LendingTree, Inc.

LENDINGTREE, INC.

FORM 10-K
(Annual Report)

Filed 02/28/17 for the Period Ending 12/31/16

Address

Telephone
CIK
Symbol
SIC Code

11115 RUSHMORE DRIVE
CHARLOTTE, NC 28277
704-943-8942
0001434621
TREE
6163 - Loan Brokers

Industry Consumer Lending

Sector
Fiscal Year

Financials
12/31

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Table of Contents
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549__________________________________________________FORM 10-K__________________________________________________(Mark One)

ý
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934For the Fiscal Year Ended December 31, 2016oro
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934For the transition period from                                  to                                 Commission File No. 001-34063__________________________________________________LendingTree, Inc.(Exact
name
of
Registrant
as
specified
in
its
charter)


Delaware(State
or
other
jurisdiction
ofincorporation
or
organization)
26-2414818(I.R.S.
Employer
Identification
No.)11115 Rushmore Drive, Charlotte, North Carolina 28277(Address
of
principal
executive
offices)(704) 541-5351(Registrant's
telephone
number,
including
area
code)Securities registered pursuant to Section 12(b) of the Act:Title of Each ClassCommon
Stock,
$0.01
Par
Value
Name of each exchange on which registeredThe
NASDAQ
Stock
MarketSecurities registered pursuant to Section 12(g) of the Act:None________________________________________________________________________________________________________Indicate
by
check
mark
if
the
registrant
is
a
well-known
seasoned
issuer,
as
defined
in
Rule
405
of
the
Securities
Act.
Yes

ý




No

oIndicate
by
check
mark
if
the
registrant
is
not
required
to
file
reports
pursuant
to
Section
13
or
Section
15(d)
of
the
Act.
Yes

o




No

ýIndicate
by
check
mark
whether
the
Registrant
(1)
has
filed
all
reports
required
to
be
filed
by
Section
13
or
15(d)
of
the
Securities
Exchange
Act
of
1934
during
the
preceding12
months
(or
for
such
shorter
period
that
the
registrant
was
required
to
file
such
reports),
and
(2)
has
been
subject
to
such
filing
requirements
for
the
past
90
days.
Yes

ý



No

oIndicate
by
check
mark
whether
the
Registrant
has
submitted
electronically
and
posted
on
its
corporate
Web
site,
if
any,
every
Interactive
Data
File
required
to
be
submittedand
posted
pursuant
to
Rule
405
of
Regulation
S-T
(§232.405
of
this
chapter)
during
the
preceding
12
months
(or
for
such
shorter
period
that
the
Registrant
was
required
tosubmit
and
post
such
files).
Yes

ý




No

oIndicate
by
check
mark
if
disclosure
of
delinquent
filers
pursuant
to
Item
405
of
Regulation
S-K
(§229.405
of
this
chapter)
is
not
contained
herein,
and
will
not
be
contained,to
the
best
of
Registrant's
knowledge,
in
definitive
proxy
or
information
statements
incorporated
by
reference
in
Part
III
of
this
Form
10-K
or
any
amendment
to
this
Form
10-K.
oIndicate
by
check
mark
whether
the
Registrant
is
a
large
accelerated
filer,
an
accelerated
filer,
a
non-accelerated
filer
or
a
smaller
reporting
company.
See
the
definitions
of"large
accelerated
filer,"
"accelerated
filer"
and
"smaller
reporting
company"
in
Rule
12b-2
of
the
Exchange
Act.






Large
accelerated
filer
o
Accelerated
filer
ý
Non-accelerated
filer
o
(Do
not
check
if
a
smaller
reporting
company)
Smaller
reporting
company
oIndicate
by
check
mark
whether
the
Registrant
is
a
shell
company
(as
defined
in
Rule
12b-2
of
the
Act).
Yes

o




No

ýThe
aggregate
market
value
of
the
voting
common
stock
held
by
non-affiliates
of
the
Registrant
as
of
June
30,
2016
was
approximately
$629
million
.
For
the
purposes
of
theforegoing
calculation
only,
all
directors
and
executive
officers
of
the
Registrant
and
the
single
stockholder
who
owns
in
excess
of
20%
of
the
voting
common
stock
are
assumedto
be
affiliates
of
the
Registrant.As
of
February
23,
2017
,
there
were
11,839,736
shares
of
the
Registrant's
common
stock,
par
value
$.01
per
share,
outstanding.Documents Incorporated By Reference:Portions
of
the
Registrant's
proxy
statement
for
its
2017
Annual
Meeting
of
Stockholders
are
incorporated
by
reference
into
Part
III
herein.
Table of ContentsTABLE OF CONTENTS 
 
Page

PART I

Item 1.
Business
3Item 1A.
Risk Factors
9Item 1B.
Unresolved Staff Comments
21Item 2.
Properties
21Item 3.
Legal Proceedings
22Item 4.
Mine Safety Disclosures
22






PART II

Item 5.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
23Item 6.
Selected Financial Data
26Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations
28Item 7A.
Quantitative and Qualitative Disclosures about Market Risk
39Item 8.
Financial Statements and Supplementary Data
40Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
74Item 9A.
Controls and Procedures
74Item 9B.
Other Information
75






PART III

Item 10.
Directors, Executive Officers and Corporate Governance
76Item 11.
Executive Compensation
76Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
76Item 13.
Certain Relationships and Related Transactions, and Director Independence
76Item 14.
Principal Accounting Fees and Services
76






PART IV

Item 15.
Exhibits, Financial Statement Schedules
77Item 16.
Form 10-K Summary
81Table of ContentsCAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATIONThis
annual
report
on
Form
10-K
for
the
fiscal
year
ended
December
31,
2016
(the
"Annual
Report")
contains
"forward-looking
statements"
within
themeaning
of
the
Securities
Act
of
1933,
as
amended,
and
the
Securities
Exchange
Act
of
1934,
as
amended
by
the
Private
Securities
Litigation
Reform
Act
of
1995.These
forward-looking
statements
include
statements
related
to
our
anticipated
financial
performance,
business
prospects
and
strategy;
anticipated
trends
andprospects
in
the
various
industries
in
which
our
businesses
operate;
new
products,
services
and
related
strategies;
and
other
similar
matters.
These
forward-lookingstatements
are
based
on
management's
current
expectations
and
assumptions
about
future
events,
which
are
inherently
subject
to
uncertainties,
risks
and
changes
incircumstances
that
are
difficult
to
predict.
The
use
of
words
such
as
"anticipates,"
"estimates,"
"expects,"
"projects,"
"intends,"
"plans"
and
"believes,"
amongothers,
generally
identify
forward-looking
statements.Actual
results
could
differ
materially
from
those
contained
in
the
forward-looking
statements.
Factors
currently
known
to
management
that
could
cause
actualresults
to
differ
materially
from
those
in
forward-looking
statements
include
those
matters
discussed
below,
including
in
Part
I.
Item
1A.
Risk
Factors.Other
unknown
or
unpredictable
factors
that
could
also
adversely
affect
our
business,
financial
condition
and
results
of
operations
may
arise
from
time
to
time.In
light
of
these
risks
and
uncertainties,
the
forward-looking
statements
discussed
in
this
report
may
not
prove
to
be
accurate.
Accordingly,
you
should
not
placeundue
reliance
on
these
forward-looking
statements,
which
only
reflect
the
views
of
LendingTree,
Inc.'s
management
as
of
the
date
of
this
report.
We
undertake
noobligation
to
update
or
revise
forward-looking
statements
to
reflect
changed
assumptions,
the
occurrence
of
unanticipated
events
or
changes
to
future
operatingresults
or
expectations,
except
as
required
by
law.PART IITEM 1.   BusinessOur CompanyLendingTree,
Inc.
("LendingTree",
the
"Company",
"we"
or
"us")
operates
what
we
believe
to
be
the
leading
online
loan
marketplace
for
consumers
seekingloans
and
other
credit-based
offerings.
Our
online
marketplace
provides
consumers
with
access
to
product
offerings
from
over
450
active
lenders
(which
we
referto
as
"Network
Lenders"),
including
mortgage
loans,
home
equity
loans
and
lines
of
credit,
reverse
mortgage
loans,
auto
loans,
credit
cards,
personal
loans,
studentloans,
small
business
loans
and
other
related
offerings.
In
addition,
we
offer
tools
and
resources,
including
free
credit
scores,
that
facilitate
comparison
shoppingfor
these
loans
and
other
credit-based
offerings.
We
seek
to
match
consumers
with
multiple
lenders,
who
can
provide
them
with
competing
quotes
for
the
productthey
are
seeking.
By
providing
consumers
access
to
a
broad
array
of
credit-based
offerings
directly
from
multiple
lenders,
rather
than
just
multiple
quotes
from
thesame
lender
or
indirectly
through
intermediaries,
we
believe
our
marketplace
is
differentiated
from
other
providers
operating
loan
comparison-shoppingmarketplaces.Our
strategically
designed
and
executed
advertising
and
marketing
campaigns
(which
we
refer
to
as
performance
marketing)
span
a
wide
array
of
digital
andtraditional
media
acquisition
channels
and
promote
our
LendingTree
and
other
brands
and
product
offerings.
Our
marketing
efforts
are
designed
to
attractconsumers
to
our
websites
and
toll-free
telephone
numbers.
Interested
consumers
complete
inquiry
forms,
providing
detailed
information
about
themselves
and
theloans
or
other
offerings
they
are
seeking.
We
refer
to
such
consumer
inquiries
as
loan
requests.
We
then
match
these
loan
requests
with
lenders
in
our
marketplacethat
are
seeking
to
serve
these
consumers'
needs.
We
generate
revenue
from
these
lenders,
generally
at
the
time
of
transmitting
a
loan
request
to
them,
in
the
formof
a
match
fee.
In
certain
instances
outside
our
mortgage
business,
we
charge
other
kinds
of
fees,
such
as
closed
loan
or
closed
sale
fees.
In
addition
to
our
primaryloan
request
data
referral
business,
LendingTree
also
matches
consumers
with
lenders
via
website
clicks
and
calls
for
which
lenders
pay
either
front-end
or
back-end
fees.We
are
continually
working
to
improve
the
consumer
experience.
We
have
made
investments
in
technologically-adept
personnel
and
we
use
in-market
real-time
testing
to
improve
our
digital
platforms.
Additionally,
we
work
with
our
lenders,
including
providing
training
and
other
resources,
to
improve
the
consumerexperience
throughout
the
loan
process.
Further,
we
have
been
building
and
improving
our
My
LendingTree
platform,
which
provides
a
relationship-basedconsumer
experience,
rather
than
just
a
transaction-based
experience.Evolution and Future Growth of Our BusinessAt
its
inception,
our
original
business
was
to
serve
consumers
seeking
home
mortgage
loans
by
matching
them
with
various
lenders.
We
launched
theLendingTree
brand
nationally
in
1998
and,
over
the
last
eighteen
years,
we
invested
significantly
in
this
brand
to
gain
widespread
consumer
recognition.Table of ContentsMore
recently,
we
have
actively
sought
to
expand
the
suite
of
loan
and
credit-based
offerings
we
provide
to
consumers,
in
order
to
both
leverage
theapplicability
of
the
LendingTree
brand
as
well
as
more
fully
serve
the
needs
of
consumers
and
lenders.
We
believe
that
consumers
with
existing
LendingTree-branded
associations
will
be
more
likely
to
utilize
our
other
service
offerings
than
those
of
other
providers
whose
brands
consumers
may
not
recognize.In
June
2014,
we
re-launched
My
LendingTree,
a
platform
that
offers
a
personalized
loan
comparison-shopping
experience,
by
providing
free
credit
scores
andcredit
score
analysis.
This
platform
enables
us
to
observe
consumers'
credit
profiles
and
then
identify
and
alert
them
to
loan
and
other
credit-based
offerings
on
ourmarketplace
that
may
be
more
favorable
than
the
loans
they
have
at
a
given
point
in
time.
This
is
designed
to
provide
consumers
with
measurable
savingsopportunities
over
their
lifetimes.By
expanding
our
portfolio
of
loan
and
credit-based
offerings,
we
are
growing
and
diversifying
our
business
and
sources
of
revenue.
We
intend
to
capitalizeon
our
expertise
in
performance
marketing,
product
development
and
technology,
and
to
leverage
the
widespread
recognition
of
the
LendingTree
brand
to
effectthis
strategy.We
believe
the
consumer
and
small
business
financial
services
industry
is
in
the
early
stages
of
a
fundamental
shift
to
online
product
offerings,
similar
to
theshift
that
started
in
retail
and
travel
many
years
ago
and
is
now
well
established.
We
believe
that
like
retail
and
travel,
as
consumers
continue
to
move
towardsonline
shopping
and
transactions
for
financial
services,
suppliers
will
increasingly
shift
their
product
offerings
and
advertising
budgets
toward
the
online
channel.We
believe
the
strength
of
our
brands
and
of
our
lender
network
place
us
in
a
strong
position
to
continue
to
benefit
from
this
market
shift.Acquisition of CompareCardsOn
November
16,
2016,
we
acquired
Iron
Horse
Holdings,
LLC,
which
does
business
under
the
name
CompareCards.
CompareCards
is
a
leading
onlinesource
for
side-by-side
credit
card
comparison
shopping.
CompareCards
provides
consumers
with
one
centralized
location
for
pertinent
credit
card
informationneeded
to
find
the
best
card
for
their
needs.
The
acquisition
continues
our
diversification
strategy
in
non-mortgage
categories.ProductsWe
currently
report
our
revenues
in
two
product
categories:
(i)
mortgage
products
and
(ii)
non-mortgage
products.
Non-mortgage
products
include
creditcards,
personal
loans,
home
equity,
reverse
mortgage,
auto
loans,
small
business
loans
and
student
loans.
Non-mortgage
products
also
include
home
improvementreferrals
and
other
credit
products
such
as
credit
repair
and
debt
settlement.Mortgage
and
non-mortgage
product
revenue
is
as
follows
(in thousands) : For the Year Ended December 31, 2016
2015
2014Mortgage
products$219,991
$165,272
134,137Non-mortgage
products164,411
88,944
33,213Total revenue$384,402
$254,216
$167,350LendingTree
does
not
charge
consumers
or
small
businesses
for
the
use
of
our
services.
Revenues
from
our
mortgage
products
are
mostly
derived
fromupfront
match
fees
paid
by
Network
Lenders
that
receive
a
loan
request,
and
in
some
cases
upfront
fees
for
clicks
or
call
transfers.
Because
a
given
loan
requestform
can
be
matched
with
more
than
one
Network
Lender,
up
to
five
match
fees
may
be
generated
from
a
single
consumer
loan
request
form.
Revenues
from
ournon-mortgage
products
are
derived
from
upfront
match
fees
paid
on
delivery
of
a
loan
request,
click
or
call
and
closed
loan
fees.
For
our
credit
card
product,
wesend
click
traffic
to
issuers
and
are
paid
per
card
approval.
For
the
years
ended
December
31,
2016
,
2015
and
2014
,
one
Network
Lender,
loanDepot,
LLC,accounted
for
13%
,
12%
and
13%
of
total
revenue,
respectively,
and
another
Network
Lender,
Quicken
Loans,
accounted
for
15%
,
11%
and
11%
of
totalrevenue,
respectively.Mortgage
ProductsOur
mortgage
products
category
includes
our
purchase
and
refinance
products.We
partner
with
lenders
throughout
the
United
States
to
provide
full
geographic
lending
coverage
and
to
offer
a
complete
suite
of
loan
offerings
on
ourmarketplace.
To
participate
on
our
marketplace,
lenders
are
required
to
enter
into
contracts
with
us
that
state
the
terms
and
conditions
for
such
participation,although
these
contracts
generally
may
be
terminated
for
convenience
by
either
party.
We
perform
certain
due
diligence
procedures
on
prospective
new
lenders,including
screening
against
a
national
anti-fraud
database
maintained
by
the
Mortgage
Asset
Research
Institute,
which
helps
manage
our
risk
exposure.
The
data
isutilized
to
determine
whether
a
lender
and
its
principals
are
eligible
to
participate
on
our
marketplace
and
have
not
been
convicted
of
and/or
penalized
forfraudulent
activity.4Table of ContentsConsumers
seeking
mortgage
loans
through
our
loan
marketplace
can
receive
multiple
conditional
loan
offers
from
participating
lenders
in
response
to
a
singleloan
request
form.
We
refer
to
the
process
by
which
we
match
consumers
and
Network
Lenders
as
the
matching
process.
This
matching
process
consists
of
thefollowing
steps:(1)Loan Request. 

Consumers
complete
a
single
loan
request
form
with
information
regarding
the
type
of
home
loan
product
they
are
seeking,
loanpreferences
and
other
data.
Consumers
also
consent
to
a
soft
inquiry
regarding
their
credit.(2)Loan Request Form Matching and Transmission. 

Our
proprietary
systems
and
technology
match
a
given
consumer's
loan
request
form
data,
creditprofile
and
geographic
location
against
certain
pre-established
criteria
of
Network
Lenders,
which
may
be
modified
from
time
to
time.
Once
a
given
loanrequest
passes
through
the
matching
process,
the
loan
request
is
automatically
transmitted
to
up
to
five
participating
Network
Lenders.(3)Lender Evaluation and Response. 

Network
Lenders
that
receive
a
loan
request
form
evaluate
the
information
contained
in
it
to
determine
whether
tomake
a
conditional
loan
offer.(4)Communication of a Conditional Offer. 

All
matched
Network
Lenders
and
any
conditional
offers
are
presented
to
the
consumer
upon
completion
ofthe
loan
request
form.
Consumers
can
return
to
the
site
and
view
their
offer(s)
at
any
time
by
logging
in
to
their
My
LendingTree
profile.
Additionally,matched
lenders
and
offers
are
also
sent
to
the
email
address
associated
with
the
consumer
request.(5)Loan Processing. 

Consumers
may
then
elect
to
work
offline
with
relevant
Network
Lenders
to
provide
property
information
and
additional
informationbearing
on
their
creditworthiness.
If
a
Network
Lender
approves
a
consumer's
application,
it
may
then
underwrite
and
originate
a
loan.(6)Ongoing Consumer and Lender Support. 

