING CREDIT AND SECURITY AGREEMENTExhibit 10.1 - Form of Director Deferred Share Unit Agreement

    
AWARD NOTICE 
AND 
DEFERRED SHARE UNIT AGREEMENT
(Directors)

HILTON WORLDWIDE HOLDINGS INC.
2013 OMNIBUS INCENTIVE PLAN

Director has been granted Deferred Share Units with the terms set forth in this Award Notice, and subject to the terms and conditions of the Plan and the Deferred Share Unit Agreement to which this Award Notice is attached. Capitalized terms used and not defined in this Award Notice shall have the meanings set forth in the Deferred Share Unit Agreement and the Plan.

Director: 

Date of Grant: 

Deferred Share Units Granted:    

    

 

DEFERRED SHARE UNIT AGREEMENT

HILTON WORLDWIDE HOLDINGS INC.
2013 OMNIBUS INCENTIVE PLAN

This Deferred Share Unit Agreement, effective as of the Date of Grant (as defined below), is between Hilton Worldwide Holdings Inc., a Delaware corporation (the “Company”), and Director (as defined below).

WHEREAS, the Company has adopted the Hilton Worldwide Holdings Inc. 2013 Omnibus Incentive Plan (the “Plan”) to provide a means whereby participants, including directors, officers, employees, consultants and advisors of the Company and its Affiliates, can acquire and maintain an equity interest in the Company; and

WHEREAS, the Committee (as defined in the Plan) responsible for administration of the Plan has determined to grant deferred share units to Director as provided herein and the Company and Director hereby wish to memorialize the terms and conditions applicable to the DSUs (as defined below);

NOW, THEREFORE, the parties hereto agree as follows:

1.Definitions. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan. The following terms shall have the following meanings for purposes of this Agreement:

(a)“Agreement” shall mean this Deferred Share Unit Agreement including (unless the context otherwise requires) the Award Notice.

(b) “Award Notice” shall mean the notice to Director.

(c)“Date of Grant” shall mean the “Date of Grant” listed in the Award Notice.

(d)“Director” shall mean the “Director” listed in the Award Notice.

(e)“DSUs” shall mean that number of deferred share units listed in the Award Notice as “Deferred Share Units Granted.”

(f)“Shares” shall mean a number of shares of the Company’s Common Stock, par value $0.01 per share, equal to the number of DSUs.

2.Grant of Units. The Company hereby grants the DSUs to Director, each of which represents the right to receive one Share upon vesting of such DSU, subject to and in accordance with the terms, conditions and restrictions set forth in the Plan and this Agreement.

3.DSU Account. The Company shall cause an account (the “Unit Account”) to be established and maintained on the books of the Company to record the number of DSUs credited to Director under the terms of this Agreement. Director’s interest in the Unit Account shall be that of a general, unsecured creditor of the Company.

4.Vesting. All DSUs issued hereunder shall be fully vested and non-forfeitable on the Date of Grant. 

		
	5.
	Termination of Services; Settlement.

(a)The Company shall deliver to Director without charge, one share of Common Stock for each DSU (as adjusted under the Plan) in accordance with Section 5(c) of this agreement, and each settled DSU shall be canceled upon such delivery. 

(b)For the purposes of this Agreement, “Settlement Date” shall mean the earliest to occur of (i) the date Director sustains a “separation from service” from the Company and its Subsidiaries (as defined in Section 409A of the Code) for any reason, and (ii) a Change in Control (provided that such Change in Control also constitutes a “change in ownership or effective control” for the purposes of Section 409A of the Code). 

(c)Upon the Settlement Date, the Company shall, as soon as reasonably practicable (and in any event within 30 days of the applicable settlement date), issue the Share underlying such vested DSU to Director, free and clear of all restrictions. The Company shall pay any costs incurred in connection with issuing the Shares. Upon the issuance of the Shares to Director, Director’s Unit Account shall be eliminated. Notwithstanding anything in this Agreement to the contrary, the Company shall have no obligation to issue or transfer the Shares as contemplated by this Agreement unless and until such issuance or transfer shall comply with all relevant provisions of law and the requirements of any stock exchange on which the Company’s shares are listed for trading. 

6.Dividends. Each DSU shall be entitled to be credited with dividend equivalent payments (upon the payment by the Company of dividends on Shares) delivered in additional DSUs in respect of a number of Shares having a Fair Market Value as of the payment date for such dividend equal to the amount of such dividends. Accumulated dividend equivalents shall be payable at the same time as the underlying DSUs are settled. 

7.Restrictions on Transfer. Director may not assign, alienate, pledge, attach, sell or otherwise transfer or encumber the DSUs or Director’s right under the DSUs to receive Shares, except other than by will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or an Affiliate; provided that the designation of a beneficiary (if permitted by the Committee) shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

8.No Right to Continued Services. Neither the Plan nor this Agreement nor Director’s receipt of the DSUs hereunder shall impose any obligation on the Company or any Affiliate to continue Director’s service as a member of the Board. Further, the Company or any Affiliate (as applicable) may at any time terminate the services of Director in accordance with the bylaws and charter of the Company, free from any liability or claim under the Plan or this Agreement, except as otherwise expressly provided herein.

9.No Rights as a Stockholder. Director’s interest in the DSUs shall not entitle Director to any rights as a stockholder of the Company. Director shall not be deemed to be the holder of, or have any of the rights and privileges of a stockholder of the Company in respect of, the Shares unless and until such Shares have been issued to Director in accordance with Section 5(c). 

10.Adjustments Upon Change in Capitalization. The terms of this agreement, including the DSUs, Director’s Unit Account, any dividend equivalent payments accrued pursuant to Section 6, and/or the Shares, shall be subject to adjustment in accordance with Section 12 of the Plan. This paragraph shall also apply with respect to any extraordinary dividend or other extraordinary distribution in respect of the Company’s Common Stock (whether in the form of cash or other property).

		
	11.
	Tax Withholding.

(a)The Company shall have the right and is hereby authorized to withhold, from any Shares or from any compensation (including from payroll or any other amounts payable to Director) the amount (in cash, Shares, or other property) of any required withholding taxes in respect of this Deferred Share Unit Award, and to take such other action as may be necessary in the opinion of the Committee or the Company to satisfy all obligations for the payment of such withholding and taxes; provided, however, that no amounts shall be withheld in excess of the Company’s statutory minimum withholding liability.  

(b)Notwithstanding the foregoing, Director acknowledges and agrees that to the extent consistent with applicable law and Director’s status as an independent consultant for U.S. Federal income tax purposes, the Company does not intend to withhold any amounts as federal income tax withholdings under any other state or federal laws, and Director hereby agrees to make adequate provision for any sums required to satisfy all applicable federal, state, local and foreign tax withholding obligations of the Company which may arise in connection with this Deferred Share Unit Award.

12.Award Subject to Plan. By entering into this Agreement, Director agrees and acknowledges that Director has received and read a copy of the Plan. The DSUs granted hereunder are subject to the Plan. The terms and provisions of the Plan, as it may be amended from time to time, are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

13.Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

14.Governing Law; Venue; Language. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and performed wholly within the State of Delaware, without giving effect to the conflict of laws provisions thereof. Any suit, action or proceeding with respect to this Agreement (or any provision incorporated by reference), or any judgment entered by any court in respect of any thereof, shall be brought in any court of competent jurisdiction in the State of New York or the State of Delaware, and each of Director, the Company, and any transferees who hold DSUs pursuant to a valid assignment, hereby submits to the exclusive jurisdiction of such courts for the purpose of any such suit, action, proceeding, or judgment. Each of Director, the Company, and any transferees who hold DSUs pursuant to a valid assignment hereby irrevocably waives (a) any objections which it may now or hereafter have to the laying of the venue of any suit, action, or proceeding arising out of or relating to this Agreement brought in any court of competent jurisdiction in the State of Delaware or the State of New York, (b) any claim that any such suit, action, or proceeding brought in any such court has been brought in any inconvenient forum and (c) any right to a jury trial. If Director has received a copy of this Agreement (or the Plan or any other document related hereto or thereto) translated into a language other than English, such translated copy is qualified in 

its entirety by reference to the English version thereof, and in the event of any conflict the English version will govern.

15.Successors in Interest. Any successor to the Company shall have the benefits of the Company under, and be entitled to enforce, this Agreement. Likewise, Director’s legal representative shall have the benefits of Director under, and be entitled to enforce, this Agreement. All obligations imposed upon Director and all rights granted to the Company under this Agreement shall be final, binding and conclusive upon Director’s heirs, executors, administrators and successors.