E-mail
and
telephone
support
are
provided
to
both
Network
Lenders
and
consumers.
This
support
isdesigned
to
provide
technical
assistance
and
increase
overall
satisfaction
of
Network
Lenders
and
consumers.We
also
offer
consumers
an
alternative
"short-form"
matching
process,
which
provides
them
with
lender
contact
information
rather
than
conditional
offersfrom
Network
Lenders.
This
short-form
process
typically
requires
consumers
to
submit
less
data
than
required
in
connection
with
the
matching
process
describedabove
and
does
not
involve
consumer
consent
to
an
inquiry
regarding
credit.In
January
2013,
we
expanded
our
mortgage
offerings
by
launching
LoanExplorer,
a
"rate
table"
loan
marketplace,
where
consumers
can
enter
their
loan
andcredit
profile
and
dynamically
view
real-time
rates
from
lenders
without
entering
their
contact
information.
Consumers
then
have
the
option
of
calling
lendersdirectly,
clicking
through
to
lenders'
websites
or
sending
data
requests
for
lenders
to
follow
up
with
them
directly.
We
developed
this
offering
through
internalproduct
development
efforts.Non-Mortgage
ProductsLending Products .
Other
lending
products
on
our
online
marketplace
include
information,
tools
and
access
to
multiple
conditional
loan
offers
for
thefollowing:•Auto,
which
includes
our
auto
refinance
and
purchase
loan
products.
Auto
loans
enable
consumers
to
purchase
new
or
used
vehicles
or
refinance
anexisting
loan
secured
by
an
automobile.•Credit
cards,
which
include
offerings
from
most
major
card
issuers.
We
launched
this
offering
in
the
second
quarter
of
2013.
Additionally,
as
describedabove,
during
the
fourth
quarter
of
2016,
we
purchased
CompareCards,
a
leader
in
the
online
credit
card
comparison
industry.•Home
equity
loans
and
lines
of
credit,
which
enable
home
owners
to
borrow
against
the
equity
in
their
home,
as
measured
by
the
difference
between
themarket
value
of
the
home
and
any
existing
loans
secured
by
the
home.
Home
equity
loans
are
one-time
lump
sum
loans,
whereas
a
home
equity
line
ofcredit
reflects
a
line
of
revolving
credit
where
the
borrower
has
flexibility
to
draw
down
and
repay
the
line
over
time.•Personal
loans,
which
are
unsecured
obligations
generally
carrying
shorter
terms
and
smaller
loan
amounts
than
home
mortgages.
We
have
historicallyoperated
a
personal
loan
offering,
but
launched
an
enhanced
version
of
this
offering
in
the
third
quarter
of
2013.•Reverse
mortgage
loans,
which
are
a
loan
product
available
to
qualifying
homeowners
age
62
or
older.
We
launched
this
offering
in
the
first
quarter
of2013
through
internal
product
development
efforts.•Small
business
loans,
which
include
a
broad
array
of
financing
types,
including
but
not
limited
to
loans
secured
by
working
capital,
equipment,
real
estateand
other
forms
of
financing,
provided
to
small
and
medium-sized
businesses
in
amounts
generally
up
to
(although
sometimes
exceeding)
$1
million.
Welaunched
our
small
business
loan
marketplace
in
the
third
quarter
of
2014.5Table of Contents•Student
loans,
which
includes
both
new
loans
to
finance
an
education
and
related
expenses,
as
well
as
refinancing
of
existing
loans.
We
launched
astudent
loan
offering
in
the
second
quarter
of
2014
and
a
student
loan
refinancing
offering
in
the
fourth
quarter
of
2014.
Additionally,
during
the
secondquarter
of
2016,
we
purchased
SimpleTuition,
a
leading
online
marketing
platform
for
student
loans.We
intend
to
continue
adding
new
lending
offerings
for
consumers,
small
businesses
and
lenders
on
our
online
marketplace,
in
order
to
grow
and
diversify
oursources
of
revenue.
We
may
develop
such
new
offerings
through
internal
product
development
efforts,
strategic
business
relationships
with
third
parties
and/oracquisitions.Other Products .
Other
products
also
includes
information,
tools
and
access
to
the
following:•Credit
repair,
through
which
consumers
can
obtain
assistance
improving
their
credit
profiles,
in
order
to
expand
and
improve
loan
and
other
financialproduct
opportunities
available
to
them.•Debt
relief
services,
through
which
consumers
can
obtain
assistance
negotiating
existing
loans.•Home
improvement
services,
through
which
consumers
have
the
opportunity
to
research
and
find
home
improvement
professional
services.•Personal
credit
data,
through
which
consumers
can
gain
insights
into
how
prospective
lenders
and
other
third
parties
view
their
credit
profiles.•Real
estate
brokerage
services,
through
which
consumers
are
matched
with
local
realtors
who
can
assist
them
in
their
home
purchase
or
sale
efforts.•Various
consumer
insurance
products,
including
home
and
automobile,
through
which
consumers
are
matched
with
insurance
lead
aggregators
to
obtaininsurance
offers.We
refer
to
the
various
purchasers
of
leads
from
our
other
marketplaces
as
lead
purchasers.
We
generate
revenue
through
the
insurance
products
and
realestate
brokerage
services
through
match
fees
paid
to
us
by
insurance
lead
aggregators
and
real
estate
brokers
participating
in
our
online
marketplace.
We
generaterevenue
from
credit
repair
and
debt
relief
services
either
through
a
fee
for
a
customer
referral
to
a
service
provider
partner
or
through
a
fee
at
the
time
a
consumerenrolls
in
a
program
with
one
of
our
partners.
Revenue
for
home
services
is
derived
primarily
through
matching
of
leads
to
other
home
services
lead
aggregators.SeasonalityRevenue
in
our
lending
business
is
subject
to
cyclical
and
seasonal
trends.
Home
sales
(and
purchase
mortgages)
typically
rise
during
the
spring
and
summermonths
and
decline
during
the
fall
and
winter
months,
while
refinancing
and
home
equity
activity
is
principally
driven
by
mortgage
interest
rates
as
well
as
realestate
values.
However,
in
recent
periods
additional
factors
affecting
the
mortgage
and
real
estate
markets,
such
as
the
2008-2009
financial
crisis
and
ensuingrecession
have
impacted
customary
seasonal
trends.We
anticipate
revenue
in
our
newer
products
to
be
cyclical
as
well;
however,
we
have
limited
historical
data
to
predict
the
nature
and
magnitude
of
thiscyclicality.
Based
on
industry
data,
we
anticipate
that
as
our
personal
loan
product
matures
we
will
experience
less
consumer
demand
during
the
fourth
and
firstquarters
of
each
year.
Other
factors
affecting
our
businesses
include
macro
factors
such
as
credit
availability
in
the
market,
the
strength
of
the
economy
andemployment.CompetitionOur
lending
and
other
businesses
compete
with
other
online
marketing
companies,
including
online
intermediaries
that
operate
network-type
arrangements.We
also
face
competition
from
lenders
that
source
consumer
loan
originations
directly.
These
companies
typically
operate
consumer-branded
websites
and
attractconsumers
via
online
banner
ads,
keyword
placement
on
search
engines,
direct
mail,
television
ads,
retail
branches,
realtors,
brokers,
radio
and
other
sources,partnerships
with
affiliates
and
business
development
arrangements
with
others,
including
major
online
portals.Product DevelopmentWe
invest
in
the
continued
development
of
both
new
and
existing
products
to
enhance
the
experiences
of
consumers
and
lenders
as
they
interact
with
us.
Weincurred
product
development
costs
of
$19.8
million,
$16.8
million
and
$11.1
million
during
the
years
ended
December
31,
2016,
2015
and
2014,
respectively,
allof
which
was
company
sponsored.6Table of ContentsFinancial Information About Segments and Geographic AreasWe
have
one
reportable
segment.
See Note
19
—Segment
Information
to
the
consolidated
financial
statements
included
elsewhere
in
this
report.Additional
information
on
our
financial
performance
by
geographic
areas
can
be
found
in
Note
2—Significant
Accounting
Policies
to
the
consolidatedfinancial
statements
included
elsewhere
in
this
report.Corporate HistoryLendingTree,
Inc.,
is
the
parent
of
LendingTree,
LLC
and
several
companies
owned
by
LendingTree,
LLC.
LendingTree,
LLC,
formerly
known
asLendingTree,
Inc.,
was
incorporated
in
the
state
of
Delaware
in
June
1996
and
commenced
nationwide
operations
in
July
1998.
LendingTree,
Inc.,
was
acquired
byIAC/InterActiveCorp
("IAC")
in
2003
and
converted
to
a
Delaware
limited
liability
company
(LendingTree,
LLC)
in
December
2004.
LendingTree,
LLC
enteredthe
mortgage
origination
business
through
the
acquisition
of
Home
Loan
Center,
Inc.
in
2004.
On
August
20,
2008,
LendingTree,
LLC
(along
with
its
parentholding
company
Tree.com,
Inc.)
was
spun
off
from
IAC/InterActiveCorp
into
a
separate
publicly-traded
company.
We
refer
to
the
separation
transaction
as
the"spin-off"
in
this
report.
Tree.com
was
incorporated
as
a
Delaware
corporation
in
April
2008
in
anticipation
of
the
spin-off.
The
Home
Loan
Center
business
wassold
to
Discover
Financial
Services
in
2012.
Since
then,
the
Company
has
operated
as
a
pure
online
marketplace
and
does
not
originate
loans.
Effective
January
1,2015,
we
changed
our
corporate
name
from
Tree.com,
Inc.
to
LendingTree,
Inc.Regulation and Legal ComplianceOur
businesses
market
and
provide
services
in
heavily
regulated
industries
through
a
number
of
different
online
and
offline
channels
across
the
United
States.As
a
result,
we
are
subject
to
a
variety
of
statutes,
rules,
regulations,
policies
and
procedures
in
various
jurisdictions
in
the
United
States,
including:•Restrictions
on
the
amount
and
nature
of
fees
or
interest
that
may
be
charged
in
connection
with
a
loan,
such
as
state
usury
and
fee
restrictions;•Restrictions
on
the
manner
in
which
consumer
loans
are
marketed
and
originated,
including,
but
not
limited
to,
the
making
of
required
consumerdisclosures,
such
as
the
Federal
Trade
Commission's
Mortgage
Advertising
Practices
("MAP")
Rules,
federal
Truth-in-Lending
Act,
the
federal
EqualCredit
Opportunity
Act,
the
federal
Fair
Credit
Reporting
Act,
the
federal
Fair
Housing
Act,
the
federal
Real
Estate
Settlement
Procedures
Act("RESPA"),
and
similar
state
laws;•Restrictions
imposed
by
the
Dodd-Frank
Wall
Street
Reform
and
Consumer
Protection
Act
(the
"Dodd
Frank
Act")
and
current
or
future
rulespromulgated
thereunder,
including,
but
not
limited
to,
limitations
on
fees
charged
by
mortgage
lenders,
mortgage
broker
disclosures
and
rulespromulgated
by
the
Consumer
Financial
Protection
Bureau
("CFPB"),
which
was
created
under
the
Dodd-Frank
Act;•Restrictions
on
the
amount
and
nature
of
fees
that
may
be
charged
to
lenders
and
real
estate
professionals
for
providing
or
obtaining
consumer
loanrequests,
such
as
under
RESPA;•Restrictions
on
the
amount
and
nature
of
fees
that
may
be
charged
to
consumers
for
real
estate
brokerage
transactions,
including
any
incentives
andrebates
that
may
be
offered
to
consumers
by
our
businesses;•Federal
and
State
laws
relating
to
the
implementation
of
the
Secure
and
Fair
Enforcement
of
Mortgage
Licensing
Act
of
2008
(the
"SAFE
Act")
thatrequire
us
to
be
licensed
in
all
States
and
the
District
of
Columbia
(licensing
requirements
are
applicable
to
both
individuals
and/or
businesses
engaged
inthe
solicitation
of
or
the
brokering
of
residential
mortgage
loans
and/or
the
brokering
of
real
estate
transactions);•State
and
federal
restrictions
on
the
marketing
activities
conducted
by
telephone,
mail,
email,
mobile
device
or
the
internet,
including
the
TelemarketingSales
Rule
("TSR"),
the
Telephone
Consumer
Protection
Act
("TCPA"),
state
telemarketing
laws,
federal
and
state
privacy
laws,
the
CAN-SPAM
Act,and
the
Federal
Trade
Commission
Act
and
their
accompanying
regulations
and
guidelines;•State
laws
requiring
licensure
for
the
solicitation
of
or
brokering
of
consumer
loans
which
could
affect
us
in
our
personal
loan,
automobile
loan,
studentloan
or
other
non-mortgage
consumer
lending
businesses;•Restrictions
on
the
usage
and
storage
of
consumer
credit
information,
such
as
those
contained
in
the
federal
Fair
Credit
Reporting
Act
and
the
federalCredit
Repair
Organization
Act;
and•State
"Bird
Dog"
laws
which
restrict
the
amount
and
nature
of
fees,
if
any,
that
may
be
charged
to
consumers
for
automobile
direct
and
indirect
financing.7Table of ContentsIntellectual PropertyWe
believe
that
our
intellectual
property
rights
are
vital
to
our
success.
To
protect
our
intellectual
property
rights
in
our
brand,
technology,
products,improvements
and
inventions,
we
rely
on
a
combination
of
trademarks,
trade
secret,
patents
and
other
laws,
and
contractual
restrictions
on
disclosure,
includingconfidentiality
agreements
with
strategic
partners,
employees,
consultants
and
other
third
parties.
As
new
or
improved
proprietary
technologies
are
developed
orinventions
are
identified,
we
seek
patent
protection
in
the
United
States
and
abroad,
as
appropriate.
We
have
two
issued
U.S.
patents
relating
to
our
technologies,including
those
relating
to
the
method
and
network
for
coordinating
a
loan
over
the
internet,
which
expire
in
2018.
In
March
2014,
a
federal
jury
found
these
twopatents
invalid.
See Note
13
—Contingencies
in
the
notes
to
the
consolidated
financial
statements
included
elsewhere
in
this
report.Many
of
our
services
are
offered
under
proprietary
trademarks
and
service
marks.
We
generally
apply
to
register
or
secure
by
contract
our
principaltrademarks
and
service
marks
as
they
are
developed
and
used.
We
have
48
trademarks
and
service
marks
registered
with
the
United
States
Patent
and
TrademarkOffice.
These
registrations
can
typically
be
renewed
at
10-year
intervals.We
reserve
and
register
domain
names
when
and
where
we
deem
appropriate
and
we
currently
have
approximately
1,232
registered
domain
names.
We
alsohave
agreements
with
third
parties
that
provide
for
the
licensing
of
patented
and
proprietary
technology
used
in
our
business.From
time
to
time,
we
may
be
subjected
to
legal
proceedings
and
claims,
or
threatened
legal
proceedings
or
claims,
including
allegations
of
infringement
ofthird-party
trademarks,
copyrights,
patents
and
other
intellectual
property
rights
of
third
parties.
In
addition,
the
use
of
litigation
may
be
necessary
for
us
to
enforceour
intellectual
property
rights,
protect
trade
secrets
or
to
determine
the
validity
and
scope
of
proprietary
rights
claimed
by
others.
Any
litigation
of
this
nature,regardless
of
outcome
or
merit,
could
result
in
substantial
costs
and
diversion
of
management
and
technical
resources,
any
of
which
could
adversely
affect
ourbusiness,
financial
condition
and
results
of
operations.
See Note
13
—Contingencies—Intellectual
Property
Litigation—Zillow
in
the
notes
to
the
consolidatedfinancial
statements
included
elsewhere
in
this
report.EmployeesAs
of
December
31,
2016
,
we
had
399
employees,
of
which
approximately
388
are
full-time
and
11
are
temporary
or
part-time.
None
of
our
employees
arerepresented
under
collective
bargaining
agreements
and
we
consider
our
relations
with
employees
and
independent
contractors
to
be
good.Additional InformationWebsite and Public FilingsWe
maintain
a
corporate
website
at
www.lendingtree.com and
an
investor
relations
website
at
investors.lendingtree.com .
None
of
the
information
on
ourwebsite
is
incorporated
by
reference
in
this
report,
or
in
any
other
filings
with,
or
in
any
information
furnished
or
submitted
to,
the
Securities
and
ExchangeCommission
(the
"SEC").We
make
available,
free
of
charge
through
our
website,
our
reports
on
Forms
10-K,
10-Q
and
8-K,
our
proxy
statement
for
the
annual
shareholders'
meetingand
beneficial
ownership
reports
on
Forms
3,
4
and
5
as
soon
as
reasonably
practicable
after
we
file
such
material
with,
or
furnish
such
material
to,
the
SEC.
Ourfilings
with
the
SEC
are
available
to
the
public
over
the
Internet
at
the
SEC's
website
at
www.sec.gov ,
or
at
the
SEC's
public
reference
room
located
at
100
FStreet,
N.E.,
Washington,
DC
20549.
Please
call
the
SEC
at
1-800-SEC-0330
for
further
information
on
the
operation
of
the
public
reference
room.Code of Business Conduct and EthicsOur
code
of
business
conduct
and
ethics,
which
applies
to
all
employees,
including
all
executive
officers
and
senior
financial
officers
and
directors,
is
postedon
our
website
at
investors.lendingtree.com/corporate-governance.cfm .
This
is
our
code
of
ethics
pursuant
to
Item
406
of
SEC
Regulation
S-K
and
the
rules
ofThe
NASDAQ
Stock
Market.
Any
amendments
to
or
waivers
of
the
code
of
business
conduct
and
ethics
that
are
of
the
type
described
in
Item
406(b)
and
(d)
ofRegulation
S-K
will
be
disclosed
on
our
website.8Table of ContentsITEM 1A.   Risk
FactorsInvesting in our common stock involves a high degree of risk. Before making an investment decision, you should carefully consider the risks described below,together with all of the other information included in this annual report and the information incorporated by reference herein. If any of the risks described below,or incorporated by reference into this annual report actually occur, our business, financial condition or results of operations could suffer. In that case, the tradingprice of our common stock may decline and you may lose all or part of your investment. The risks and uncertainties we have described are not the only ones weface. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business, financial condition andresults of operations. Certain statements below are forward-looking statements. See the information included under the heading "Cautionary Statement RegardingForward-Looking Information."Risks Related to Our Business and IndustryAdverse
conditions
in
the
primary
and
secondary
mortgage
markets,
as
well
as
the
general
economy,
could
materially
and
adversely
affect
our
business,financial
condition
and
results
of
operations.Constraints
in
the
primary
and
secondary
mortgage
markets
have
in
the
past
had,
and
may
in
the
future
have,
an
adverse
effect
on
our
business,
financialcondition
and
results
of
operations.
Generally,
increases
in
interest
rates
adversely
affect
the
ability
of
our
Network
Lenders
to
close
loans,
and
adverse
economictrends
limit
the
ability
of
our
Network
Lenders
to
offer
home
loans
other
than
low-margin
conforming
loans.
Our
businesses
may
experience
a
decline
in
demandfor
their
offerings
due
to
decreased
consumer
demand
as
a
result
of
the
conditions
described
above,
now
or
in
the
future.
Conversely,
during
periods
with
decreasedinterest
rates,
Network
Lenders
have
less
incentive
to
use
our
marketplaces,
or
in
the
case
of
sudden
increases
in
consumer
demand,
our
Network
Lenders
may
lackthe
ability
to
support
sudden
increases
in
volume.We
depend
on
relationships
with
Network
Lenders
and
any
adverse
changes
in
these
relationships
could
adversely
affect
our
business,
financial
condition
andresults
of
operations.Our
success
depends
in
significant
part
on
the
financial
strength
of
lenders
participating
on
our
marketplaces
and
continuing
relationships
with
such
lenders.Network
Lenders
could,
for
any
reason,
experience
financial
difficulties
and
cease
participating
on
our
lender
marketplace,
fail
to
pay
match
and/or
closing
feeswhen
due
and/or
drop
the
quality
of
their
services
to
consumers.
We
could
also
have
commercial
or
other
disputes
with
such
Network
Lenders
from
time
to
time.The
occurrence
of
one
or
more
of
these
events
with
a
significant
number
of
Network
Lenders
could,
alone
or
in
combination,
have
a
material
and
adverse
effect
onour
business,
financial
condition
and
results
of
operations.Failure
to
maintain
brand
recognition
and
attract
and
retain
consumers
in
a
cost-effective
manner
could
materially
and
adversely
affect
our
business,financial
condition
and
results
of
operations.In
order
to
attract
visitors
to
our
websites,
convert
these
visitors
into
loan
requests
for
our
Network
Lenders
and
lead
purchasers
and
generate
repeat
visitsfrom
consumers,
our
businesses
must
promote
and
maintain
their
various
brands.
Brand
promotion
and
maintenance
requires
the
expenditure
of
considerablemoney
and
resources
for
online
and
offline
advertising,
marketing
and
related
efforts,
as
well
as
the
continued
provision
and
introduction
of
high-quality
productsand
services.Brand
recognition
is
a
key
differentiating
factor
among
providers
of
online
services.
We
believe
that
continuing
to
build
and
maintain
the
recognition
of
ourvarious
brands
is
critical
to
achieving
increased
demand
for
the
services
provided
by
our
businesses.
Accordingly,
we
have
spent,
and
expect
to
continue
to
spend,significant
amounts
on,
and
devote
significant
resources
to,
branding,
advertising
and
other
marketing
initiatives,
which
may
not
be
successful
or
cost-effective.The
failure
of
our
businesses
to
maintain
the
recognition
of
their
respective
brands
and
attract
and
retain
consumers
in
a
cost-effective
manner
could
materially
andadversely
affect
our
business,
financial
condition
and
results
of
operations.Adverse
publicity
from
legal
proceedings
against
us
or
our
businesses,
including
governmental
proceedings
and
consumer
class
action
litigation,
or
from
thedisclosure
of
information
security
breaches,
could
negatively
impact
our
various
brands,
which
could
materially
and
adversely
affect
our
business,
financialcondition
and
results
of
operations.
In
addition,
the
actions
of
our
third-party
marketing
partners
who
engage
in
advertising
on
our
behalf
could
negatively
impactour
various
brands.We
depend
on
search
engines
and
other
online
sources
to
attract
visitors
to
our
websites,
and
if
we
are
unable
to
attract
these
visitors
and
convert
them
intoloan
requests
for
our
Network
Lenders
and
lead
purchasers
in
a
cost-effective
manner,
our
business
and
financial
results
may
be
harmed.Our
success
depends
on
our
ability
to
attract
online
consumers
to
our
websites
and
convert
them
into
customers
in
a
cost-effective
manner.
We
depend,
in
part,on
search
engines
and
other
online
sources
for
our
website
traffic.
We
are
included
in
search
results
as
a
result
of
both
paid
search
listings,
where
we
purchasespecific
search
terms
that
result
in
the
inclusion
of
our9Table of Contentsadvertisement,
and,
separately,
organic
searches,
that
depend
upon
the
searchable
content
on
our
sites.
Search
engines
and
other
online
sources
revise
theiralgorithms
from
time
to
time
in
an
attempt
to
optimize
their
search
results.If
one
or
more
of
the
search
engines
or
other
online
sources
on
which
we
rely
for
website
traffic
were
to
modify
its
general
methodology
for
how
it
displaysour
websites,
resulting
in
fewer
consumers
clicking
through
to
our
websites,
our
business
could
suffer.
If
any
free
search
engine
traffic
on
which
we
rely
beginscharging
fees
for
listing
or
placement,
or
if
one
or
more
of
the
search
engines
or
other
online
sources
on
which
we
rely
for
purchased
listings,
modifies
orterminates
its
relationship
with
us,
our
expenses
could
rise,
we
could
lose
customers,
and
traffic
to
our
websites
could
decrease,
all
of
which
could
have
a
materialand
adverse
effect
on
our
business,
financial
condition
and
results
of
operations.We
compete
with
a
number
of
other
online
marketing
companies,
and
we
face
the
possibility
of
new
competitors.We
currently
compete
with
a
number
of
other
online
marketing
companies
and
we
expect
that
competition
will
intensify.
Some
of
these
existing
competitorsmay
have
more
capital
or
complementary
products
or
services
than
we
do,
and
they
may
leverage
their
greater
capital
or
diversification
in
a
manner
that
adverselyaffects
our
competitive
position,
including
by
making
strategic
acquisitions.
In
addition,
new
competitors
may
enter
the
market
and
may
be
able
to
innovate
andbring
products
and
services
to
market
faster,
or
anticipate
and
meet
consumer
or
Network
Lender
demand
before
we
do.
Other
newcomers,
including
major
searchengines
and
content
aggregators,
may
be
able
to
leverage
their
existing
products
and
services
to
our
disadvantage.
We
may
be
forced
to
expend
significantresources
to
remain
competitive
with
current
and
potential
competitors.
If
any
of
our
competitors
are
more
successful
than
we
are
at
attracting
and
retainingcustomers
or
Network
Lenders,
our
business,
financial
condition
and
results
of
operations
could
be
materially
and
adversely
affected.Our
success
depends,
in
part,
on
the
integrity
of
our
systems
and
infrastructures.
System
interruption
and
the
lack
of
integration
and
redundancy
in
thesesystems
and
infrastructures
may
have
a
material
and
adverse
impact
on
our
business,
financial
condition
and
results
of
operations.Our
success
depends,
in
part,
on
our
ability
to
maintain
the
integrity
of
our
systems
and
infrastructures,
including
websites,
information
and
related
systems,call
centers
and
distribution
and
fulfillment
facilities.
System
interruption
and
the
lack
of
integration
and
redundancy
in
our
information
systems
and
infrastructuresmay
materially
and
adversely
affect
our
ability
to
operate
websites,
process
and
fulfill
transactions,
respond
to
customer
inquiries
and
generally
maintain
cost-efficient
operations.
We
may
experience
occasional
system
interruptions
that
make
some
or
all
systems
or
data
unavailable
or
prevent
our
businesses
fromefficiently
providing
services
or
fulfilling
orders.
We
also
rely
on
affiliate
and
third-party
computer
systems,
broadband
and
other
communications
systems
andservice
providers
in
connection
with
the
provision
of
services
generally,
as
well
as
to
facilitate,
process
and
fulfill
transactions.
Any
interruptions,
outages
or
delaysin
our
systems
and
infrastructures,
our
businesses,
our
affiliates
and/or
third
parties,
or
deterioration
in
the
performance
of
these
systems
and
infrastructures,
couldimpair
the
ability
of
our
businesses
to
provide
services,
fulfill
orders
and/or
process
transactions.
Fire,
flood,
power
loss,
telecommunications
failure,
hurricanes,tornadoes,
earthquakes,
acts
of
war
or
terrorism,
acts
of
God,
unauthorized
intrusions
or
computer
viruses,
and
similar
events
or
disruptions
may
damage
orinterrupt
computer,
broadband
or
other
communications
systems
and
infrastructures
at
any
time.
Any
of
these
events
could
cause
system
interruption,
delays
andloss
of
critical
data,
and
could
prevent
our
businesses
from
providing
services,
fulfilling
orders
and/or
processing
transactions.
While
our
businesses
have
backupsystems
for
certain
aspects
of
their
operations,
these
systems
are
not
fully
redundant
and
disaster
recovery
planning
is
not
sufficient
for
all
eventualities.
Inaddition,
we
may
not
have
adequate
insurance
coverage
to
compensate
for
losses
from
a
major
interruption.
If
any
of
these
events
were
to
occur,
it
could
materiallyand
adversely
affect
our
business,
financial
condition
and
results
of
operations.A
breach
of
our
network
security
or
the
misappropriation
or
misuse
of
personal
consumer
information
may
have
a
material
and
adverse
impact
on
ourbusiness,
financial
condition
and
results
of
operations.Any
penetration
of
network
security
or
other
misappropriation
or
misuse
of
personal
consumer
information
maintained
by
us
or
our
third-party
marketingpartners
could
cause
interruptions
in
the
operations
of
our
businesses
and
subject
us
to
increased
costs,
litigation
and
other
liabilities.
Claims
could
also
be
madeagainst
us
or
our
third-party
marketing
partners
for
other
misuse
of
personal
information,
such
as
for
unauthorized
purposes
or
identity
theft,
which
could
result
inlitigation
and
financial
liabilities,
as
well
as
administrative
action
from
governmental
authorities.
Real
or
perceived
security
breaches
could
also
significantlydamage
our
reputation
with
consumers
and
third
parties
with
whom
we
do
business.We
may
be
required
to
expend
significant
capital
and
other
resources
to
protect
against
and
remedy
any
potential
or
existing
security
breaches
and
theirconsequences.
We
also
face
risks
associated
with
security
breaches
affecting
third
parties
with
whom
we
are
affiliated
or
otherwise
conduct
business
with
online.Consumers
are
generally
concerned
with
security
and
privacy
of
the
Internet,
and
any
publicized
security
problems
affecting
our
businesses
and/or
those
of
thirdparties
may
discourage
consumers
from
doing
business
with
us,
which
could
have
a
material
and
adverse
effect
on
our
business,
financial
condition
and
results
ofoperations.10Table of ContentsLitigation
and
indemnification
of
secondary
market
purchasers
could
have
a
material
and
adverse
effect
on
our
business,
financial
condition,
results
ofoperations
and
liquidity.In
connection
with
the
sale
of
loans
to
secondary
market
purchasers,
Home
Loan
Center,
Inc.
("HLC")
may
be
liable
for
certain
indemnification,
repurchaseand
premium
repayment
obligations.
For
example,
in
connection
with
the
sale
of
loans
to
secondary
market
purchasers,
HLC
made
certain
representationsregarding
related
borrower
credit
information,
loan
documentation
and
collateral.
To
the
extent
that
these
representations
were
incorrect,
HLC
may
be
required
torepurchase
loans
or
indemnify
secondary
market
purchasers
for
losses
due
to
borrower
defaults.
HLC
also
agreed
to
repurchase
loans
or
indemnify
secondarymarket
purchasers
for
losses
due
to
early
payment
defaults
(
i.e., 
late
payments
during
a
limited
time
period
immediately
following
HLC's
origination
of
the
loan).Further,
HLC
agreed
to
repay
all
or
a
portion
of
the
initial
premiums
paid
by
secondary
market
purchasers
in
instances
where
the
borrower
prepays
the
loan
withina
specified
period
of
time.
HLC
has
made
payments
for
these
liabilities
in
the
past
and
expects
to
make
payments
for
these
liabilities
in
the
future.We
continue
to
be
liable
for
these
indemnification
obligations,
repurchase
obligations
and
premium
repayment
obligations
following
the
sale
of
substantiallyall
of
the
operating
assets
of
our
LendingTree
Loans
business.
We
have
in
the
past
and
intend
to
continue
to
negotiate
in
the
future
with
secondary
marketpurchasers
to
settle
any
existing
and
future
contingent
liabilities,
but
we
cannot
assure
you
we
will
be
able
to
do
so
on
terms
acceptable
to
us,
or
at
all.
Theoccurrence
of
indemnification
claims,
repurchase
obligations
or
premium
repayments
beyond
our
reserves
for
these
contingencies,
or
our
inability
to
settle
withsecondary
market
purchasers,
may
have
a
material
and
adverse
effect
on
our
business,
financial
condition
and
results
of
operations.Difficult
market
conditions
have
adversely
affected
the
mortgage
industry.Declines
in
the
housing
market
from
2006
through
early
2012,
as
measured
by
the
S&P/Case-Schiller
20-city
composite
home
price
index,
with
home
pricedeclines
and
increased
foreclosures,
unemployment
and
under-employment,
negatively
impacted
the
credit
performance
of
mortgage
loans
and
resulted
insignificant
write-downs
of
asset
values
by
financial
institutions,
including
government-sponsored
entities
as
well
as
major
commercial
and
investment
banks.These
write-downs,
initially
of
mortgage-backed
securities
but
subsequently
of
other
asset-backed
securities,
credit
default
swaps
and
other
derivative
and
cashsecurities,
in
turn,
caused
many
financial
institutions
to
seek
additional
capital,
merge
with
larger
and
stronger
institutions
and,
in
some
cases,
to
fail.Reflecting
concern
about
the
stability
of
the
housing
markets
generally
and
the
strength
of
counterparties,
many
lenders
and
institutional
investors
reduced
orceased
providing
funding
to
borrowers,
including
to
other
financial
institutions.
This
market
disruption
and
tightening
of
credit
led
to
an
increased
level
ofcommercial
and
consumer
delinquencies,
lack
of
consumer
confidence
and
increased
market
volatility.
The
resulting
economic
pressure
on
consumers
and
lack
ofconfidence
in
the
financial
markets
has
had
in
the
past
and
may
have
in
the
future,
an
adverse
effect
on
our
business,
financial
condition
and
results
of
operations.While
conditions
in
the
housing
markets
have
improved
since
2013,
the
failure
to
sustain
such
improvements
could
have
adverse
effects
on
us
and
ourNetwork
Lenders.
Further,
our
business
could
be
adversely
affected
by
the
actions
and
commercial
soundness
of
other
businesses
in
the
financial
services
sector.As
a
result,
defaults
by,
or
even
rumors
or
questions
about,
one
or
more
of
these
entities,
or
the
financial
services
industry
generally,
have
in
the
past,
and
may
inthe
future,
lead
to
market-wide
liquidity
problems
and
could
lead
to
disruptions
in
the
mortgage
industry.
Any
such
disruption
could
have
a
material
and
adverseeffect
on
our
business,
financial
condition
and
results
of
operations.Our
recent
revenue
growth
has
been
driven
in
significant
part
by
personal
loan
offerings.
If
lenders
participating
on
our
marketplace
decide
to
reduce
theirofferings
of
personal
loans
or
if
such
loans
become
unattractive
to
consumers
because
of
higher
interest
rates
demanded
by
lenders,
then
our
results
ofoperations
and
future
growth
prospects
could
be
materially
and
adversely
affected.We
re-launched
our
personal
loan
product
in
the
third
quarter
of
2013.
Revenue
from
personal
loan
offerings
was
responsible
for
a
significant
portion
of
thegrowth
in
the
non-mortgage
revenue
over
the
last
few
years.
Revenue
from
our
personal
loan
product
increased
$15.2
million
in
2016
from
2015
and
$38.9
millionin
2015
from
2014.Personal
loans
are
unsecured
obligations
and
generally
carry
shorter
terms
and
smaller
loan
amounts
than
mortgages.
Because
they
are
unsecured,
they
aregenerally
riskier
assets
for
lenders
than
mortgages
or
other
secured
loans.
Consumer
demand
for
unsecured
loans
offered
on
our
marketplace
is
often
forrefinancing
of
higher
interest
credit
card
debt
or
for
a
lower
interest
alternative
to
credit
card
debt
for
a
contemplated
larger
purchase
that
would
otherwise
bepurchased
with
a
credit
card.
Lenders
participating
on
our
marketplace
may
reduce
their
willingness
to
make
personal
loans
at
more
attractive
interest
rates
thancredit
card
debt
and
may
for
that
reason,
or
for
any
other
reason,
reduce
their
demand
for
personal
loan
requests
generated
from
our
personal
loan
marketplace.Reasons
that
lenders
might
reduce
their
willingness
to
make
personal
loans
at
attractive
interest
rates
may
include
regulatory
changes,
stricter
institutional
lendingcriteria,
a
lack
of
adequate
funding
sources
or
capital
for
loan
originations,
or
increased
borrower
default
levels,
which
may
occur
upon
adverse
changes
inregional,
national
or
global
economic11Table of Contentsconditions.
Additionally,
lenders
may
tighten
their
underwriting
standards,
making
it
more
difficult
for
consumers
to
qualify
for
personal
loans.
If
lendersparticipating
on
our
marketplace
decide
to
reduce
their
offerings
of
personal
loans,
tighten
their
underwriting
standards,
or
if
personal
loans
become
unattractive
toconsumers
because
of
higher
interest
rates
demanded
by
lenders,
then
our
results
of
operations
and
future
growth
prospects
could
be
materially
and
adverselyaffected.Network
Lenders
affiliated
with
our
marketplaces
are
not
precluded
from
offering
products
and
services
outside
of
our
marketplaces,
or
obtaining
productsand
services
from
our
competitors.Because
our
businesses
do
not
have
exclusive
relationships
with
Network
Lenders,
consumers
may
obtain
loans
from
these
third-party
service
providerswithout
having
to
use
our
marketplaces.
Network
Lenders
can
offer
loans
directly
to
consumers
through
their
own
marketing
campaigns
or
other
traditionalmethods
of
distribution,
such
as
referral
arrangements,
physical
store-front
operations
or
broker
agreements.
Network
Lenders
may
also
offer
loans
and
services
toprospective
customers
online
directly,
through
one
or
more
online
competitors
of
our
businesses,
or
both.
If
a
significant
number
of
consumers
seek
loans
andservices
directly
from
Network
Lenders
or
through
our
competitors
as
opposed
to
through
our
marketplaces,
our
business,
financial
condition
and
results
ofoperations
could
be
materially
and
adversely
affected.Some
of
our
lending
services
are
new
to
the
market
and
may
fail
to
achieve
or
maintain
customer
acceptance
and
profitability.We
have
launched
new
non-mortgage
products
over
the
last
several
years.
We
do
not
have
as
much
experience
with
these
new
non-mortgage
products
as
withthe
mortgage
products.
Accordingly,
new
non-mortgage
products
may
be
subject
to
greater
risks
than
our
more
mature
mortgage
products.The
success
of
new
products
we
may
offer
will
depend
on
a
number
of
factors,
including:•Implementing,
at
an
acceptable
cost,
product
features
offered
by
our
competitors
and/or
expected
by
consumers
and
lenders;•Market
acceptance
by
consumers
and
lenders;•Offerings
by
current
and
future
competitors;•Our
ability
to
attract
and
retain
management
and
other
skilled
personnel
for
these
businesses;•Our
ability
to
collect
amounts
owed
to
us
from
third
parties;•Our
ability
to
develop
successful
and
cost-effective
marketing
campaigns;
and•Our
ability
to
timely
adjust
marketing
expenditures
in
relation
to
changes
in
demand
for
the
underlying
products
and
services
offered
by
our
leadpurchasers.Our
results
of
operations
may
suffer
if
we
fail
to
successfully
anticipate
and
manage
these
issues
associated
with
new
products.If
we
are
unable
to
continually
enhance
our
products
and
services
and
adapt
them
to
technological
changes
and
consumer
and
lender
and/or
lead
purchaserneeds,
including
the
emergence
of
new
computing
devices
and
more
sophisticated
online
services,
we
may
lose
market
share
and
revenue
and
our
businesscould
suffer.We
need
to
anticipate,
develop
and
introduce
new
products,
services
and
applications
on
a
timely
and
cost-effective
basis
that
keep
pace
with
technologicaldevelopments
and
changing
consumer
and
customer
needs.
For
example,
the
number
of
individuals
who
access
the
internet
through
devices
other
than
a
personalcomputer,
such
as
tablets,
mobile
telephones,
televisions
and
set-top
box
devices
has
increased
significantly
and
this
trend
is
likely
to
continue.
Because
eachmanufacturer
or
distributor
may
establish
unique
technical
standards
for
its
devices,
our
websites
may
not
be
functional
or
viewable
on
these
devices.
Additionally,new
devices
and
new
platforms
are
continually
being
released.
Consumers
access
many
traditional
web
services
on
mobile
devices
through
applications,
or
apps.It
is
difficult
to
predict
the
problems
we
may
encounter
in
improving
our
websites'
functionality
with
these
alternative
devices
or
developing
apps
for
mobileplatforms.
If
we
fail
to
develop
our
websites
or
apps
to
respond
to
these
or
other
technological
developments
and
changing
consumer
and
customer
needs
costeffectively,
we
may
lose
market
share,
which
could
materially
and
adversely
affect
our
business,
financial
condition
and
results
of
operations.We
may
fail
to
adequately
protect
our
intellectual
property
rights
or
may
be
accused
of
infringing
intellectual
property
rights
of
third
parties.We
regard
our
intellectual
property
rights,
including
patents,
service
marks,
trademarks
and
domain
names,
copyrights,
trade
secrets
and
similar
intellectualproperty
(as
applicable),
as
critical
to
our
success.
Our
businesses
also
rely
heavily
upon
software
codes,
informational
databases
and
other
components
that
makeup
their
products
and
services.12Table of ContentsWe
rely
on
a
combination
of
laws
and
contractual
restrictions
with
employees,
customers,
suppliers,
affiliates
and
others
to
establish
and
protect
theseproprietary
rights.
Despite
these
precautions,
it
may
be
possible
for
a
third
party
to
copy
or
otherwise
obtain
and
use
trade
secrets
or
copyrighted
intellectualproperty
without
authorization
which,
if
discovered,
might
require
legal
action
to
correct.
In
addition,
third
parties
may
independently
and
lawfully
developsubstantially
similar
intellectual
properties.We
have
generally
registered
and
continue
to
apply
to
register,
or
secure
by
contract
when
appropriate,
our
principal
trademarks
and
service
marks
as
they
aredeveloped
and
used,
and
reserve
and
register
domain
names
when
and
where
we
deem
appropriate.
We
generally
consider
the
protection
of
our
trademarks
to
beimportant
for
purposes
of
brand
maintenance
and
reputation.
While
we
vigorously
protect
our
trademarks,
service
marks
and
domain
names,
effective
trademarkprotection
may
not
be
available
or
may
not
be
sought
in
every
country
in
which
products
and
services
are
made
available,
and
contractual
disputes
may
affect
theuse
of
marks
governed
by
private
contract.
Similarly,
not
every
variation
of
a
domain
name
may
be
available
or
be
registered,
even
if
available.
Our
failure
toprotect
our
intellectual
property
rights
in
a
meaningful
manner
or
challenges
to
related
contractual
rights
could
result
in
erosion
of
brand
names
and
limit
ourability
to
control
marketing
on
or
through
the
Internet
using
our
various
domain
names
or
otherwise,
which
could
materially
and
adversely
affect
our
business,financial
condition
and
results
of
operations.We
have
been
granted
patents
and
we
have
patent
applications
pending
with
the
United
States
Patent
and
Trademark
Office
and
various
foreign
patentauthorities
for
various
proprietary
technologies
and
other
inventions.
The
status
of
any
patent
involves
complex
legal
and
factual
questions,
and
the
breadth
ofclaims
allowed
is
uncertain.
Accordingly,
any
patent
application
filed
may
not
result
in
a
patent
being
issued,
or
existing
or
future
patents
may
not
be
adjudicatedvalid
by
a
court
or
be
afforded
adequate
protection
against
competitors
with
similar
technology.
In
March
2014,
a
federal
jury
found
our
two
issued
patents
invalid.See Note
13
—Contingencies—Intellectual
Property
Litigation—Zillow
in
the
notes
to
the
consolidated
financial
statements
included
elsewhere
in
this
report.
Inaddition,
third
parties
may
create
new
products
or
methods
that
achieve
similar
results
without
infringing
upon
patents
that
we
own.Likewise,
the
issuance
of
a
patent
to
us
does
not
mean
that
our
processes
or
inventions
will
be
found
not
to
infringe
upon
patents
or
other
rights
previouslyissued
to
third
parties.From
time
to
time,
in
the
ordinary
course
of
business
we
are
subjected
to
legal
proceedings,
claims
and
counterclaims,
or
threatened
legal
proceedings,
claimsor
counterclaims,
including
allegations
of
infringement
of
the
trademarks,
copyrights,
patents
and
other
intellectual
property
rights
of
third
parties.
In
addition,litigation
may
be
necessary
in
the
future
to
enforce
our
intellectual
property
rights,
protect
trade
secrets
or
to
determine
the
validity
and
scope
of
proprietary
rightsclaimed
by
others.
Any
litigation
of
this
nature,
regardless
of
outcome
or
merit,
could
result
in
substantial
costs
and
diversion
of
management
and
technicalresources,
any
of
which
could
materially
and
adversely
affect
our
business,
financial
condition
and
results
of
operations.
Patent
litigation
tends
to
be
particularlyprotracted
and
expensive.
In
2014,
we
participated
in
a
jury
trial
for
the
litigation
described
in
Note
13
—Contingencies—Intellectual
Property
Litigation—Zillowin
the
notes
to
the
consolidated
financial
statements
included
elsewhere
in
this
report.
The
legal
expenses
associated
with
this
jury
trial
were
material
andnegatively
affected
our
results
of
operations
for
2014.Our
framework
for
managing
risks
may
not
be
effective
in
mitigating
our
risk
of
loss.Our
risk
management
framework
seeks
to
mitigate
risk
and
appropriately
balance
risk
and
return.
We
have
established
processes
and
procedures
intended
toidentify,
measure,
monitor
and
report
the
types
of
risk
to
which
we
are
subject,
including
credit
risk,
market
risk,
liquidity
risk,
operational
risk,
legal
andcompliance
risk,
and
strategic
risk.
We
seek
to
monitor
and
control
our
risk
exposure
through
a
framework
of
policies,
procedures
and
reporting
requirements.There
may
be
risks
that
exist,
or
that
develop
in
the
future,
that
we
have
not
appropriately
anticipated,
identified
or
mitigated.
If
our
risk
management
frameworkdoes
not
effectively
identify
or
mitigate
our
risks,
we
could
suffer
unexpected
losses
and
could
be
materially
and
adversely
affected.The
intended
benefits
of
the
CompareCards
acquisition
may
not
be
realized.The
CompareCards
acquisition
poses
risks
for
our
ongoing
operations,
including,
among
others:•that
senior
management’s
attention
may
be
diverted
from
the
management
of
daily
operations
to
the
integration
of
the
business
acquired
in
theacquisition;•we
may
be
unable
to
retain
key
employees
of
CompareCards;•costs
and
expenses
associated
with
any
undisclosed
or
potential
liabilities;•that
the
business
acquired
in
the
acquisition
may
not
perform
as
well
as
anticipated;•adverse
conditions
in
the
economy
may
affect
credit
card
issuers
and
their
willingness
to
issue
new
credit;•credit
card
issuers
and
other
advertisers
in
the
business
verticals
in
which
we
or
CompareCards
operate
may
be
unwilling
to
advertise
on
our
orCompareCards's
websites
or
mobile
applications;13Table of Contents•changes
in
application
approval
rates
by
credit
card
issuer
customers;•increased
competition
and
its
effect
on
our
or
CompareCards's
website
traffic,
click-through
rates,
advertising
rates,
margins,
and
market
share
ability
toprovide
competitive
service
to
credit
card
issuers
and
to
consumers
using
CompareCards'
and
our
online
offerings
and
other
platforms;•our
ability
to
maintain
brand
recognition
for
both
us
and
CompareCards
and
to
effectively
leverage
the
LendingTree
brand
with
the
CompareCards
brand;•our
ability
to
develop
new
products
and
services
and
enhance
existing
ones;•risks
associated
with
our
ongoing
litigation
with
NextAdvisor
including
the
effect
of
the
preliminary
injunction
obtained
by
NextAdvisor
on
a
portion
ofthe
acquired
CompareCards
business;
and•assumed
liabilities
associated
with
CompareCards'
historical
operations,
including
as
a
result
of
privacy
regulations
or
data
breaches.As
a
result
of
the
foregoing,
the
CompareCards
acquisition
may
not
be
accretive
to
us
in
the
near
term
or
at
all.
Furthermore,
if
we
fail
to
realize
the
intendedbenefits
of
the
business
acquired
in
the
acquisition,
the
market
price
of
our
common
stock
could
decline
to
the
extent
that
the
market
price
reflects
an
expectationof
those
benefits.Other
acquisitions
or
strategic
investments
that
we
pursue
may
not
be
successful
and
could
disrupt
our
business
and
harm
our
financial
condition.We
may
consider
or
undertake
strategic
acquisitions
of,
or
material
investments
in,
businesses,
products
or
technologies.
We
may
not
be
able
to
identifysuitable
acquisition
or
investment
candidates,
or
even
if
we
do
identify
suitable
candidates,
they
may
be
difficult
to
finance,
expensive
to
fund
and
there
is
noguarantee
that
we
can
obtain
any
necessary
regulatory
approvals
or
complete
such
transactions
on
terms
that
are
favorable
to
us.
To
the
extent
we
pay
the
purchaseprice
of
any
acquisition
or
investment
in
cash
or
through
borrowings
under
our
revolving
credit
facility,
it
would
reduce
our
cash
balances
and/or
result
inindebtedness
we
must
service,
which
may
have
a
material
and
adverse
effect
on
our
business
and
financial
condition.
If
the
purchase
price
is
paid
with
our
stock,
itwould
be
dilutive
to
our
stockholders.
In
addition,
we
may
assume
liabilities
associated
with
a
business
acquisition
or
investment,
including
unrecorded
liabilitiesthat
are
not
discovered
at
the
time
of
the
transaction,
and
the
repayment
of
those
liabilities
may
have
a
material
and
adverse
effect
on
our
financial
condition.
Theremay
also
be
litigation
or
other
claims
arising
in
connection
with
an
acquisition
itself.We
may
not
be
able
to
successfully
integrate
the
personnel,
operations,
businesses,
products
or
technologies
of
an
acquisition
or
investment.
Integration
maybe
particularly
challenging
if
we
enter
into
a
line
of
business
in
which
we
have
limited
experience
and
the
business
operates
in
a
difficult
legal,
regulatory
orcompetitive
environment.
We
may
find
that
we
do
not
have
adequate
operations
or
expertise
to
manage
the
new
business.
The
integration
of
any
acquisition
orinvestment
may
divert
management's
time
and
resources
from
our
core
business,
which
could
impair
our
relationships
with
our
current
employees,
customers
andstrategic
partners
and
disrupt
our
operations.
Acquisitions
and
investments
also
may
not
perform
to
our
expectations
for
various
reasons,
including
the
loss
of
keypersonnel
or
customers.
If
we
fail
to
integrate
acquisitions
or
investments
or
realize
the
expected
benefits,
we
may
lose
the
return
on
these
acquisitions
orinvestments
or
incur
additional
transaction
costs
and
our
business
and
financial
condition
may
be
harmed
as
a
result.We
rely
on
the
performance
of
highly
skilled
personnel
and
if
we
are
unable
to
attract,
retain
and
motivate
well-qualified
employees,
our
business
could
beharmed.We
believe
our
success
has
depended,
and
continues
to
depend,
on
the
efforts
and
talents
of
our
management
team
and
our
highly
skilled
employees,
includingour
software
engineers,
analysts,
marketing
professionals
and
sales
staff.
Our
future
success
depends
on
our
continuing
ability
to
attract,
develop,
motivate
andretain
highly
qualified
and
skilled
employees.
The
loss
of
any
of
our
senior
management
or
key
employees
could
materially
and
adversely
affect
our
ability
to
buildon
the
efforts
they
have
undertaken
and
to
execute
our
business
plan,
and
we
may
not
be
able
to
find
adequate
replacements.
We
cannot
ensure
that
we
will
be
ableto
retain
the
services
of
any
members
of
our
senior
management
or
other
key
employees.
If
we
do
not
succeed
in
attracting
well-qualified
employees
or
retainingand
motivating
existing
employees,
our
business
and
results
of
operations
could
be
harmed.Network
Lenders
and
lead
purchasers
on
our
marketplaces
may
not
provide
competitive
levels
of
service
to
consumers,
which
could
materially
and
adverselyaffect
our
brands
and
businesses
and
their
ability
to
attract
consumers.The
ability
of
our
businesses
to
provide
consumers
with
a
high-quality
experience
depends,
in
part,
on
consumers
receiving
competitive
levels
of
convenience,customer
service,
price
and
responsiveness
from
Network
Lenders
and
lead
purchasers
participating
on
our
other
marketplaces
with
whom
they
are
matched.
Ifthese
providers
do
not
provide
consumers
with
competitive14Table of Contentslevels
of
convenience,
customer
service,
price
and
responsiveness,
the
value
of
our
various
brands
may
be
harmed,
the
ability
of
our
businesses
to
attractconsumers
to
our
websites
may
be
limited
and
the
number
of
consumers
matched
through
our
marketplaces
may
decline,
which
could
have
a
material
and
adverseeffect
on
our
business,
financial
condition
and
results
of
operations.A
significant
portion
of
our
total
revenue
is
derived
from
two
Network
Lenders,
and
our
results
from
operations
could
be
adversely
affected
and
stockholdervalue
harmed
if
we
lose
significant
business
from
either
of
these
Network
Lenders.For
the
years
ended
December
31,
2016,
2015
and
2014,
one
Network
Lender
accounted
for
13%
,
12%
and
13%
of
total
revenue,
and
another
NetworkLender
accounted
for
15%
,
11%
and
11%
,
of
total
revenue.
If
either
of
these
significant
Network
Lenders
were
to
cease
purchasing
loan
requests
and
theCompany
were
unable
to
replace
the
associated
demand,
the
loss
could
have
a
material
adverse
effect
on
our
results
of
operations
in
the
short
term
and
potentiallyalso
the
longer
term.
Also,
if
either
Network
Lender
reduces
its
volume
of
loan
requests
for
any
reason,
our
business
could
be
adversely
affected.We
have
incurred
significant
operating
losses
in
the
past
and
we
may
not
be
able
to
generate
sufficient
revenue
to
be
profitable
over
the
long
term.We
have
a
history
of
incurring
operating
losses
from
continuing
operations,
including
for
the
year
ended
December
31,
2014,
and
although
we
were
profitablein
2015
and
2016,
we
have
an
accumulated
deficit
of
$722.6
million
at
December
31,
2016
.
If
we
fail
to
maintain
or
grow
our
revenue
and
manage
our
expenses,we
may
incur
significant
losses
in
the
future
and
not
be
able
to
maintain
profitability.We
will
experience
costs
and
risks
associated
with
a
two
building
office
complex
we
purchased
in
Charlotte,
North
Carolina.In
December
2016,
our
subsidiary,
Rexford
Office
Holdings,
LLC,
completed
the
purchase
of
two
office
buildings
in
Charlotte,
North
Carolina
for
anaggregate
purchase
price
of
$23.5
million.
We
intend
to
occupy
a
portion
of
this
space
and
lease
a
portion
of
this
space
to
other
tenants.
There
are
costs
and
risksassociated
with
owning
and
leasing
real
estate
that
may
apply
to
us
in
connection
with
owning
and
leasing
these
properties,
including:•real
estate
taxes
and
maintenance
costs;•financial
difficulties
or
lease
defaults
by
our
tenants;•tenant
turnover
and
loss
of
potential
tenants
to
competing
landlords;•actions
by
competing
landlords
that
may
decrease
or
prevent
increases
in
the
occupancy
and
rental
rates
of
our
properties;•costs
of
compliance
with
governmental
rules
and
regulations,
including
the
Americans
with
Disabilities
Act,
and
zoning
laws
and
potential
liabilitythereunder;•changes
in
the
cost
or
availability
of
adequate
insurance,
including
coverage
for
mold
and
asbestos;•costs
associated
with
environmental
conditions
or
retained
liabilities
for
such
conditions;
and•less
flexibility
to
move
into
alternative
space
or
expand
into
alternative
geographic
locations
than
we
might
have
if
we
leased
our
primary
headquarters.Any
of
these
costs
and
risks
may
negatively
impact
our
earnings
and
cause
our
stock
price
to
decline.Our
revolving
credit
facility
contains
financial
covenants
and
other
restrictions
on
our
actions,
and
it
could
therefore
limit
our
operational
flexibility
orotherwise
adversely
affect
our
financial
condition.
Failure
to
comply
with
the
terms
of
any
such
facility
could
impair
our
rights
to
the
assets
that
have
beenpledged
as
collateral
under
the
facility.On
October
22,
2015,
our
wholly-owned
subsidiary
LendingTree,
LLC
entered
into
a
$125.0
million
five-year
senior
secured
revolving
credit
facility
whichmatures
on
October
22,
2020
(the
"Revolving
Credit
Facility").
The
proceeds
of
the
Revolving
Credit
Facility
can
be
used
to
finance
working
capital
needs,
capitalexpenditures,
and
general
corporate
purposes,
including
to
finance
permitted
acquisitions.
We
do
not
currently
have
any
borrowings
outstanding
under
theRevolving
Credit
Facility.The
Revolving
Credit
Facility
contains
certain
restrictive
covenants,
which
include
a
consolidated
debt
to
consolidated
EBITDA
ratio
and
a
consolidatedEBITDA
to
consolidated
interest
expense
ratio.
In
addition,
the
Revolving
Credit
Facility
contains
customary
affirmative
and
negative
covenants,
including,subject
to
certain
exceptions,
restrictions
on
our
ability
to,
among
other
things:•incur
additional
indebtedness;•grant
liens;15Table of Contents•make
loans
and
investments;•enter
into
mergers
or
make
certain
fundamental
changes;•make
certain
restricted
payments,
including
dividends,
distributions,
stock
repurchases
or
redemptions;•sell
assets;•enter
into
transactions
with
affiliates;•enter
into
restrictive
transactions;•enter
into
sale
and
leaseback
transactions;•enter
into
hedging
transactions;
and•engage
in
certain
other
transactions
without
the
prior
consent
of
the
lenders.The
Revolving
Credit
Facility
requires
LendingTree,
LLC
to
pledge
as
collateral,
subject
to
certain
customary
exclusions,
100%
of
the
assets,
including
100%of
its
equity
in
all
of
its
subsidiaries.
The
obligations
under
this
facility
are
unconditionally
guaranteed
on
a
senior
basis
by
LendingTree,
Inc.
and
specificsubsidiaries
of
LendingTree,
LLC,
which
guarantees
are
secured
by
a
pledge
as
collateral,
subject
to
certain
customary
exclusions,
of
100%
of
each
suchguarantor's
assets,
including
100%
of
its
equity
in
all
of
its
subsidiaries.If
an
event
of
default
occurs
or
if
we
otherwise
fail
to
comply
with
any
of
the
negative
or
affirmative
covenants
of
the
Revolving
Credit
Facility,
the
lendersmay
declare
all
of
the
obligations
and
indebtedness
under
such
facility
due
and
payable.
In
such
a
scenario,
the
lenders
could
exercise
their
lien
on
the
pledgedcollateral,
which
would
have
a
material
adverse
effect
on
our
business,
operations,
financial
condition
and
liquidity.
For
additional
information
on
the
RevolvingCredit
Facility,
see Note
11
—Revolving
Credit
Facility,
in
the
notes
to
the
consolidated
financial
statements
included
elsewhere
in
this
report.If
our
goodwill
or
indefinite-lived
intangible
assets
become
impaired,
we
may
be
required
to
record
a
significant
charge
to
earnings.Under
accounting
principles
generally
accepted
in
the
United
States
of
America
("GAAP"),
we
review
the
carrying
value
of
goodwill
and
indefinite-livedintangible
assets
on
an
annual
basis
as
of
October
1,
or
more
frequently
if
an
event
occurs
or
circumstances
change
that
would
more
likely
than
not
reduce
the
fairvalue
of
a
reporting
unit
below
its
carrying
value.
Factors
that
may
be
considered
a
change
in
circumstances,
indicating
that
the
carrying
value
of
our
goodwill
orindefinite-lived
intangible
assets
may
not
be
recoverable,
include
a
decline
in
stock
price
and
market
capitalization,
reduced
future
cash
flow
estimates
and
slowergrowth
rates
in
our
industry
or
our
customers'
industries.
We
may
be
required
to
record
a
significant
charge
in
our
financial
statements
during
a
period
in
whichany
impairment
of
our
goodwill
or
indefinite-lived
intangible
assets
is
determined,
negatively
impacting
our
results
of
operations.Charges
to
earnings
resulting
from
acquisitions
may
adversely
affect
our
operating
results.Under
GAAP,
when
we
acquire
businesses,
we
allocate
the
purchase
price
to
tangible
assets
and
liabilities
and
identifiable
intangible
assets
acquired
at
theiracquisition
date
fair
values.
Any
residual
purchase
price
is
recorded
as
goodwill.
We
also
estimate
the
fair
value
of
any
contingent
consideration.
Our
estimates
offair
value
are
based
upon
assumptions
believed
to
be
reasonable
but
which
are
uncertain
and
involve
significant
judgments
by
management.
After
we
complete
anacquisition,
the
following
factors
could
result
in
material
charges
and
adversely
affect
our
operating
results
and
may
adversely
affect
our
cash
flows:•costs
incurred
to
combine
the
operations
of
companies
we
acquire,
such
as
transitional
employee
expenses
and
employee
retention
or
relocation
expenses;•impairment
of
goodwill
or
intangible
assets;•a
reduction
in
the
useful
lives
of
intangible
assets
acquired;•impairment
of
long-lived
assets;•identification
of,
or
changes
to,
assumed
contingent
liabilities;•changes
in
the
fair
value
of
any
contingent
consideration;•charges
to
our
operating
results
due
to
duplicative
pre-merger
activities;•charges
to
our
operating
results
from
expenses
incurred
to
effect
the
acquisition;
and•charges
to
our
operating
results
due
to
the
expensing
of
certain
stock
awards
assumed
in
an
acquisition.16Table of ContentsSubstantially
all
of
these
potential
charges
would
be
accounted
for
as
expenses
that
would
decrease
our
net
income
and
earnings
per
share
for
the
periods
inwhich
those
costs
are
incurred.
Charges
to
our
operating
results
in
any
given
period
could
differ
substantially
from
other
periods
based
on
the
timing
and
size
ofour
acquisitions
and
the
extent
of
acquisition
accounting
adjustments.In
particular,
we
acquired
CompareCards
in
November
2016
for
$80.7
million
in
cash
at
closing
and
contingent
consideration
payments
of
up
to
$22.5
millionin
each
of
2017
and
2018.
We
assigned
a
fair
value
of
the
contingent
consideration
of
$23.1
million.
We
will
reassess
this
fair
value
quarterly,
and
increases
ordecreases
based
on
the
actual
performance
of
CompareCards
against
the
contingent
consideration
targets
or
other
factors
will
cause
decreases
or
increases,respectively,
in
our
results
of
operations.
These
quarterly
adjustments
could
have
a
material
adverse
effect
on
our
results
of
operations.Risks Related to Compliance and RegulationFailure
to
comply
with
past,
existing
or
new
laws,
rules
and
regulations,
or
to
obtain
and
maintain
required
licenses,
could
materially
and
adversely
affect
ourbusiness,
financial
condition
and
results
of
operations.We
market
and
provide
services
in
heavily
regulated
industries
through
a
number
of
different
channels
across
the
United
States.
As
a
result,
our
businesseshave
been
and
remain
subject
to
a
variety
of
statutes,
rules,
regulations,
policies
and
procedures
in
various
jurisdictions
in
the
United
States,
which
are
subject
tochange
at
any
time.
The
failure
of
our
businesses
to
comply
with
past,
existing
or
new
laws,
rules
and
regulations,
or
to
obtain
and
maintain
required
licenses,could
result
in
administrative
fines
and/or
proceedings
against
us
or
our
businesses
by
governmental
agencies
and/or
litigation
by
consumers,
which
couldmaterially
and
adversely
affect
our
business,
financial
condition
and
results
of
operations
and
our
brand.Our
businesses
conduct
marketing
activities
via
the
telephone,
the
mail
and/or
through
online
marketing
channels,
which
general
marketing
activities
aregoverned
by
numerous
federal
and
state
regulations,
such
as
the
Telemarketing
Sales
Rule,
state
telemarketing
laws,
federal
and
state
privacy
laws,
the
CAN-SPAM
Act,
the
Telephone
Consumer
Protection
Act
and
the
Federal
Trade
Commission
Act
and
its
accompanying
regulations
and
guidelines,
among
others.Increased
regulation
by
the
U.S.
Federal
Trade
Commission
("FTC")
and
Federal
Communications
Commission
("FCC")
has
resulted
in
restrictions
on
telephonecalls
to
residential
and
wireless
telephone
subscribers.Additional
federal,
state
and
in
some
instances,
local
laws
regulate
secured
and
unsecured
lending
activities,
which
impacts
the
marketplace,
lenders
andconsumers.
These
laws
generally
regulate
the
manner
in
which
lending
and
lending-related
activities
are
marketed
or
made
available,
including
advertising
andother
consumer
disclosures,
payments
for
services
and
record
keeping
requirements;
these
laws
include
RESPA,
the
Fair
Credit
Reporting
Act,
the
Truth
inLending
Act,
the
Equal
Credit
Opportunity
Act,
the
Fair
Housing
Act
and
various
state
laws.
State
laws
often
restrict
the
amount
of
interest
and
fees
that
may
becharged
by
a
lender
or
mortgage
broker,
or
otherwise
regulate
the
manner
in
which
lenders
or
mortgage
brokers
operate
or
advertise.Failure
to
comply
with
applicable
laws
and
regulatory
requirements
may
result
in,
among
other
things,
revocation
of
or
inability
to
renew
required
licenses
orregistrations,
loss
of
approval
status,
termination
of
contracts
without
compensation,
administrative
enforcement
actions
and
fines,
private
lawsuits,
including
thosestyled
as
class
actions,
cease
and
desist
orders
and
civil
and
criminal
liability.Most
states
require
licenses
to
solicit,
broker
or
make
loans
secured
by
residential
mortgages
and
other
consumer
loans
to
residents
of
those
states,
as
well
asto
operate
real
estate
referral
and
brokerage
services,
and
in
many
cases
require
the
licensure
or
registration
of
individual
employees
engaged
in
aspects
of
thesebusinesses.
In
2008,
Congress
mandated
that
all
states
adopt
certain
minimum
standards
for
the
licensing
of
individuals
involved
in
mortgage
lending
or
loanbrokering.
Compliance
with
these
requirements
may
render
it
more
difficult
for
us
and
our
Network
Lenders
to
operate
or
may
raise
our
internal
costs
or
the
costsof
our
Network
Lenders,
which
may
be
passed
on
to
us
through
less
favorable
commercial
arrangements.
While
our
businesses
have
endeavored
to
comply
withapplicable
requirements,
the
application
of
these
requirements
to
persons
operating
online
is
not
always
clear.
Moreover,
any
of
the
licenses
or
rights
currently
heldby
our
businesses
or
our
employees
may
be
revoked
prior
to,
or
may
not
be
renewed
upon,
their
expiration.
In
addition,
our
businesses
or
our
employees
may
notbe
granted
new
licenses
or
rights
for
which
they
may
be
required
to
apply
from
time
to
time
in
the
future.Likewise,
states
or
municipalities
may
adopt
statutes
or
regulations
making
it
unattractive,
impracticable
or
infeasible
for
our
businesses
to
continue
to
conductbusiness
in
such
jurisdictions.
The
withdrawal
from
any
jurisdiction
due
to
emerging
legal
requirements
could
materially
and
adversely
affect
our
business,financial
condition
and
results
of
operations.Our
businesses
are
also
subject
to
various
state,
federal
and/or
local
laws,
rules
and
regulations
that
regulate
the
amount
and
nature
of
fees
that
may
be
chargedfor
transactions
and
incentives,
such
as
rebates,
that
may
be
offered
to
consumers
by
our
businesses,
as
well
as
the
manner
in
which
these
businesses
may
offer,advertise
or
promote
transactions.
For
example,
RESPA
generally
prohibits
the
payment
or
receipt
of
referral
fees
and
fee
shares
or
splits
in
connection
withresidential
mortgage
loan
transactions,
subject
to
certain
exceptions.
The
applicability
of
referral
fee
and
fee
sharing
prohibitions
to
lenders
and
real
estate17Table of Contentsproviders,
including
online
networks,
may
have
the
effect
of
reducing
the
types
and
amounts
of
fees
that
may
be
charged
or
paid
in
connection
with
real
estate-secured
loan
offerings
or
activities,
including
mortgage
brokerage,
lending
and
real
estate
brokerage
services,
or
otherwise
limiting
our
and
our
Network
Lenders'ability
to
conduct
marketing
and
referral
activities.Various
federal,
state
and,
in
some
instances,
local,
laws
also
prohibit
unfair
and
deceptive
sales
practices.
We
have
adopted
appropriate
policies
andprocedures
to
address
these
requirements
(such
as
appropriate
consumer
disclosures
and
call
scripting,
call
monitoring
and
other
quality
assurance
and
compliancemeasures),
but
it
is
not
possible
to
ensure
that
all
employees
comply
with
our
policies
and
procedures
at
all
times.Compliance
with
these
laws,
rules
and
regulations
is
a
significant
component
of
our
internal
costs,
and
new
laws,
rules
and
regulations
are
frequently
proposedand
adopted,
requiring
us
to
adopt
new
procedures
and
practices.
Changes
to
existing
laws,
rules
and
regulations
or
changes
to
interpretation
of
existing
laws,
rulesand
regulations
could
result
in
further
restriction
of
activities
incidental
to
our
business
and
could
have
a
material
and
adverse
effect
on
our
business,
results
ofoperation
and
financial
condition.Parties
through
which
our
businesses
conduct
business
similarly
may
be
subject
to
federal
and
state
regulation.
These
parties
typically
act
as
independentcontractors
and
not
as
agents
in
their
solicitations
and
transactions
with
consumers.
We
cannot
ensure
that
these
entities
will
comply
with
applicable
laws
andregulations
at
all
times.
Failure
on
the
part
of
a
lender,
website
operator
or
other
third
party
to
comply
with
these
laws
or
regulations
could
result
in,
among
otherthings,
claims
of
vicarious
liability
or
a
negative
impact
on
our
reputation
and
business.Regulatory
authorities
and
private
plaintiffs
may
allege
that
we
failed
to
comply
with
applicable
laws,
rules
and
regulations
where
we
believe
we
havecomplied.
These
allegations
may
relate
to
past
conduct
and/or
past
business
operations,
such
as
our
discontinued
mortgage
origination
operation
(which
wassubject
to
various
state
and
local
laws,
rules
and
regulations).
Even
allegations
that
our
activities
have
not
complied
or
do
not
comply
with
all
applicable
laws
andregulations
may
have
a
material
and
adverse
effect
on
our
business,
financial
condition
and
results
of
operations.
The
alleged
violation
of
such
laws,
rules
orregulations
may
entitle
an
individual
plaintiff
to
seek
monetary
damages,
or
may
entitle
an
enforcing
government
agency
to
seek
significant
civil
or
criminalpenalties,
costs
and
attorneys'
fees.
Regardless
of
its
merit,
an
allegation
typically
requires
legal
fee
expenditures
to
defend
against.
We
have
in
the
past
and
may
inthe
future
decide
to
settle
allegations
of
non-compliance
with
laws,
rules
and
regulations
when
we
determine
that
the
cost
of
settlement
is
less
than
the
cost
and
riskof
continuing
to
defend
against
an
allegation.
Settlements
may
require
us
to
pay
monetary
fines
and
may
require
us
to
adopt
new
procedures
and
practices,
whichmay
render
it
more
difficult
to
operate
or
may
raise
our
internal
costs.
The
future
occurrence
of
one
or
more
of
these
events
could
have
a
material
and
adverseeffect
on
our
business,
financial
condition
and
results
of
operations.Our
businesses
are
also
subject
to
the
Dodd-Frank
Act,
which
contains
a
comprehensive
set
of
provisions
designed
to
govern
the
practices
and
oversight
offinancial
institutions
and
other
participants
in
the
financial
markets.
The
Dodd-Frank
Act
requires
various
federal
agencies
to
adopt
a
broad
range
of
new
rules
andregulations,
many
of
which
have
not
yet
been
adopted
and
to
prepare
numerous
studies
and
reports
for
Congress,
which
could
result
in
additional
legislative
orregulatory
action.
The
Dodd-Frank
Act,
as
well
as
other
legislative
and
regulatory
changes,
could
have
a
significant
impact
on
us
by,
for
example,
requiring
us
tochange
our
business
practices,
limiting
our
ability
to
pursue
business
opportunities,
imposing
additional
costs
on
us,
limiting
fees
we
can
charge,
impacting
thevalue
of
our
assets,
or
otherwise
adversely
affecting
our
businesses.
Among
other
things,
the
Dodd-Frank
Act
established
the
Consumer
Financial
ProtectionBureau
to
regulate
consumer
financial
services
and
products,
including
credit,
savings
and
payment
products.
The
effect
of
the
Dodd-Frank
Act
on
our
businessand
operations
has
been
and
could
continue
to
be
significant,
depending
upon
remaining
implementing
regulations,
the
actions
of
our
competitors
and
the
behaviorof
other
marketplace
participants.
In
addition,
we
have
been,
and
likely
will
continue
to
be
required
to
invest
significant
management
time
and
resources
to
addressthe
various
provisions
of
the
Dodd-Frank
Act
and
the
numerous
regulations
that
are
required
to
be
issued
under
it.In
response
to
conditions
in
the
U.S.
financial
markets
and
economy,
as
well
as
a
heightened
regulatory
and
Congressional
focus
on
consumer
lending,regulators
have
increased
their
scrutiny
of
the
financial
services
industry,
the
result
of
which
has
included
new
regulations
and
guidance.
We
are
unable
to
predictthe
long-term
impact
of
this
enhanced
scrutiny.
We
are
also
unable
to
predict
whether
any
additional
or
similar
changes
to
statutes
or
regulations,
including
theinterpretation
or
implementation
thereof,
will
occur
in
the
future.The
collection,
processing,
storage,
use
and
disclosure
of
personal
data
could
give
rise
to
liabilities
as
a
result
of
governmental
regulation,
conflicting
legalrequirements
or
differing
views
of
personal
privacy
rights.In
the
processing
of
consumer
transactions,
our
businesses
receive,
transmit
and
store
a
large
volume
of
personally
identifiable
information
and
other
userdata.
The
collection,
sharing,
use,
disclosure
and
protection
of
this
information
are
governed
by
the
privacy
and
data
security
policies
maintained
by
us
and
ourbusinesses.
Moreover,
there
are
federal,
state
and
international
laws
regarding
privacy
and
the
storing,
sharing,
use,
disclosure
and
protection
of
personallyidentifiable
information
and
user
data.
Specifically,
personally
identifiable
information
is
increasingly
subject
to
legislation
and
regulations
in
numerousjurisdictions
around
the
world,
the
intent
of
which
is
to
protect
the
privacy
of
personal
information
that
is
collected,
processed
and
transmitted18Table of Contentsin
or
from
the
governing
jurisdiction.
In
the
United
States,
regulations
and
interpretations
concerning
personally
identifiable
and
data
security
promulgated
by
stateand
federal
regulators,
including
the
CFPB
and
FTC,
could
conflict
or
give
rise
to
differing
views
of
personal
privacy
rights.
We
could
be
materially
and
adverselyaffected
if
legislation
or
regulations
are
expanded
to
require
changes
in
business
practices
or
privacy
policies,
or
if
governing
jurisdictions
interpret
or
implementtheir
legislation
or
regulations
in
ways
that
negatively
affect
our
business,
financial
condition
and
results
of
operations.Our
failure,
and/or
the
failure
by
the
various
third-party
vendors
and
service
providers
with
whom
we
do
business,
to
comply
with
applicable
privacy
policiesor
federal,
state
or
similar
international
laws
and
regulations
or
any
compromise
of
security
that
results
in
the
unauthorized
release
of
personally
identifiableinformation
or
other
user
data
could
damage
the
reputation
of
these
businesses,
discourage
potential
users
from
our
products
and
services
and/or
result
in
finesand/or
proceedings
by
governmental
agencies
and/or
consumers,
one
or
all
of
which
could
materially
and
adversely
affect
our
business,
financial
condition
andresults
of
operations.Changes
in
the
regulation
of
the
Internet
could
negatively
affect
our
business.Laws,
rules
and
regulations
governing
Internet
communications,
advertising
and
e-commerce
are
dynamic
and
the
extent
of
future
government
regulation
isuncertain.
Federal
and
state
regulations
govern
various
aspects
of
our
online
business,
including
intellectual
property
ownership
and
infringement,
trade
secrets,
thedistribution
of
electronic
communications,
marketing
and
advertising,
user
privacy
and
data
security,
search
engines
and
Internet
tracking
technologies.
Futuretaxation
on
the
use
of
the
Internet
or
e-commerce
transactions
could
also
be
imposed.
Existing
or
future
regulation
or
taxation
could
hinder
growth
in
or
negativelyimpact
the
use
of
the
Internet
generally,
including
the
viability
of
Internet
e-commerce,
which
could
reduce
our
revenue,
increase
our
operating
expenses
andexpose
us
to
significant
liabilities.If
Network
Lenders
fail
to
produce
required
documents
for
examination
by,
or
other
affiliated
parties
fail
to
make
certain
filings
with,
state
regulators,
we
maybe
subject
to
fines,
forfeitures
and
the
revocation
of
required
licenses.Some
of
the
states
in
which
our
businesses
maintain
licenses
require
them
to
collect
various
loan
documents
from
Network
Lenders
and
produce
thesedocuments
for
examination
by
state
regulators.
While
Network
Lenders
are
contractually
obligated
to
provide
these
documents
upon
request,
these
measures
maybe
insufficient.
Failure
to
produce
required
documents
for
examination
could
result
in
fines,
as
well
as
the
revocation
of
our
licenses
to
operate
in
certain
states,which
could
have
a
material
and
adverse
effect
on
our
business,
financial
condition
and
results
of
operations.Regulations
promulgated
by
some
states
may
impose
compliance
obligations
on
directors,
executive
officers,
large
customers
and
any
person
who
acquires
acertain
percentage
(for
example,
10%
or
more)
of
the
equity
in
a
licensed
entity,
including
requiring
such
persons
to
periodically
file
financial
and
other
personaland
business
information
with
state
regulators.
If
any
such
person
refuses
or
fails
to
comply
with
these
requirements,
we
may
be
unable
to
obtain
certain
licensesand
existing
licensing
arrangements
may
be
jeopardized.
The
inability
to
obtain,
or
the
loss
of,
required
licenses
could
have
a
material
and
adverse
effect
on
ourbusiness,
financial
condition
and
results
of
operations.Risks Related to an Investment in our Common StockFluctuations
in
our
operating
results,
quarter
to
quarter
earnings
and
other
factors
may
result
in
significant
decreases
in
the
price
of
our
common
stock.The
market
price
for
our
common
stock
has
been
volatile
since
our
spin-off.
In
addition,
the
trading
volume
in
our
common
stock
has
fluctuated
and
maycontinue
to
fluctuate,
causing
significant
price
variations
to
occur.
As
of
December
31,
2016,
since
our
spin-off,
the
price
per
share
of
our
common
stock
hasfluctuated
from
an
intra-day
low
of
$1.42
per
share
to
an
intra-day
high
of
$139.59
per
share.
If
the
market
price
of
our
shares
declines
significantly,
the
value
ofan
investment
in
our
common
stock
would
decline.
The
market
price
of
our
common
stock
may
fluctuate
or
decline
significantly
in
the
future.
Some
of
the
factorsthat
could
negatively
affect
the
price
of
our
common
stock
or
result
in
fluctuations
in
the
price
or
trading
volume
of
our
common
stock
include:•variations
in
our
quarterly
operating
and
financial
results;•variations
in
our
projected
operating
and
financial
results;•failure
to
meet
analysts'
earnings
estimates;•publication
of
research
reports
about
us,
our
Network
Lenders
or
our
industry
or
the
failure
of
securities
analysts
to
cover
our
common
shares
or
ourindustry;•additions
or
departures
of
key
management
personnel;•adverse
market
reaction
to
any
indebtedness
we
may
incur
or
preferred
or
common
shares
we
may
issue
in
the
future;19Table of Contents•changes
in
our
dividend
payment
policy
or
failure
to
execute
our
existing
policy;•actions
by
shareholders;•changes
in
market
valuations
of
other
companies
in
our
industry,
including
our
customers
and
competitors;•announcements
by
us
or
our
competitors
of
significant
contracts,
acquisitions,
dispositions,
strategic
partnerships,
joint
ventures
or
capital
commitments;•speculation
in
the
press
or
investment
community,
including
short
selling;•changes
or
proposed
changes
in
laws
or
regulations
affecting
our
industry
or
enforcement
of
these
laws
and
regulations,
or
announcements
relating
tothese
matters;•changes
in
estimated
fair
value
of
contingent
consideration
related
to
acquisitions;
and•changes
in
general
economic
or
market
conditions.Recently,
and
in
the
past,
the
stock
market
has
experienced
extreme
price
and
volume
fluctuations.
These
market
fluctuations
could
result
in
extreme
volatilityin
the
trading
price
of
our
common
stock,
which
could
cause
a
decline
in
the
value
of
your
investment
in
our
common
shares.
In
addition,
the
trading
price
of
ourcommon
stock
could
decline
for
reasons
unrelated
to
our
business
or
financial
results,
including
in
reaction
to
events
that
affect
other
companies
in
our
industryeven
if
those
events
do
not
directly
affect
us.
You
should
also
be
aware
that
price
volatility
may
be
greater
if
the
public
float
and
trading
volume
of
our
commonstock
are
low.
These
factors
may
result
in
short-term
or
long-term
negative
pressure
on
the
value
of
our
common
stock.If
securities
or
industry
analysts
do
not
publish
research
or
publish
inaccurate
or
unfavorable
research
about
our
business,
our
stock
price
and
trading
volumecould
decline.The
trading
market
for
internet
marketplace
operators
and
lead-generation
companies
depends,
in
part,
on
the
research
and
reports
that
securities
or
industryanalysts
publish
about
the
industry
and
specific
companies.
If
one
or
more
analysts
covering
us
currently
or
in
the
future
fail
to
publish
reports
on
us
regularly,demand
for
our
common
stock
could
decline,
which
could
cause
our
stock
price
and
trading
volume
to
decline.
If
one
or
more
recognized
securities
or
industryanalysts
that
cover
our
company
or
our
industry
in
the
future
downgrades
our
common
stock
or
publishes
inaccurate
or
unfavorable
research
about
our
business
orindustry,
our
stock
price
would
likely
decline.Two
holders
of
our
common
stock
own
a
substantial
portion
of
our
outstanding
common
stock,
which
concentrates
voting
control
and
limits
your
ability
toinfluence
corporate
matters.As
of
February
23,
2017
,
Douglas
Lebda,
our
Chairman
and
Chief
Executive
Officer,
and
Liberty
Interactive
Corporation
beneficially
owned
approximately21%
and
23%
,
respectively,
of
our
outstanding
common
stock.
Liberty
Interactive
also
has
the
right
to
nominate
20%
of
the
total
number
of
directors
serving
onthe
board,
rounded
up.
Two
of
our
seven
directors,
Neal
Dermer
and
Craig
Troyer,
were
nominated
by
Liberty
Interactive.Therefore,
for
the
foreseeable
future,
Mr.
Lebda
and
Liberty
Interactive
will
each
have
influence
over
our
management
and
affairs
and
all
matters
requiringshareholder
approval,
including
the
election
or
removal
(with
or
without
cause)
of
directors
and
approval
of
any
significant
corporate
transaction,
such
as
a
mergeror
other
sale
of
us
or
our
assets.
The
interests
of
Mr.
Lebda
or
Liberty
Interactive
may
not
necessarily
align
with
the
interests
of
our
other
stockholders.
Mr.
Lebdaor
Liberty
Interactive
could
elect
to
sell
a
significant
interest
in
us
and
you
may
receive
less
than
the
then-current
fair
market
value
or
the
price
you
paid
for
yourshares
as
a
result
of
such
transaction.
This
concentrated
control
could
delay,
defer
or
prevent
a
change
of
control,
merger,
consolidation,
takeover
or
other
businesscombination
involving
us
that
other
stockholders
may
otherwise
support.
This
concentrated
control
could
also
discourage
a
potential
investor
from
acquiring
ourcommon
stock
and
might
harm
the
market
price
of
our
common
stock.Future
sales
of
common
stock
by
our
existing
stockholders
may
cause
our
stock
price
to
fall.The
market
price
of
our
common
stock
could
decline
as
a
result
of
sales
by
our
existing
stockholders
in
the
market,
or
the
perception
that
these
sales
couldoccur.
These
sales
might
also
make
it
more
difficult
for
us
to
sell
equity
securities
at
a
time
and
price
that
we
deem
appropriate.We
may
issue
additional
shares
of
our
common
stock
in
the
future
pursuant
to
current
or
future
equity
incentive
plans,
or
in
connection
with
futureacquisitions
or
financings.
If
we
were
to
raise
capital
in
the
future
by
selling
shares
of
our
common
stock,
or
securities
that
are
convertible
into
our
common
stockor
issuing
shares
of
our
common
stock
in
a
business
acquisition,
their
issuance
would
have
a
dilutive
effect
on
the
percentage
ownership
of
our
stockholders
and,depending
on
the
prices
at
which
such20Table of Contentsshares
or
convertible
securities
are
sold
or
issued,
on
their
investment
in
our
common
stock
and,
therefore,
could
have
a
material
adverse
effect
on
the
marketprices
of
our
common
stock.Under
a
registration
rights
agreement
with
Liberty
Interactive,
Liberty
Interactive
and
its
permitted
transferees
are
entitled
to
three
demand
registrations
rights(and
unlimited
piggyback
registration
rights)
in
respect
of
the
shares
of
our
common
stock
received
by
Liberty
Interactive
as
a
result
of
the
spin-off
and
othershares
of
our
common
stock
acquired
by
Liberty
Interactive
or
its
affiliates.
These
holders
will
also
be
permitted
to
exercise
their
registration
rights
in
connectionwith
certain
hedging
transactions
that
they
may
enter
into
in
respect
of
the
registrable
shares.
The
presence
of
additional
shares
of
our
common
stock
trading
in
thepublic
market,
as
a
result
of
the
exercise
of
such
registration
rights,
may
have
an
adverse
effect
on
the
market
price
of
our
securities.Anti-takeover
provisions
in
our
charter
documents
and
under
Delaware
law
could
make
an
acquisition
of
us
more
difficult,
limit
attempts
by
stockholders
toreplace
or
remove
our
management
and
affect
the
market
price
of
our
common
stock.Provisions
in
our
certificate
of
incorporation
and
bylaws,
as
amended
and
restated,
may
have
the
effect
of
delaying
or
preventing
a
change
of
control
orchanges
in
our
management.
Our
amended
and
restated
articles
of
incorporation
and/or
amended
and
restated
bylaws
include
provisions
that:•Authorize
our
board
of
directors
to
issue,
without
further
action
by
our
stockholders,
up
to
five
million
shares
of
undesignated
preferred
stock,
sometimesreferred
to
as
"blank
check
preferred";•Prohibit
cumulative
voting
in
the
election
of
directors;•Provide
that
vacancies
on
our
board
of
directors
may
be
filled
only
by
the
affirmative
vote
of
a
majority
of
directors
then
in
office
or
by
the
soleremaining
director;•Provide
that
only
our
board
of
directors
may
change
the
size
of
our
board
of
directors;•Specify
that
special
meetings
of
our
stockholders
may
be
called
only
by
or
at
the
direction
of
our
board
of
directors
or
by
a
person
specifically
designatedwith
such
authority
by
the
board;
and•Prohibit
stockholders
from
taking
action
by
written
consent.The
provisions
described
above
may
frustrate
or
prevent
any
attempts
by
our
stockholders
to
replace
or
remove
our
current
management
by
making
it
moredifficult
for
stockholders
to
replace
members
of
our
board
of
directors,
which
is
responsible
for
appointing
our
management.
These
provisions
may
also
have
theeffect
of
delaying
or
preventing
a
change
of
control
of
our
company,
even
if
stockholders
support
such
a
change
of
control.We
do
not
intend
to
pay
any
cash
dividends
on
our
common
stock
in
the
foreseeable
future.We
have
not
declared
or
paid
a
cash
dividend
on
our
common
stock
during
the
four
most
recent
fiscal
years.
We
have
no
current
intention
to
declare
or
paycash
dividends
on
our
common
stock
in
the
foreseeable
future.
In
addition,
the
Revolving
Credit
Facility
contains
certain
restrictions
on
our
ability
to
paydividends.
See Note
11
—Revolving
Credit
Facility,
in
the
notes
to
the
consolidated
financial
statements
included
elsewhere
in
this
report.
The
declaration,payment
and
amount
of
future
cash
dividends,
if
any,
will
be
at
the
discretion
of
our
board
of
directors.
As
a
result,
capital
appreciation,
if
any,
of
our
commonstock
will
be
the
sole
source
of
gain
for
the
foreseeable
future
for
holders
of
our
common
stock.Our
financial
results
fluctuate
as
a
result
of
seasonality,
which
may
make
it
difficult
to
predict
our
future
performance
and
may
adversely
affect
our
commonstock
price.Our
mortgage
products
business
is
historically
subject
to
seasonal
trends.
These
trends
reflect
the
general
patterns
of
the
mortgage
industry
and
housing
sales,which
typically
peak
in
the
spring
and
summer
seasons.
In
recent
periods,
broader
cyclical
trends
in
interest
rates,
as
well
as
the
mortgage
and
real
estate
markets,have
upset
the
customary
seasonal
trends.
However,
seasonal
trends
may
resume
and
our
quarterly
operating
results
may
fluctuate.
Our
non-mortgage
productsbusinesses
have
various
seasonality
trends
which
may
create
further
uncertainty
in
our
quarterly
operating
results.
See Item
1.
Business—Seasonality
includedelsewhere
in
this
report
for
more
information.
Any
of
these
seasonal
trends,
or
the
combination
of
them,
may
negatively
impact
the
price
of
our
common
stock.ITEM 1B.   Unresolved
Staff
CommentsNot
applicable.ITEM 2.   Properties21Table of ContentsOur
principal
executive
offices
are
currently
located
in
approximately
37,800
square
feet
of
office
space
in
Charlotte,
North
Carolina
under
a
lease
that
expiresin
December
2020.
In
addition,
we
have
offices
located
in
approximately
6,100
square
feet
of
office
space
in
Burlingame,
California
under
a
lease
that
expires
inMarch
2017
and
approximately
13,000
square
feet
of
additional
office
space
in
Charlotte,
North
Carolina
under
a
lease
that
expires
in
August
2018.In
December
2016,
we
completed
the
acquisition
of
two
office
buildings
in
Charlotte,
North
Carolina,
with
approximately
64,000
and
73,000
square
feet
ofoffice
space,
respectively.
We
intend
to
utilize
one
or
both
buildings
in
the
future
as
our
principal
executive
offices
and
any
unused
space
will
continue
to
beoccupied
by
tenants.ITEM 3.   Legal
ProceedingsIn
the
ordinary
course
of
business,
we
are
party
to
litigation
involving
property,
contract,
intellectual
property
and
a
variety
of
other
claims.
The
amounts
thatmay
be
recovered
in
such
matters
may
be
subject
to
insurance
coverage.
See Note
13
— Contingencies
in
the
notes
to
the
consolidated
financial
statementsincluded
elsewhere
in
this
report
for
a
discussion
of
our
current
litigation.ITEM 4.   Mine
Safety
DisclosuresNot
applicable.22Table of ContentsPART IIITEM 5.   Market
for
Registrant's
Common
Equity,
Related
Stockholder
Matters
and
Issuer
Purchases
of
Equity
SecuritiesGeneral Market Information, Holders and DividendsOur
common
stock
is
quoted
on
the
NASDAQ
Global
Select
Market
under
the
ticker
symbol
"TREE".
The
table
below
sets
forth,
for
the
calendar
periodsindicated,
the
high
and
low
intraday
sales
prices
per
share
for
LendingTree
common
stock
as
reported
on
the
NASDAQ
Stock
Market.
The
stock
price
informationis
based
on
published
financial
sources.Year Ended December 31, 2016
High
LowFirst
Quarter
$100.19
$52.11Second
Quarter
106.82
64.07Third
Quarter
112.00
87.50Fourth
Quarter
110.10
75.05Year Ended December 31, 2015
High
LowFirst
Quarter
$58.00
$38.85Second
Quarter
78.78
54.32Third
Quarter
139.59
73.56Fourth
Quarter
131.83
85.18As
of
February
23,
2017
,
there
were
approximately
790
holders
of
record
of
our
common
stock
and
the
closing
price
of
the
common
stock
was
$122.25
.We
have
not
declared
a
cash
dividend
on
our
common
stock
during
the
four
most
recent
fiscal
years.
We
have
no
current
intention
to
declare
or
pay
cashdividends
on
our
common
stock
in
the
foreseeable
future.
The
declaration,
payment
and
amount
of
future
cash
dividends,
if
any,
will
be
at
the
discretion
of
ourboard
of
directors.
The
revolving
credit
facility
we
entered
into
on
October
22,
2015
contains
contractual
restrictions
on
our
ability
to
pay
dividends.
See Note
11—Revolving
Credit
Facility,
in
the
notes
to
the
consolidated
financial
statements
included
elsewhere
in
this
report
for
additional
information.Performance GraphThe performance graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or incorporated by reference into any filings under theSecurities Act or the Exchange Act, except as otherwise expressly set forth by specific reference in such filing.Set
forth
below
is
a
line
graph,
for
the
period
from
December
31,
2011
through
December
31,
2016,
comparing
the
cumulative
total
stockholder
return
of
$100invested
(assuming
that
all
dividends
were
reinvested)
in
(1)
our
common
stock,
(2)
the
cumulative
return
of
all
companies
listed
on
the
NASDAQ
CompositeIndex
and
(3)
the
cumulative
total
return
of
the
Research
Development
Group
("RDG")
Internet
index.
Returns
over
the
indicated
periods
should
not
be
consideredindicative
of
future
stock
prices
or
stockholder
returns.23Table of ContentsUnregistered Sales of Equity Securities and Use of ProceedsDuring
the
year
ended
December
31,
2016
,
we
did
not
issue
or
sell
any
shares
of
our
common
stock
or
other
equity
securities
in
transactions
that
were
notregistered
under
the
Securities
Act.Issuer Purchases of Equity SecuritiesIn
each
of
January
2010,
May
2014,
January
2016
and
February
2016,
the
board
of
directors
authorized
and
we
announced
a
stock
repurchase
program
whichallowed
for
the
repurchase
of
up
to
$10.0
million,
$10.0
million,
$50.0
million
and
$40.0
million,
respectively,
of
our
common
stock.
At
December
31,
2016
,approximately
$48.7
million
remains
authorized
for
share
repurchase
under
this
program.
Under
this
program,
we
can
repurchase
stock
in
the
open
market
orthrough
privately-negotiated
transactions.
We
have
used
available
cash
to
finance
these
repurchases.
We
will
determine
the
timing
and
amount
of
any
additionalrepurchases
based
on
our
evaluation
of
market
conditions,
applicable
SEC
guidelines
and
regulations,
and
other
factors.
This
program
may
be
suspended
ordiscontinued
at
any
time
at
the
discretion
of
our
board
of
directors.
No
shares
of
common
stock
were
repurchased
under
the
stock
repurchase
program
during
thequarter
ended
December
31,
2016
.
As
of
February
23,
2017
,
approximately
$48.7
million
remains
authorized
for
share
repurchase.Additionally,
the
LendingTree
Fourth
Amended
and
Restated
2008
Stock
and
Award
Incentive
Plan
allows
employees
to
forfeit
shares
of
our
common
stockto
satisfy
federal
and
state
withholding
obligations
upon
the
exercise
of
stock
options,
the
settlement
of
restricted
stock
unit
awards
and
the
vesting
of
restrictedstock
awards
granted
to
those
individuals
under
this
plan.
During
the
quarter
ended
December
31,
2016
,
12,854
shares
were
purchased
related
to
these
obligationsunder
the
LendingTree
Fourth
Amended
and
Restated
2008
Stock
and
Award
Incentive
Plan.
The
withholding
of
those
shares
does
not
affect
the
dollar
amount
ornumber
of
shares
that
may
be
purchased
under
the
stock
repurchase
program
described
above.24Table of ContentsThe
following
table
provides
information
about
the
Company's
purchases
of
equity
securities
during
the
quarter
ended
December
31,
2016
.Period
Total Number ofShares Purchased (1)
Average PricePaid per Share
Total Number ofShares Purchased asPart of PubliclyAnnounced Plans orPrograms (2)
MaximumNumber/ApproximateDollar Value of Sharesthat May Yet bePurchased Under thePlans or Programs







(in
thousands)10/1/16
-
10/31/16
—
$—
—
$48,74811/1/16
-
11/30/16
11,832
$83.68
—
$48,74812/1/16
-
12/31/16
1,022
$104.15
—
$48,748Total
12,854
$85.30
—
$48,748(1)During
October
2016,
November
2016
and
December
2016,
0
shares,
11,832
shares
and
1,022
shares,
respectively
(totaling
12,854
shares),
werepurchased
to
satisfy
federal
and
state
withholding
obligations
of
our
employees
upon
the
settlement
of
restricted
stock
unit
awards
and
the
vesting
ofrestricted
stock
awards,
all
in
accordance
with
our
Fourth
Amended
and
Restated
2008
Stock
and
Award
Incentive
Plan,
as
described
above.(2)See
the
narrative
disclosure
above
the
table
for
further
description
of
our
publicly
announced
stock
repurchase
program.25Table of ContentsITEM 6.   Selected
Financial
DataThe
summary
financial
data
presented
below
represents
portions
of
our
consolidated
financial
statements
and
are
not
complete.
The
following
financialinformation
should
be
read
in
conjunction
with
Item
7.
Management's
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations
and
ourconsolidated
financial
statements
and
notes
thereto
contained
in
Item
8.
Financial
Statements
and
Supplementary
Data
included
elsewhere
in
this
Annual
Report.Historical
results
are
not
necessarily
indicative
of
future
performance
or
results
of
operations. Year Ended December 31, 2016
2015
2014
2013
2012 (1) (in
thousands,
except
per
share
amounts)Results of Operations:








Revenue$384,402
$254,216
$167,350
$139,240
$77,443Income
(loss)
from
continuing
operations
(2)31,208
51,316
(487)
(673)
(2,249)(Loss)
income
from
discontinued
operations
(3)(3,714)
(3,269)
9,849
4,620
48,874Net
income
and
comprehensive
income$27,494
$48,047
$9,362
$3,947
$46,625









Weighted
average
shares
outstanding:








Basic11,812
11,516
11,188
11,035
10,695Diluted12,773
12,541
11,188
11,035
10,695Income
(loss)
per
share
from
continuing
operations:








Basic$2.64
$4.46
$(0.04)
$(0.06)
$(0.21)Diluted$2.44
$4.09
$(0.04)
$(0.06)
$(0.21)(Loss)
income
per
share
from
discontinued
operations:








Basic$(0.31)
$(0.28)
$0.88
$0.42
$4.57Diluted$(0.29)
$(0.26)
$0.88
$0.42
$4.57Net
income
per
share:








Basic$2.33
$4.17
$0.84
$0.36
$4.36Diluted$2.15
$3.83
$0.84
$0.36
$4.36Cash
dividend
per
share$—
$—
$—
$—
$1.00









Financial Position:








Cash
and
cash
equivalents
(4)
(5)$91,131
$206,975
$86,212
$91,667
$80,190Total
assets$323,427
$295,781
$139,891
$152,644
$143,171Total
long-term
liabilities
(5)$25,285
$612
$4,889
$5,437
$5,883Total
shareholders'
equity
(4)$231,435
$241,142
$96,366
$87,008
$82,922(1)In
June
2012,
we
sold
substantially
all
of
the
operating
assets
of
our
LendingTree
Loans
business.
See ITEM
7.

Management's
Discussion
and
Analysis
ofFinancial
Condition
and
Results
of
Operations—Results
of
Operations
for
the
Years
Ended
December
31,
2016,
2015
and
2014—Discontinued
Operationsfor
more
information.(2)In
2015,
we
released
the
majority
of
the
valuation
allowance,
which,
along
with
federal
and
state
income
taxes,
resulted
in
a
total
tax
benefit
of
$23.0million.
See Note
10
—Income
Taxes
in
the
notes
to
the
consolidated
financial
statements
included
elsewhere
in
this
report
for
additional
information.(3)See ITEM
7.

Management's
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations—Results
of
Operations
for
the
Years
EndedDecember
31,
2016,
2015
and
2014—Discontinued
Operations
for
a
discussion
of
discontinued
operations.(4)In
November
2015,
we
completed
an
equity
offering
of
852,500
shares
of
our
common
stock,
receiving
net
proceeds
of
$91.5
million.26Table of Contents(5)In
November
2016,
we
acquired
CompareCards
for
$80.7
million
in
cash
at
closing
and
contingent
consideration
payments
of
up
to
$22.5
million
in
each
of2017
and
2018.
We
assigned
a
fair
value
of
the
contingent
consideration
of
$23.1
million,
which
is
in
included
in
total
long-term
liabilities.
We
will
reassessthis
fair
value
quarterly.
In
December
2016,
we
acquired
two
office
buildings
in
Charlotte,
North
Carolina
for
$23.5
million
in
cash.
See Note
6
—BusinessAcquisitions
and
Note
4
—Property
and
Equipment,
respectively,
in
the
notes
to
the
consolidated
financial
statements
included
elsewhere
in
this
report
foradditional
information.27Table of ContentsITEM 7.   Management's
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
OperationsThe
following
Management's
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations
should
be
read
in
conjunction
with
our
consolidatedfinancial
statements
and
accompanying
notes
included
elsewhere
within
this
report.
This
discussion
includes
both
historical
information
and
forward-lookinginformation
that
involves
risks,
uncertainties
and
assumptions.
Our
actual
results
may
differ
materially
from
management's
expectations
as
a
result
of
variousfactors,
including
but
not
limited
to
those
discussed
in
the
sections
entitled
"Risk
Factors"
and
"Cautionary
Statement
Regarding
Forward-Looking
Information."Company OverviewLendingTree,
Inc.
is
the
parent
of
LendingTree,
LLC
and
several
companies
owned
by
LendingTree,
LLC.LendingTree
operates
what
we
believe
to
be
the
leading
online
loan
marketplace
for
consumers
seeking
loans
and
other
credit-based
offerings.
Our
onlinemarketplace
provides
consumers
with
access
to
product
offerings
from
our
Network
Lenders,
including
mortgage
loans,
home
equity
loans
and
lines
of
credit,reverse
mortgage
loans,
auto
loans,
credit
cards,
personal
loans,
student
loans,
small
business
loans
and
other
related
offerings.
In
addition,
we
offer
tools
andresources,
including
free
credit
scores,
that
facilitate
comparison
shopping
for
these
loan
and
other
credit-based
offerings.
We
seek
to
match
consumers
withmultiple
lenders,
who
can
provide
them
with
competing
quotes
for
the
product
they
are
seeking.
We
also
serve
as
a
valued
partner
to
lenders
seeking
an
efficient,scalable
and
flexible
source
of
customer
acquisition
with
directly
measurable
benefits,
by
matching
the
consumer
inquiries
we
generate
with
these
lenders.Our
My
LendingTree
platform
offers
a
personalized
loan
comparison-shopping
experience
by
providing
free
credit
scores
and
credit
score
analysis.
Thisplatform
enables
us
to
observe
consumers'
credit
profiles
and
then
identify
and
alert
them
to
loan
and
other
credit-based
opportunities
on
our
marketplace
that
maybe
more
favorable
than
the
loans
they
may
have
at
a
given
point
in
time.
This
is
designed
to
provide
consumers
with
measurable
savings
opportunities
over
theirlifetimes.In
addition
to
operating
our
core
mortgage
business,
we
are
focused
on
growing
our
non-mortgage
lending
businesses
and
developing
new
product
offeringsand
enhancements
to
improve
the
experiences
that
consumers
and
lenders
have
as
they
interact
with
us.
By
expanding
our
portfolio
of
loan
and
credit-basedofferings,
we
are
growing
and
diversifying
our
business
and
sources
of
revenue.
We
intend
to
capitalize
on
our
expertise
in
performance
marketing,
productdevelopment
and
technology,
and
to
leverage
the
widespread
recognition
of
the
LendingTree
brand
to
effect
this
strategy.We
believe
the
consumer
and
small
business
financial
services
industry
is
in
the
early
stages
of
a
fundamental
shift
to
online
product
offerings,
similar
to
theshift
that
started
in
retail
and
travel
many
years
ago
and
is
now
well
established.
We
believe
that
like
retail
and
travel,
as
consumers
continue
to
move
towardsonline
shopping
and
transactions
for
financial
services,
suppliers
will
increasingly
shift
their
product
offerings
and
advertising
budgets
toward
the
online
channel.We
believe
the
strength
of
our
brands
and
of
our
lender
network
place
us
in
a
strong
position
to
continue
to
benefit
from
this
market
shift.The
LendingTree
Loans
business
is
presented
as
discontinued
operations
in
the
accompanying
consolidated
balance
sheets,
consolidated
statements
ofoperations
and
comprehensive
income
and
consolidated
cash
flows
for
all
periods
presented.
Except
for
the
discussion
under
the
heading
"DiscontinuedOperations,"
the
analysis
within
Management's
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations
reflects
our
continuing
operations.Acquisition of CompareCardsOn
November
16,
2016,
we
acquired
Iron
Horse
Holdings,
LLC,
which
does
business
under
the
name
CompareCards
for
$80.7
million
in
cash
at
closing
andcontingent
consideration
payments
of
up
to
$22.5
million
in
each
of
2017
and
2018,
subject
to
achieving
specific
growth
targets.
CompareCards
is
a
leading
onlinesource
for
side-by-side
credit
card
comparison
shopping.
CompareCards
provides
consumers
with
one
centralized
location
for
pertinent
credit
card
informationneeded
to
find
the
best
card
for
their
needs.
The
acquisition
continues
our
diversification
strategy.Acquisition of North Carolina Office PropertiesIn
December
2016,
we
completed
the
acquisition
of
two
office
buildings
in
Charlotte,
North
Carolina,
for
$23.5
million
in
cash.
We
intend
to
utilize
one
orboth
buildings
in
the
future
as
our
principal
executive
offices,
and
any
unused
space
will
continue
to
be
occupied
by
tenants.With
our
expansion
in
North
Carolina,
we
received
a
grant
from
the
state
that
provides
up
to
$4.9
million
in
reimbursements
over
12
years
for
investing
in
realestate
and
infrastructure
in
addition
to
increasing
jobs
in
North
Carolina
at
specific
targeted
levels
between
2017
and
2020,
and
maintaining
the
jobs
thereafter.Additionally,
the
city
of
Charlotte
and
the
county
of
Mecklenburg
provided
a
grant
that
will
be
paid
over
five
years
and
is
based
on
a
percentage
of
new
propertytax
we
pay
on
the
development.28Table of ContentsRecent Mortgage Interest Rate TrendsInterest
rate
and
market
risks
can
be
substantial
in
the
mortgage
lead
generation
business.
Short-term
fluctuations
in
mortgage
interest
rates
primarily
affectconsumer
demand
for
mortgage
refinancings,
while
long-term
fluctuations
in
mortgage
interest
rates,
coupled
with
the
U.S.
real
estate
market,
affect
consumerdemand
for
new
mortgages.
Consumer
demand,
in
turn,
affects
lender
demand
for
mortgage
leads
from
third-party
sources.
Typically,
a
decline
in
mortgageinterest
rates
will
lead
to
reduced
lender
demand,
as
there
are
more
consumers
in
the
marketplace
seeking
financing
and,
accordingly,
lenders
receive
more
organiclead
volume.
Conversely,
an
increase
in
mortgage
interest
rates
will
typically
lead
to
an
increase
in
lender
demand,
as
there
are
fewer
consumers
in
the
marketplaceand,
accordingly,
the
supply
of
organic
mortgage
lead
volume
decreases.
According
to
Freddie
Mac,
30-year
mortgage
interest
rates
generally
declined
as
2014
progressed,
to
an
average
of
3.86%
in
December
2014,
the
lowest
sinceMay
2013.
In
January
2015,
30-year
mortgage
interest
rates
continued
to
decline,
reaching
a
monthly
average
of
3.67%,
after
which
the
mortgage
interest
ratesgenerally
increased
to
3.96%
by
the
end
of
2015.
In
2016
30-year
interest
rates
declined,
reaching
an
average
of
3.44%
in
August
2016,
the
lowest
since
January2013.
By
December
2016,
30-year
mortgage
interest
rates
increased
to
an
average
of
4.20%.On
a
full-year
basis,
30-year
mortgage
interest
rates
declined
to
an
average
3.65%
in
2016,
as
compared
to
3.85%
and
4.17%
in
2015
and
2014,
respectively.Typically,
as
mortgage
interest
rates
decline,
there
are
more
consumers
in
the
marketplace
seeking
refinancings
and,
accordingly,
the
mix
of
mortgageorigination
dollars
moves
towards
refinance
mortgages.
According
to
Mortgage
Bankers
Association
("MBA")
data,
total
refinance
origination
dollars
haveincreased
from
43%
of
total
2014
mortgage
origination
dollars
to
45%
in
2015
and
48%
in
2016,
as
a
result
of
the
general
decrease
in
average
mortgage
interestrates.Looking
forward,
MBA
is
projecting
30-year
mortgage
interest
rates
to
climb
in
2017,
to
an
average
4.5%
on
30-year
fixed
rate
mortgages.
According
toMBA
projections,
as
interest
rates
climb,
the
mix
of
mortgage
origination
dollars
will
move
towards
purchase
mortgages
with
the
refinance
share
representing
just30%
for
2017.The U.S. Real Estate MarketThe
health
of
the
U.S.
real
estate
market
and
interest
rate
levels
are
the
primary
drivers
of
consumer
demand
for
new
mortgages.
Consumer
demand,
in
turn,affects
lender
demand
for
purchase
mortgage
leads
from
third-party
sources.
Typically,
a
strong
real
estate
market
will
lead
to
reduced
lender
demand
for
leads,
asthere
are
more
consumers
in
the
marketplace
seeking
financing
and,
accordingly,
lenders
receive
more
organic
lead
volume.
Conversely,
a
weaker
real
estatemarket
will
typically
lead
to
an
increase
in
lender
demand,
as
there
are
fewer
consumers
in
the
marketplace
seeking
mortgages.
Despite
continued
indications
of
economic
recovery,
in
2014,
existing
home
sales
nationwide
declined
approximately
3%
over
2013,
according
to
the
NationalAssociation
of
Realtors
("NAR"),
likely
due
to
lessening
housing
affordability
and
higher
mortgage
interest
rates.
However,
sales
of
existing
homes
in
the
secondhalf
of
2014
were
up
6%
from
the
first
half
of
the
year,
as
economic
growth
accelerated,
housing
inventory
increased
and
sales
prices
moderated.
This
momentumcontinued
into
2015,29Table of Contentswith
nationwide
existing
home
sales
increasing
approximately
7%
over
2014,
equating
to
the
housing
market's
best
year
in
nearly
a
decade.While
nationwide
existing
home
sales
in
2016
increased
3%
over
2015,
the
NAR
expects
lower
(but
moderate)
growth
in
existing
home
sales
in
2017compared
to
2016,
in
large
part
due
to
the
smaller
inventory
of
homes
for
sale,
with
the
supply
of
homes
for
sale
at
its
lowest
since
1999,
and
the
anticipatedincrease
in
mortgage
rates.Results of Operations for the Years ended December 31, 2016 , 2015 and 2014 Year Ended December 31,
2016 vs. 2015
2015 vs. 2014 201620152014
$Change%Change
$Change%Change
(Dollars
in
thousands)Mortgage
products$219,991$165,272$134,137
$54,71933
%
$31,13523
%Non-mortgage
products164,41188,94433,213
75,46785
%
55,731168
%Revenue384,402254,216167,350
130,18651 %
86,86652 %Costs
and
expenses:








Cost
of
revenue
(exclusive of depreciation and amortization shownseparately below)13,7649,3707,903
4,39447
%
1,46719
%Selling
and
marketing
expense261,100172,849112,704
88,25151
%
60,14553
%General
and
administrative
expense37,22730,03025,883
7,19724
%
4,14716
%Product
development13,76110,4857,457
3,27631
%
3,02841
%Depreciation4,9443,0083,245
1,93664
%
(237)(7)%Amortization
of
intangibles1,243149136
1,094734
%
1310
%Restructuring
and
severance122422373
(300)(71)%
4913
%Litigation
settlements
and
contingencies129(611)10,618
740121
%
(11,229)(106)%Total
costs
and
expenses332,290225,702168,319
106,58847 %
57,38334 %Operating income (loss)52,11228,514(969)
23,59883 %
29,4833,043 %Other
income
(expense),
net:








Interest
expense,
net(561)(171)(2)
390228
%
1698,450
%Other
income23——
23—
%
——
%Income (loss) before income taxes51,57428,343(971)
23,23182 %
29,3143,019 %Income
tax
(expense)
benefit(20,366)22,973484
(43,339)(189)%
22,4894,646
%Net income (loss) from continuing operations31,20851,316(487)
(20,108)(39)%
51,80310,637 %(Loss) income from discontinued operations(3,714)(3,269)9,849
(445)(14)%
(13,118)(133)%Net
income
and
comprehensive
income$27,494$48,047$9,362
$(20,553)(43)%
$38,685413 %RevenueRevenue
increased
in
2016
compared
to
2015
due
to
increases
in
our
non-mortgage
products
of
$75.5
million
and
in
our
mortgage
products
of
$54.7
million.Our
non-mortgage
products
include
the
following
non-mortgage
lending
products:
personal
loans,
credit
cards,
home
equity
loans
and
lines
of
credit,
reversemortgage
loans,
auto
loans,
small
business
loans
and
student
loans.
Our
non-mortgage
products
also
include
home
improvement
referrals
and
other
credit
productssuch
as
credit
repair
and
debt
settlement.
Many
of
our
non-mortgage
products
are
not
individually
significant
to
revenue.
The
increase
in
revenue
from
our
non-mortgage
products
in
2016
compared
to
2015
is
primarily
due
to
an
increase
in
lenders
on
our
exchange,
increased
marketing
efforts
and
two
business
acquisitions.This
resulted
in
an
increase
in
the
number
of
consumers
completing
request
forms
for
the
non-mortgage
products
in
2016.Revenue
from
our
personal
loan
product
increased
$15.2
million
to
$66.5
million
in
2016
from
$51.3
million
in
2015,
or
30%.
Revenue
from
our
personalloans
product
increased
in
2016
due
to
an
increase
in
lenders
on
our
exchange
and
increased
marketing
efforts,
partially
offset
by
decreases
in
revenue
earned
perconsumer.
Certain
of
our
online
personal
loan
lenders
experienced
well-publicized
challenges
in
2016,
in
particular,
general
unavailability
of
capital,
increasedpricing
demanded
by
investors
of
personal30Table of Contentsloans,
which
in
some
cases
led
to
reductions
in
marketing
spend
and
tightening
in
underwriting
standards.
We
believe
the
market
for
our
non-mortgage
products,including
personal
loans,
remains
under-penetrated
and
we
believe
long-term
growth
prospects
are
strong
for
non-mortgage
products.
A
significant
industry-widecontraction
in
the
availability
of
capital
for
non-mortgage
lending
products
would
likely
adversely
affect
our
non-mortgage
product
revenues.
While
we
expectsignificant
growth
in
our
non-mortgage
products
in
2017
compared
to
2016,
we
do
not
anticipate
the
growth
rate
will
meet
the
2016
growth
of
85%.Revenue
from
our
credit
card
product
increased
$29.6
million
to
$39.4
million
in
2016
from
$9.8
million
in
2015,
or
302%.
Revenue
from
our
credit
cardproduct
increased
in
2016
due
to
increases
in
payouts
from
issuers
in
addition
to
increased
marketing
efforts.
Additionally,
the
CompareCards
acquisition,completed
on
November
16,
2016,
increased
revenue
by
$9.2
million
in
2016.For
2016
and
2015,
no
other
non-mortgage
product
represented
more
than
10%
of
revenue,
however
certain
other
non-mortgage
products
experienced
notableincreases.
Revenue
from
our
home
equity
product
increased
$13.6
million
in
2016
compared
to
2015,
due
to
an
increase
in
lender
coverage
and
an
increase
inrevenue
earned
per
consumer
combined
with
increased
marketing
efforts.The
increase
in
revenue
from
our
mortgage
products
in
2016
compared
to
2015
is
primarily
due
to
an
increase
in
revenue
from
our
refinance
product.
Therevenue
from
our
refinance
product
increased
approximately
$50.0
million
in
2016
from
2015,
primarily
due
to
an
increase
in
lender
demand
and
an
increase
inmarketing
efforts.
The
number
of
consumers
completing
a
request
form
for
mortgage
products
increased
in
2016
from
2015,
partially
offset
by
a
decrease
inrevenue
earned
per
consumer
in
2016
compared
to
2015.
We
expect
more
moderate
year-over-year
growth
in
mortgage
revenue.Revenue
increased
in
2015
compared
to
2014
due
to
increases
in
our
non-mortgage
products
of
$55.7
million
and
in
our
mortgage
products
of
$31.1
million.The
increase
in
revenue
from
our
non-mortgage
products
in
2015
compared
to
2014
is
primarily
due
to
increases
in
revenue
from
our
personal
loans
productand
our
credit
cards
product.
Revenue
from
our
personal
loans
product
increased
$38.9
million
to
$51.3
million
in
2015
from
$12.3
million
in
2014,
or
316%,
dueto
growing
awareness
in
the
market
of
the
product,
an
increase
in
lenders
on
our
exchange,
increases
in
revenue
earned
per
matched
consumer
and
increasedmarketing
efforts.
Revenue
from
our
credit
cards
product
increased
$9.2
million
to
$9.8
million
in
2015
from
$0.7
million
in
2014,
or
1314%,
due
to
increases
inpayouts
from
issuers
in
addition
to
increased
marketing
efforts.
For
2015
and
2014,
no
other
non-mortgage
product
represented
more
than
10%
of
revenue.The
increase
in
revenue
from
our
mortgage
products
in
2015
compared
to
2014
is
primarily
due
to
an
increase
in
revenue
from
our
refinance
product.
Therevenue
from
our
refinance
product
increased
approximately
$30.0
million
in
2015
from
2014
primarily
due
to
increased
demand
of
both
new
and
existing
lenderson
our
marketplace.
Additionally,
mortgage
interest
rates
were
lower
in
2015
compared
to
2014,
causing
an
increase
in
sales
of
the
refinance
product.
The
numberof
consumers
completing
a
request
form
for
mortgage
products
increased
in
2015
from
2014,
partially
offset
by
a
decrease
in
revenue
earned
per
consumer
in
2015compared
to
2014.Cost of revenueCost
of
revenue
consists
primarily
of
costs
associated
with
compensation
and
other
employee-related
costs
(including
stock-based
compensation)
relating
tointernally-operated
customer
call
centers,
third-party
customer
call
center
fees,
credit
scoring
fees,
credit
card
fees,
website
network
hosting
and
server
fees.Cost
of
revenue
increased
in
2016
from
2015,
primarily
due
to
increases
of
$1.3
million
in
compensation
and
benefits
as
a
result
of
increases
in
headcount,$0.9
million
in
credit
scoring
fees,
$0.7
million
in
call
center
technology
fees,
$0.6
million
in
credit
card
fees
and
$0.4
million
in
lead
verification
fees.Cost
of
revenue
increased
in
2015
from
2014,
primarily
due
to
increases
of
$1.1
million
in
compensation
and
benefits
as
a
result
of
increases
in
headcount
and$0.7
million
in
credit
card
fees,
partially
offset
by
a
$0.7
million
decrease
in
credit
scoring
fees.Cost
of
revenue
as
a
percentage
of
revenue
decreased
slightly
to
4%
in
2016
and
2015
from
5%
in
2014.Selling and marketing expenseSelling
and
marketing
expense
consists
primarily
of
advertising
and
promotional
expenditures,
fees
paid
for
consumer
inquiries
and
compensation
and
otheremployee-related
costs
(including
stock-based
compensation)
for
personnel
engaged
in
sales
or
marketing
functions.
Advertising
and
promotional
expendituresprimarily
include
online
marketing,
as
well
as
television,
print
and
radio
spending.
Advertising
production
costs
are
expensed
in
the
period
the
related
ad
is
firstrun.31Table of ContentsThe
increases
in
selling
and
marketing
expense
in
2016
compared
to
2015
and
2015
compared
to
2014
were
primarily
due
to
increases
in
advertising
andpromotional
expense
of
$84.0
million
and
$57.1
million,
respectively,
as
discussed
below.
In
addition,
selling
and
marketing
expense
increased
in
2016
comparedto
2015
and
in
2015
compared
to
2014
due
to
an
increase
in
compensation
and
benefits
of
$4.3
million
and
$3.1
million,
respectively,
as
a
result
of
increases
inheadcount.Advertising
and
promotional
expense
is
the
largest
component
of
selling
and
marketing
expense,
and
is
comprised
of
the
following:
Year Ended December 31,
2016 vs. 2015
2015 vs. 2014 2016
2015
2014
$Change%Change
$Change%Change
(Dollars
in
thousands)Online$210,635
$127,294
$86,088
$83,34165%
$41,20648%Broadcast28,455
28,066
14,011
3891%
14,055100%Other4,131
3,863
2,056
2687%
1,80788%Total advertising expense$243,221
$159,223
$102,155
$83,99853%
$57,06856%We
increased
our
advertising
expenditures
in
2016
compared
to
2015
and
in
2015
compared
to
2014,
in
order
to
generate
additional
consumer
inquiries
tomeet
the
increased
demand
of
lenders
on
our
marketplace.We
will
continue
to
adjust
selling
and
marketing
expenditures
dynamically
in
relation
to
anticipated
revenue
opportunities.General and administrative expenseGeneral
and
administrative
expense
consists
primarily
of
compensation
and
other
employee-related
costs
(including
stock-based
compensation)
for
personnelengaged
in
finance,
legal,
tax,
corporate
information
technology,
human
resources
and
executive
management
functions,
as
well
as
facilities
and
infrastructurecosts
and
fees
for
professional
services.
General
and
administrative
expense
increased
in
2016
compared
to
2015,
primarily
due
to
increases
in
compensation
and
benefits
of
$2.0
million
as
a
result
ofincreases
in
headcount,
increases
in
professional
fees
of
$3.1
million,
increases
in
travel
and
entertainment
expenses
of
$0.8
million,
increases
in
facility
expensesof
$0.6
million
and
increases
in
other
tax
expense
of
$0.5
million.
The
increase
in
professional
fees
is
partially
due
to
an
increase
in
acquisition
related
expenses
of$0.9
million.General
and
administrative
expense
as
a
percentage
of
revenue
decreased
to
10%
in
2016
compared
to
12%
in
2015.General
and
administrative
expense
increased
in
2015
compared
to
2014,
primarily
due
to
increases
in
compensation
and
benefits
of
$2.0
million
as
a
result
ofincreases
in
headcount,
increases
in
recruiting
expenses
of
$0.5
million,
increases
in
computer
software
maintenance
of
$0.8
million
and
increases
in
professionalfees
of
$0.8
million,
partially
offset
by
decreases
in
asset
impairments
of
$0.3
million.General
and
administrative
expense
as
a
percentage
of
revenue
decreased
to
12%
in
2015
compared
to
15%
in
2014.Product developmentProduct
development
expense
consists
primarily
of
compensation
and
other
employee-related
costs
(including
stock-based
compensation)
and
third-partylabor
costs
that
are
not
capitalized,
for
employees
and
consultants
engaged
in
the
design,
development,
testing
and
enhancement
of
technology.
Product
development
expense
increased
in
2016
compared
to
2015
and
in
2015
compared
to
2014,
as
we
continued
to
invest
in
internal
development
of
newand
enhanced
features,
functionality
and
business
opportunities
that
we
believe
will
enable
us
to
better
and
more
fully
serve
consumers
and
lenders.
Productdevelopment
expenses
are
comprised
primarily
of
compensation
and
other
employee-related
costs.
We
increased
headcount
in
2016
compared
to
2015
and
in
2015compared
to
2014,
in
order
to
support
planned
product
launches.Litigation settlements and contingenciesLitigation
settlements
and
contingencies
consists
of
expenses
related
to
actual
or
anticipated
litigation
settlements,
in
addition
to
legal
fees
incurred
inconnection
with
various
patent
litigation
claims
we
are
pursuing.
During
2014,
we
participated
in
a
jury
trial
for
the
Zillow
litigation
described
in
Note
13
—Contingencies
in
the
notes
to
the
consolidated
financial
statementsincluded
elsewhere
in
this
report.
The
legal
expenses
associated
with
this
jury
trial
and
post-32Table of Contentstrial
motions
increased
our
litigation
settlements
and
contingencies
expense
for
2014.
In
addition,
in
October
2014,
the
court
awarded
NexTag's
attorney
fees
andcosts
totaling
$2.3
million,
which
were
recorded
as
litigation
expense
in
2014.
We
appealed
the
award
of
NexTag's
attorney
fees
and
costs
in
November
2014
and,in
June
2015,
we
reached
a
settlement
agreement
with
NexTag
for
$1.1
million.
During
the
year
ended
December
31,
2015,
we
recorded
$0.6
million
in
incomeprimarily
due
to
an
adjustment
in
the
reserve
for
NexTag
attorney
fees
and
costs
associated
with
this
matter,
partially
offset
by
legal
fees.
During
the
year
endedDecember
31,
2014,
we
recorded
$10.6
million
in
expenses,
due
primarily
to
legal
fees
incurred
in
connection
with
this
patent
litigation.Income tax expense Year Ended December 31, 2016
2015
2014
(in thousands, except percentages)Income
tax
(expense)
benefit$(20,366)
$22,973
$484Effective tax rate39.5%
(81.1)%
(49.8)%For
2016,
the
effective
tax
rate
varied
from
the
statutory
rate
of
35%
primarily
due
to
the
benefit
derived
from
the
federal
research
tax
credit,
partially
offsetby
state
taxes,
including
the
impact
of
a
reduction
in
the
North
Carolina
state
income
tax
rate
which
reduced
the
value
of
our
deferred
tax
assets.
The
federalresearch
tax
credit
benefit
is
the
result
of
a
study
completed
during
the
second
quarter
for
the
open
tax
years
of
2011
through
2015,
plus
an
estimate
of
the
benefitfrom
current
research
activities.For
2015,
the
effective
tax
rate
varied
from
the
statutory
rate
of
35%
primarily
due
to
the
reversal
of
the
federal
and
partial
reversal
of
the
state
valuationallowance
set
up
in
prior
years
against
our
deferred
tax
assets,
partially
offset
by
state
taxes.For
2014,
the
effective
tax
rates
varied
from
the
statutory
rate
of
35%
primarily
due
to
state
taxes.Discontinued OperationsOn
June
6,
2012,
we
sold
substantially
all
of
the
operating
assets
of
our
LendingTree
Loans
business
for
approximately
$55.9
million
in
cash
to
Discover.Discover
generally
did
not
assume
liabilities
of
the
LendingTree
Loans
business
that
arose
before
the
closing
date,
except
for
certain
liabilities
directly
relatedto
assets
Discover
acquired.
Of
the
purchase
price
paid,
as
of
December
31,
2016
,
$4.0
million
is
being
held
in
escrow
in
accordance
with
the
agreement
withDiscover
for
certain
loan
loss
obligations
that
remain
with
us
following
the
sale.During
2016
,
2015
and
2014
,
(loss)
income
from
discontinued
operations
of
$(3.7)
million
,
$(3.3)
million
and
$9.8
million
,
respectively,
was
primarilyattributable
to
the
LendingTree
Loans
business.
In
2014,
results
of
discontinued
operations
were
primarily
due
to
income
from
an
adjustment
in
the
loan
lossreserve
as
a
result
of
a
settlement
with
one
of
LendingTree
Loans'
secondary
market
purchasers,
partially
offset
by
costs
relating
to
the
ongoing
wind-down
of
thebusiness.
In
2016
and
2015,
loss
from
discontinued
operations
was
primarily
due
to
litigation
settlements
and
contingencies
and
legal
fees
associated
with
ongoinglegal
proceedings.Adjusted Earnings Before Interest, Taxes, Depreciation and AmortizationWe
report
adjusted
EBITDA
as
a
supplemental
measure
to
GAAP.
This
measure
is
the
primary
metric
by
which
we
evaluate
the
performance
of
ourbusinesses,
on
which
our
marketing
expenditures
and
internal
budgets
are
based
and
by
which
management
and
many
employees
are
compensated.
We
believe
thatinvestors
should
have
access
to
the
same
set
of
tools
that
we
use
in
analyzing
our
results.
This
non-GAAP
measure
should
be
considered
in
addition
to
resultsprepared
in
accordance
with
GAAP,
but
should
not
be
considered
a
substitute
for
or
superior
to
GAAP
results.
We
provide
and
encourage
investors
to
examine
thereconciling
adjustments
between
the
GAAP
and
non-GAAP
measures
discussed
below.Definition of Adjusted EBITDAWe
report
Adjusted
EBITDA
as
net
income
from
continuing
operations
adjusted
to
exclude
interest,
income
tax,
amortization
of
intangibles
and
depreciation,and
to
further
exclude
(1)
non-cash
compensation
expense,
(2)
non-cash
impairment
charges,
(3)
gain/loss
on
disposal
of
assets,
(4)
restructuring
and
severanceexpenses,
(5)
litigation
settlements
and
contingencies
and
legal
fees
for
certain
patent
litigation,
(6)
acquisitions
and
dispositions
income
or
expense
(includingwith
respect
to
changes
in
fair
value
of
contingent
consideration)
and
(7)
one-time
items.
Adjusted
EBITDA
has
certain
limitations
in
that
it
does
not
take
intoaccount
the
impact
to
our
statement
of
operations
of
certain
expenses,
including
depreciation,
non-cash
compensation
and33Table of Contentsacquisition-related
accounting.
We
endeavor
to
compensate
for
the
limitations
of
the
non-GAAP
measures
presented
by
also
providing
the
comparable
GAAPmeasures
with
equal
or
greater
prominence
and
descriptions
of
the
reconciling
items,
including
quantifying
such
items,
to
derive
the
non-GAAP
measures.
Thesenon-GAAP
measures
may
not
be
comparable
to
similarly
titled
measures
used
by
other
companies.
One-Time ItemsAdjusted
EBITDA
is
adjusted
for
one-time
items,
if
applicable.
Items
are
considered
one-time
in
nature
if
they
are
non-recurring,
infrequent
or
unusual
andhave
not
occurred
in
the
past
two
years
or
are
not
expected
to
recur
in
the
next
two
years,
in
accordance
with
SEC
rules.
For
the
periods
presented
in
this
report,there
are
no
adjustments
for
one-time
items,
except
for
$0.1
million
related
to
an
estimated
settlement
for
unclaimed
property
in
2015.Non-Cash Expenses that are Excluded from Adjusted EBITDANon-cash
compensation
expense
consists
principally
of
expense
associated
with
grants
of
restricted
stock,
restricted
stock
units
and
stock
options.
Theseexpenses
are
not
paid
in
cash,
and
we
include
the
related
shares
in
our
calculations
of
fully
diluted
shares
outstanding.
Upon
settlement
of
restricted
stock
units,exercise
of
certain
stock
options
or
vesting
of
restricted
stock
awards,
the
awards
may
be
settled,
on
a
net
basis,
with
us
remitting
the
required
tax
withholdingamount
from
our
current
funds.Amortization
of
intangibles
are
non-cash
expenses
relating
primarily
to
intangible
assets
acquired
through
acquisitions.
At
the
time
of
an
acquisition,
theintangible
assets
of
the
acquired
company,
such
as
purchase
agreements,
technology
and
customer
relationships,
are
valued
and
amortized
over
their
estimatedlives.The
following
table
is
a
reconciliation
of
net
income
(loss)
from
continuing
operations
to
Adjusted
EBITDA.
Year Ended December 31, 2016
2015
2014
(in
thousands)Net income (loss) from continuing operations$31,208
$51,316
$(487)Adjustments
to
reconcile
to
Adjusted
EBITDA:




Amortization
of
intangibles1,243
149
136Depreciation4,944
3,008
3,245Restructuring
and
severance122
422
373Loss
on
disposal
of
assets640
748
282Impairment
of
long-lived
assets—
—
805Non-cash
compensation9,647
8,370
7,277Estimated
settlement
for
unclaimed
property—
134
—Acquisition
expense959
84
60Litigation
settlements
and
contingencies129
(611)
10,618Interest
expense,
net561
171
2Income
tax
expense
(benefit)20,366
(22,973)
(484)Adjusted EBITDA$69,819
$40,818
$21,827Financial Position, Liquidity and Capital ResourcesGeneralAs
of
December
31,
2016
,
we
had
$91.1
million
of
cash
and
cash
equivalents
and
$4.1
million
of
restricted
cash
and
cash
equivalents,
compared
to
$207.0million
of
cash
and
cash
equivalents
and
$6.5
million
of
restricted
cash
and
cash
equivalents
as
of
December
31,
2015
.In
2016,
we
purchased
690,218
shares
of
our
common
stock
pursuant
to
a
stock
repurchase
program
for
$48.5
million.In
December
2016,
we
acquired
two
office
buildings
in
Charlotte,
North
Carolina
for
$23.5
million
in
cash.
In
November
2016,
we
acquired
CompareCardsfor
$80.7
million
cash
at
closing
and
potential
future
contingent
consideration
payments
of
up
to
$22.5
million
in
each
of
2017
and
2018,
subject
to
achievingspecified
targets.
See Note
6
—Business
Acquisitions
and
Note
4
—Property
and
Equipment,
respectively,
in
the
notes
to
the
consolidated
financial
statementsincluded
elsewhere
in
this
report
for
additional
information.34Table of ContentsIn
November
2015,
we
completed
an
equity
offering
of
852,500
shares
of
our
common
stock.
We
received
net
proceeds
of
$91.5
million,
after
deductingapproximately
$5.9
million
in
underwriting
discounts
and
$0.7
million
in
offering
expenses.We
expect
our
cash
and
cash
equivalents
and
cash
flows
from
operations
to
be
sufficient
to
fund
our
operating
needs
for
the
next
twelve
months
and
beyond.Our
revolving
credit
facility
described
below
is
an
additional
potential
source
of
liquidity.Senior Secured Revolving Credit FacilityOn
October
22,
2015,
we
established
a
$125.0
million
five-year
Senior
Secured
Revolving
Credit
Facility
which
matures
on
October
22,
2020
(the
"RevolvingCredit
Facility").
The
proceeds
of
the
Revolving
Credit
Facility
can
be
used
to
finance
working
capital
needs,
capital
expenditures
and
general
corporate
purposes,including
to
finance
permitted
acquisitions.
As
of
February
28,
2017,
we
do
not
have
any
borrowings
under
the
Revolving
Credit
Facility.For
additional
information
on
the
Revolving
Credit
Facility,
see Note
11
—Revolving
Credit
Facility
in
the
notes
to
the
consolidated
financial
statementsincluded
elsewhere
in
this
report.Cash Flows from Continuing OperationsOur
cash
flows
attributable
to
continuing
operations
are
as
follows: Year Ended December 31, 2016
2015
2014
(in
thousands)Net
cash
provided
by
operating
activities$58,454
$32,584
$9,075Net
cash
(used
in)
provided
by
investing
activities(117,215)
4,901
2,704Net
cash
(used
in)
provided
by
financing
activities(46,880)
86,909
(7,651)Cash
Flows
from
Operating
ActivitiesOur
largest
source
of
cash
provided
by
our
operating
activities
is
revenues
generated
by
our
mortgage
and
non-mortgage
products.
Our
primary
uses
of
cashfrom
our
operating
activities
include
advertising
and
promotional
payments
and
fees
paid
for
consumer
inquiries.
In
addition,
our
uses
of
cash
from
operatingactivities
include
compensation
and
other
employee-related
costs,
other
general
corporate
expenditures,
litigation
settlements
and
contingencies
and
income
taxes.Net
cash
provided
by
operating
activities
attributable
to
continuing
operations
increased
in
2016
from
2015
primarily
due
to
an
increase
in
revenue,
partiallyoffset
by
an
increase
in
cost
of
revenue
and
selling
and
marketing.
Additionally,
there
was
an
increase
in
cash
from
changes
in
working
capital
primarily
driven
bychanges
in
accounts
receivable
and
income
taxes
payable.Net
cash
provided
by
operating
activities
attributable
to
continuing
operations
increased
in
2015
from
2014
primarily
due
to
an
increase
in
revenue,
partiallyoffset
by
an
increase
in
cost
of
revenue
and
selling
and
marketing.
Additionally,
there
was
a
decrease
in
payments
related
to
litigation
settlements
andcontingencies
and
a
net
increase
in
cash
from
changes
in
working
capital
primarily
driven
by
changes
in
accounts
payable
and
other
current
liabilities
and
incometaxes
payable.Cash
Flows
from
Investing
ActivitiesNet
cash
used
in
investing
activities
attributable
to
continuing
operations
in
2016
of
$117.2
million
consisted
primarily
of
the
acquisition
of
CompareCards
for$81.2
million,
the
acquisition
of
SimpleTuition
for
$4.5
million,
the
acquisition
of
two
office
buildings
in
Charlotte,
North
Carolina
for
$23.4
million
and
$10.6million
related
to
internally
developed
software
and
the
acquisition
of
an
aircraft.
This
was
partially
offset
by
a
$2.5
million
decrease
in
restricted
cash
due
to
therelease
of
funds
in
escrow
for
the
surety
bonds
due
to
a
reduction
in
collateral
requirements.Net
cash
provided
by
investing
activities
attributable
to
continuing
operations
in
2015
of
$4.9
million
consisted
primarily
of
$12.2
million
in
the
release
ofrestricted
cash
previously
held
in
escrow
in
connection
with
the
sale
of
LendingTree
Loans,
offset
by
capital
expenditures
of
$7.2
million
primarily
related
tointernally
developed
software.Net
cash
provided
by
investing
activities
attributable
to
continuing
operations
in
2014
of
$2.7
million
consisted
primarily
of
capital
expenditures
of
$3.9million
and
$0.7
million
in
payments
to
acquire
a
business,
which
was
more
than
offset
by
a
decrease
in
restricted
cash
of
$7.3
million
.
In
2014,
we
reached
andexecuted
a
settlement
with
the
disputing
party
on
the
earnout
related
to
an
acquisition,
upon
which
$2.0
million
of
cash
previously
held
in
escrow
was
released.Additionally,
in
2014,
we
reached
and
executed
a
settlement
with
one
of
our
LendingTree
Loans'
secondary
market
purchasers
related
to
loan
loss
obligations,upon
which
$2.0
million
of
cash
previously
held
in
escrow
was
released
to
us.
Finally,
in
2014,
we
reached
and
executed
a
settlement35Table of Contentswith
another
secondary
market
purchaser
related
to
loan
loss
obligations,
upon
which
$3.1
million
of
cash
previously
held
by
such
secondary
market
purchaser
waspaid
out.Cash
Flows
from
Financing
ActivitiesNet
cash
used
in
financing
activities
attributable
to
continuing
operations
in
2016
of
$46.9
million
consisted
primarily
of
the
repurchase
of
our
stock
of
$48.5million
and
$4.1
million
in
withholding
taxes
paid
by
us
upon
surrender
of
shares
to
satisfy
obligations
on
equity
awards;
offset
by
$5.8
million
in
excess
taxbenefits
from
stock-based
award
activity.Net
cash
provided
by
financing
activities
attributable
to
continuing
operations
in
2015
of
$86.9
million
consisted
primarily
of
net
proceeds
from
the
November2015
equity
offering
of
$91.5
million
and
$4.6
million
in
excess
tax
benefits
from
stock-based
award
activity,
offset
by
$7.6
million
in
withholding
taxes
paid
byus
upon
the
surrender
of
shares
to
satisfy
obligations
on
equity
awards,
$1.2
million
for
the
payment
of
debt
issuance
costs,
the
repurchase
of
our
stock
of
$0.2million
and
$0.1
million
in
dividend
payments.Net
cash
used
in
financing
activities
attributable
to
continuing
operations
in
2014
of
$7.7
million
consisted
primarily
of
$4.8
million
in
withholding
taxes
paidby
us
upon
the
surrender
of
shares
to
satisfy
obligations
on
equity
awards
and
the
repurchase
of
our
stock
of
$2.6
million.Off-Balance Sheet ArrangementsWe
have
no
off-balance
sheet
arrangements
other
than
our
operating
lease
obligations
and
funding
commitments
pursuant
to
our
surety
bonds,
none
of
whichhave
or
are
reasonably
likely
to
have
a
current
or
future
effect
on
our
financial
condition,
changes
in
financial
condition,
revenues
or
expenses,
results
ofoperations,
liquidity,
capital
expenditures
or
capital
resources
that
is
material
to
investors.
See Note
12
—Commitments
to
the
consolidated
financial
statementsincluded
elsewhere
in
the
report
for
further
details.Summary of Contractual ObligationsThe
following
table
sets
forth
our
contractual
obligations
and
commercial
commitments
as
of
December
31,
2016
.
Payments Due By Period as of December 31, 2016Contractual Obligations (a)TotalLess Than1 Year1-3 Years3-5 YearsMore Than5 YearsOperating
lease
obligations
(b)$4,681$1,374$2,252$1,055$—Long-term
contractual
obligations
(c)23,600—23,600——Total contractual obligations$28,281$1,374$25,852$1,055$—(a)Excludes
potential
obligations
under
surety
and
litigation
bonds
and
the
indemnification
obligations,
repurchase
obligations
and
premium
repaymentobligations
for
which
our
HLC
subsidiary
continues
to
be
liable
following
the
sale
of
substantially
all
of
the
operating
assets
of
our
LendingTree
Loansbusiness
in
the
second
quarter
of
2012.
Excludes
a
$0.6
million
accrual
related
to
uncertain
tax
position,
as
we
are
unable
to
determine
when,
or
if,payments
for
these
taxes
will
ultimately
be
made.(b)Our
operating
lease
obligations
are
associated
with
office
space.(c)Includes
a
liability
of
$23.1
million
for
the
estimated
fair
value
of
contingent
consideration
obligations
reflected
on
the
balance
sheet
for
the
acquisition
ofCompareCards.
Actual
contingent
consideration
payments
could
range
from
zero
to
$45.0
million.
Also
includes
a
$0.5
million
hold-back
of
the
purchaseprice
related
to
the
SimpleTuition
acquisition.36Table of ContentsCritical Accounting Policies and EstimatesThe
following
disclosure
is
provided
to
supplement
the
description
of
our
accounting
policies
contained
in
Note

2
—Significant
Accounting
Policies
to
theconsolidated
financial
statements
included
elsewhere
in
this
report
in
regard
to
significant
areas
of
judgment.
This
disclosure
includes
accounting
policies
related
toboth
continuing
operations
and
discontinued
operations.
Management
is
required
to
make
certain
estimates
and
assumptions
during
the
preparation
of
theconsolidated
financial
statements
in
accordance
with
generally
accepted
accounting
principles.
These
estimates
and
assumptions
impact
the
reported
amount
ofassets
and
liabilities
and
disclosures
of
contingent
assets
and
liabilities
as
of
the
date
of
the
consolidated
financial
statements.
They
also
impact
the
reported
amountof
net
earnings
during
any
period.
Actual
results
could
differ
from
those
estimates.
Because
of
the
size
of
the
financial
statement
elements
to
which
they
relate,some
of
our
accounting
policies
and
estimates
have
a
more
significant
impact
on
our
consolidated
financial
statements
than
others.
A
discussion
of
some
of
ourmore
significant
accounting
policies
and
estimates
follows.Loan Loss ObligationsWe
make
estimates
as
to
our
exposure
related
to
our
obligation
to
repurchase
loans
previously
sold
to
investors
or
to
repay
premiums
paid
by
investors
inpurchasing
loans,
and
reserve
for
such
contingencies
accordingly.
Such
payments
to
investors
may
be
required
in
cases
where
underwriting
deficiencies,
borrowerfraud,
documentation
defects,
early
payment
defaults
and
early
loan
payoffs
occurred.Our
HLC
subsidiary
continues
to
be
liable
for
certain
indemnification
obligations,
repurchase
obligations
and
premium
repayment
obligations
following
thesale
of
substantially
all
of
the
operating
assets
of
our
LendingTree
Loans
business
on
June
6,
2012.
Approximately
$4.0
million
is
being
held
in
escrow
pendingresolution
of
certain
of
these
contingent
liabilities.
We
have
been
negotiating
with
certain
secondary
market
purchasers
to
settle
any
existing
and
future
contingentliabilities,
but
we
may
not
be
able
to
complete
such
negotiations
on
acceptable
terms,
or
at
all.
Because
we
do
not
service
the
loans
LendingTree
Loans
sold,
we
donot
maintain
nor
have
access
to
the
current
balances
and
loan
performance
data
with
respect
to
the
individual
loans
previously
sold
to
investors.
Accordingly,
weare
unable
to
determine,
with
precision,
our
maximum
exposure
for
breaches
of
the
representations
and
warranties
LendingTree
Loans
made
to
the
investors
thatpurchased
such
loans.We
estimate
the
liability
for
loan
losses
using
a
settlement
discount
framework.
This
approach
estimates
the
lifetime
losses
on
the
population
of
remainingloans
originated
and
sold
by
LendingTree
Loans
using
actual
defaults
for
loans
with
similar
characteristics
and
projected
future
defaults.
It
also
considers
thelikelihood
of
claims
expected
due
to
alleged
breaches
of
representations
and
warranties
made
by
LendingTree
Loans
and
the
percentage
of
those
claims
investorsestimate
LendingTree
Loans
may
agree
to
repurchase.
We
then
apply
a
settlement
discount
factor
to
the
result
of
the
foregoing
to
reflect
publicly-
announced
bulksettlements
for
similar
loan
types
and
vintages,
our
own
settlement
experience,
as
well
as
LendingTree
Loans'
non-operating
status,
in
order
to
estimate
a
range
ofthe
potential
obligation.
Changes
to
any
one
of
these
factors
could
significantly
impact
the
estimate
of
the
liability
and
could
have
a
material
and
adverse
impact
onour
results
of
operations
for
any
particular
period.We
have
considered
both
objective
and
subjective
factors
in
our
estimation
process,
but
given
current
general
industry
trends
in
mortgage
loans
as
well
ashousing
prices,
market
expectations
and
actual
losses
related
to
LendingTree
Loans'
obligations
could
vary
significantly
from
the
obligation
recorded
as
ofDecember
31,
2016
of
$6.8
million
or
the
range
of
remaining
loan
losses
of
$4.4
million
to
$8.0
million
.
See Note
18
—Discontinued
Operations—LendingTreeLoans—Loan
Loss
Obligations
to
the
consolidated
financial
statements
included
elsewhere
in
this
report
for
additional
information
on
the
loan
loss
reserve.Income TaxesEstimates
of
deferred
income
taxes
and
the
significant
items
giving
rise
to
the
deferred
assets
and
liabilities
are
shown
in
Note

10
—Income
Taxes
to
theconsolidated
financial
statements
included
elsewhere
in
this
report,
and
reflect
management's
assessment
of
actual
future
taxes
to
be
paid
on
items
reflected
in
theconsolidated
financial
statements,
giving
consideration
to
both
timing
and
the
probability
of
realization.
Actual
income
taxes
could
vary
from
these
estimates
dueto
future
changes
in
income
tax
law,
state
income
tax
apportionment
or
the
outcome
of
any
review
of
our
tax
returns
by
the
IRS,
as
well
as
actual
operating
resultsthat
may
vary
significantly
from
anticipated
results.We
also
recognize
liabilities
for
uncertain
tax
positions
based
on
the
two-step
process
prescribed
by
the
accounting
guidance
for
uncertainty
in
income
taxes.The
first
step
is
to
evaluate
the
tax
position
for
recognition
by
determining
if
the
weight
of
available
evidence
indicates
it
is
more
likely
than
not
that
the
positionwill
be
sustained
on
audit,
including
resolution
of
related
appeals
or
litigation
processes,
if
any.
The
second
step
is
to
measure
the
tax
benefit
as
the
largest
amountthat
is
more
than
50%
likely
of
being
realized
upon
ultimate
settlement.
This
measurement
step
is
inherently
difficult
and
requires
subjective
estimations
of
suchamounts
to
determine
the
probability
of
various
possible
outcomes.
We
consider
many
factors
when
evaluating
and
estimating
our
tax
positions
and
tax
benefits,which
may
require
periodic
adjustments
and
which
may
not
accurately
anticipate
actual
outcomes.37Table of ContentsA
valuation
allowance
is
provided
on
deferred
tax
assets
if
it
is
determined
that
it
is
"more likely than not" that
the
deferred
tax
asset
will
not
be
realized.In
the
fourth
quarter
of
2015,
we
concluded,
based
upon
all
available
evidence,
it
was
more
likely
than
not
we
would
have
sufficient
future
taxable
income
torealize
the
majority
of
our
net
deferred
tax
assets.
As
a
result,
we
released
the
majority
of
the
valuation
allowance
in
2015.
We
significantly
improved
ouroperating
performance
in
2015,
emerged
from
cumulative
losses
in
recent
years
to
a
cumulative
profit
position
and
project
taxable
income
in
future
years.
Whilewe
believe
the
assumptions
included
in
our
projections
of
future
taxable
income
are
reasonable,
if
the
actual
results
vary
from
expected
results
due
to
unforeseenchanges
in
the
economy
or
mortgage
industry,
or
other
factors,
we
may
need
to
make
future
adjustments
to
the
valuation
allowance
for
all,
or
a
portion,
of
the
netdeferred
tax
assets.At
December
31,
2016
and
2015,
we
recorded
a
partial
valuation
allowance
of
$2.1
million
and
$2.3
million
,
respectively,
primarily
related
to
state
netoperating
losses,
which
we
do
not
expect
to
be
able
to
utilize
prior
to
expiration.Stock-Based CompensationThe
forms
of
stock-based
awards
granted
to
our
employees
are
principally
restricted
stock
units
("RSUs"),
RSUs
with
performance
conditions,
restricted
stockand
stock
options.
The
value
of
RSU
and
restricted
stock
awards
is
measured
at
their
grant
dates
as
the
fair
value
of
common
stock
and
amortized
ratably
as
non-cash
compensation
expense
over
the
vesting
term.
The
value
of
RSUs
with
performance
conditions
is
measured
at
their
grant
dates
as
the
fair
value
of
commonstock
and
recognized
as
non-cash
compensation
expense,
using
a
graded
vesting
attribution
model
that
considers
the
probability
of
the
targets
being
achieved.
Thevalue
of
stock
options
issued,
as
discussed
in
Note