16.Data Privacy Consent. Director hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Director’s personal data as described in this Agreement and any other DSU grant materials by and among, as applicable, Director’s employer or contracting party (the “Employer”) and the Company for the exclusive purpose of implementing, administering and managing Director’s participation in the Plan. Director understands that the Company may hold certain personal information about Director, including, but not limited to, Director’s name, home address and telephone number, work location and phone number, date of birth, social insurance number or other identification number, salary or compensation, nationality, job title, hire date, any shares of stock or other directorships held in the Company, details of all awards or any other entitlement to shares awarded, cancelled, exercised, vested, unvested or outstanding in Director’s favor, for the purpose of implementing, administering and managing the Plan (“Personal Data”). Director understands that Personal Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, now or in the future, that these recipients may be located in Director’s country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than Director’s country. Director understands that Director may request a list with the names and addresses of any potential recipients of the Personal Data by contacting Director’s local human resources representative. Director authorizes the recipients to receive, possess, use, retain and transfer the Personal Data, in electronic or other form, for the purposes of implementing, administering and managing Director’s participation in the Plan. Director understands that Personal Data will be held only as long as is necessary to implement, administer and manage Director’s participation in the Plan. Director understands that Director may, at any time, view Personal Data, request additional information about the storage and processing of Personal Data, require any necessary amendments to Personal Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Director’s local human resources representative. Further, Director understands that Director is providing the consents herein on a purely voluntary basis. If Director does not consent, or if Director later seeks to revoke Director’s consent, Director’s employment status or service and career with the Employer will not be adversely affected; the only consequence of Director’s refusing or withdrawing Director’s consent is that the Company would not be able to grant DSUs or other equity awards to Director or administer or maintain such awards.  Therefore, Director understands that refusing or withdrawing Director’s consent may affect Director’s ability to participate in the Plan. For more information on the consequences of Director’s refusal to consent or withdrawal of consent, Director understands that Director may contact Director’s local human resources representative. 

17.Award Administrator. The Company may from time to time designate a third party (an “Award Administrator”) to assist the Company in the implementation, administration and management of the Plan and any DSUs granted thereunder, including by sending Award Notices on behalf of the Company to Director, and by facilitating through electronic means acceptance of DSU Agreements by Director. 

		
	18.
	Section 409A. 

(a)This Agreement is intended to comply with the provisions of Section 409A of the Code and the regulations promulgated thereunder. Without limiting the foregoing, the Committee shall have the right to amend the terms and conditions of this Agreement in any respect as may be necessary or appropriate to comply with Section 409A of the Code or any regulations promulgated thereunder, including without limitation by delaying the issuance of the Shares contemplated hereunder. 

(b)Notwithstanding any other provision of this Agreement to the contrary, if Director is a “specified employee” within the meaning of Section 409A (which Director is not expected to be), no payments in respect of any DSU that is “deferred compensation” subject to Section 409A and which would otherwise be payable upon Director’s “separation from service” (as defined in Section 409A) shall be made to Director prior to the date that is six months after the date of Director’s “separation from service” or, if earlier, Director’s date of death. Following any applicable six month delay, all such delayed payments will be paid in a single lump sum on the earliest date permitted under Section 409A that is also a business day. Notwithstanding the foregoing, the Company does not expect that Director would be a “specified employee” within the meaning of Section 409A at the time of a “separation from service”, as determined under the regulations and guidance promulgated under Section 409A issued or in effect on the Date of Grant.

(c) Director is solely responsible and liable for the satisfaction of all taxes and penalties under Section 409A that may be imposed on or in respect of Director in connection with this Agreement, and the Company shall not be liable to Director for any payment made under this Plan that is determined to result in an additional tax, penalty or interest under Section 409A, nor for reporting in good faith any payment made under this Agreement as an amount includible in gross income under Section 409A.

19.Book Entry Delivery of Shares. Whenever reference in this Agreement is made to the issuance or delivery of certificates representing one or more Shares, the Company may elect to issue or deliver such Shares in book entry form in lieu of certificates.

20.Electronic Delivery and Acceptance.  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.  Director hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

21.Acceptance and Agreement by Director. By accepting the DSUs (including through electronic means, if applicable), Director agrees to be bound by the terms, conditions, and restrictions set forth in the Plan, this Agreement, and the Company’s policies, as in effect from time to time, relating to the Plan. 

22.No Advice Regarding DSUs. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Director's participation in the Plan, or Director's acquisition or sale of the underlying Shares.  Director is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

23.Imposition of Other Requirements. The Company reserves the right to impose other requirements on Director's participation in the Plan, on the DSUs and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Director to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

24.Waiver. Director acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Director or any other participant in the Plan.

[Signatures follow]

	
		
	HILTON WORLDWIDE HOLDINGS INC.

	 

	By:
	 

	 
	 

	 
	 

	 

	By:
	 

	 
	 

	 
	 

Acknowledged and Agreed
as of the date first written above:

______________________________
Name:

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