9
—Stock-Based
Compensation
to
the
consolidated
financial
statements
included
elsewhere
in
this
report,
isestimated
using
a
Black-Scholes
option
pricing
model.
If
an
award
is
modified,
we
determine
if
the
modification
requires
a
new
calculation
of
fair
value
or
changein
the
vesting
term
of
the
award.As
of
December
31,
2016
,
there
was
approximately
$7.8
million
,
$7.5
million
,
$1.7
million
and
$0.1
million
of
unrecognized
compensation
cost
related
tostock
options,
RSUs,
RSUs
with
performance
conditions
and
restricted
stock,
respectively.
These
costs
are
expected
to
be
recognized
over
a
weighted-averageperiod
of
approximately
1.5
years

for
stock
options,
1.9
years

for
RSUs,
1.9
years
for
RSUs
with
performance
conditions
and
0.4
years

for
restricted
stock.Recoverability of Long-Lived AssetsWe
review
the
carrying
value
of
all
long-lived
assets,
primarily
property
and
equipment,
and
definite-lived
intangible
assets
for
impairment
whenever
eventsor
changes
in
circumstances
indicate
that
the
carrying
value
of
an
asset
may
be
impaired.
Impairment
is
considered
to
have
occurred
whenever
the
carrying
valueof
a
long-lived
asset
cannot
be
recovered
from
cash
flows
that
are
expected
to
result
from
the
use
and
eventual
disposition
of
the
asset.
This
recoverability
testrequires
us
to
make
assumptions
and
judgments
related
to
factors
used
in
a
calculation
of
undiscounted
cash
flows,
including,
but
not
limited
to,
management’sexpectations
for
future
operations
and
projected
cash
flows.
The
key
assumptions
used
in
this
calculation
include
Adjusted
EBITDA,
the
remaining
useful
lives
ofthe
primary
cash
flow
generating
asset
in
the
asset
group
and,
to
a
lesser
extent,
the
deduction
of
capital
expenditures
and
taxes
paid
in
cash
to
arrive
at
net
cashflows.During
the
fourth
quarter
of
2014,
we
lost
key
customers
and
experienced
a
decline
in
revenue
for
a
certain
product
included
within
the
Education
business.Accordingly,
in
early
2015,
we
amended
our
strategic
course
for
this
product,
resulting
in
a
reduction
in
anticipated
future
cash
flows.
At
December
31,
2014,
wereviewed
the
long-lived
assets
associated
with
this
product
for
recoverability,
resulting
in
an
impairment
charge
to
customer
lists
and
internally
developed
softwareof
approximately
$0.8
million.
The
fair
value
of
the
long-lived
assets
was
determined
using
a
discounted
cash
flow
model.
The
impairment
charge
is
included
ingeneral
and
administrative
expense
on
the
accompanying
consolidated
statement
of
operations
and
comprehensive
income.The
value
of
long-lived
assets
subject
to
assessment
for
impairment
is
$97.0
million
at
December
31,
2016
.Business AcquisitionsWhen
we
acquire
businesses,
we
allocate
the
purchase
price
to
tangible
assets
and
liabilities
and
identifiable
intangible
assets
acquired
at
their
acquisition
datefair
values.
Any
residual
purchase
price
is
recorded
as
goodwill.
We
also
estimate
the
fair
value
of
any
contingent
consideration
using
Level
3
unobservable
inputs.Our
estimates
of
fair
value
are
based
upon
assumptions
believed
to
be
reasonable
but
which
are
uncertain
and
involve
significant
judgments
by
management.We
reassess
the
fair
value
of
contingent
consideration
quarterly
until
the
contingency
is
resolved,
and
changes
in
the
fair
value
are
recorded
in
operatingincome
(expense)
in
the
consolidated
statements
of
operations.38Table of ContentsNew Accounting PronouncementsSee Note

2
—Significant
Accounting
Policies
to
the
consolidated
financial
statements
included
elsewhere
in
this
report
for
a
description
of
recent
accountingpronouncements.ITEM 7A.   Quantitative
and
Qualitative
Disclosures
about
Market
RiskOther
than
our
Revolving
Credit
Facility,
which
currently
has
no
borrowings
outstanding,
we
do
not
have
any
financial
instruments
that
are
exposed
tosignificant
market
risk.
We
maintain
our
cash
and
cash
equivalents
in
bank
deposits
and
short-term,
highly
liquid
money
market
investments.
A
hypothetical
100-basis
point
increase
or
decrease
in
market
interest
rates
would
not
have
a
material
impact
on
the
fair
value
of
our
cash
equivalents
securities,
or
our
earnings
onsuch
cash
equivalents,
but
would
have
an
effect
on
the
interest
paid
on
borrowings
under
the
Revolving
Credit
Facility,
if
any.
As
of
February
28,
2017
,
there
wereno
borrowings
under
the
Revolving
Credit
Facility.Fluctuations
in
interest
rates
affect
consumer
demand
for
new
mortgages
and
the
level
of
refinancing
activity
which,
in
turn,
affects
lender
demand
formortgage
leads.
Typically,
a
decline
in
mortgage
interest
rates
will
lead
to
reduced
lender
demand
for
leads
from
third-party
sources,
as
there
are
more
consumersin
the
marketplace
seeking
refinancings
and,
accordingly,
lenders
receive
more
organic
lead
volume.
Conversely,
an
increase
in
mortgage
interest
rates
willtypically
lead
to
an
increase
in
lender
demand
for
third-party
leads,
as
there
are
fewer
consumers
in
the
marketplace
and,
accordingly,
the
supply
of
organicmortgage
lead
volume
decreases.39Table of ContentsITEM 8.   Financial
Statements
and
Supplementary
DataINDEX TO FINANCIAL STATEMENTS  PageNumberLENDINGTREE,
INC.
AND
SUBSIDIARIES:Report
of
Independent
Registered
Public
Accounting
Firm41
CONSOLIDATED
FINANCIAL
STATEMENTS:

Consolidated
Statements
of
Operations

and
Comprehensive
Income42
Consolidated
Balance
Sheets43
Consolidated
Statements
of
Shareholders'
Equity44
Consolidated
Statements
of
Cash
Flows45
Notes
to
Consolidated
Financial
Statements4640Table of ContentsReport of Independent Registered Public Accounting FirmTo
the
Board
of
Directors
and
Shareholders
of
LendingTree,
Inc.In
our
opinion,
the
accompanying
consolidated
balance
sheets
and
the
related
consolidated
statements
of
operations
and
comprehensive
income,
of
shareholders’equity
and
of
cash
flows
present
fairly,
in
all
material
respects,
the
financial
position
of
LendingTree,
Inc.
and
its
subsidiaries
at
December
31,
2016
and
December31,
2015,
and
the
results
of
their
operations
and
their
cash
flows
for
each
of
the
three
years
in
the
period
ended
December
31,
2016
in
conformity
with
accountingprinciples
generally
accepted
in
the
United
States
of
America.
Also
in
our
opinion,
the
Company
maintained,
in
all
material
respects,
effective
internal
control
overfinancial
reporting
as
of
December
31,
2016,
based
on
criteria
established
in
Internal Control - Integrated Framework (2013) issued
by
the
Committee
ofSponsoring
Organizations
of
the
Treadway
Commission
(COSO).
The
Company's
management
is
responsible
for
these
financial
statements,
for
maintainingeffective
internal
control
over
financial
reporting
and
for
its
assessment
of
the
effectiveness
of
internal
control
over
financial
reporting,
included
in
Management'sReport
on
Internal
Control
over
Financial
Reporting
appearing
under
Item
9A.
Our
responsibility
is
to
express
opinions
on
these
financial
statements
and
on
theCompany's
internal
control
over
financial
reporting
based
on
our
integrated
audits.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PublicCompany
Accounting
Oversight
Board
(United
States).
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whetherthe
financial
statements
are
free
of
material
misstatement
and
whether
effective
internal
control
over
financial
reporting
was
maintained
in
all
material
respects.Our
audits
of
the
financial
statements
included
examining,
on
a
test
basis,
evidence
supporting
the
amounts
and
disclosures
in
the
financial
statements,
assessingthe
accounting
principles
used
and
significant
estimates
made
by
management,
and
evaluating
the
overall
financial
statement
presentation.
Our
audit
of
internalcontrol
over
financial
reporting
included
obtaining
an
understanding
of
internal
control
over
financial
reporting,
assessing
the
risk
that
a
material
weakness
exists,and
testing
and
evaluating
the
design
and
operating
effectiveness
of
internal
control
based
on
the
assessed
risk.
Our
audits
also
included
performing
such
otherprocedures
as
we
considered
necessary
in
the
circumstances.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinions.A
company’s
internal
control
over
financial
reporting
is
a
process
designed
to
provide
reasonable
assurance
regarding
the
reliability
of
financial
reporting
and
thepreparation
of
financial
statements
for
external
purposes
in
accordance
with
generally
accepted
accounting
principles.
A
company’s
internal
control
over
financialreporting
includes
those
policies
and
procedures
that
(i)
pertain
to
the
maintenance
of
records
that,
in
reasonable
detail,
accurately
and
fairly
reflect
the
transactionsand
dispositions
of
the
assets
of
the
company;
(ii)
provide
reasonable
assurance
that
transactions
are
recorded
as
necessary
to
permit
preparation
of
financialstatements
in
accordance
with
generally
accepted
accounting
principles,
and
that
receipts
and
expenditures
of
the
company
are
being
made
only
in
accordance
withauthorizations
of
management
and
directors
of
the
company;
and
(iii)
provide
reasonable
assurance
regarding
prevention
or
timely
detection
of
unauthorizedacquisition,
use,
or
disposition
of
the
company’s
assets
that
could
have
a
material
effect
on
the
financial
statements.Because
of
its
inherent
limitations,
internal
control
over
financial
reporting
may
not
prevent
or
detect
misstatements.
Also,
projections
of
any
evaluation
ofeffectiveness
to
future
periods
are
subject
to
the
risk
that
controls
may
become
inadequate
because
of
changes
in
conditions,
or
that
the
degree
of
compliance
withthe
policies
or
procedures
may
deteriorate./s/
PricewaterhouseCoopers
LLPCharlotte,
North
CarolinaFebruary
28,
201741Table of ContentsLENDINGTREE, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME Year Ended December 31, 2016
2015
2014 (in
thousands,
except
per
share
amounts)Revenue$384,402$254,216
$167,350Costs
and
expenses:
Cost
of
revenue
(exclusive of depreciation and amortization shown separately below)13,7649,370
7,903Selling
and
marketing
expense261,100172,849
112,704General
and
administrative
expense37,22730,030
25,883Product
development13,76110,485
7,457Depreciation4,9443,008
3,245Amortization
of
intangibles1,243149
136Restructuring
and
severance122422
373Litigation
settlements
and
contingencies129(611)
10,618Total costs and expenses332,290225,702
168,319Operating income (loss)52,11228,514
(969)Other
income
(expense),
net:


Interest
expense,
net(561)(171)
(2)Other
income23
—
—Income (loss) before income taxes51,57428,343
(971)Income
tax
(expense)
benefit(20,366)22,973
484Net income (loss) from continuing operations31,20851,316
(487)(Loss) income from discontinued operations(3,714)(3,269)
9,849Net income and comprehensive income$27,494$48,047
$9,362
Weighted average shares outstanding:
Basic11,81211,516
11,188Diluted12,77312,541
11,188Income (loss) per share from continuing operations:


Basic$2.64$4.46
$(0.04)Diluted$2.44$4.09
$(0.04)(Loss) income per share from discontinued operations:



Basic$(0.31)$(0.28)
$0.88Diluted$(0.29)$(0.26)
$0.88 Net income per share:



Basic$2.33$4.17
$0.84Diluted$2.15$3.83
$0.84The
accompanying
notes
to
consolidated
financial
statements
are
an
integral
part
of
these
statements.42Table of ContentsLENDINGTREE, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSDecember 31, 2016December 31, 2015 (in
thousands,
except
par
valueand
share
amounts)ASSETS:

Cash
and
cash
equivalents$91,131$206,975Restricted
cash
and
cash
equivalents4,0896,541Accounts
receivable
(net
of
allowance
of
$1,059
and
$606,
respectively)41,38229,873Prepaid
and
other
current
assets4,0212,085Current
assets
of
discontinued
operations—110Total current assets140,623245,584Property
and
equipment,
net35,4629,415Goodwill56,4573,632Intangible
assets,
net71,68410,992Deferred
income
tax
assets14,610
20,977Other
non-current
assets8101,039Non-current
assets
of
discontinued
operations3,7814,142Total assets$323,427$295,781LIABILITIES:

Accounts
payable,
trade$5,593$5,741Accrued
expenses
and
other
current
liabilities49,40334,885Current
liabilities
of
discontinued
operations
(Note
18)11,71113,401Total current liabilities66,70754,027Contingent
considerations23,600—Other
non-current
liabilities1,685586Non-current
liabilities
of
discontinued
operations—26Total liabilities91,99254,639Commitments
and
contingencies
(Notes
12
and
13)SHAREHOLDERS' EQUITY:

Preferred
stock
$.01
par
value;
5,000,000
shares
authorized;
none
issued
or
outstanding——Common
stock
$.01
par
value;
50,000,000
shares
authorized;
13,955,378
and
13,865,620
shares
issued,respectively,
and
11,791,633
and
12,392,093
shares
outstanding,
respectively140139Additional
paid-in
capital1,018,0101,006,688Accumulated
deficit(722,630)(750,124)Treasury
stock
2,163,745
and
1,473,527
shares,
respectively(64,085)(15,561)Total shareholders' equity231,435241,142Total liabilities and shareholders' equity$323,427$295,781


The
accompanying
notes
to
consolidated
financial
statements
are
an
integral
part
of
these
statements.43Table of ContentsLENDINGTREE, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY  
Common Stock
 
 
Treasury Stock Total
Numberof Shares
Amount
AdditionalPaid-inCapital
AccumulatedDeficit
Numberof Shares
Amount (in
thousands)Balance as of December 31, 2013$87,00812,620$126$907,148$(807,533)1,369$(12,733)Net
income
and
comprehensive
income9,362
—
—
—
9,362
—
—Non-cash
compensation7,446——7,446———Purchase
of
treasury
stock(2,610)————99(2,610)Dividends(28)——(28)———Issuance
of
common
stock
for
stockoptions,
restricted
stock
awards
andrestricted
stock
units,
net
of
withholdingtaxes(4,812)2353(4,815)———Balance as of December 31, 2014$96,36612,855$129$909,751$(798,171)1,468$(15,343)Net
income
and
comprehensive
income48,047
—
—
—
48,047
—
—Non-cash
compensation8,508——8,508———Purchase
of
treasury
stock(218)————6(218)Dividends(11)——(11)———Issuance
of
common
stock
for
stockoptions,
restricted
stock
awards
andrestricted
stock
units,
net
of
withholdingtaxes(7,613)1581(7,614)———Tax
benefit
from
stock-based
awardactivity4,601
—
—
4,601
—
—
—Proceeds
from
equity
offering,
net
ofoffering
costs91,462
853
9
91,453
—
—
—Balance as of December 31, 2015$241,14213,866$139$1,006,688$(750,124)1,474$(15,561)Net
income
and
comprehensive
income27,494
—
—
—
27,494
—
—Non-cash
compensation9,647——9,647———Purchase
of
treasury
stock(48,524)————690(48,524)Issuance
of
common
stock
for
stockoptions,
restricted
stock
awards
andrestricted
stock
units,
net
of
withholdingtaxes(4,084)891(4,085)———Tax
benefit
from
stock-based
awardactivity5,760
—
—
5,760
—
—
—Balance as of December 31, 2016$231,43513,955$140$1,018,010$(722,630)2,164$(64,085)


The
accompanying
notes
to
consolidated
financial
statements
are
an
integral
part
of
these
statements.44Table of ContentsLENDINGTREE, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
201620152014
(in
thousands)Cash
flows
from
operating
activities
attributable
to
continuing
operations:

Net income and comprehensive income$27,494$48,047$9,362Less:
Loss
(income)
from
discontinued
operations,
net
of
tax3,7143,269(9,849)Income
(loss)
from
continuing
operations31,20851,316(487)Adjustments
to
reconcile
income
(loss)
from
continuing
operations
to
net
cash
provided
by
operating
activities
attributable
tocontinuing
operations:

Loss
on
disposal
of
fixed
assets640748282Impairment
of
long-lived
assets——805Amortization
of
intangibles1,243149136Depreciation4,9443,0083,245Non-cash
compensation
expense9,6478,5087,446Deferred
income
taxes6,367(29,969)106Excess
tax
benefit
from
stock-based
award
activity(5,760)(4,601)—Bad
debt
expense515337206Amortization
of
debt
issuance
costs24547—Changes
in
current
assets
and
liabilities:
Accounts
receivable(8,361)(16,598)(1,228)Prepaid
and
other
current
assets(1,558)(874)(84)Accounts
payable,
accrued
expenses
and
other
current
liabilities4,76913,689(1,935)Income
taxes
payable13,3856,247740Other,
net1,170577(157)Net cash provided by operating activities attributable to continuing operations58,45432,5849,075Cash
flows
from
investing
activities
attributable
to
continuing
operations:

Capital
expenditures(31,955)(7,237)(3,856)Acquisition
of
intangible
assets(2,030)——Acquisition
of
CompareCards(81,182)——Acquisition
of
other
businesses(4,500)(37)(740)Decrease
in
restricted
cash2,45212,1757,300Net cash (used in) provided by investing activities attributable to continuing operations(117,215)4,9012,704Cash
flows
from
financing
activities
attributable
to
continuing
operations:

Payments
related
to
net-share
settlement
of
stock
-based
compensation,
net
of
proceeds
from
exercise
of
stock
options(4,085)(7,612)(4,812)Proceeds
from
equity
offering,
net
of
offering
costs(23)91,484—Payment
of
debt
issuance
costs(8)(1,215)—Excess
tax
benefit
from
stock-based
award
activity5,7604,601—Purchase
of
treasury
stock(48,524)(218)(2,610)Dividends—(131)(229)Net cash (used in) provided by financing activities attributable to continuing operations(46,880)86,909(7,651)Total cash (used in) provided by continuing operations(105,641)124,3944,128Discontinued
operations:Net
cash
used
in
operating
activities
attributable
to
discontinued
operations(10,203)(3,631)(9,583)Total cash used in discontinued operations(10,203)(3,631)(9,583)Net (decrease) increase in cash and cash equivalents(115,844)120,763(5,455)Cash
and
cash
equivalents
at
beginning
of
period206,97586,21291,667Cash and cash equivalents at end of period$91,131$206,975$86,212Supplemental cash flow information:Interest
paid$320$60$2Income
tax
payments3,0957033Income
tax
refunds(22)(96)(779)


The
accompanying
notes
to
consolidated
financial
statements
are
an
integral
part
of
these
statements.45LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 1—ORGANIZATIONCompany OverviewLendingTree,
Inc.
("LendingTree"
or
the
"Company"),
is
the
parent
of
LendingTree,
LLC
and
several
companies
owned
by
LendingTree,
LLC.LendingTree
operates
what
it
believes
to
be
the
leading
online
loan
marketplace
for
consumers
seeking
loans
and
other
credit-based
offerings.
The
Companyoffers
consumers
tools
and
resources,
including
free
credit
scores,
that
facilitate
comparison-shopping
for
mortgage
loans,
home
equity
loans,
reverse
mortgageloans,
auto
loans,
credit
cards,
personal
loans,
student
loans,
small
business
loans
and
other
related
offerings.
The
Company
primarily
seeks
to
match
in-marketconsumers
with
multiple
lenders
on
its
marketplace
who
can
provide
them
with
competing
quotes
for
the
loans
or
credit-based
offerings
they
are
seeking.
TheCompany
also
serves
as
a
valued
partner
to
lenders
seeking
an
efficient,
scalable
and
flexible
source
of
customer
acquisition
with
directly
measurable
benefits,
bymatching
the
consumer
loan
inquiries
it
generates
with
these
lenders.The
consolidated
financial
statements
include
the
accounts
of
LendingTree
and
all
its
wholly-owned
entities.
Intercompany
transactions
and
accounts
havebeen
eliminated.Discontinued OperationsThe
businesses
of
RealEstate.com,
REALTORS®
(which
represent
the
former
Real
Estate
segment)
and
LendingTree
Loans
are
presented
as
discontinuedoperations
in
the
accompanying
consolidated
balance
sheets,
consolidated
statements
of
operations
and
comprehensive
income
and
consolidated
cash
flows
for
allperiods
presented.
The
notes
accompanying
these
consolidated
financial
statements
reflect
the
Company's
continuing
operations
and,
unless
otherwise
noted,exclude
information
related
to
the
discontinued
operations.
See Note
18
— Discontinued
Operations
for
additional
information.Basis of PresentationThe
accompanying
consolidated
financial
statements
have
been
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
ofAmerica
("GAAP")
and
pursuant
to
the
rules
and
regulations
of
the
U.S.
Securities
and
Exchange
Commission
("SEC").NOTE 2—SIGNIFICANT ACCOUNTING POLICIESRevenue RecognitionThe
Company
derives
its
revenue
primarily
from
match
fees
and
closing
fees.
Revenue
within
the
mortgage
product
category
is
primarily
generated
frommatch
fees
paid
by
network
lenders
that
receive
a
loan
request,
and
in
some
cases
upfront
fees
or
clicks
or
call
transfers.
In
addition
to
match
and
other
upfrontfees,
revenue
within
the
non-mortgage
product
category
is
also
generated
from
closing
fees
and
approval
fees.Match
fees
are
earned
through
the
delivery
of
qualified
loan
requests
that
originated
through
the
Company's
websites
or
affiliates.
The
Company
recognizesrevenue
when
persuasive
evidence
of
an
arrangement
exists,
delivery
has
occurred,
the
fee
is
fixed
or
determinable
and
collectability
is
reasonably
assured.Delivery
is
deemed
to
have
occurred
at
the
time
a
loan
request
is
delivered
to
the
customer,
provided
that
no
significant
obligations
remain.Closing
fees
are
derived
from
lenders
on
certain
auto,
business,
personal
loan
types
and
student
loans
when
a
transaction
is
closed
with
the
consumer.
Closedloan
fees
and
closed
sale
fees
are
recognized
at
the
time
the
lender
reports
the
closed
loan
or
closed
sale
to
the
Company,
which
could
be
several
months
after
theoriginal
request
is
transmitted.
For
consumer
credit
card
loan
requests,
the
Company
sends
traffic
to
issuers
and
recognizes
revenue
at
the
time
of
card
approval.Cash and Cash EquivalentsCash
and
cash
equivalents
include
cash
and
short-term,
highly
liquid
money
market
investments
with
original
maturities
of
three
months
or
less.46LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSRestricted CashCash
escrowed
or
contractually
restricted
for
a
specific
purpose
is
designated
as
restricted
cash.Accounts ReceivableAccounts
receivable
are
stated
at
amounts
due
from
customers,
net
of
an
allowance
for
doubtful
accounts.The
Company
determines
its
allowance
for
doubtful
accounts
by
considering
a
number
of
factors,
including
the
length
of
time
accounts
receivable
are
pastdue,
previous
loss
history
and
the
specific
customer's
current
ability
to
pay
its
obligation.
Accounts
receivable
are
considered
past
due
when
they
are
outstandinglonger
than
the
contractual
payment
terms.
Accounts
receivable
are
written
off
when
management
deems
them
uncollectible.A
reconciliation
of
the
beginning
and
ending
balances
of
the
allowance
for
doubtful
accounts
is
as
follows
(in thousands) : Year Ended December 31, 2016
2015
2014Balance, beginning of the period$606
$349
$408Charges
to
earnings515
337
206Write-off
of
uncollectible
accounts
receivable(62)
(80)
(265)Balance, end of the period$1,059
$606
$349Loan Loss Obligations (Discontinued Operations)The
Company's
Home
Loan
Center,
Inc.
("HLC")
subsidiary,
which
during
its
period
of
active
operation
primarily
conducted
business
as
LendingTree
Loans,sold
loans
it
originated
to
investors
on
a
servicing-released
basis
and
the
risk
of
loss
or
default
by
the
borrower
was
generally
transferred
to
the
investor.
However,LendingTree
Loans
was
required
by
these
investors
to
make
certain
representations
relating
to
credit
information,
loan
documentation
and
collateral.
To
the
extentLendingTree
Loans
did
not
comply
with
such
representations
or
there
are
early
payment
defaults,
LendingTree
Loans
may
be
required
to
repurchase
loans
orindemnify
the
investors
for
any
losses
from
borrower
defaults.
LendingTree
Loans
maintains
a
liability
for
the
estimated
exposure
relating
to
such
contingentobligations
and
changes
to
the
estimate
are
recorded
in
income
from
discontinued
operations
in
the
periods
they
occur.The
Company
estimates
the
liability
for
loan
losses
using
a
settlement
discount
framework.
This
approach
estimates
the
lifetime
losses
on
the
population
ofremaining
loans
originated
and
sold
by
LendingTree
Loans
using
actual
defaults
for
loans
with
similar
characteristics
and
projected
future
defaults.
It
alsoconsiders
the
likelihood
of
claims
expected
due
to
alleged
breaches
of
representations
and
warranties
made
by
LendingTree
Loans
and
the
percentage
of
thoseclaims
investors
estimate
LendingTree
Loans
may
agree
to
repurchase.
The
Company
then
applies
a
settlement
discount
factor
to
the
result
of
the
foregoing
toreflect
publicly
announced
bulk
settlements
for
similar
loan
types
and
vintages,
the
Company's
own
settlement
experience,
as
well
as
LendingTree
Loans'
non-operating
status,
in
order
to
estimate
a
range
of
potential
liability.
Changes
to
any
one
of
these
factors
could
significantly
impact
the
estimate
of
the
liability
andcould
have
a
material
impact
on
the
Company's
results
of
operations
for
any
particular
period.
See Note
18
—Discontinued
Operations—LendingTree
Loans—Loan
Loss
Obligations
for
additional
information
on
the
loan
loss
reserve.Segment ReportingThe
Company
has
one
reportable
segment.Property and EquipmentProperty
and
equipment,
including
internally-developed
software
and
significant
improvements,
are
recorded
at
cost
less
accumulated
depreciation.Acquisition
and
construction
costs
for
land
and
building
is
capitalized
and
depreciated
over
the
applicable
useful
lives.
Due
to
the
rapid
advancements
intechnology
and
evolution
of
company
products,
all
internally-developed
software
is
written-off
at
the
end
of
its
useful
life.
Repairs
and
maintenance
and
any
gainsor
losses
on
dispositions
are
recognized
as
incurred
in
current
operations.47LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDepreciation
is
recorded
on
a
straight-line
basis
to
allocate
the
cost
of
depreciable
assets
to
operations
over
their
estimated
service
lives.
The
following
tablepresents
the
estimated
useful
lives
for
each
asset
category:Asset CategoryEstimated Useful LivesLandN/ABuilding34
yearsSite
Improvements1
to
15
yearsComputer
equipment
and
capitalized
software1
to
5
yearsLeasehold
improvementsLesser
of
asset
life
or
life
of
leaseFurniture
and
other
equipment3
to
7
yearsAircraft
and
automobile5
to
10
yearsSoftware Development CostsSoftware
development
costs
primarily
include
internal
and
external
labor
expenses
incurred
to
develop
the
software
that
powers
the
Company's
websites.Certain
costs
incurred
during
the
application
development
stage
are
capitalized
based
on
specific
activities
tracked,
while
costs
incurred
during
the
preliminaryproject
stage
and
post-implementation/operation
stage
are
expensed
as
incurred.
Capitalized
software
development
costs
are
amortized
over
an
estimated
useful
lifeof
one
to
three
years
.Goodwill and Indefinite-Lived Intangible AssetsGoodwill
acquired
in
business
combinations
is
assigned
to
the
reporting
units
that
are
expected
to
benefit
from
the
combination
as
of
the
acquisition
date.Goodwill
and
indefinite-lived
intangible
assets,
primarily
the
Company's
trade
names
and
trademarks,
are
not
amortized.
Rather,
these
assets
are
tested
annually
forimpairment
as
of
October
1,
or
more
frequently
upon
the
occurrence
of
certain
events
or
substantive
changes
in
circumstances.As
part
of
its
annual
impairment
testing
of
goodwill
and
indefinite-lived
intangible
assets,
in
each
instance,
the
Company
may
elect
to
assess
qualitativefactors
as
a
basis
for
determining
whether
it
is
necessary
to
perform
the
traditional
quantitative
impairment
testing.
If
the
Company’s
assessment
of
thesequalitative
factors
indicates
that
it
is
not
more
likely
than
not
that
the
fair
value
of
the
reporting
unit
or
indefinite-lived
intangible
asset
is
less
than
its
carryingvalue,
then
no
further
testing
is
required.
Otherwise,
the
goodwill
reporting
unit
or
long-lived
intangible
assets,
as
applicable,
must
be
quantitatively
tested
forimpairment.The
quantitative
test
for
goodwill
impairment
is
determined
using
a
two-step
process.
The
first
step
is
to
compare
the
fair
value
of
a
reporting
unit
with
itscarrying
amount,
including
goodwill.
In
performing
the
first
step,
the
Company
determines
the
fair
value
of
its
reporting
units
by
using
a
market
approach
and
adiscounted
cash
flow
("DCF")
analysis.
Determining
fair
value
using
a
DCF
analysis
requires
the
exercise
of
significant
judgments,
including
judgments
aboutappropriate
discount
rates,
perpetual
growth
rates
and
the
amount
and
timing
of
expected
future
cash
flows.
If
the
fair
value
of
a
reporting
unit
exceeds
its
carryingamount,
goodwill
of
the
reporting
unit
is
not
impaired
and
the
second
step
of
the
impairment
test
is
not
required.
If
the
carrying
amount
of
a
reporting
unit
exceedsits
fair
value,
the
second
step
of
the
goodwill
impairment
test
is
required
to
be
performed
to
measure
the
amount
of
impairment,
if
any.
The
second
step
of
thegoodwill
impairment
test
compares
the
implied
fair
value
of
the
reporting
unit's
goodwill
with
the
carrying
amount
of
that
goodwill.
The
implied
fair
value
ofgoodwill
is
determined
in
the
same
manner
as
the
amount
of
goodwill
recognized
in
a
business
combination.
If
the
carrying
amount
of
the
reporting
unit's
goodwillexceeds
the
implied
fair
value
of
that
goodwill,
an
impairment
loss
is
recognized
in
an
amount
equal
to
that
excess.The
quantitative
impairment
test
for
indefinite-lived
intangible
assets
involves
a
comparison
of
the
estimated
fair
value
of
the
intangible
asset
with
its
carryingvalue.
If
the
carrying
value
of
the
indefinite-lived
intangible
asset
exceeds
its
estimated
fair
value,
an
impairment
loss
is
recognized
in
an
amount
equal
to
thatexcess.
The
estimates
of
fair
value
of
indefinite-lived
intangible
assets
are
determined
using
a
DCF
valuation
analysis
that
employs
a
relief-from-royaltymethodology
in
estimating
the
fair
value
of
trade
names
and
trademarks.
Significant
judgments
inherent
in
this
analysis
include
the
determination
of
royalty
rates,discount
rates,
perpetual
growth
rates
and
the
amount
and
timing
of
future
revenues.For
the
October
1,
2016
and
2015
annual
impairment
tests
of
goodwill
and
indefinite-lived
intangible
assets,
the
Company
elected
to
perform
qualitativeassessments
as
a
precursor
to
the
traditional
quantitative
tests.
Results
of
the
October
1,
2016
and
2015
annual
impairment
tests
indicated
that
it
is
not
more
likelythan
not
that
the
fair
value
of
the
goodwill
and
the
indefinite-lived
intangible
assets
were
each
less
than
their
respective
carrying
values.
Accordingly,
no
furthertesting
was
required.48LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSLong-Lived Assets and Intangible Assets with Definite LivesLong-lived
assets
include
property
and
equipment
and
intangible
assets
with
definite
lives.
Amortization
of
definite-lived
intangible
assets
is
recorded
on
astraight-line
basis
over
their
estimated
lives.Long-lived
assets
are
tested
for
recoverability
whenever
events
or
changes
in
circumstances
indicate
that
their
carrying
amounts
may
not
be
recoverable.
Thecarrying
amount
of
a
long-lived
asset
is
not
recoverable
if
it
exceeds
the
sum
of
the
undiscounted
cash
flows
expected
to
result
from
the
use
and
eventualdisposition
of
the
asset.
If
the
carrying
amount
is
deemed
to
not
be
recoverable,
an
impairment
loss
is
recorded
as
the
amount
by
which
the
carrying
amount
of
thelong-lived
asset
exceeds
its
fair
value.At
December
31,
2016
and
2015,
the
Company
performed
its
annual
review
of
impairment
triggering
events
for
long-lived
assets
and
determined
that
atriggering
event
had
not
occurred.During
the
fourth
quarter
of
2014,
the
Company
lost
key
customers
and
experienced
a
decline
in
revenue
for
a
certain
product
included
within
the
Educationbusiness.
Accordingly,
in
early
2015,
the
Company
amended
its
strategic
course
for
this
product,
resulting
in
a
reduction
in
anticipated
future
cash
flows.
AtDecember
31,
2014,
the
Company
reviewed
the
long-lived
assets
associated
with
this
product
for
recoverability,
resulting
in
an
impairment
charge
to
customer
listsand
internally
developed
software
of
approximately
$0.8
million
.
The
fair
value
of
the
long-lived
assets
was
determined
using
a
discounted
cash
flow
model.
Theimpairment
charge
is
included
in
general
and
administrative
expense
on
the
accompanying
consolidated
statement
of
operations
and
comprehensive
income.Fair Value MeasurementsThe
Company
categorizes
its
assets
and
liabilities
measured
at
fair
value
into
a
fair
value
hierarchy
that
prioritizes
the
assumptions
used
in
pricing
the
asset
orliability
into
the
following
three
levels:•Level 1 :
Observable
inputs,
such
as
quoted
prices
for
identical
assets
and
liabilities
in
active
markets
obtained
from
independent
sources.•Level 2 :
Other
inputs
that
are
observable
directly
or
indirectly,
such
as
quoted
prices
for
similar
assets
or
liabilities
in
active
markets,
quoted
prices
foridentical
or
similar
assets
or
liabilities
in
markets
that
are
not
active
and
inputs
that
are
derived
principally
from
or
corroborated
by
observable
marketdata.•Level 3 :
Unobservable
inputs
for
which
there
is
little
or
no
market
data
and
which
require
the
Company
to
develop
its
own
assumptions,
based
on
thebest
information
available
under
the
circumstances,
about
the
assumptions
market
participants
would
use
in
pricing
the
asset
or
liability.The
Company's
non-financial
assets,
such
as
goodwill,
intangible
assets
and
property
and
equipment
are
measured
at
fair
value
when
there
is
an
indicator
ofimpairment
and
recorded
at
fair
value
only
when
an
impairment
charge
is
recognized.
Such
fair
value
measurements
are
based
predominantly
on
Level
3
inputs.Contingent
consideration
payments
related
to
acquisitions
are
measured
at
fair
value
each
reporting
period
using
Level
3
inputs.
The
Company's
estimates
offair
value
are
based
upon
assumptions
believed
to
be
reasonable
but
which
are
uncertain
and
involve
significant
judgments
by
management.
Any
changes
in
thefair
value
of
these
contingent
consideration
payments
are
included
in
operating
income
(expense)
in
the
consolidated
statements
of
operations.Cost of RevenueCost
of
revenue
consists
primarily
of
expenses
associated
with
compensation
and
other
employee-related
costs
(including
stock-based
compensation)
relatedto
internally-operated
call
centers,
third-party
customer
call
center
fees,
credit
scoring
fees,
credit
card
fees,
website
network
hosting
and
server
fees.Product DevelopmentProduct
development
expense
consists
primarily
of
compensation
and
other
employee-related
costs
(including
stock-based
compensation)
and
third-partylabor
costs
that
are
not
capitalized,
for
employees
and
consultants
engaged
in
the
design,
development,
testing
and
enhancement
of
technology.49LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSAdvertisingAdvertising
costs
are
expensed
in
the
period
incurred
(except
for
production
costs
which
are
initially
capitalized
and
then
recognized
as
expense
when
theadvertisement
first
runs)
and
principally
represent
offline
costs,
including
television,
print
and
radio
advertising,
and
online
advertising
costs,
including
fees
paid
tosearch
engines
and
distribution
partners.
Advertising
expense
was
$243.2
million
,
$159.2
million
and
$102.2
million
for
the
years
ended
December
31,
2016
,2015
and
2014
,
respectively,
and
is
included
in
selling
and
marketing
expense
on
the
consolidated
statements
of
operations
and
comprehensive
income.Income TaxesIncome
taxes
are
accounted
for
under
the
liability
method,
and
deferred
tax
assets
and
liabilities
are
recognized
for
the
future
tax
consequences
attributable
todifferences
between
the
financial
statement
carrying
amounts
of
existing
assets
and
liabilities
and
their
respective
tax
bases.
In
estimating
future
tax
consequences,all
expected
future
events
are
considered.
Deferred
tax
assets
and
liabilities
are
measured
using
enacted
tax
rates
in
effect
for
the
year
in
which
those
temporarydifferences
are
expected
to
be
recovered
or
settled.
A
valuation
allowance
is
provided
on
deferred
tax
assets
if
it
is
determined
that
it
is
more
likely
than
not
thatthe
deferred
tax
asset
will
not
be
realized.
Interest
is
recorded
on
potential
tax
contingencies
as
a
component
of
income
tax
expense
and
recorded
net
of
anyapplicable
related
income
tax
benefit.
For
the
years
ended
December
31,
2016
and
2015,
the
Company
followed
the
incremental
or
"with"
and
"without"
approachto
intraperiod
tax
allocation
for
determination
of
the
amount
of
tax
benefit
to
allocate
to
continuing
operations
as
prescribed
in
ASC
740-20-45-7
with
theexception
of
the
allocation
of
the
release
of
the
valuation
allowance
for
deferred
tax
assets
which
is
governed
by
ASC
740-10-45-20.
During
2014
,
the
Companyreported
loss
from
continuing
operations
and
income
from
discontinued
operations.
As
a
result,
the
Company
followed
the
accounting
guidance
prescribed
in
ASC740-20-45-7,
which
provides
an
exception
to
the
"with"
and
"without"
approach
to
intraperiod
tax
allocation
for
determination
of
the
amount
of
tax
benefit
toallocate
to
continuing
operations
in
such
circumstances.In
accordance
with
the
accounting
standard
for
uncertainty
in
income
taxes,
liabilities
for
uncertain
tax
positions
are
recognized
based
on
the
two-step
processprescribed
by
the
accounting
standards.
The
first
step
is
to
evaluate
the
tax
position
for
recognition
by
determining
if
the
weight
of
available
evidence
indicates
it
ismore
likely
than
not
that
the
position
will
be
sustained
on
audit,
including
resolution
of
related
appeals
or
litigation
processes,
if
any.
The
second
step
is
to
measurethe
tax
benefit
as
the
largest
amount
that
is
more
than
50%
likely
of
being
realized
upon
ultimate
settlement.The
Company
uses
the
tax
law
ordering
approach
to
determine
the
potential
utilization
of
windfall
benefits.
These
tax
benefits
are
credited
to
additional
paid-in
capital
when
they
reduce
current
taxable
income
consistent
with
the
tax
law
ordering
approach.Stock-Based CompensationThe
forms
of
stock-based
awards
granted
to
LendingTree
employees
are
principally
restricted
stock
units
("RSUs"),
RSUs
with
performance
conditions,restricted
stock
and
stock
options.
RSUs
are
awards
in
the
form
of
units,
denominated
in
a
hypothetical
equivalent
number
of
shares
of
LendingTree
common
stockand
with
the
value
of
each
award
equal
to
the
fair
value
of
LendingTree
common
stock
at
the
date
of
grant.
RSUs
may
be
settled
in
cash,
stock
or
both,
asdetermined
by
the
Company's
Compensation
Committee
at
the
time
of
grant.
The
Company
does
not
have
a
history
of
settling
these
awards
in
cash.
Each
stock-based
award
is
subject
to
service-based
vesting,
where
a
specific
period
of
continued
employment
must
pass
before
an
award
vests.
The
Compensation
Committeecan
modify
the
vesting
provisions
of
an
award.
Certain
RSUs
and
restricted
stock
awards
also
include
performance-based
vesting,
where
certain
performancetargets
set
at
the
time
of
grant
must
be
achieved
before
an
award
vests.LendingTree
recognizes
as
expense
non-cash
compensation
for
all
stock-based
awards
for
which
vesting
is
considered
probable.
The
amount
of
non-cashcompensation
is
reduced
by
estimated
forfeitures,
as
the
amount
recorded
to
the
consolidated
statement
of
operations
and
comprehensive
income
is
based
onawards
ultimately
expected
to
vest.
The
forfeiture
rate
is
estimated
at
the
grant
date,
based
on
historical
experience
and
revised,
if
necessary,
in
subsequent
periodsif
the
actual
forfeiture
rate
differs
from
the
estimated
rate.For
service-based
awards,
non-cash
compensation
is
measured
at
fair
value
on
the
grant
date
and
expensed
ratably
over
the
vesting
term.
The
fair
value
ofeach
stock
option
award
is
estimated
using
the
Black-Scholes
option
pricing
model,
while
the
fair
value
of
an
RSU
or
restricted
stock
award
is
measured
as
theclosing
common
stock
price
at
the
time
of
grant.
For
certain
performance-based
awards,
the
fair
value
is
measured
on
the
grant
date
as
the
fair
value
of
theCompany's
common
stock
awarded
and
recognized
as
non-cash
compensation,
using
a
graded
vesting
attribution
model
that
considers
the
probability
of
the
targetsbeing
achieved.Tax
benefits
resulting
from
tax
deductions
in
excess
of
the
non-cash
compensation
recognized
in
the
consolidated
statement
of
operations
and
comprehensiveincome
are
reported
as
a
component
of
financing
cash
flows.
In
2016
and
2015,
$5.8
million
and
$4.6
million
,
respectively,
of
tax
benefits
in
excess
of
non-cashcompensation
recognized
in
the
consolidated
statement
of50LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSshareholders'
equity
is
reported
as
a
component
of
financing
cash
flows.
In
2014,
while
there
were
excess
tax
benefits
from
non-cash
compensation,
the
tax
benefitsare
not
reflected
in
the
consolidated
statement
of
shareholders'
equity
because
the
Company
did
not
recognize
a
current
tax
benefit.Litigation Settlements and ContingenciesLitigation
settlements
and
contingencies
consists
of
expenses
related
to
actual
or
anticipated
litigation
settlements,
in
addition
to
legal
fees
incurred
inconnection
with
various
patent
litigation
claims
the
Company
pursues
against
others.The
Company
is
involved
in
legal
proceedings
on
an
ongoing
basis.
If
the
Company
believes
that
a
loss
arising
from
such
matters
is
probable
and
can
bereasonably
estimated,
the
estimated
liability
is
accrued
in
the
consolidated
financial
statements.
If
only
a
range
of
estimated
losses
can
be
determined,
an
amountwithin
the
range
is
accrued
that,
in
the
Company's
judgment,
reflects
the
most
likely
outcome;
if
none
of
the
estimates
within
that
range
is
a
better
estimate
thanany
other
amount,
the
low
end
of
the
range
is
accrued.
For
those
proceedings
in
which
an
unfavorable
outcome
is
reasonably
possible
but
not
probable,
an
estimateof
the
reasonably
possible
loss
or
range
of
losses
or
a
conclusion
that
an
estimate
of
the
reasonably
possible
loss
or
range
of
losses
arising
directly
from
theproceeding
(i.e.,
monetary
damages
or
amounts
paid
in
judgment
or
settlement)
are
not
material
is
disclosed.
Legal
expenses
associated
with
these
matters
arerecognized
as
incurred.Accounting EstimatesManagement
is
required
to
make
certain
estimates
and
assumptions
during
the
preparation
of
the
consolidated
financial
statements
in
accordance
with
GAAP.These
estimates
and
assumptions
impact
the
reported
amount
of
assets
and
liabilities
and
disclosures
of
contingent
assets
and
liabilities
as
of
the
date
of
theconsolidated
financial
statements.
They
also
impact
the
reported
amount
of
net
earnings
during
any
period.
Actual
results
could
differ
from
those
estimates.Significant
estimates
underlying
the
accompanying
consolidated
financial
statements,
including
discontinued
operations,
include:
loan
loss
obligations;
therecoverability
of
long-lived
assets,
goodwill
and
intangible
assets;
the
determination
of
income
taxes
payable
and
deferred
income
taxes,
including
relatedvaluation
allowances;
contingent
consideration
related
to
business
combinations;
litigation
accruals;
various
other
allowances,
reserves
and
accruals;
andassumptions
related
to
the
determination
of
stock-based
compensation.Certain Risks and ConcentrationsLendingTree's
business
is
subject
to
certain
risks
and
concentrations
including
dependence
on
third-party
technology
providers,
exposure
to
risks
associatedwith
online
commerce
security
and
credit
card
fraud.Financial
instruments,
which
potentially
subject
the
Company
to
concentration
of
credit
risk
at
December
31,
2016
,
consist
primarily
of
cash
and
cashequivalents
and
accounts
receivable,
as
disclosed
in
the
consolidated
balance
sheet.
Cash
and
cash
equivalents
are
in
excess
of
Federal
Deposit
InsuranceCorporation
insurance
limits,
but
are
maintained
with
quality
financial
institutions
of
high
credit.
The
Company
requires
certain
network
lenders
to
maintainsecurity
deposits
with
the
Company,
which
in
the
event
of
non-payment,
would
be
applied
against
any
accounts
receivable
outstanding.Due
to
the
nature
of
the
mortgage
lending
industry,
interest
rate
fluctuations
may
negatively
impact
future
revenue
from
the
Company's
lender
marketplace.For
the
years
ended
December
31,
2016
,
2015
and
2014
,
one
marketplace
lender
accounted
for
revenue
representing
13%
,
12%
and
13%
of
total
revenue,respectively,
and
another
marketplace
lender
accounted
for
15%
,
11%
and
11%
of
total
revenue,
respectively.Lenders
participating
on
the
Company's
marketplace
can
offer
their
products
directly
to
consumers
through
brokers,
mass
marketing
campaigns
or
throughother
traditional
methods
of
credit
distribution.
These
lenders
can
also
offer
their
products
online,
either
directly
to
prospective
borrowers,
through
one
or
moreonline
competitors,
or
both.
If
a
significant
number
of
potential
consumers
are
able
to
obtain
loans
from
participating
lenders
without
utilizing
the
Company'sservice,
its
ability
to
generate
revenue
may
be
limited.
Because
the
Company
does
not
have
exclusive
relationships
with
the
lenders
whose
loan
offerings
areoffered
on
its
online
marketplace,
consumers
may
obtain
offers
and
loans
from
these
lenders
without
using
its
service.The
Company
maintains
operations
solely
in
the
United
States.51LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSRecent Accounting PronouncementsIn
January
2017,
the
Financial
Accounting
Standards
Board
("FASB")
issued
Accounting
Standards
Update
("ASU")
2017-06
which
eliminates
therequirement
to
calculate
the
implied
fair
value
of
goodwill
to
measure
a
goodwill
impairment
charge
(Step
2
of
the
goodwill
impairment
test).
Instead,
animpairment
charge
will
be
based
on
the
excess
of
the
carrying
amount
over
the
fair
value.
This
ASU
is
effective
for
annual
and
interim
impairment
tests
performedin
periods
beginning
after
December
15,
2019.
Early
adoption
is
permitted
for
annual
and
interim
goodwill
impairment
testing
dates
after
January
1,
2017.
ThisASU
will
have
an
immaterial
impact
on
the
Company.In
January
2017,
the
FASB
issued
ASU
2017-01
which
provides
guidance
to
assist
in
evaluating
whether
a
set
of
transferred
assets
and
activities
constitutes
abusiness
or
an
asset.
This
ASU
is
effective
for
annual
and
interim
reporting
periods
beginning
after
December
15,
2017,
with
early
adoption
permitted.
The
ASU
isto
be
applied
prospectively
to
any
transactions
occurring
within
the
period
of
adoption.
The
Company
early
adopted
this
ASU.
See Note
4
—Property
andEquipment
for
the
impact
of
this
ASU
on
the
acquisition
of
office
buildings
in
December
2016.In
November
2016,
the
FASB
issued
ASU
2016-18
which
is
intended
to
reduce
the
diversity
in
the
classification
and
presentation
of
changes
in
restricted
cashin
the
statement
of
cash
flows,
by
requiring
entities
to
combine
the
changes
in
cash
and
cash
equivalents
and
restricted
cash
in
one
line.
As
a
result,
entities
will
nolonger
present
transfers
between
cash
and
cash
equivalents
and
restricted
cash
in
the
statement
of
cash
flows.
In
addition,
if
more
than
one
line
item
is
recorded
onthe
balance
sheet
for
cash
and
cash
equivalents
and
restricted
cash,
a
reconciliation
between
the
statement
of
cash
flows
and
balance
sheet
is
required.
This
ASU
iseffective
for
annual
and
interim
reporting
periods
beginning
after
December
15,
2017,
with
early
adoption
permitted.
The
retrospective
transition
method,
requiringadjustment
to
all
comparative
periods
presented,
is
required.
The
Company
is
evaluating
the
impact
this
ASU
will
have
on
its
consolidated
financial
statements
andwhether
to
early
adopt.In
August
2016,
the
FASB
issued
ASU
2016-15
which
addresses
eight
cash
flow
classification
issues,
eliminating
the
diversity
in
practice.
This
ASU
iseffective
for
annual
and
interim
reporting
periods
beginning
after
December
15,
2017,
with
early
adoption
permitted.
The
retrospective
transition
method,
requiringadjustment
to
all
comparative
periods
presented,
is
required
unless
it
is
impracticable
for
some
of
the
amendments,
in
which
case
those
amendments
would
beprospectively
applied
as
of
the
earliest
date
practicable.
The
Company
is
evaluating
the
impact
this
ASU
will
have
on
its
consolidated
financial
statements
andwhether
to
early
adopt.In
March
2016,
the
FASB
issued
ASU
2016-09
which
simplifies
various
aspects
related
to
how
share-based
payments
are
accounted
for
and
presented
in
thefinancial
statements,
including
the
income
tax
consequences,
classification
of
awards
as
either
equity
or
liabilities,
forfeitures
and
classification
of
excess
taxbenefits
on
the
statement
of
cash
flows.
This
ASU
is
effective
for
annual
and
interim
reporting
periods
beginning
after
December
15,
2016,
with
early
adoptionpermitted.
Upon
adoption,
any
adjustments
are
to
be
reflected
as
of
the
beginning
of
the
fiscal
year
of
adoption.
The
Company
is
evaluating
the
impact
this
ASUwill
have
on
its
consolidated
financial
statements.In
February
2016,
the
FASB
issued
ASU
2016-02
related
to
leases.
This
ASU
requires
the
recognition
of
a
right-of-use
lease
asset
and
a
lease
liability
bylessees
for
all
leases
greater
than
one
year
in
duration.
This
ASU
is
effective
for
annual
and
interim
reporting
periods
beginning
after
December
15,
2018,
withearly
adoption
permitted.
The
guidance
must
be
adopted
using
a
modified
retrospective
transition.
The
Company
is
evaluating
the
impact
this
ASU
will
have
on
itsconsolidated
financial
statements
and
whether
to
early
adopt.In
August
2014,
the
FASB
issued
ASU
2014-15
related
to
management's
assessment
of
a
company's
ability
to
continue
as
a
going
concern.
This
ASU
requiresan
assessment
for
each
annual
and
interim
reporting
period
and
requires
disclosure
when
there
is
substantial
doubt
about
a
company's
ability
to
continue
as
a
goingconcern.
This
ASU
is
effective
for
annual
and
interim
reporting
period
beginning
after
December
15,
2016.
The
Company
adopted
this
ASU
and
it
did
not
have
asignificant
impact.In
May
2014,
the
FASB
issued
ASU
2014-09
related
to
revenue
recognition.
This
ASU
was
initiated
as
a
joint
project
between
the
FASB
and
the
InternationalAccounting
Standards
Board
("IASB")
to
clarify
the
principles
for
recognizing
revenue
and
to
develop
a
common
revenue
standard
for
GAAP
and
internationalfinancial
reporting
standards
("IFRS").
This
guidance
will
supersede
the
existing
revenue
recognition
requirements
in
Accounting
Standards
Codification
("ASC")Topic
605,
Revenue
Recognition
and
was
set
to
be
effective
for
annual
reporting
periods
beginning
after
December
15,
2016.
However,
in
July
2015,
the
FASBdeferred
the
effective
date
by
one
year,
such
that
the
standard
will
be
effective
for
annual
reporting
periods
beginning
after
December
15,
2017.
Early
adoption
ispermitted
as
of
the
original
effective
date
of
December
15,
2016.
The
ASU
can
be
applied
(i)
retrospectively
to
each
prior
period
presented
or
(ii)
retrospectivelywith
the
cumulative
effect
of
initially
adopting
the
ASU
recognized
at
the
date
of
initial
application.
In
March
2016,
the
FASB
issued
ASU
2016-08,
whichclarifies
the
principal52LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSversus
agent
guidance
under
ASU
2014-09.
In
April
2016,
the
FASB
issued
ASU
2016-10,
which
clarifies
the
identification
of
distinct
performance
obligations
ina
contract.
In
May
2016,
the
FASB
issued
ASU
2016-12,
which
clarifies
the
guidance
on
assessing
collectability,
presenting
sales
taxes,
measuring
noncashconsideration
and
certain
other
transition
matters.
The
clarification
ASU's
must
be
adopted
concurrently
with
the
adoption
of
ASU
2014-09.
The
Company
isevaluating
the
impact
these
ASU's
will
have
on
its
consolidated
financial
statements
and
which
implementation
method
to
apply.NOTE 3—RESTRICTED CASHRestricted
cash
and
cash
equivalents
consists
of
the
following
(in thousands) :
December 31, 2016
December 31, 2015Cash
in
escrow
for
surety
bonds
(a)$—
$2,453Cash
in
escrow
from
sale
of
LendingTree
Loans
(b)4,032
4,028Other57
60Total restricted cash and cash equivalents$4,089
$6,541(a)See Note
12
—Commitments
for
a
discussion
of
surety
bonds.
In
February
2016,
all
funds
in
escrow
were
released
to
the
Company
from
restriction
due
toa
reduction
in
collateral
requirements.(b)HLC,
a
subsidiary
of
the
Company,
continues
to
be
liable
for
certain
indemnification
obligations,
repurchase
obligations
and
premium
repaymentobligations
following
the
sale
of
substantially
all
of
the
operating
assets
of
its
LendingTree
Loans
business
in
the
second
quarter
of
2012.NOTE 4 —PROPERTY AND EQUIPMENTThe
balance
of
property
and
equipment,
net
is
as
follows
(in thousands) :
December 31, 2016
December 31, 2015Land$5,818
$—Building14,679
—Site
improvements950
—Computer
equipment
and
capitalized
software14,886
10,192Leasehold
improvements3,048
2,096Furniture
and
other
equipment826
432Aircraft
and
automobile1,988
23Projects
in
progress3,006
3,612Total gross property and equipment45,201
16,355Accumulated
depreciation(9,739)
(6,940)Total property and equipment, net$35,462
$9,415Unamortized
capitalized
software
development
costs,
in
service
or
under
development,
are
$9.4
million
and
$8.0
million
at
December
31,
2016
and
2015
,respectively.
Capitalized
software
development
depreciation
expense
was
$4.3
million
,
$2.6
million
and
$2.8
million
for
the
years
ended
December
31,
2016
,2015
and
2014
,
respectively.During
2014,
the
Company
recorded
an
impairment
charge
in
its
Education
business
of
approximately
$0.4
million
to
internally
developed
software.
SeeNote
2—Significant
Accounting
Policies
for
a
discussion
of
the
impairment.53LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSIn
December
2016,
the
Company
acquired
two
office
buildings
in
Charlotte,
North
Carolina
for
$23.5
million
in
cash,
which
included
$0.1
million
inacquisition-related
costs
which
were
capitalized.
The
Company
intends
to
utilize
one
or
both
buildings
in
the
future
as
the
corporate
headquarters
and
to
continueto
rent
any
unused
space.
The
acquisition
has
been
accounted
for
as
an
asset
purchase
and
the
allocation
of
the
purchase
price
to
the
assets
acquired
is
as
follows(in thousands) :
Fair Value
WeightedAverageDepreciation LifeLand$5,818
N/ABuilding14,679
34.0
yearsSite
improvements950
6.6
yearsTenant
leases2,029
3.2
yearsTotal
purchase
price$23,476

Future
rental
income
from
the
building
tenants
as
of
December
31,
2016
under
operating
lease
agreements
having
an
initial
or
remaining
non-cancelable
leaseterm
in
excess
of
one
year
are
as
follows
(in thousands) :Year ending December 31,Amount2017$1,43520181,197201995120205992021151Total$4,333Rental
income
is
included
in
other
income
on
the
accompanying
consolidated
statement
of
operations
and
comprehensive
income.NOTE 5—GOODWILL AND INTANGIBLE ASSETSThe
balance
of
goodwill,
net
is
as
follows
(in thousands) :
Goodwill
AccumulatedImpairment Loss
Net GoodwillBalance at December 31, 2015$486,720
$(483,088)
$3,632Acquisition
of
CompareCards$52,450
—
$52,450Acquisition
of
SimpleTuition$375
—
$375Balance at December 31, 2016$539,545
$(483,088)
$56,457The
balance
of
intangible
assets,
net
is
as
follows
(in thousands) :
December 31, 2016
December 31, 2015Intangible
assets
with
indefinite
lives$10,142
$10,142Intangible
assets
with
definite
lives,
net61,542
850Total intangible assets, net$71,684
$10,992Goodwill and Indefinite-Lived Intangible AssetsThe
Company's
goodwill
is
associated
with
its
one
reportable
segment.
The
carrying
amount
of
goodwill
increased
during
the
year
ended
December
31,
2016due
to
the
acquisitions
of
CompareCards
and
SimpleTuition.
See Note
6
—Business
Acquisitions
for
a
discussion
of
the
acquisitions
and
associated
goodwill.There
was
no
change
in
the
carrying
amount
of
goodwill
during
the
year
ended
December
31,
2015
.
Results
of
the
annual
impairment
test
as
of
October
1,
2016indicated
that
no
impairment
had
occurred.54LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSIntangible
assets
with
indefinite
lives
relate
to
the
Company's
trademarks.
Results
of
the
annual
impairment
test
as
of
October
1,
2016
indicated
that
noimpairment
had
occurred.Intangible Assets with Definite LivesIntangible
assets
with
definite
lives
relate
to
the
following
(dollars in thousands) :
Weighted AverageAmortization Life
Cost
AccumulatedAmortization
NetTechnology4.0 years
$28,300
$(659)
$27,641Customer
lists11.7 years
28,100
(639)
27,461Trademarks
and
tradenames4.5 years
5,342
(937)
4,405Tenant
leases3.2 years
2,030
—
2,030Other3.0 years
250
(245)
5Balance at December 31, 2016

$64,022
$(2,480)
$61,542
Weighted AverageAmortization Life
Cost
AccumulatedAmortization
NetCustomer
lists10.0 years
$1,000
$(150)
$850Other2.2 years
1,087
(1,087)
—Balance at December 31, 2015

$2,087
$(1,237)
$850Amortization
of
intangible
assets
with
definite
lives
is
computed
on
a
straight-line
basis
and,
based
on
balances
as
of
December
31,
2016
,
future
amortizationis
estimated
to
be
as
follows
(in thousands) : Amortization ExpenseYear
ending
December
31,
2017$11,175Year
ending
December
31,
201811,037Year
ending
December
31,
201910,783Year
ending
December
31,
20209,935Year
ending
December
31,
20213,270Thereafter15,342Total intangible assets with definite lives, net$61,542On
November
16,
2016,
the
Company
acquired
Iron
Horse
Holdings,
LLC,
which
does
business
under
the
name
CompareCards.
See Note
6
—BusinessAcquisitions
for
a
discussion
of
the
acquisition
and
associated
intangibles.In
December
2016,
the
Company
acquired
two
office
buildings
in
Charlotte,
North
Carolina.
See Note
4
—Property
and
Equipment
for
a
discussion
of
thepurchase
and
associated
intangibles.During
2014,
the
Company
recorded
an
impairment
charge
in
its
Education
business
of
approximately
$0.4
million
to
customer
lists.
See Note
2—SignificantAccounting
Policies
for
a
discussion
of
the
impairment.NOTE 6 —BUSINESS ACQUISITIONSIron Horse Holdings, LLCOn
November
16,
2016,
the
Company
acquired
all
of
the
membership
interests
of
Iron
Horse
Holdings,
LLC,
which
does
business
under
the
nameCompareCards
("CompareCards").
CompareCards
is
an
online
marketing
platform
for
credit
cards,
which
the
Company
plans
to
use
to
grow
its
existing
credit
cardbusiness.
The
Company
paid
$80.7
million
in
initial
cash
consideration
and
will
make
two
earnout
payments,
each
ranging
from
zero
to
$22.5
million
,
based
onthe
amount
of
earnings
before
interest,55LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTStaxes,
depreciation
and
amortization
CompareCards
generates
during
the
periods
of
January
1,
2017
through
December
31,
2017
and
January
1,
2018
throughDecember
31,
2018,
or
up
to
$45.0
million
in
aggregate
payments
(the
“Earnout
Payments”).The
purchase
price
for
the
acquisition
is
$103.8
million
comprised
of
an
upfront
cash
payment
of
$80.7
million
on
November
16,
2016
and
$23.1
million
forthe
estimated
fair
value
of
the
Earnout
Payments,
which
is
included
in
contingent
considerations
in
the
accompanying
consolidated
balance
sheet.
The
upfront
cashpayment
was
funded
from
cash
on
hand.The
estimated
fair
value
of
the
Earnout
Payments
is
determined
using
an
option
pricing
model.
The
estimated
value
of
the
Earnout
Payments
is
based
uponavailable
information
and
certain
assumptions,
known
at
the
time
of
this
report,
which
management
believes
are
reasonable.
Any
differences
in
the
actual
EarnoutPayments
from
the
current
estimated
fair
value
of
the
Earnout
Payments
will
be
recorded
in
operating
income
(expense)
in
the
consolidated
statements
ofoperations.The
acquisition
has
been
accounted
for
as
a
business
combination.
The
preliminary
allocation
of
purchase
price
to
the
assets
acquired
and
the
liabilitiesassumed
is
as
follows
(in thousands) : Fair ValueAccounts
receivable$3,538Total
intangible
assets
with
definite
lives,
net55,400Goodwill52,450Accounts
payable
and
accrued
liabilities(7,582)Total purchase price$103,806The
Company
primarily
used
the
income
approach
for
the
valuation
as
appropriate,
and
used
valuation
inputs
in
these
models
and
analyses
that
were
based
onmarket
participant
assumptions.
Market
participants
are
buyers
and
sellers
unrelated
to
the
Company
and
fair
value
is
determined
as
the
price
that
would
bereceived
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
at
the
measurement
date.The
acquired
intangible
assets
are
definite-lived
assets
consisting
primarily
of
development
technology,
customer
relationships,
and
trade
name
andtrademarks.
The
estimated
fair
values
of
the
developed
technology
was
determined
using
excess
earnings
analysis,
the
customer
relationships
were
determinedusing
the
distributor
method
and
the
trade
name
and
trademarks
were
determined
using
relief
from
royalty
analysis.
The
fair
value
of
the
intangible
assets
withdefinite
lives
are
as
follows
(dollars in thousands) :
Fair ValueWeightedAverageAmortization LifeTechnology$27,9004
yearsCustomer
lists$23,20012
yearsTrade
name
and
trademarks$4,3005
yearsAs
of
December
31,
2016,
the
Company
has
not
completed
its
determination
of
the
final
allocation
of
the
purchase
price
with
respect
to
the
acquired
workingcapital.
The
purchase
price
allocation
is
expected
to
be
finalized
during
the
first
quarter
of
2017.
The
valuation
of
intangible
assets
has
been
completed,
but
theCompany
continues
to
obtain
information
on
other
current
assets
and
liabilities
that
existed
at
the
time
of
the
acquisition.
Any
future
adjustments
to
the
currentassets
and
liabilities
acquired
as
part
of
the
acquisition
will
also
adjust
goodwill.The
Company
recorded
goodwill
of
$52.5
million
,
which
represents
the
excess
of
the
purchase
price
over
the
estimated
fair
value
of
tangible
and
intangibleassets
acquired,
net
of
the
liabilities
assumed.
The
goodwill
is
primarily
attributable
to
CompareCards
as
a
going
concern,
which
represents
the
ability
of
theCompany
to
earn
a
higher
return
on
the
collection
of
assets
and
business
of
CompareCards
than
if
those
assets
and
business
were
to
be
acquired
and
managedseparately.
The
benefit
of
access
to
the
work
force
is
an
additional
relevant
element
of
goodwill.
The
goodwill
is
recorded
in
the
Company’s
one
reportablesegment.
For
income
tax
purposes,
the
Company
treated
the
acquisition
as
an
asset
purchase
and
the
goodwill
will
be
tax
deductible.As
of
the
acquisition
date,
the
Company’s
consolidated
results
of
operations
include
the
results
of
the
acquired
CompareCards
business.
In
2016,
revenue
of$9.2
million
and
net
income
from
continuing
operations
of
$0.8
million
have
been
included
in
the
Company’s
consolidated
results
of
operations.
Acquisition-related
costs
were
$0.4
million
in
2016
and
are
included
in
general
and
administrative
expense
on
the
consolidated
statement
of
operations
and
comprehensiveincome.56LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe
unaudited
pro
forma
financial
results
for
the
years
ended
December
31,
2016
and
2015
combine
the
consolidated
results
of
the
Company
andCompareCards
giving
effect
to
the
acquisition
as
if
it
had
been
completed
on
January
1,
2015.
This
unaudited
pro
forma
financial
information
is
presented
forinformational
purposes
only
and
is
not
indicative
of
future
operations
or
results
had
the
acquisition
been
completed
as
of
January
1,
2015,
or
any
other
date.The
unaudited
pro
forma
financial
results
include
adjustments
for
additional
amortization
expense
based
on
the
fair
value
of
the
intangible
assets
with
definitelives
and
their
estimated
useful
lives.
The
provision
for
income
taxes
from
continuing
operations
has
also
been
adjusted
to
reflect
the
results
of
operations
ofCompareCards
and
the
adjustment
to
historical
results.
CompareCards
did
not
pay
taxes
at
the
entity
level
as
it
was
a
limited
liability
company
whose
memberselected
for
it
to
be
taxed
as
a
partnership.
20162015
(in thousands)Pro
forma
revenue$448,418$308,647Pro
forma
net
income
from
continuing
operations$33,407$41,099The
unaudited
pro
forma
net
income
from
continuing
operations
for
2015
has
been
adjusted
to
include
acquisition-related
costs
of
$5.5
million
incurred
by
theCompany
and
CompareCards
that
are
directly
attributable
to
the
acquisition,
which
will
not
have
an
ongoing
impact.
Accordingly,
these
costs
have
been
eliminatedfrom
the
unaudited
pro
forma
net
income
from
continuing
operations
for
2016.SimpleTuition, Inc.On
May
31,
2016,
the
Company
acquired
certain
assets
of
SimpleTuition,
Inc.
("SimpleTuition"),
a
leading
online
marketing
platform
for
student
loans,
for$5.0
million
of
cash
consideration.
Of
the
purchase
price,
$4.5
million
was
funded
with
available
cash
on
hand
and
$0.5
million
was
held-back
in
satisfaction
ofany
potential
claims.The
acquisition
has
been
accounted
for
as
a
business
combination.
During
the
quarter
ended
September
30,
2016,
the
Company
completed
its
determination
ofthe
final
allocation
of
the
purchase
price
with
respect
to
the
acquired
assets.
The
Company
has
recorded
the
$5.0
million
paid
to
the
tangible
and
identifiableintangible
assets
based
on
their
fair
value,
with
the
residual
recorded
to
goodwill
in
the
Company's
one
reportable
segment.
No
liabilities
were
assumed.Acquisition-related
costs
were
$0.1
million
for
2016
and
are
included
in
general
and
administrative
expense
on
the
consolidated
statements
of
operations
andcomprehensive
income.
The
allocation
of
the
purchase
price
to
the
assets
acquired
is
as
follows
(dollars in thousands) : Fair Value
WeightedAverageAmortization LifeAccounts
receivable$125
N/ATotal
intangible
assets
with
definite
lives,
net$4,500
9.2
yearsGoodwill$375
N/AThe
Company
treated
the
purchase
as
an
asset
acquisition
for
income
tax
purposes
and
is
deducting
the
recognized
goodwill
for
income
tax
purposes.The
acquisition
of
SimpleTuition
was
not
considered
significant
to
the
accompanying
consolidated
financial
statements.OtherOn
June
30,
2014,
the
Company
acquired
certain
intangible
assets
to
be
used
in
its
home
services
business
for
$0.6
million
paid
on
the
acquisition
date,
pluscontingent
consideration
of
$0
to
$0.8
million
.
During
the
fourth
quarter
of
2014,
the
Company
finalized
the
purchase
price
of
$1.0
million
,
which
included
anestimated
contingent
consideration
of
$0.4
million
.
The
entire
purchase
price
was
allocated
to
the
customer
lists
acquired,
which
is
being
amortized
on
a
straight-line
basis
over
a
useful
life
of
10
years
.
Additionally
during
the
nine
months
following
the
acquisition,
performance
against
the
conditions
of
the
earn-out
reducedthe
total
contingent
consideration
to
$0.2
million
,
which
was
fully
paid
as
of
December
31,
2015.57LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 7—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIESAccrued
expenses
and
other
current
liabilities
consist
of
the
following
(in thousands) :
December 31, 2016
December 31, 2015Accrued
litigation
liabilities$736
$636Accrued
advertising
expense26,976
20,841Accrued
compensation
and
benefits5,626
4,464Accrued
professional
fees1,411
711Customer
deposits
and
escrows5,041
4,471Other9,613
3,762Total accrued expenses and other current liabilities$49,403
$34,885NOTE 8 —SHAREHOLDERS' EQUITYBasic
and
diluted
income
(loss)
per
share
was
determined
based
on
the
following
share
data
(in thousands) : Year Ended December 31, 2016
2015
2014Weighted average basic common shares11,812
11,516
11,188Effect
of
stock
options886
866
—Effect
of
dilutive
share
awards75
159
—Weighted average diluted common shares12,773
12,541
11,188For
the
year
ended
December
31,
2014
,
the
Company
had
losses
from
continuing
operations
and,
as
a
result,
no
potentially
dilutive
securities
were
included
inthe
denominator
for
computing
diluted
loss
per
share,
because
the
impact
would
have
been
anti-dilutive.
Accordingly,
the
weighted
average
basic
sharesoutstanding
were
used
to
compute
loss
per
share
amounts
for
this
period.
For
the
year
ended
December
31,
2014,
approximately
0.7
million
shares
related
topotentially
dilutive
securities
were
excluded
from
the
calculation
of
diluted
loss
per
share,
because
their
inclusion
would
have
been
anti-dilutive.See Note

9
—Stock-Based
Compensation
for
a
full
description
of
outstanding
equity
awards.Common Stock RepurchasesIn
each
of
January
2010,
May
2014,
January
2016
and
February
2016,
the
board
of
directors
authorized
and
the
Company
announced
the
repurchase
of
up
to$10.0
million
,
$10.0
million
,
$50.0
million
and
$40.0
million
,
respectively,
of
LendingTree's
common
stock.
During
the
years
ended
December
31,
2016
,
2015and
2014
,
the
Company
purchased
690,218
,
5,250
and
99,345
shares,
respectively,
of
its
common
stock
for
aggregate
consideration
of
$48.5
million
,
$0.2million
and
$2.6
million
,
respectively.
At
December
31,
2016
,
approximately
$48.7
million
remains
authorized
for
share
repurchase.Equity OfferingIn
November
2015,
the
Company
completed
an
equity
offering
of
852,500
shares
of
its
common
stock.
The
common
stock
was
issued
at
a
price
of
$115.00
pershare.
The
Company
received
net
proceeds
of
$91.5
million
,
after
deducting
approximately
$5.9
million
in
underwriting
discounts
and
$0.7
million
in
offeringexpenses.NOTE 9 —STOCK-BASED COMPENSATIONThe
Company
currently
has
one
active
plan,
the
Fourth
Amended
and
Restated
LendingTree
2008
Stock
and
Annual
Incentive
Plan
(the
"Equity
AwardPlan"),
under
which
future
awards
may
be
granted,
which
currently
covers
outstanding
stock
options
to
acquire
shares
of
the
Company's
common
stock,
restrictedstock,
RSUs
and
RSUs
with
performance
conditions,
and
provides
for
the
future
grants
of
these
and
other
equity
awards.
Under
the
Equity
Award
Plan,
theCompany
is
authorized
to
grant
stock
options,
restricted
stock,
RSUs
and
other
equity-based
awards
for
up
to
4.35
million
shares
of
LendingTree
common
stock
toemployees,
non-employee
consultants,
officers
and
directors.58LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe
Equity
Award
Plan
has
a
stated
term
of
ten
years
and
provides
that
the
exercise
price
of
stock
options
granted
will
not
be
less
than
the
market
price
of
thecommon
stock
on
the
grant
date.
The
Equity
Award
Plan
itself
does
not
specify
grant
dates
or
vesting
schedules,
as
those
determinations
are
delegated
to
theCompensation
Committee
of
the
board
of
directors.
Each
grant
agreement
reflects
the
vesting
schedule
for
that
particular
grant,
as
determined
by
the
CompensationCommittee.
The
Compensation
Committee
has
the
authority
to
modify
the
vesting
provisions
of
an
award.Non-cash
compensation
related
to
equity
awards
is
included
in
the
following
line
items
in
the
accompanying
consolidated
statements
of
operations
andcomprehensive
income
(in thousands) :
Year Ended December 31,
2016
2015
2014Cost
of
revenue$129
$95
$32Selling
and
marketing
expense2,722
1,597
901General
and
administrative
expense4,699
5,120
5,148Product
development2,097
1,558
1,196Restructuring
and
severance—
138
169Total non-cash compensation$9,647
$8,508
$7,446For
the
years
ended
December
31,
2016
and
2015,
the
Company
recognized
$3.7
million
and
$3.0
million
of
income
tax
benefit
related
to
non-cashcompensation.
For
the
year
ended
December
31,
2014
,
the
Company
recognized
no
income
tax
benefit
related
to
non-cash
compensation
due
to
its
net
operatingloss
and
valuation
allowance.
As
of
December
31,
2016
,
there
was
approximately
$7.8
million
,
$7.5
million
,
$1.7
million
and
$0.1
million
of
unrecognizedcompensation
cost
related
to
stock
options,
RSUs,
RSUs
with
performance
conditions
and
restricted
stock,
respectively.
These
costs
are
expected
to
be
recognizedover
a
weighted-average
period
of
approximately
1.5
years

for
stock
options,
1.9
years

for
RSUs,
1.9
years
for
RSUs
with
performance
conditions
and
0.4
years
for
restricted
stock.Stock OptionsA
summary
of
the
changes
in
outstanding
stock
options
is
as
follows:
Number of Options
WeightedAverageExercisePrice
WeightedAverageRemainingContractualTerm
AggregateIntrinsicValue (a)


(per
option)
(in
years)
(in
thousands)Outstanding at December 31, 20151,918,182
$18.85


 Granted86,149
79.46



Exercised(6,093)
38.58



Forfeited(6,329)
74.48



Expired(107)
117.95



Outstanding at December 31, 20161,991,802
$21.23
5.16
$159,754Options exercisable970,202
$9.69
2.63
$88,977(a)The
aggregate
intrinsic
value
represents
the
total
pre-tax
intrinsic
value
(the
difference
between
the
Company's
closing
stock
price
of
$101.35
on
the
lasttrading
day
of
2016
and
the
exercise
price,
multiplied
by
the
number
of
shares
covered
by
in-the-money
options)
that
would
have
been
received
by
theoption
holders
had
all
option
holders
exercised
their
options
on
December
31,
2016
.
The
intrinsic
value
changes
based
on
the
market
value
of
theCompany's
common
stock.Upon
exercise,
the
intrinsic
value
represents
the
pre-tax
difference
between
the
Company's
closing
stock
price
on
the
exercise
date
and
the
exercise
price,multiplied
by
the
number
of
stock
options
exercised.
During
the
years
ended
December
31,
2016
,
2015
and
2014
,
the
total
intrinsic
value
of
stock
options
thatwere
exercised
was
$0.3
million
,
$5.9
million
and
$0.2
million
,
respectively.
Cash
received
from
stock
option
exercises
and
the
related
actual
tax
benefit
realizedwere
$0.2
million
and
$0.1
million
,
respectively,
for
the
year
ended
December
31,
2016
.59LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDuring
the
years
ended
December
31,
2016
,
2015
and
2014,
the
Company
granted
stock
options
with
a
weighted
average
grant
date
fair
value
per
share
of$40.05
,
$27.60
and
$11.22
,
respectively,
of
which
the
vesting
periods
include
(a)
three
years
from
the
grant
date,
(b)
25%
and
75%
over
a
period
of
2.5
years
and3.5
years
,
respectively,
(c)
25%
and
75%
over
a
period
of
2.0
years
and
3.0
years
,
respectively,
(d)
25%
and
75%
over
a
period
of
1.67
years
and
2.67
years
,respectively,
(e)
six
months
from
the
grant
date,
(f)
one
year
from
the
grant
date,
(g)
two
years
from
the
grant
date
and
(h)
five
months
from
the
grant
date.For
purposes
of
determining
stock-based
compensation
expense,
the
weighted
average
grant
date
fair
value
per
share
of
the
stock
options
was
estimated
usingthe
Black-Scholes
option
pricing
model,
which
requires
the
use
of
various
key
assumptions.
The
weighted
average
assumptions
used
are
as
follows:
Year Ended December 31,
201620152014Expected
term
(1)5.22
-
6.38
years5.21
-
6.23
years5.75
-
6.63
yearsExpected
dividend
(2)———Expected
volatility
(3)48%
-
53%38%
-
48%36%
-
64%Risk-free
interest
rate
(4)1.10%
-
2.18%1.65%
-
2.01%1.81%
-
2.13%(1)The
expected
term
of
stock
options
granted
was
calculated
using
the
'Simplified
Method',
which
utilizes
the
midpoint
between
the
weighted
averagetime
of
vesting
and
the
end
of
the
contractual
term.
This
method
was
utilized
for
the
stock
options
due
to
a
lack
of
historical
exercise
behavior
by
theCompany's
employees.(2)For
all
stock
options
granted
during
the
years
ended
December
31,
2016
,
2015
and
2014,
no
dividends
are
expected
to
be
paid
over
the
contractualterm
of
the
stock
options,
resulting
in
a
zero
expected
dividend
rate.(3)The
expected
volatility
rate
is
based
on
the
historical
volatility
of
the
Company's
common
stock
or
a
blended
rate
which
includes
the
historicalvolatility
of
the
Company's
common
stock
and
that
of
a
peer
group.(4)The
risk-free
interest
rate
is
specific
to
the
date
of
grant.
The
risk-free
interest
rate
is
based
on
U.S.
Treasury
yields
for
notes
with
comparableexpected
terms
as
the
awards,
in
effect
at
the
grant
date.As
of
December
31,
2016
,
the
non-vested
options
are
expected
to
vest
over
a
weighted-average
period
of
approximately
1.5
years
.
During
the
years
endedDecember
31,
2016
,
2015
and
2014
,
the
total
fair
value
of
options
vested
was
$0.9
million
,
$0.8
million
and
$0.4
million
,
respectively.Restricted Stock UnitsA
summary
of
the
changes
in
outstanding
nonvested
RSUs
is
as
follows: RSUs Number ofUnits
WeightedAverage GrantDate FairValue


(per
unit)Nonvested at December 31, 2015237,377
$43.13Granted
(a)78,334
76.52Vested(142,289)
34.72Forfeited(21,048)
61.35Nonvested at December 31, 2016152,374
$65.64(a)The
grant
date
fair
value
per
share
of
the
RSUs
is
calculated
as
the
closing
market
price
of
LendingTree's
common
stock
at
the
time
of
the
grant.The
total
fair
value
of
RSUs
that
vested
during
the
years
ended
December
31,
2016
,
2015
and
2014
was
$10.1
million
,
$11.0
million
and
$11.0
million
,respectively.60LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSRestricted StockA
summary
of
the
changes
in
outstanding
nonvested
restricted
stock
is
as
follows: Restricted Stock Number ofShares
WeightedAverage GrantDate FairValue


(per
share)Nonvested at December 31, 201568,762
$23.60Granted
(a)—
—Vested(54,298)
23.18Forfeited—
—Nonvested at December 31, 201614,464
$25.14(a)The
grant
date
fair
value
per
share
of
the
restricted
stock
is
calculated
as
the
closing
market
price
of
LendingTree's
common
stock
at
the
time
of
grant.The
total
fair
value
of
restricted
stock
that
vested
during
the
years
ended
December
31,
2016
,
2015
and
2014
was
$3.9
million
,
$4.1
million
and
$1.5
million
,respectively.Restricted Stock Units with Performance ConditionsDuring
2016,
the
Company
granted
RSUs
with
performance
conditions
to
certain
employees,
of
which
vesting
periods
range
from
0.33
years
to
2.33
years
,pending
the
attainment
of
certain
performance
targets
set
at
the
time
of
grant.A
summary
of
the
changes
in
outstanding
nonvested
RSUs
with
performance
conditions
is
as
follows: RSUs with Performance Conditions Number of Units
Weighted AverageGrant Date Fair Value


(per
unit)Nonvested at December 31, 2015—
$—Granted56,761
87.27Vested(1,953)
83.60Forfeited(10,299)
83.60Nonvested at December 31, 201644,509
$88.28(a)The
grant
date
fair
value
per
share
of
the
RSUs
with
performance
conditions
is
calculated
as
the
closing
market
price
of
LendingTree's
common
stock
atthe
time
of
grant.The
total
fair
value
of
RSUs
with
performance
conditions
that
vested
during
the
year
ended
December
31,
2016
was
$0.2
million
.61LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 10 —INCOME TAXESIncome Tax ProvisionThe
components
of
the
income
tax
expense
(benefit)
are
as
follows
(in thousands) : Year Ended December 31, 2016
2015
2014Current
income
tax
expense
(benefit):




Federal$11,519
$5,847
$(371)State2,480
1,149
(219)Current income tax expense (benefit)13,999
6,996
(590)Deferred
income
tax
(benefit)
provision:




Federal3,703
(19,676)
63State2,664
(10,293)
43Deferred income tax (benefit) provision6,367
(29,969)
106Income tax expense (benefit)$20,366
$(22,973)
$(484)A
reconciliation
of
the
income
tax
expense
(benefit)
to
the
amounts
computed
by
applying
the
statutory
federal
income
tax
rate
to
income
(loss)
fromcontinuing
operations
before
income
taxes
is
shown
as
follows
(in thousands) : Year Ended December 31, 2016
2015
2014Income
tax
expense
(benefit)
at
the
federal
statutory
rate
of
35%$18,051
$9,920
$(340)State
income
taxes,
net
of
effect
of
federal
tax
benefit4,038
1,480
(143)Change
in
(release
of)
valuation
allowance(416)
(34,409)—Research
and
experimentation
tax
credit(2,574)
—
—Other,
net1,267
36
(1)Income tax expense (benefit)$20,366
$(22,973)
$(484)62LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDeferred Income TaxesThe
tax
effects
of
cumulative
temporary
differences
that
give
rise
to
significant
portions
of
the
deferred
tax
assets
and
deferred
tax
liabilities
are
as
follows
(inthousands) : December 31, 2016
2015Deferred
tax
assets:


Provision
for
accrued
expenses$8,056
$7,247Net
operating
loss
carryforwards
(a)8,548
15,036Non-cash
compensation
expense5,699
4,321Goodwill1,825
1,825Other139
1,544Total
gross
deferred
tax
assets24,267
29,973Less:
valuation
allowance
(b)(2,101)
(2,341)Total deferred tax assets, net of the valuation allowance22,166
27,632Deferred
tax
liabilities:


Intangible
and
other
assets(2,704)
(2,060)Other(1,071)
(453)Total gross deferred tax liabilities(3,775)
(2,513)Net deferred taxes$18,391
$25,119(a)At
December
31,
2016
,
the
Company
had
pre-tax
consolidated
federal
net
operating
losses
("NOLs")
of
$10.9
million
.
The
federal
NOLs
will
expire
in2030.
The
Company's
NOLs
will
be
available
to
offset
taxable
income
(until
such
NOLs
are
either
used
or
expire)
subject
to
the
Internal
Revenue
CodeSection
382
annual
limitation.
In
addition,
the
Company
has
state
NOLs
of
approximately
$221.0
million
at
December
31,
2016
that
will
expire
at
varioustimes
between
2017
and
2037.(b)The
valuation
allowance
is
related
to
items
for
which
it
is
"more likely than not" that
the
tax
benefit
will
not
be
realized.Deferred
income
taxes
are
presented
in
the
accompanying
consolidated
balance
sheets
as
follows
(in thousands) : December 31, 2016
2015Deferred
income
tax
assets$14,610
$20,977Non-current
assets
of
discontinued
operations3,781
4,142Net deferred taxes$18,391
$25,119Valuation AllowanceA
valuation
allowance
is
provided
on
deferred
tax
assets
if
it
is
determined
that
it
is
"more likely than not" that
the
deferred
tax
asset
will
not
be
realized.
As
ofeach
reporting
date,
management
considers
both
positive
and
negative
evidence
regarding
the
likelihood
of
future
realization
of
the
deferred
tax
assets.In
the
fourth
quarter
of
2015
the
Company
concluded,
based
upon
all
available
evidence,
it
was
more
likely
than
not
it
would
have
sufficient
future
taxableincome
to
realize
the
majority
of
its
net
deferred
tax
assets.
As
a
result,
the
Company
released
the
majority
of
the
valuation
allowance
in
2015.
The
Companysignificantly
improved
its
operating
performance
in
2015,
emerged
from
cumulative
losses
in
recent
years
due
to
a
cumulative
profit
position
and
projects
taxableincome
in
future
years.
While
the
Company
believes
the
assumptions
included
in
its
projections
of
future
taxable
income
are
reasonable,
if
the
actual
results
varyfrom
expected
results
due
to
unforeseen
changes
in
the
economy
or
mortgage
industry,
or
other
factors,
the
Company
may
need
to
make
future
adjustments
to
thevaluation
allowance
for
all,
or
a
portion,
of
the
net
deferred
tax
assets.
At
December
31,
2016
and
2015,
the
Company
recorded
a
partial
valuation
allowance
of$2.1
million
and
$2.3
million
,
respectively,
primarily
related
to
state
net
operating
losses,
which
the
Company
does
not
expect
to
be
able
to
utilize
prior
toexpiration.63LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSA
reconciliation
of
the
beginning
and
ending
balances
of
the
deferred
tax
valuation
allowance
is
as
follows
(in thousands) : Year Ended December 31, 2016
2015
2014Balance, beginning of the period$2,341
$40,121
$49,674Charges
to
earnings
(a)(240)
(37,780)(3,707)Out
of
period
adjustment
(b)—
—
(5,846)Balance, end of the period$2,101
$2,341
$40,121(a)
During
2015,
the
amount
is
primarily
related
to
the
Company's
release
of
the
valuation
allowance,
current
year
utilization
of
net
operating
losscarryforwards,
the
write-off
of
certain
state
net
operating
losses
that
expire
in
2015
and
state
net
operating
losses
not
expected
to
be
utilized
in
futureyears
due
to
changes
in
ownership
limitations.(b)
Out
of
period
adjustment
in
the
valuation
allowance
is
offset
by
an
out
of
period
adjustment
to
the
deferred
tax
assets,
thus
the
adjustment
is
limited
todisclosure.
The
error
related
primarily
to
the
calculation
of
the
federal
benefit
of
the
state
operating
loss
carryforwards.Unrecognized Tax BenefitsA
reconciliation
of
the
beginning
and
ending
amounts
of
unrecognized
tax
benefits,
excluding
interest
and
penalties,
is
as
follows
(in thousands) : Year Ended December 31, 2016
2015Balance, beginning of the period$19
$23Additions
based
on
tax
positions
of
the
current
year550
—Lapse
of
statute
of
limitations(19)
(4)Balance, end of the period$550
$19Interest
and,
if
applicable,
penalties
are
recognized
related
to
unrecognized
tax
benefits
in
income
tax
expense.
For
the
year
ended
December
31,
2015,
theCompany
incurred
interest
and
penalties
on
unrecognized
tax
benefits
of
$0.1
million
which
was
included
in
income
tax
expense.
Interest
and
penalties
onunrecognized
tax
benefits
included
in
income
tax
expense
for
each
of
the
years
ended
December
31,
2016
and
2014
was
immaterial.
As
of
December
31,
2015
,
theaccrual
for
interest
and
penalties
was
$0.1
million
.
The
accrual
for
interest
and
penalties
as
of
December
31,
2016
was
immaterial.As
of
December
31,
2016
,
the
accrual
for
unrecognized
tax
benefits,
including
interest,
was
$0.6
million
,
which
would
benefit
the
effective
tax
rate
ifrecognized.
As
of
December
31,
2015,
the
accrual
for
unrecognized
tax
benefits,
including
interest,
was
$0.2
million
,
of
which
an
immaterial
amount
wouldbenefit
the
effective
tax
rate
if
recognized.Tax AuditsLendingTree
is
subject
to
audits
by
federal,
state
and
local
authorities
in
the
area
of
income
tax.
These
audits
include
questioning
the
timing
and
the
amountof
deductions
and
the
allocation
of
income
among
various
tax
jurisdictions.
Income
taxes
payable
include
amounts
considered
sufficient
to
pay
assessments
thatmay
result
from
examination
of
prior
year
returns;
however,
any
amounts
paid
upon
resolution
of
issues
raised
may
differ
from
the
amount
provided.
Differencesbetween
the
reserves
for
tax
contingencies
and
the
amounts
owed
by
the
Company
are
recorded
in
the
period
they
become
known.
As
of
December
31,
2016,
theCompany
is
subject
to
a
federal
income
tax
examination
for
the
tax
years
2012
through
2015.
In
addition,
the
Company
is
subject
to
state
and
local
taxexaminations
for
the
tax
years
2013
through
2015.NOTE 11 —REVOLVING CREDIT FACILITYSenior Secured Revolving Credit FacilityOn
October
22,
2015,
the
Company's
wholly-owned
subsidiary,
LendingTree,
LLC,
entered
into
a
$125.0
million
five
-year
senior
secured
revolving
creditfacility
which
matures
on
October
22,
2020
(the
“Revolving
Credit
Facility”).
The
proceeds
of
the
Revolving
Credit
Facility
can
be
used
to
finance
working
capitalneeds,
capital
expenditures
and
general
corporate
purposes,64LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSincluding
to
finance
permitted
acquisitions.
As
of
December
31,
2016
,
the
Company
does
not
have
any
borrowings
outstanding
under
the
Revolving
CreditFacility.Up
to
$10.0
million
of
the
Revolving
Credit
Facility
will
be
available
for
short-term
loans,
referred
to
as
swingline
loans.
Additionally,
up
to
$10.0
million
ofthe
Revolving
Credit
Facility
will
be
available
for
the
issuance
of
letters
of
credit.
Under
certain
conditions,
the
Company
will
be
permitted
to
add
one
or
moreterm
loans
and/or
increase
revolving
commitments
under
the
Revolving
Credit
Facility
up
to
an
aggregate
amount
of
$50.0
million
.The
Company’s
borrowings
under
the
Revolving
Credit
Facility
bear
interest
at
annual
rates
that,
at
the
Company’s
option,
will
be
either:•a
base
rate
generally
defined
as
the
sum
of
(i)
the
greater
of
(a)
the
prime
rate
of
SunTrust
Bank
,
(b)
the
federal
funds
effective
rate
plus
0.5%
and
(c)
theLIBO
rate
(defined
below)
on
a
daily
basis
applicable
for
an
interest
period
of
one
month
plus
1.0%
and
(ii)
an
applicable
percentage
of
1.0%
to
2.0%based
on
the
funded
debt
to
consolidated
EBITDA
ratio;
or•a
LIBO
rate
generally
defined
as
the
sum
of
(i)
the
rate
for
Eurodollar
deposits
in
the
applicable
currency
and
(ii)
an
applicable
percentage
of
2.0%
to3.0%
based
on
the
funded
debt
to
consolidated
EBITDA
ratio.All
swingline
loans
bear
interest
at
the
base
rate
defined
above.
Interest
on
the
Company’s
borrowings
are
payable
quarterly
in
arrears
for
base
rate
loans
andon
the
last
day
of
each
interest
rate
period
(but
not
less
often
than
three
months)
for
LIBO
rate
loans.The
Revolving
Credit
Facility
contains
certain
restrictive
financial
covenants,
which
include
a
funded
debt
to
consolidated
EBITDA
ratio
and
a
consolidatedEBITDA
to
interest
expense
ratio.
In
addition,
the
Revolving
Credit
Facility
contains
customary
affirmative
and
negative
covenants
in
addition
to
events
of
defaultfor
a
transaction
of
this
type
that,
among
other
things,
restrict
additional
indebtedness,
liens,
mergers
or
certain
fundamental
changes,
asset
dispositions,
dividends,stock
repurchases
and
other
restricted
payments,
transactions
with
affiliates,
sale-leaseback
transactions,
hedging
transactions,
loans
and
investments
and
othermatters
customarily
restricted
in
such
agreements.
The
Company
was
in
compliance
with
all
covenants
at
December
31,
2016.The
Revolving
Credit
Facility
requires
LendingTree,
LLC
to
pledge
as
collateral,
subject
to
certain
customary
exclusions,
100%
of
its
assets,
including
100%of
its
equity
in
all
of
its
subsidiaries.
The
obligations
under
this
facility
are
unconditionally
guaranteed
on
a
senior
basis
by
LendingTree,
Inc.
and
specificsubsidiaries
of
LendingTree,
LLC,
which
guaranties
are
secured
by
a
pledge
as
collateral,
subject
to
certain
customary
exclusions,
of
100%
of
each
of
suchguarantor's
assets,
including
100%
of
its
equity
in
all
of
its
subsidiaries.The
Company
is
required
to
pay
an
unused
commitment
fee
quarterly
in
arrears
on
the
difference
between
committed
amounts
and
amounts
actually
borrowedunder
the
Revolving
Credit
Facility
equal
to
an
applicable
percentage
of
0.25%
to
0.5%
per
annum
based
on
a
funded
debt
to
consolidated
EBITDA
ratio.
TheCompany
is
required
to
pay
a
letter
of
credit
participation
fee
and
a
letter
of
credit
fronting
fee
quarterly
in
arrears.
The
letter
of
credit
participation
fee
is
basedupon
the
aggregate
face
amount
of
outstanding
letters
of
credit
at
an
applicable
percentage
of
2.0%
to
3.0%
based
on
the
funded
debt
to
consolidated
EBITDAratio.
The
letter
of
credit
fronting
fee
is
0.125%
per
annum
on
the
face
amount
of
each
letter
of
credit.The
Company
incurred
debt
issuance
costs
of
$1.2
million
for
the
Revolving
Credit
Facility,
which
is
included
in
prepaid
and
other
current
assets
and
othernon-current
assets
in
the
Company's
consolidated
balance
sheet
and
is
being
amortized
to
interest
expense
over
the
life
of
the
Revolving
Credit
Facility
of
fiveyears
.NOTE 12 —COMMITMENTSOperating LeasesThe
Company
leases
office
space
used
in
connection
with
its
operations
under
various
operating
leases,
which
contain
escalation
clauses.
The
Company'soperating
leases
relate
to
its
office
space
in
Charlotte,
North
Carolina
and
Burlingame,
California.65LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSFuture
minimum
payments
as
of
December
31,
2016
under
operating
lease
agreements
having
an
initial
or
remaining
non-cancelable
lease
term
in
excess
ofone
year
are
as
follows
(in thousands) :Year ending December 31,
Amount2017
$1,3742018
1,2272019
1,0252020
1,0552021
—Total
$4,681Rental
expense
for
all
operating
leases,
except
those
with
terms
of
a
month
or
less
that
were
not
renewed,
charged
to
continuing
operations
was
$1.6
million
,$1.2
million
and
$1.1
million
,
for
each
of
the
years
ended
December
31,
2016
,
2015
and
2014
,
respectively,
and
a
majority
of
which
is
included
in
general
andadministrative
expense
in
the
consolidated
statements
of
operations
and
comprehensive
income.BondsThe
Company
has
funding
commitments
that
could
potentially
require
performance
in
the
event
of
demands
by
third
parties
or
contingent
events,
as
follows(in thousands) : Commitments Due By Period Total
Less Than1 year
1-3 years
3-5 years
More Than5 yearsSurety
bonds
(a)$4,293
$4,268
$25
$—
$—Litigation
bonds
(b)140
140
—
—
—Total$4,433
$4,408
$25
$—
$—(a)
State
laws
and
regulations
generally
require
businesses
which
engage
in
mortgage
brokering
activity
to
maintain
a
mortgage
broker
or
similar
license.Mortgage
brokering
activity
is
generally
defined
to
include,
among
other
things,
receiving
valuable
consideration
for
offering
assistance
to
a
buyer
inobtaining
a
residential
mortgage
or
soliciting
financial
and
mortgage
information
from
the
public
and
providing
that
information
to
an
originator
ofresidential
mortgage
loans.
All
states
require
that
the
Company
maintain
surety
bonds
for
potential
claims.(b)
Bonds
required
for
certain
legal
matters.NOTE 13 —CONTINGENCIESOverviewLendingTree
is
involved
in
legal
proceedings
on
an
ongoing
basis.
In
assessing
the
materiality
of
a
legal
proceeding,
the
Company
evaluates,
among
otherfactors,
the
amount
of
monetary
damages
claimed,
as
well
as
the
potential
impact
of
non-monetary
remedies
sought
by
plaintiffs
(e.g.,
injunctive
relief)
that
mayrequire
it
to
change
its
business
practices
in
a
manner
that
could
have
a
material
and
adverse
impact
on
the
business.
With
respect
to
the
matters
disclosed
in
thisNote

13
,
unless
otherwise
indicated,
the
Company
is
unable
to
estimate
the
possible
loss
or
range
of
losses
that
could
potentially
result
from
the
application
ofsuch
non-monetary
remedies.As
of
December
31,
2016
and
2015
,
the
Company
has
a
litigation
settlement
accrual
of
$0.7
million
and
$0.6
million
,
respectively,
in
continuing
operationsand
$4.0
million
and
$3.6
million
,
respectively,
in
discontinued
operations.
The
litigation
settlement
accrual
relates
to
litigation
matters
that
were
either
settled
or
afirm
offer
for
settlement
was
extended,
thereby
establishing
an
accrual
amount
that
is
both
probable
and
reasonably
estimable.66LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSSpecific MattersIntellectual Property LitigationZillowLendingTree v. Zillow, Inc., et al. Civil Action No. 3:10-cv-439 .
On
September
8,
2010,
the
Company
filed
an
action
for
patent
infringement
in
the
U.S.District
Court
for
the
Western
District
of
North
Carolina
against
Zillow,
Inc.,
Nextag,
Inc.,
Quinstreet,
Inc.,
Quinstreet
Media,
Inc.
and
Adchemy,
Inc.
Thecomplaint
was
amended
to
include
Leadpoint,
Inc.
d/b/a
Securerights
on
September
24,
2010.
The
complaint
alleged
that
each
of
the
defendants
infringed
one
orboth
of
the
Company's
patents—U.S.
Patent
No.
6,385,594,
entitled
"Method
and
Computer
Network
for
Co-Ordinating
a
Loan
over
the
Internet,"
and
U.S.
PatentNo.
6,611,816,
entitled
"Method
and
Computer
Network
for
Co-Ordinating
a
Loan
over
the
Internet."
The
defendants
in
this
action
asserted
various
defenses
andcounterclaims
against
the
Company,
including
the
assertion
by
certain
of
the
defendants
of
counterclaims
alleging
illegal
monopolization
via
the
Company'smaintenance
of
the
asserted
patents.
Defendant
NexTag
asserted
defenses
of
laches
and
equitable
estoppel.
In
July
2011,
the
Company
reached
a
settlementagreement
with
Leadpoint,
Inc.,
pursuant
to
which
all
claims
against
Leadpoint,
Inc.
and
all
counterclaims
against
the
Company
by
Leadpoint,
Inc.
were
dismissed.In
November
2012,
the
Company
reached
a
settlement
agreement
with
Quinstreet,
Inc.
and
Quinstreet
Media,
Inc.
(collectively,
the
"Quinstreet
Parties"),
pursuantto
which
all
claims
against
the
Quinstreet
Parties
and
all
counterclaims
against
the
Company
by
the
Quinstreet
Parties
were
dismissed.
After
an
unsuccessfulattempt
to
reach
settlement
through
mediation
with
the
remaining
parties,
this
matter
went
to
trial
beginning
in
February
2014,
and
on
March
12,
2014,
the
juryreturned
a
verdict.
The
jury
found
that
the
defendants
Zillow,
Inc.,
Adchemy,
Inc.,
and
NexTag,
Inc.
did
not
infringe
the
two
patents
referenced
above
anddetermined
that
those
patents
are
invalid
due
to
an
inventorship
defect,
and
the
court
found
that
NexTag
was
entitled
to
defenses
of
laches
and
equitable
estoppel.The
jury
found
in
the
Company’s
favor
on
the
defendants'
counterclaims
alleging
inequitable
conduct
and
antitrust
violations.
Judgment
was
entered
on
March
31,2014.
After
the
court
entered
judgment,
on
May
27,
2014,
the
Company
reached
a
settlement
agreement
with
defendant
Adchemy,
Inc.,
including
an
agreement
todismiss
and
withdraw
all
claims,
counterclaims,
and
motions
between
the
Company
and
Adchemy,
Inc.
As
a
result,
a
joint
and
voluntary
dismissal
was
filed
June12,
2014
with
respect
to
claims
between
the
Company
and
Adchemy.
The
parties
filed
various
post-trial
motions;
in
particular,
defendants
collectively
sought
up
to$9.7
million
in
fees
and
costs.
On
October
9,
2014,
the
court
denied
the
Company's
post-trial
motion
for
judgment
as
a
matter
of
law
and
denied
Zillow's
post-trialmotions
for
sanctions
and
attorneys'
fees.
The
court
also
denied
in
part
and
granted
in
part
NexTag's
post-trial
motion
for
attorneys'
fees,
awarding
NexTag
aportion
of
its
attorneys'
fees
and
costs
totaling
$2.3
million
,
plus
interest.In
November
2014,
the
Company
filed
a
notice
of
appeal
to
the
U.S.
Court
of
Appeals
for
the
Federal
Circuit
with
respect
to
the
jury
verdict
concerningZillow,
Inc.
and
Nextag,
Inc.
and
the
award
of
attorneys'
fees.
In
March
2015,
the
U.S.
Court
of
Appeals
for
the
Federal
Circuit
granted
the
Company's
motion
tostay
appellate
briefing
pending
an
en banc review
by
such
court
of
the
laches
defense
in
an
unrelated
patent
infringement
matter
and
ruled
in
favor
of
Zillow,
Inc.on
an
immaterial
amount
of
costs
related
to
the
trial
process.
In
June
2015,
the
Company
reached
a
settlement
agreement
for
$1.1
million
with
defendant
NexTagpursuant
to
which
the
Company
dismissed
its
appeal
of
the
jury
verdict
and
the
award
of
attorney's
fees
concerning
NexTag,
and
NexTag
dismissed
its
cross-appeal
and
claims
relating
to
the
jury
verdict
and
the
award
of
attorneys'
fees.
In
July
2015,
the
stay
was
lifted
on
the
Company's
appeal
with
respect
to
the
juryverdict
concerning
Zillow,
Inc.
The
appeal
was
heard
by
the
U.S.
Court
of
Appeals
for
the
Federal
Circuit
in
June
2016,
and
in
July
2016
the
Court
determined
thatcertain
of
the
claims
of
the
two
patents
referenced
above
were
directed
to
ineligible
subject
matter
and
thus
such
claims
were
invalid
under
35
U.S.C.
Section
101.With
respect
to
the
remaining
claims
that
the
Court
did
not
hold
were
ineligible,
the
Court
granted
a
remand
to
the
federal
district
court
to
allow
LendingTree
tofile
a
motion
to
vacate
the
judgment
of
invalidity
for
incorrect
inventorship.Legal MattersNext
Advisor
Continued,
Inc.Next Advisor Continued, Inc. v. LendingTree, Inc. and LendingTree, LLC, No. 15-cvs-20775 (N.C. Super. Ct.). 
On
November
6,
2015,
the
plaintiff
filed
thisaction
against
LendingTree,
Inc.
and
LendingTree,
LLC
(together
“LendingTree”).
The
plaintiff
generally
alleges
that
LendingTree
breached
a
non-disclosureagreement
and
misappropriated
trade
secrets
in
the
context
of
a
potential
business
acquisition
of
the
plaintiff
by
LendingTree.
Based
upon
these
allegations,
theplaintiff
asserts
claims
for
breach
of
contract,
misappropriation
of
trade
secrets,
and
violation
of
the
North
Carolina
Unfair
and
Deceptive
Trade
Practices
Act.
Theplaintiff
seeks
damages,
attorneys’
fees
and
injunctive
relief.On
December
16,
2015,
LendingTree
filed
its
answer
to
the
plaintiff's
complaint,
denying
the
material
allegations
and
asserting
numerous
defenses
thereto.
InJune
2016,
the
Court
granted
plaintiff's
motion
for
preliminary
injunction
and
ordered
that
LendingTree
cease
any
utilization
of
confidential
and
trade
secretinformation
of
plaintiff
and
cease
marketing
its
credit
card
product
via
certain
third
party
content
marketing
platforms
until
the
judge
finally
determines
the
facts
inthis
matter
and
the67LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSappropriate
relief,
if
any,
to
be
granted
with
respect
thereto.
LendingTree
believes
that
the
plaintiff's
allegations
lack
merit
and
intends
to
vigorously
defend
thisaction.
In
July
2016,
LendingTree
filed
a
notice
of
interlocutory
appeal
with
respect
to
the
order
granting
plaintiff's
motion
for
preliminary
injunction
to
the
NorthCarolina
Supreme
Court;
the
interlocutory
appeal
was
dismissed
in
December
2016.
In
February
2017,
LendingTree
filed
a
motion
for
partial
summary
judgment.An
estimated
liability
of
$0.1
million
for
this
matter
is
included
in
the
accompanying
consolidated
balance
sheet
as
of
December
31,
2016
.Legal MattersMassachusetts
Division
of
BanksOn
February
11,
2011,
the
Massachusetts
Division
of
Banks
(the
"Division")
delivered
a
Report
of
Examination/Inspection
to
LendingTree,
LLC,
whichidentified
various
alleged
violations
of
Massachusetts
and
federal
laws,
including
the
alleged
insufficient
delivery
by
LendingTree,
LLC
of
various
disclosures
toits
customers.
On
October
14,
2011,
the
Division
provided
a
proposed
Consent
Agreement
and
Order
to
settle
the
Division's
allegations,
which
the
Division
hadshared
with
other
state
mortgage
lending
regulators.
Thirty-four
of
such
state
mortgage
lending
regulators
(the
"Joining
Regulators")
indicated
that
if
LendingTree,LLC
would
enter
into
the
Consent
Agreement
and
Order,
they
would
agree
not
to
pursue
any
analogous
allegations
that
they
otherwise
might
assert.
None
of
theJoining
Regulators
have
asserted
any
such
allegations.
The
proposed
Consent
Agreement
and
Order
calls
for
a
fine
to
be
allocated
among
the
Division
and
the
Joining
Regulators
and
for
LendingTree,
LLC
toadopt
various
new
procedures
and
practices.
The
Company
has
commenced
negotiations
toward
an
acceptable
Consent
Agreement
and
Order.
It
does
not
believeits
mortgage
marketplace
business
violated
any
federal
or
state
mortgage
lending
laws;
nor
does
it
believe
that
any
past
operations
of
the
mortgage
business
haveresulted
in
a
material
violation
of
any
such
laws.
Should
the
Division
or
any
Joining
Regulator
bring
any
actions
relating
to
the
matters
alleged
in
theFebruary
2011
Report
of
Examination/Inspection,
the
Company
intends
to
defend
against
such
actions
vigorously.
The
range
of
possible
loss
is
estimated
to
bebetween
$0.5
million
and
$6.5
million
,
and
an
estimated
liability
of
$0.5
million
has
been
established
for
this
matter
in
the
accompanying
consolidated
balancesheet
as
of
December
31,
2016
.Litigation Related to Discontinued OperationsResidential
Funding
CompanyResidential Funding Company, LLC v Home Loan Center, Inc., No. 13-cv-3451 (U.S. Dist. Ct., Minn.). 
On
or
about
December
16,
2013,
Home
Loan
Center,Inc.
was
served
in
the
above
captioned
matter.
Generally,
Residential
Funding
Company,
LLC
("RFC")
seeks
damages
for
breach
of
contract
and
indemnificationfor
certain
residential
mortgage
loans
as
well
as
residential
mortgage-backed
securitizations
("RMBS")
containing
mortgage
loans.
RFC
asserts
that,
beginning
in2008,
RFC
faced
massive
repurchase
demands
and
lawsuits
from
purchasers
or
insurers
of
the
loans
and
RMBS
that
RFC
had
sold.
RFC
filed
for
bankruptcyprotection
in
May
2012.
Plaintiff
alleges
that,
after
RFC
filed
for
Chapter
11
protection,
hundreds
of
proofs
of
claim
were
filed,
many
of
which
mirrored
thelitigation
filed
against
RFC
prior
to
its
bankruptcy.In
December
2013,
the
United
States
Bankruptcy
Court
for
the
Southern
District
of
New
York
entered
an
Order
confirming
the
Second
Amended
JointChapter
11
Plan
Proposed
by
Residential
Capital,
LLC
et
al.
and
the
Official
Committee
of
Unsecured
Creditors.
Plaintiff
then
began
filing
substantially
similarcomplaints
against
approximately
80
of
the
loan
originators
from
whom
RFC
had
purchased
loans,
including
Home
Loan
Center,
in
federal
and
state
courts
inMinnesota
and
New
York.
In
each
case,
Plaintiff
claims
that
the
defendant
is
liable
for
a
portion
of
the
global
settlement
in
RFC’s
bankruptcy.Plaintiff
asserts
two
claims
against
HLC:
(1)
breach
of
contract
based
on
HLC’s
alleged
breach
of
representations
and
warranties
concerning
the
quality
andcharacteristics
of
the
mortgage
loans
it
sold
to
RFC
(Count
One);
and
(2)
contractual
indemnification
for
alleged
liabilities,
losses,
and
damages
incurred
by
RFCarising
out
of
purported
defects
in
loans
that
RFC
purchased
from
HSBC
and
sold
to
third
parties
(Count
Two).
Plaintiff
alleges
that
the
“types
of
defects”contained
in
the
loans
it
purchased
from
HLC
included
“income
misrepresentation,
employment
misrepresentation,
appraisal
misrepresentations
or
inaccuracies,undisclosed
debt,
and
missing
or
inaccurate
documents.”HLC
filed
a
Motion
to
Dismiss
under
Rule
12(b)(6)
of
the
Federal
Rules
of
Civil
Procedure
or,
in
the
alternative,
a
Motion
for
More
Definite
Statement
underRule
12(e).
On
June
25,
2015
the
judge
denied
HLC's
motion.On
July
9,
2015,
HLC
filed
its
answer
to
RFC’s
complaint,
denying
the
material
allegations
of
the
complaint
and
asserting
numerous
defenses
thereto.

Discovery
is
ongoing
in
this
matter.

HLC
intends
to
vigorously
defend
this
action.
An
estimated
liability
of
$3.0
million
for
this
matter
is
included
in
theaccompanying
consolidated
balance
sheet
as
of
December
31,
2016.68LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSLehman
Brothers
Holdings,
Inc.
Demand
LetterLehman Brothers Holdings Inc. v. 1 st Advantage Mortgage, LLC et al., Case No. 08-13555 (SCC) (Bankr. S.D.N.Y.). 

In
February
2016,
Lehman
BrothersHoldings
Inc.
(“LBHI”)
filed
an
Adversary
Complaint
against
Home
Loan
Center
and
approximately
149
other
defendants
(the
“Complaint”).

The
Complaintgenerally
seeks
(1)
a
declaratory
judgment
that
the
settlements
entered
by
LBHI
with
Fannie
Mae
and
Freddie
Mac
as
part
of
LBHI’s
bankruptcy
proceedings
gaverise
to
LBHI’s
contractual
indemnification
claims
against
defendants
alleged
in
the
Complaint;
(2)
indemnification
from
HLC
and
the
other
defendants
for
lossesallegedly
incurred
by
LBHI
in
respect
of
defective
mortgage
loans
sold
by
defendants
to
LBHI
or
its
affiliates;
and
(3)
interest,
attorneys’
fees
and
costs
incurredby
LBHI
in
the
litigation.

HLC
intends
to
defend
this
action
vigorously.

HLC
had
previously
received
a
demand
letter
(the
“Letter”)
from
LBHI
in
December2014
with
respect
to
64
loans
(the
“Loans”)
that
LBHI
alleged
were
sold
by
HLC
to
Lehman
Brothers
Bank
FSB
(“LBB”)
between
2004
and
2008
pursuant
to
aloan
purchase
agreement
(the
“LPA”)
between
HLC
and
LBB.

The
Letter
generally
sought
indemnification
from
HLC
in
accordance
with
the
LPA
for
certainclaims
that
LBHI
alleged
it
allowed
in
its
bankruptcy
with
respect
to
the
Loans.

An
estimated
liability
of
$1.0
million
for
this
matter
is
included
in
theaccompanying
consolidated
balance
sheet
as
of
December
31,
2016
.NOTE 14—FAIR VALUE MEASUREMENTSThe
carrying
amounts
of
the
Company's
financial
instruments
are
equal
to
fair
value
at
December
31,
2016.Contingent
consideration
payments
related
to
acquisitions
are
measured
at
fair
value
each
reporting
period
using
Level
3
unobservable
inputs.
The
changes
inthe
fair
value
of
the
Company's
Level
3
liabilities
during
the
year
ended
December
31,
2016
are
as
follows
(in thousands) : Contingent ConsiderationBalance at January 1, 2016$—Transfers
into
Level
3—Transfers
out
of
Level
3—Total
net
gains
(losses)
included
in
earnings
(realized
and
unrealized)—Purchases,
sales
and
settlements:Additions23,100Payments—Balance at December 31, 2016$23,100The
contingent
consideration
liability
at
December
31,
2016
is
the
estimated
fair
value
of
the
Earnout
Payments
of
the
CompareCards
acquisition.
TheCompany
will
make
Earnout
Payments
ranging
from
zero
to
$45.0
million
based
on
the
achievement
of
certain
defined
earnings
targets.
See Note
6
—BusinessAcquisitions
for
additional
information
on
the
contingent
consideration
of
the
CompareCards
acquisition.
The
significant
unobservable
inputs
used
to
calculate
thefair
value
of
the
contingent
consideration
are
estimated
future
cash
flows
for
CompareCards
and
the
discount
rate.
Actual
results
will
differ
from
the
projectedresults
and
could
have
a
significant
impact
on
the
estimated
fair
value
of
the
contingent
consideration.
Additionally,
as
the
liability
is
stated
at
present
value,
thepassage
of
time
alone
will
increase
the
estimated
fair
value
of
the
liability
each
reporting
period.
Any
changes
in
fair
value
will
be
recorded
in
operating
income(expense)
in
the
consolidated
statements
of
operations.NOTE 15—RELATED PARTY TRANSACTIONSOne
of
the
Company's
board
of
directors
also
serves
as
a
director
to
a
marketing
partner
of
the
Company.
During
2016
and
2015,
the
Company
recognized$1.3
million
and
$0.7
million
,
respectively,
of
expenses
for
this
marketing
partner
through
the
normal
course
of
business.69LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 16—BENEFIT PLANSThe
Company
operates
a
retirement
savings
plan
for
its
employees
in
the
United
States
that
is
qualified
under
Section
401(k)
of
the
Internal
Revenue
Code.Employees
are
eligible
to
enroll
in
the
plan
upon
date
of
hire.
Participating
employees
may
contribute
up
to
50%
of
their
pre-tax
earnings,
but
not
more
thanstatutory
limits
(generally
$18,000
,
$18,000
and
$17,500
for
2016
,
2015
and
2014
,
respectively).
The
company
match
contribution
is
fifty
cents
for
each
dollar
aparticipant
contributes
to
the
plan,
with
a
maximum
contribution
of
6%
of
a
participant's
eligible
earnings.
Matching
contributions
are
invested
in
the
same
manneras
each
participant's
voluntary
contributions
in
the
investment
options
provided
under
the
plan.
LendingTree
stock
is
not
included
in
the
available
investmentoptions
or
the
plan
assets.
Funds
contributed
to
the
plan
vest
according
to
the
participant's
years
of
service,
with
less
than
three
years
of
service
vesting
at
0%
,
andthree
years
or
more
of
service
vesting
at
100%
.
Matching
contributions
were
approximately
$0.7
million
,
$0.5
million
and
$0.5
million
for
the
years
endedDecember
31,
2016
,
2015
and
2014
,
respectively.NOTE 17—RESTRUCTURING EXPENSEAccrued
restructuring
costs
primarily
relate
to
lease
obligations
for
call
center
leases
exited
in
2010,
which
were
completed
in
2015.
Restructuring
expenseand
payments
against
liabilities
are
as
follows
(in thousands) : ContinuingLeaseObligationsBalance at December 31, 2013$462Restructuring
expense13Payments(297)Balance at December 31, 2014$178Restructuring
income(29)Payments(149)Balance at December 31, 2015$—NOTE 18 —DISCONTINUED OPERATIONSThe
revenue
and
net
(loss)
income
reported
as
discontinued
operations
in
the
accompanying
consolidated
statements
of
operations
and
comprehensive
incomeare
as
follows
(in thousands) : Year Ended December 31, 2016
2015
2014Revenue$1,325
$6
$14,256





(Loss)
income
before
income
taxes
(a)$(5,728)
$(5,047)
$10,392Income
tax
benefit
(expense)2,014
1,778
(543)Net (loss) income$(3,714)
$(3,269)
$9,849(a)Income
before
income
taxes
for
the
year
ended
December
31,
2014
includes
income
from
a
reduction
in
the
loan
loss
reserve
of
$14.1
million
.
Seeadditional
information
in
"Loan
Loss
Obligations"
below.LendingTree LoansOn
June
6,
2012,
the
Company
sold
substantially
all
of
the
operating
assets
of
its
LendingTree
Loans
business
for
$55.9
million
in
cash
to
a
wholly-ownedsubsidiary
of
Discover
Financial
Services
("Discover").Discover
generally
did
not
assume
liabilities
of
the
LendingTree
Loans
business
that
arose
before
the
closing
date,
except
for
certain
liabilities
directly
relatedto
assets
Discover
acquired.
Of
the
purchase
price
paid,
as
of
December
31,
2016,
$4.0
million
is
being
held
in
escrow
in
accordance
with
the
agreement
withDiscover
for
certain
loan
loss
obligations
that
remain
with
the
Company
following
the
sale.
As
a
result
of
a
settlement
agreement
in
2014
with
a
secondary
marketpurchaser
of
loans,
$12.1
million
was
released
from
escrow
in
December
2015.
The
escrowed
amount
is
recorded
as
restricted
cash
at
December
31,
2016.70LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDiscover
participated
as
a
marketplace
lender
from
closing
of
the
transaction
through
July
2015.Significant Assets and Liabilities of LendingTree LoansUpon
closing
of
the
sale
of
substantially
all
of
the
operating
assets
of
the
LendingTree
Loans
business
on
June
6,
2012,
LendingTree
Loans
ceased
to
originateconsumer
loans.
Liability
for
losses
on
previously
sold
loans
will
remain
with
LendingTree
Loans
and
are
discussed
below.Loan
Loss
ObligationsLendingTree
Loans
sold
loans
it
originated
to
investors
on
a
servicing-released
basis,
so
the
risk
of
loss
or
default
by
the
borrower
was
generally
transferred
tothe
investor.
However,
LendingTree
Loans
was
required
by
these
investors
to
make
certain
representations
and
warranties
relating
to
credit
information,
loandocumentation
and
collateral.
These
representations
and
warranties
may
extend
through
the
contractual
life
of
the
loan.
Subsequent
to
the
loan
sale,
if
underwritingdeficiencies,
borrower
fraud
or
documentation
defects
are
discovered
in
individual
loans,
LendingTree
Loans
may
be
obligated
to
repurchase
the
respective
loan
orindemnify
the
investors
for
any
losses
from
borrower
defaults
if
such
deficiency
or
defect
cannot
be
cured
within
the
specified
period
following
discovery.
In
thecase
of
early
loan
payoffs
and
early
defaults
on
certain
loans,
LendingTree
Loans
may
be
required
to
repay
all
or
a
portion
of
the
premium
initially
paid
by
theinvestor.HLC,
a
subsidiary
of
the
Company,
continues
to
be
liable
for
these
indemnification
obligations,
repurchase
obligations
and
premium
repayment
obligationsfollowing
the
sale
of
substantially
all
of
the
operating
assets
of
its
LendingTree
Loans
business
in
the
second
quarter
of
2012.The
following
table
represents
the
aggregate
loans
sold,
subsequent
settlements
and
remaining
unsettled
loans
as
of
December
31,
2016: Number of Loans
Original Issue Balance (in thousands)
(in billions)Loans
sold
by
HLC234
$38.9Subsequent
settlements(172)
(28.8)Remaining unsettled loans62
$10.1During
the
fourth
quarter
of
2015,
LendingTree
Loans
completed
a
settlement
agreement
for
$0.6
million
with
one
of
the
investors
to
which
it
had
sold
loans.This
investor
accounted
for
approximately
10%
of
the
total
number
of
loans
sold
and
12%
of
the
original
issue
balance.
This
settlement
related
to
all
existing
andfuture
losses
on
loans
sold
to
this
investor.During
the
fourth
quarter
of
2014,
LendingTree
Loans
completed
a
settlement
agreement
for
$5.4
million
with
the
largest
investor
to
which
it
had
sold
loans.This
investor
accounted
for
approximately
40%
of
both
the
total
number
of
loans
sold
and
the
original
issue
balance.
This
settlement
related
to
all
existing
andfuture
losses
on
loans
sold
to
this
investor.
The
settlement
was
paid
in
the
fourth
quarter
of
2014
with
restricted
cash
of
$3.1
million
and
cash
on
hand
of
$2.3million
.
The
settlement
with
this
investor
in
the
fourth
quarter
of
2014
and
the
impact
this
settlement
had
on
the
estimate
of
the
remaining
loan
loss
obligationsresulted
in
income
of
$14.1
million
,
which
was
included
in
income
from
discontinued
operations
in
the
accompanying
consolidated
statements
of
operations
andcomprehensive
income
during
2014.
The
adjustment
to
the
loan
loss
reserve
did
not
result
in
tax
expense
recognition
due
to
the
Company's
full
valuationallowance
against
its
deferred
tax
assets.In
the
second
quarter
of
2014,
LendingTree
Loans
completed
settlements
with
two
buyers
of
previously
purchased
loans.The
Company
has
been
negotiating
with
certain
of
the
remaining
secondary
market
purchasers
to
settle
any
existing
and
future
contingent
liabilities,
but
itmay
not
be
able
to
complete
such
negotiations
on
acceptable
terms,
or
at
all.
Because
LendingTree
Loans
does
not
service
the
loans
it
sold,
it
does
not
maintain
norgenerally
have
access
to
the
current
balances
and
loan
performance
data
with
respect
to
the
individual
loans
previously
sold
to
investors.
Accordingly,
LendingTreeLoans
is
unable
to
determine,
with
precision,
its
maximum
exposure
for
breaches
of
the
representations
and
warranties
it
made
to
the
investors
that
purchased
suchloans.The
Company
uses
a
settlement
discount
framework
for
evaluating
the
adequacy
of
the
reserve
for
loan
losses.
This
model
estimates
lifetime
losses
on
thepopulation
of
remaining
loans
originated
and
sold
by
LendingTree
Loans
using
actual
defaults
for
loans
with
similar
characteristics
and
projected
future
defaults.
Italso
considers
the
likelihood
of
claims
expected
due
to
alleged
breaches
of
representations
and
warranties
made
by
LendingTree
Loans
and
the
percentage
of
thoseclaims
investors
estimate
LendingTree
Loans
may
agree
to
repurchase.
A
settlement
discount
factor
is
then
applied
to
the
result
of
the
foregoing
to
reflect71LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSpublicly-announced
bulk
settlements
for
similar
loan
types
and
vintages,
as
well
as
LendingTree
Loans'
non-operating
status,
in
order
to
estimate
a
range
ofpotential
obligation.The
estimated
range
of
remaining
loan
losses
using
this
settlement
discount
framework
was
determined
to
be
$4.4
million
to
$8.0
million
at
December
31,2016
.
The
reserve
balance
recorded
as
of
December
31,
2016
was
$6.8
million
.
Management
has
considered
both
objective
and
subjective
factors
in
theestimation
process,
but
given
current
general
industry
trends
in
mortgage
loans
as
well
as
housing
prices
and
market
expectations,
actual
losses
related
toLendingTree
Loans'
obligations
could
vary
significantly
from
the
obligation
recorded
as
of
the
balance
sheet
date
or
the
range
estimated
above.Additionally,
LendingTree
has
guaranteed
certain
loans
sold
to
two
investors
in
the
event
that
LendingTree
Loans
is
unable
to
satisfy
its
repurchase
andwarranty
obligations
related
to
such
loans.Based
on
historical
experience,
it
is
anticipated
that
LendingTree
Loans
will
continue
to
receive
repurchase
requests
and
incur
losses
on
loans
sold
in
prioryears.The
activity
related
to
loss
reserves
on
previously
sold
loans
is
as
follows
(in thousands) : Year Ended December 31, 2016
2015
2014Loan loss reserve, beginning of period$8,127
$8,750
$28,543Provision
adjustments
(a)(1,323)
—
(14,144)Charge-offs
to
reserves—
(623)
(5,649)Loan loss reserve, end of period$6,804
$8,127
$8,750(a)As
discussed
above,
during
2014,
LendingTree
Loans
completed
a
settlement
agreement
with
the
largest
investor
to
which
it
had
sold
loans,
resulting
inan
adjustment
to
the
provision.
During
2016,
the
Company
adjusted
the
loan
loss
reserve
by
$1.8
million
to
remove
the
estimated
liability
for
loans
sold
toRFC.
The
Company
is
in
litigation
with
RFC
and
reserved
the
loss
for
this
litigation
in
the
legal
reserve.
See Note
13
—Contingencies
for
additionalinformation
about
the
RFC
litigation.The
liability
for
losses
on
previously
sold
loans
is
presented
as
current
liabilities
of
discontinued
operations
in
the
accompanying
consolidated
balance
sheetsas
of
December
31,
2016
and
2015
.NOTE 19 —SEGMENT INFORMATIONThe
Company
has
one
reportable
segment.Mortgage
and
non-mortgage
product
revenue
is
as
follows
(in thousands) : Year Ended December 31, 2016
2015
2014Mortgage
products$219,991
$165,272
134,137Non-mortgage
products164,411
88,944
33,213Total revenue$384,402
$254,216
$167,35072LENDINGTREE, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 20—QUARTERLY FINANCIAL INFORMATION (UNAUDITED)The
following
tables
set
forth
summary
financial
information
for
the
years
ended
December
31,
2016
and
2015: Q1
Q2
Q3
Q4
(in thousands, except per share amounts)2016






Revenue$94,713
$94,290
$94,558
$100,841Operating
income11,845
12,715
14,150
13,402Income
from
continuing
operations6,905
9,002
7,280
8,021Loss
from
discontinued
operations(1,203)
(1,150)
(664)
(697)Net
income
and
comprehensive
income$5,702
$7,852
$6,616
$7,324Income
per
share
from
continuing
operations:






Basic$0.58
$0.76
$0.62
$0.68Diluted$0.54
$0.71
$0.57
$0.63Loss
per
share
from
discontinued
operations:






Basic$(0.10)
$(0.10)
$(0.06)
$(0.06)Diluted$(0.09)
$(0.09)
$(0.05)
$(0.05)Net
income
per
share:






Basic$0.48
$0.67
$0.56
$0.62Diluted$0.44
$0.62
$0.52
$0.57 Q1
Q2
Q3
Q4
(in thousands, except per share amounts)2015






Revenue$50,935
$55,136
$69,804
$78,341Operating
income5,718
6,775
7,773
8,248Income
from
continuing
operations5,413
6,439
7,383
32,081Loss
from
discontinued
operations(226)
(1,717)
(1,295)
(31)Net
income
and
comprehensive
income$5,187
$4,722
$6,088
$32,050Income
per
share
from
continuing
operations:






Basic$0.48
$0.57
$0.65
$2.69Diluted$0.44
$0.52
$0.59
$2.47Loss
per
share
from
discontinued
operations:






Basic$(0.02)
$(0.15)
$(0.11)
$—Diluted$(0.02)
$(0.14)
$(0.10)
$—Net
income
per
share:






Basic$0.46
$0.41
$0.53
$2.69Diluted$0.43
$0.38
$0.49
$2.4773Table of ContentsITEM 9.   Changes
in
and
Disagreements
With
Accountants
on
Accounting
and
Financial
DisclosureNot
applicable.ITEM 9A.   Controls
and
ProceduresEvaluation of Disclosure Controls and ProceduresAs
required
by
Rule
13a-15(b)
of
the
Securities
Exchange
Act
of
1934
(the
"Exchange
Act"),
management,
with
the
participation
of
our
principal
executiveofficer
(Chief
Executive
Officer)
and
our
principal
financial
officer
(Chief
Financial
Officer),
evaluated,
as
of
the
end
of
the
period
covered
by
this
report,
theeffectiveness
of
our
disclosure
controls
and
procedures
as
defined
in
Exchange
Act
Rule
13a-15(e).
Management
necessarily
applied
its
judgment
in
assessing
thecosts
and
benefits
of
such
controls
and
procedures,
which
by
their
nature
can
provide
only
reasonable
assurance
regarding
management's
control
objectives.Management
does
not
expect
that
our
disclosure
controls
and
procedures
will
prevent
or
detect
all
errors
and
fraud.
A
control
system,
irrespective
of
how
well
it
isdesigned
and
operated,
can
only
provide
reasonable
assurance
and
cannot
guarantee
that
it
will
succeed
in
its
stated
objectives.Based
upon
that
evaluation,
our
Chief
Executive
Officer
and
Chief
Financial
Officer
concluded
that,
as
of
December
31,
2016
,
our
disclosure
controls
andprocedures
were
effective
to
provide
reasonable
assurance
that
the
information
required
to
be
disclosed
by
us
in
the
reports
we
file
or
submit
under
the
ExchangeAct
is
recorded,
processed,
summarized
and
reported
within
the
time
periods
specified
in
the
SEC's
rules
and
forms,
and
that
such
information
is
accumulated
andcommunicated
to
our
management,
including
our
Chief
Executive
Officer
and
Chief
Financial
Officer,
as
appropriate
to
allow
timely
decisions
regarding
requireddisclosure.Management's Report on Internal Control over Financial ReportingManagement
is
responsible
for
establishing
and
maintaining
adequate
internal
control
over
financial
reporting,
as
defined
in
Rule
13a-15(f)
under
theExchange
Act.
Our
internal
control
over
financial
reporting
is
a
process
designed
to
provide
reasonable
assurance
regarding
the
reliability
of
financial
reportingand
the
preparation
of
financial
statements
for
external
purposes
in
accordance
with
GAAP.
Our
internal
control
over
financial
reporting
includes
those
policiesand
procedures
that:
(1)
pertain
to
the
maintenance
of
records
that
in
reasonable
detail
accurately
and
fairly
reflect
our
transactions
and
dispositions
of
our
assets;(2)
provide
reasonable
assurance
that
transactions
are
recorded
as
necessary
to
permit
preparation
of
financial
statements
in
accordance
with
GAAP
and
that
ourreceipts
and
expenditures
are
being
made
only
in
accordance
with
authorizations
of
our
management
and
our
directors;
and
(3)
provide
reasonable
assuranceregarding
prevention
or
timely
detection
of
unauthorized
acquisition,
use
or
disposition
of
our
assets
that
could
have
a
material
effect
on
the
financial
statements.Because
of
its
inherent
limitations,
internal
control
over
financial
reporting
may
not
prevent
or
detect
misstatements.
Also,
projections
of
any
evaluation
ofeffectiveness
to
future
periods
are
subject
to
the
risk
that
controls
may
become
inadequate
because
of
changes
in
conditions,
or
that
the
degree
of
compliance
withthe
policies
or
procedures
may
deteriorate.Management,
with
the
participation
of
our
Chief
Executive
Officer
and
Chief
Financial
Officer,
assessed
the
effectiveness
of
our
internal
control
overfinancial
reporting
as
of
December
31,
2016
.
In
making
this
assessment,
our
management
used
the
criteria
for
effective
internal
control
over
financial
reportingdescribed
in
"Internal
Control-Integrated
Framework"
(2013)
issued
by
the
Committee
of
Sponsoring
Organizations
of
the
Treadway
Commission
("COSO").Based
on
our
evaluation
under
the
framework
in
the
Internal
Control-Integrated
Framework,
issued
by
the
COSO,
management
has
concluded
that
our
internalcontrol
over
financial
reporting
was
effective
as
of
December
31,
2016
.
The
effectiveness
of
our
internal
control
over
financial
reporting
as
of
December
31,
2016has
been
audited
by
PricewaterhouseCoopers
LLP,
an
independent
registered
public
accounting
firm,
as
stated
in
their
report
appearing
under
"Item
8.
FinancialStatements
and
Supplementary
Data"
included
elsewhere
in
this
annual
report.Changes in Internal Control over Financial ReportingThere
was
no
change
in
our
internal
control
over
financial
reporting
(as
defined
in
the
Exchange
Act,
Rules
13a-15(f))
that
occurred
during
the
quarter
endedDecember
31,
2016
that
has
materially
affected,
or
is
reasonably
likely
to
materially
affect,
our
internal
control
over
financial
reporting.74ITEM 9B.   Other
InformationIncrease
in
Authorized
Number
of
DirectorsOn
February
22,
2017,
in
accordance
with
our
bylaws
and
upon
the
recommendation
of
the
Nominating
and
Corporate
Governance
Committee,
our
board
ofdirectors
duly
adopted
a
resolution
increasing
the
authorized
number
of
directors
from
seven
to
nine.Appointment
of
New
DirectorsOn
February
22,
2017,
our
board
of
directors,
upon
the
recommendation
of
the
Nominating
and
Corporate
Governance
Committee,
appointed
Mr.
Thomas
M.Davidson,
Jr.
and
Mr.
G.
Kennedy
Thompson
to
fill
two
newly-created
vacancies
on
our
board
of
directors,
effective
March
15,
2017.
Our
board
of
directors
hasdetermined
that
Messrs.
Davidson
and
Thompson
both
qualify
as
independent
under
the
independence
standards
under
the
Listing
Rules
of
the
NASDAQ
StockMarket.Mr.
Davidson,
age
45,
is
the
co-founder
and
has
served
as
Chief
Executive
Officer
of
EverFi,
Inc.,
a
software-as-a-service
education
technology
companyheadquartered
in
Washington,
D.C.,
since
2008.
Prior
to
founding
EverFi,
Inc.,
Mr.
Davidson
was
a
venture
capitalist
at
Village
Ventures
from
2007-2009
with
afocus
on
early-stage
technology
companies
in
the
education
and
social
media
spaces.
From
1994
to
2000,
Mr.
Davidson
served
three
terms
in
the
Maine
House
ofRepresentatives
where
he
served
as
Chairman
of
the
Utilities
and
Energy
Committee
and
was
a
senior
member
of
the
Taxation
Committee
and
the
BankingInsurance
and
Business
and
Economic
Development
Committees.Mr.
Thompson,
age
66,
has
been
a
partner
of
Aquiline
Capital
Partners,
a
New
York
based
private
equity
firm,
since
2009.
From
1999
to
2008,
Mr.
Thompsonwas
President
and
Chief
Executive
Officer
of
Wachovia
Corporation.
Mr.
Thompson
served
in
numerous
industry
leadership
positions
including
Chairman
of
theClearing
House,
Chairman
of
the
Financial
Services
Roundtable,
Chairman
of
the
Financial
Services
Forum
and
President
of
the
Federal
Advisory
Council
of
theFederal
Reserve
Board.
In
the
past
five
years,
he
has
served
as
a
member
of
the
board
of
directors
of
HP
Inc.
(NYSE:
HPQ)
and
BNC
Bank,
and
is
currently
atrustee
of
the
Morehead-Cain
Foundation.In
consideration
for
their
services,
Messrs.
Davidson
and
Thompson
will
be
compensated
in
accordance
with
the
compensation
plan
for
non-employeedirectors
previously
approved
by
our
board
of
directors.There
are
no
arrangements
or
understandings
between
Messrs.
Davidson
or
Thompson
and
any
other
persons
pursuant
to
which
either
was
selected
as
adirector,
and
no
transactions
between
our
company
and
Messrs.
Davidson
or
Thompson
which
require
disclosure
under
Item
404(a)
of
Regulation
S-K.New
Board
Committee
CompositionsOn
February
22,
2017,
our
board
of
directors,
upon
the
recommendation
of
the
Nominating
and
Corporate
Governance
Committee,
approved
the
followingnew
committee
assignments,
effective
March
1,
2017
(except
as
provided
below):•Our
Audit
Committee
will
be
composed
of
Ms.
Henderson,
Peter
Horan
and
Steven
Ozonian
(Chair),
each
of
whom
is
independent
and
each
of
whom
isqualified
under
the
Listing
Rules
of
the
NASDAQ
Stock
Market
to
serve
on
our
audit
committee.
Our
board
has
designated
each
of
Peter
Horan
andSteve
Ozonian
as
an
audit
committee
financial
expert.•Our
Compensation
Committee
will
be
composed
of
Craig
Troyer,
Steven
Ozonian
(Chair)
and
Saras
Sarasvathy.•Our
Nominating
and
Corporate
Governance
Committee
will
be
composed
of
Robin
Henderson
and
Peter
Horan
(Chair).
Thomas
Davidson
will
become
amember
of
the
Nominating
and
Corporate
Governance
Committee
effective
March
15,
2017.•Our
Transactions
Committee
will
be
composed
of
Douglas
Lebda
(Chair),
Peter
Horan
and
Neal
Dermer.
G.
Kennedy
Thompson
will
become
a
memberof
our
Transactions
Committee
effective
March
15,
2017.75Table of ContentsPART IIIAs
set
forth
below,
the
information
required
by
Part
III
(Items
10,
11,
12,
13
and
14)
is
incorporated
herein
by
reference
to
the
Company's
definitive
proxystatement
to
be
used
in
connection
with
its
2017
Annual
Meeting
of
Stockholders
and
which
will
be
filed
with
the
Securities
and
Exchange
Commission
not
laterthan
120
days
after
the
end
of
the
Company's
fiscal
year
ended
December
31,
2016
(the
"
2017
Proxy
Statement"),
in
accordance
with
General
Instruction
G(3)
ofForm
10-K.ITEM 10.   Directors,
Executive
Officers
and
Corporate
GovernanceThe
information
required
by
Item
10
will
be
contained
in,
and
is
hereby
incorporated
by
reference
to,
the
2017
Proxy
Statement.ITEM 11.   Executive
CompensationThe
information
required
by
Item
11
will
be
contained
in,
and
is
hereby
incorporated
by
reference
to,
the
2017
Proxy
Statement.ITEM 12.   Security
Ownership
of
Certain
Beneficial
Owners
and
Management
and
Related
Stockholder
MattersThe
information
required
by
Item
12
will
be
contained
in,
and
is
hereby
incorporated
by
reference
to,
the
2017
Proxy
Statement.ITEM 13.   Certain
Relationships
and
Related
Transactions,
and
Director
IndependenceThe
information
required
by
Item
13
will
be
contained
in,
and
is
hereby
incorporated
by
reference
to,
the
2017
Proxy
Statement.ITEM 14.   Principal
Accounting
Fees
and
ServicesThe
information
required
by
Item
14
will
be
contained
in,
and
is
hereby
incorporated
by
reference
to,
the
2017
Proxy
Statement.76Table of ContentsPART IVITEM 15.   Exhibits,
Financial
Statement
Schedules( a)


List
of
documents
filed
as
part
of
this
report:(1)   Consolidated Financial Statements of LendingTree, Inc.Report
of
Independent
Registered
Public
Accounting
Firm:
PricewaterhouseCoopers
LLP.Consolidated
Statements
of
Operations
and
Comprehensive
Income
for
the
Years
Ended
December
31,
2016
,
2015
and
2014
.Consolidated
Balance
Sheets
as
of
December
31,
2016
and
2015
.Consolidated
Statements
of
Shareholders'
Equity
for
the
Years
Ended
December
31,
2016
,
2015
and
2014
.Consolidated
Statements
of
Cash
Flows
for
the
Years
Ended
December
31,
2016
,
2015
and
2014
.Notes
to
Consolidated
Financial
Statements.(2)   Consolidated Financial Statement Schedules of LendingTree, Inc.All
financial
statements
and
schedules
have
been
omitted
since
the
required
information
is
included
in
the
consolidated
financial
statements
or
the
notesthereto,
or
is
not
applicable
or
required.(3)   ExhibitsThe
documents
set
forth
below,
numbered
in
accordance
with
Item
601
of
Regulation
S-K,
are
filed
herewith
or
incorporated
herein
by
reference
to
thelocation
indicated
below.ExhibitNumberDescriptionLocation2.1Separation
and
Distribution
Agreement
among
IAC/InterActiveCorp,HSN,
Inc.,
Interval
Leisure
Group,
Inc.,
Ticketmaster
and
Tree.com,
Inc.,dated
August
20,
2008.Exhibit
10.1
to
the
Registrant's
Registration
Statement
on
Form
S-1(No.
333-152700),
filed
August
1,
20082.2Tax
Sharing
Agreement
among
IAC/InterActiveCorp,
HSN,
Inc.,
IntervalLeisure
Group,
Inc.,
Ticketmaster
and
Tree.com,
Inc.,
dated
August
20,2008.Exhibit
10.2
to
the
Registrant's
Current
Report
on
Form
8-K
(No.
001-34063)
filed
August
25,
20082.3Employee
Matters
Agreement
among
IAC/InterActiveCorp,
HSN,
Inc.,Interval
Leisure
Group,
Inc.,
Ticketmaster
and
Tree.com,
Inc.,
datedAugust
20,
2008.Exhibit
10.3
to
the
Registrant's
Current
Report
on
Form
8-K
(No.
001-34063)
filed
August
25,
20082.4Transition
Services
Agreement
among
IAC/InterActiveCorp,
HSN,
Inc.,Interval
Leisure
Group,
Inc.,
Ticketmaster
and
Tree.com,
Inc.,
datedAugust
20,
2008.Exhibit
10.4
to
the
Registrant's
Current
Report
on
Form
8-K
(No.
001-34063)
filed
August
25,
20082.5Spinco
Assignment
and
Assumption
Agreement
amongIAC/InterActiveCorp,
Tree.com,
Inc.,
Liberty
Media
Corporation
andLiberty
USA
Holdings,
LLC,
dated
August
20,
2008.Exhibit
10.6
to
the
Registrant's
Current
Report
on
Form
8-K
(No.
001-34063)
filed
August
25,
20082.6Asset
Purchase
Agreement
among
Home
Loan
Center,
Inc.,
FirstResidential
Mortgage
Network,
Inc.
dba
SurePoint
Lending,
and
theshareholders
of
First
Residential
Mortgage
Network
named
therein,
datedNovember
15,
2010.Exhibit
2.1
to
Registrant's
Current
Report
on
Form
8-K
(No.
001-34063)
filed
November
16,
20102.7First
Amendment
to
Asset
Purchase
Agreement
among
HLC,
SurePointand
the
shareholders
party
thereto,
dated
March
14,
2011.Exhibit
2.1
to
the
Registrant's
Current
Report
on
Form
8-K
filedMarch
21,
20112.8Second
Amendment
to
Asset
Purchase
Agreement
among
HLC,SurePoint
and
the
shareholders
party
thereto,
dated
March
15,
2011.Exhibit
2.2
to
the
Registrant's
Current
Report
on
Form
8-K
filedMarch
21,
201177ExhibitNumberDescriptionLocation2.9Asset
Purchase
Agreement
among
Tree.com,
Inc.,
Home
Loan
Center,Inc.,
LendingTree,
LLC,
HLC
Escrow,
Inc.
and
Discover
Bank,
datedMay
12,
2011**Exhibit
2.1
to
the
Registrant's
Current
Report
on
Form
8-K
filed
May16,
20112.10Asset
Purchase
Agreement
among
LendingTree,
LLC,
RealEstate.com,Inc.
and
Market
Leader,
Inc.,
dated
September
15,
2011**Exhibit
2.1
to
the
Registrant's
Current
Report
on
Form
8-K
filedSeptember
21,
20112.11Amendment
to
Asset
Purchase
Agreement
among
Home
Loan
Center,Inc.,
HLC
Escrow,
Inc.,
LendingTree,
LLC,
Tree.com,
Inc.,
DiscoverBank
and
Discover
Financial
Services,
dated
February
7,
2012**Exhibit
2.1
to
the
Registrant's
Current
Report
on
Form
8-K
filedFebruary
8,
20122.12Membership
Interest
Purchase
Agreement,
dated
as
of
November
16,2016,
by
and
among
LendingTree,
LLC,
Iron
Horse
Holdings,
LLC,
all
ofthe
members
of
Iron
Horse
Holdings,
LLC
and
Christopher
J.
Mettler.
**Exhibit
2.1
to
the
Registrant's
Current
Report
on
Form
8-K
filedNovember
22,
20163.1Amended
and
Restated
Certificate
of
Incorporation
of
LendingTree,
Inc.Exhibit
3.1
to
the
Registrant's
Current
Report
on
Form
8-K
(No.
001-34063)
filed
August
25,
20083.2Third
Amended
and
Restated
By-laws
of
LendingTree,
Inc.Exhibit
3.2
to
the
Registrant's
Current
Report
on
Form
8-K
filedDecember
31,
20144.1Amended
and
Restated
Restricted
Share
Grant
and
Shareholders'Agreement,
among
Forest
Merger
Corp.,
LendingTree,
Inc.,InterActiveCorp
and
the
Grantees
named
therein,
dated
July
7,
2003*Exhibit
10.8
to
the
Registrant's
Registration
Statement
on
Form
S-1(No.
333-152700),
filed
August
1,
20084.2Registration
Rights
Agreement
among
Tree.com,
Inc.,
Liberty
MediaCorporation
and
Liberty
USA
Holdings,
LLC,
dated
August
20,
2008.Exhibit
10.5
to
the
Registrant's
Current
Report
on
Form
8-K
(No.
001-34063)
filed
August
25,
200810.1Letter
Agreement
between
Tree.com,
Inc.
and
Alexander
Mandel,
datedJuly
27,
2012*Exhibit
10.1
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
filedNovember
14,
201210.2Change
in
Control
Letter
between
Tree.com,
Inc.
and
Alexander
Mandel,dated
July
27,
2012*Exhibit
10.2
to
Registrant's
Quarterly
Report
on
Form
10-Q
filedNovember
14,
201210.3Amended
Employment
Offer
and
Change
in
Control
Letter
and
Releaseby
and
between
Alexander
Mandel
and
LendingTree,
Inc.,
dated
July
2,2015
*Exhibit
10.1
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
filedOctober
26,
201510.4Letter
Agreement
between
Tree.com,
Inc.
and
Carla
Shumate,
datedDecember
11,
2012*Exhibit
10.1
to
the
Registrant's
Annual
Report
on
Form
10-K
filedApril
1,
201310.5Letter
Agreement
between
LendingTree,
Inc.
and
Carla
Shumate,
datedMarch
11,
2015*Exhibit
10.1
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
filedApril
30,
201510.6Letter
Agreement
between
LendingTree,
Inc.
and
Carla
Shumate,
datedDecember
31,
2015*Exhibit
10.6
to
the
Registrant's
Annual
Report
on
From
10-K
filedMarch
1,
201610.7Employment
Agreement
between
Tree.com,
Inc.
and
Douglas
Lebda,dated
January
9,
2014*Exhibit
10.1
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
filedMay
7,
201410.8Restricted
Share
Grant
and
Stockholder's
Agreement
amongIAC/InterActiveCorp,
LendingTree
Holdings
Corp.
and
Douglas
R.Lebda,
dated
August
15,
2008,
together
with
Exhibit
A
thereto,
Amendedand
Restated
Certificate
of
Incorporation
of
LendingTree
Holdings
Corp.*Exhibits
99.2
and
99.3
to
the
Registrant's
Current
Report
on
Form
8-K(No.
001-34063)
filed
August
20,
200810.9Amendment
No.
1
to
the
Restricted
Share
Grant
and
Stockholder'sAgreement
between
Tree.com,
Inc.,
LendingTree
Holdings
Corp.
andDouglas
R.
Lebda,
dated
August
30,
2010*Exhibit
10.4
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
(No.001-34063)
filed
November
12,
201010.10Amendment
No.
1
to
the
Stock
Option
Award
Agreement
betweenDouglas
R.
Lebda
and
Tree.com,
Inc.,
dated
May
10,
2010*Exhibit
10.15
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
(No.001-34063)
filed
May
12,
201078ExhibitNumberDescriptionLocation10.11Employment
Agreement
between
Tree.com,
Inc.
and
Gabriel
Dalporto,dated
January
9,
2014*Exhibit
10.2
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
filedMay
7,
201410.12Employment
Agreement
between
LendingTree,
Inc.
and
GabrielDalporto,
dated
March
11,
2015*Exhibit
10.6
to
the
Registrant's
Annual
Report
on
Form
10-K
filedMarch
16,
201510.13Letter
Agreement
between
LendingTree,
Inc.
and
Nikul
Patel,
datedDecember
31,
2015*Exhibit
10.13
to
the
Registrant's
Annual
Report
on
From
10-K
filedMarch
1,
201610.14Fourth
Amended
and
Restated
Tree.com,
Inc.
2008
Stock
and
AnnualIncentive
Plan*Exhibit
10.1
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
filedAugust
7,
201410.15Deferred
Compensation
Plan
for
Non-Employee
Directors*Exhibit
10.15
to
the
Registrant's
Registration
Statement
on
Form
S-1(No.
333-152700),
filed
August
1,
200810.162011
Deferred
Compensation
Plan
for
Non-Employee
Directors*Exhibit
10.2
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
filedApril
30,
201510.17Form
of
Notice
of
Restricted
Stock
Unit
Award*Exhibit
10.86(b)
to
the
Registrant's
Post-Effective
Amendment
to
itsRegistration
Statement
on
Form
S-1
(No.
333-152700),
filed
July
13,201210.18Form
of
Notice
of
Restricted
Stock
Unit
Award*Exhibit
10.3
to
the
Registrant's
Quarterly
Report
on
From
10-Q
filedMay
7,
201410.19Form
of
Restricted
Stock
Award*Exhibit
10.86(c)
to
the
Registrant's
Post-Effective
Amendment
to
itsRegistration
Statement
on
Form
S-1
(No.
333-152700),
filed
July
13,201210.20Form
of
Notice
of
Restricted
Stock
Award*Exhibit
10.4
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
filedMay
7,
201410.21Standard
Terms
and
Conditions
to
Restricted
Stock
Award
Letters
ofTree.com
BU
Holding
Company,
Inc.*Exhibit
10.2
to
the
Registrant's
Current
Report
on
Form
8-K
filedFebruary
3,
201110.22Form
of
Amendment
to
Restricted
Stock
Awards
for
Douglas
R.
Lebda*Exhibit
10.4
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
filedMay
12,
201010.23Form
of
Notice
of
Stock
Option
Award
Granted
Under
the
2008
Stockand
Annual
Incentive
Plan*Exhibit
10.6
to
the
Registrant's
Current
Report
on
Form
8-K
(No.
001-34063)
filed
March
27,
200910.24Form
of
Notice
of
Stock
Option
Award
Granted
Under
the
Amended
andRestated
2008
Stock
and
Annual
Incentive
Plan*Exhibit
10.86(d)
to
the
Registrant's
Post-Effective
Amendment
to
itsRegistration
Statement
on
Form
S-1
(No.
333-152700),
filed
July
13,201210.25Form
of
Notice
of
Stock
Option
Award
Granted
Under
the
SecondAmended
and
Restated
2008
Stock
and
Annual
Incentive
Plan*Exhibit
10.13
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
(No.001-34063)
filed
May
12,
201010.26Form
of
Notice
of
Stock
Option
Award
Granted
Under
the
2008
Stockand
Annual
Incentive
Plan*Exhibit
10.5
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
filedMay
7,
201410.27Stock
Purchase
Agreement
between
Tree.com,
Inc.
and
Douglas
R.Lebda,
dated
February
8,
2009*Exhibit
10.1
to
the
Registrant's
Current
Report
on
Form
8-K
(No.
001-34063)
filed
February
11,
200910.28Amendment
No.
1
to
Stock
Purchase
Agreement
between
Tree.com,
Inc.and
Douglas
R.
Lebda,
dated
May
10,
2010*Exhibit
10.2
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
(No.001-34063)
filed
May
12,
201010.29Credit
Agreement
by
and
among
LendingTree,
LLC,
LendingTree,
Inc.and
SunTrust
Bank,
dated
October
22,
2015Exhibit
99.1
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
filedOctober
26,
201510.30First
Amendment
to
Credit
Agreement
by
and
among
LendingTree,
LLC,LendingTree,
Inc.
and
SunTrust
Bank,
dated
February
25,
2016†10.31Agreement
of
Purchase
and
Sale,
by
and
among
LendingTree,
LLC
andan
affiliate
of
Greenstreet
Real
Estate
Partners,
L.P.,
dated
October
17,2016†+10.32First
Amendment
to
Purchase
and
Sale,
by
and
among
LendingTree,
LLCand
an
affiliate
of
Greenstreet
Real
Estate
Partners,
L.P.,
dated
November28,
2016†79ExhibitNumberDescriptionLocation10.33Employment
Agreement
between
LendingTree,
Inc.
and
Neil
Salvage,dated
August
2,
2013*Exhibit
10.1
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
filedMay
10,
201610.34Letter
Agreement
between
LendingTree,
Inc.
and
Neil
Salvage,
datedJanuary
15,
2015*Exhibit
10.2
to
the
Registrant's
Quarterly
Report
on
Form
10-Q
filedMay
10,
201610.35Employment
Agreement
between
LendingTree,
Inc.
and
Neil
Salvagedated
November
28,
2016*†10.36Letter
Agreement
between
LendingTree,
Inc.
and
Neil
Salvage
datedNovember
28,
2016*†21.1Subsidiaries
of
LendingTree,
Inc.†23.1Consent
of
independent
registered
public
accounting
firm.†24.1Power
of
Attorney
(included
on
signature
page
of
this
Annual
Report
onForm
10-K)†31.1Certification
of
the
Chief
Executive
Officer
pursuant
to
Rule
13a-14(a)
orRule
15d-14(a)
of
the
Securities
Exchange
Act
of
1934
as
adoptedpursuant
to
Section
302
of
the
Sarbanes-Oxley
Act
of
2002†31.2Certification
of
the
Chief
Financial
Officer
pursuant
to
Rule
13a-14(a)
orRule
15d-14(a)
of
the
Securities
Exchange
Act
of
1934
as
adoptedpursuant
to
Section
302
of
the
Sarbanes-Oxley
Act
of
2002†32.1Certification
of
the
Chief
Executive
Officer
pursuant
to
18
U.S.C.Section
1350
as
adopted
pursuant
to
Section
906
of
the
Sarbanes-OxleyAct
of
2002††32.2Certification
of
the
Chief
Financial
Officer
pursuant
to
18
U.S.C.Section
1350
as
adopted
pursuant
to
Section
906
of
the
Sarbanes-OxleyAct
of
2002††101.CALXBRL
Taxonomy
Extension
Calculation
Linkbase
Document†††101.DEFXBRL
Taxonomy
Extension
Definition
Linkbase
Document†††101.INSXBRL
Instance
Document†††101.LABXBRL
Taxonomy
Extension
Label
Linkbase
Document†††101.PREXBRL
Taxonomy
Extension
Presentation
Linkbase
Document†††101.SCHXBRL
Taxonomy
Extension
Schema
Document†††___________________________________________________________________________†
Filed
herewith††
This
certification
is
being
furnished
solely
to
accompany
this
report
pursuant
to
18
U.S.C.
1350,
and
is
not
being
filed
for
purposes
of
Section
18
of
theExchange
Act
and
is
not
to
be
incorporated
by
reference
into
any
filing
of
the
registrant,
whether
made
before
or
after
the
date
hereof,
regardless
of
any
generalincorporation
language
in
such
filing.†††
Furnished
herewith.
Pursuant
to
Rule
406T
of
Regulation
S-T,
the
Interactive
Data
Files
on
Exhibit
101
hereto
are
deemed
not
filed
or
part
of
a
registrationstatement
or
prospectus
for
purposes
of
Sections
11
or
12
of
the
Securities
Act
are
deemed
not
filed
for
purposes
of
Section
18
of
the
Exchange
Act
and
otherwiseare
not
subject
to
liability
under
those
sections.*
Management
contract
or
compensation
plan
or
arrangement.80**
Certain
schedules
to
this
Exhibit
have
been
omitted
in
accordance
with
Regulation
S-K
Item
601(b)(2).
The
Company
agrees
to
furnish
supplementally
a
copyof
all
omitted
schedules
to
the
SEC
upon
its
request.+
Portions
of
this
exhibit
have
been
omitted
pursuant
to
a
request
for
confidential
treatment
and
this
exhibit
has
been
submitted
separately
to
the
SEC.ITEM 16.  Form 10-K SummaryNot
applicable.81Table of ContentsSIGNATURESPursuant
to
the
requirements
of
Section
13
or
15(d)
of
the
Securities
Exchange
Act
of
1934,
the
Registrant
has
duly
caused
this
report
to
be
signed
on
itsbehalf
by
the
undersigned,
thereunto
duly
authorized.Date:
February
28,
2017
LendingTree,
Inc.



By:/s/ DOUGLAS R. LEBDA

Douglas
R.
Lebda
 Chairman and Chief Executive Officer________________________________________________________________________________________________________________________KNOW
ALL
PERSONS
BY
THESE
PRESENTS,
that
each
individual
whose
signature
appears
below
constitutes
and
appoints
Katharine
Pierce
as
his
or
hertrue
and
lawful
attorney
and
agent,
with
full
power
of
substitution
and
resubstitution,
for
him
or
her
and
in
his
or
her
name,
place
and
stead,
in
any
and
allcapacities,
to
sign
any
and
all
amendments
to
the
Registrant's
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
December
31,
2016
,
and
to
file
the
same
withall
exhibits
thereto,
and
all
other
documents
in
connection
therewith,
with
the
Securities
and
Exchange
Commission,
granting
unto
said
attorney
and
agent
fullpower
and
authority
to
do
and
perform
each
and
every
act
and
thing
requisite
and
necessary
to
be
done,
as
fully
to
all
intents
and
purposes
as
he
or
she
might
orcould
do
in
person,
hereby
ratifying
and
confirming
all
that
said
attorney
and
agent
may
lawfully
do
or
cause
to
be
done
by
virtue
hereof.Pursuant
to
the
requirements
of
the
Securities
Exchange
Act
of
1934,
this
report
has
been
signed
below
by
the
following
persons
on
behalf
of
the
Registrantand
in
the
capacities
indicated
and
on
the
dates
indicated.Signature
Title
Date




/s/ DOUGLAS R. LEBDA
Chairman,
Chief
Executive
Officer
and
Director(Principal Executive Officer)
February
28,
2017Douglas
R.
Lebda







/s/ GABRIEL DALPORTO
Chief
Financial
Officer(Principal Financial Officer)
February
28,
2017Gabriel
Dalporto







/s/ CARLA SHUMATE
Senior
Vice
President
and
Chief
Accounting
Officer(Principal Accounting Officer)
February
28,
2017Carla
Shumate







/s/ NEAL DERMER
Director
February
28,
2017Neal
Dermer







/s/ ROBIN HENDERSON
Director
February
28,
2017Robin
Henderson







/s/ PETER HORAN
Director
February
28,
2017Peter
Horan







/s/ STEVEN OZONIAN
Director
February
28,
2017Steven
Ozonian







/s/ SARAS SARASVATHY
Director
February
28,
2017Saras
Sarasvathy







/s/ CRAIG TROYER
Director
February
28,
2017Craig
Troyer


82EXHIBIT 10.30FIRST AMENDMENT TO CREDIT AGREEMENTTHIS
FIRST
AMENDMENT
TO
CREDIT
AGREEMENT
(this
“
Agreement
”)
is
made
and
entered
into
as
of
February
25,
2016,
by
and
amongLENDINGTREE,
LLC,
a
Delaware
limited
liability
company
(the
“
Borrower
”),
LENDINGTREE,
INC.,
a
Delaware
corporation
(“
Parent
”),
the
other
LoanParties
(as
defined
in
the
Credit
Agreement
referred
to
below),
the
Lenders
(as
defined
below)
party
hereto,
and
SUNTRUST
BANK,
as
the
administrative
agentfor
itself
and
on
behalf
of
the
Lenders
(in
such
capacity,
the
“
Administrative
Agent
”).W
I
T
N
E
S
S
E
T
H
:WHEREAS,
the
Borrower,
Parent,
the
financial
institutions
from
time
to
time
party
thereto
(the
“
Lenders
”),
and
the
Administrative
Agent
have
executedand
delivered
that
certain
Credit
Agreement
dated
as
of
October
22,
2015
(as
the
same
may
be
amended,
restated,
supplemented,
or
otherwise
modified
from
timeto
time,
the
“
Credit
Agreement
”);
andWHEREAS,
the
Borrower
has
requested
that
the
Lenders
agree
to
amend
certain
provisions
of
the
Credit
Agreement
as
set
forth
herein,
and
theAdministrative
Agent
and
the
Lenders
party
hereto
have
agreed
to
such
amendments,
in
each
case
subject
to
the
terms
and
conditions
hereof.NOW,
THEREFORE,
for
and
in
consideration
of
the
above
premises
and
other
good
and
valuable
consideration,
the
receipt
and
sufficiency
of
which
ishereby
acknowledged
by
the
parties
hereto,
each
of
the
parties
hereto
hereby
covenants
and
agrees
as
follows:SECTION
1.
Definitions
.
Unless
otherwise
specifically
defined
herein,
each
term
used
herein
(and
in
the
recitals
above)
which
isdefined
in
the
Credit
Agreement
shall
have
the
meaning
assigned
to
such
term
in
the
Credit
Agreement.
Each
reference
to
“hereof,”
“hereunder,”
“herein,”
and“hereby”
and
each
other
similar
reference
and
each
reference
to
“this
Agreement”
and
each
other
similar
reference
contained
in
the
Credit
Agreement
shall
fromand
after
the
date
hereof
refer
to
the
Credit
Agreement
as
amended
hereby.SECTION
2.
Amendments
to
Credit
Agreement
.(a)
Amendments
to
Section
1.1
.
The
following
new
definitions
are
hereby
added
to
Section
1.1
of
the
Credit
Agreement
in
appropriatealphabetical
order:“
Specified
Cash
Contribution
”
shall
mean
capital
contributions
to
Parent
made
in
cash
or
the
net
cash
proceeds
from
Permitted
Capital
StockIssuances
actually
received
by
Parent.“
Specified
Cash
Contribution
Amount
”
shall
mean
the
aggregate
amount
of
Specified
Cash
Contributions
made
after
the
Closing
Date.“
Permitted
Capital
Stock
Issuance
”
shall
mean
any
sale
or
issuance
of
any
Qualified
Capital
Stock
of
Parent
to
the
extent
permitted
hereunder.“
Qualified
Capital
Stock
”
shall
mean
any
Capital
Stock
that
is
not
Disqualified
Capital
Stock.(b)
Amendments
to
Section
7.5(f)
.
Section
7.5(f)
of
the
Credit
Agreement
is
amended
and
restated
in
its
entirety
so
that
it
reads
as
follows:(f)



other
Restricted
Payments
made
by
Parent
or
any
Subsidiary
of
Parent
so
long
as
(i)
the
aggregate
amount
of
Restricted
Payments
madepursuant
to
this
clause
(f)
since
the
Closing
Date
does
not
exceed
the
sum
of
(A)
$50,000,000,
plus
(B)
50%
of
cumulative
Excess
Cash
Flow
for
the
periodcommencing
on
January
1,
2016,
and
ending
on
the
first
day
of
the
most
recent
Fiscal
Year
beginning
before
such
Restricted
Payment
is
made,
plus
(C)
theSpecified
Cash
Contribution
Amount,
(ii)
no
Default
or
Event
of
Default
shall
have
occurred
and
be
continuing
at
the
time
such
Restricted
Payment
is
made,(iii)
the
Consolidated
Leverage
Ratio
is
less
than
or
equal
to
2.75
to
1.00,
calculated
on
a
Pro
Forma
Basis
as
of
the
last
day
of
the
most
recently
ended
FiscalQuarter
for
which
financial
statements
are
required
to
have
been
delivered
pursuant
to
Section
5.1(a)
or
(b)
,
and
(iv)
after
giving
effect
to
such
RestrictedPayment,
the
Loan
Parties
shall
have
Liquidity
of
at
least
$20,000,000.1SECTION
3.
Conditions
Precedent
.
This
Agreement
shall
become
effective
only
upon
satisfaction
or
waiver
of
the
followingconditions
precedent
except
as
otherwise
agreed
between
the
Borrower,
Parent,
and
the
Administrative
Agent:(a)
the
Administrative
Agent’s
receipt
of
this
Agreement
duly
executed
by
each
of
(i)
the
Loan
Parties,
(ii)
the
Required
Lenders,
and
(iii)
theAdministrative
Agent;
and(b)
the
Borrower
shall
have
paid
all
fees,
costs
and
expenses
owed
by
the
Borrower
to
the
Administrative
Agent
or
any
of
its
Affiliates,
withoutlimitation,
reasonable
fees,
charges
and
disbursements
of
counsel
for
the
Administrative
Agent.SECTION
4.
Miscellaneous
Terms
.(a)
Loan
Document
.
For
avoidance
of
doubt,
the
Loan
Parties,
the
Lenders
party
hereto,
and
the
Administrative
Agent
each
herebyacknowledges
and
agrees
that
this
Agreement
is
a
Loan
Document.(b)
Effect
of
Agreement
.
Except
as
set
forth
expressly
hereinabove,
all
terms
of
the
Credit
Agreement
and
the
other
Loan
Documentsshall
be
and
remain
in
full
force
and
effect,
and
shall
constitute
the
legal,
valid,
binding,
and
enforceable
obligations
of
the
Loan
Parties.(c)
No
Novation
or
Mutual
Departure
.
The
Loan
Parties
expressly
acknowledge
and
agree
that
(i)
there
has
not
been,
and
thisAgreement
does
not
constitute
or
establish,
a
novation
with
respect
to
the
Credit
Agreement
or
any
of
the
other
Loan
Documents,
or
a
mutual
departure
from
thestrict
terms,
provisions,
and
conditions
thereof,
other
than
with
respect
to
the
amendments
contained
in
Section
2
above
and
(ii)
nothing
in
this
Agreement
shallaffect
or
limit
the
Administrative
Agent’s
or
any
Lender’s
right
to
demand
payment
of
liabilities
owing
from
any
Loan
Party
to
the
Administrative
Agent
or
theLender
under,
or
to
demand
strict
performance
of
the
terms,
provisions,
and
conditions
of,
the
Credit
Agreement
and
the
other
Loan
Documents,
to
exercise
anyand
all
rights,
powers,
and
remedies
under
the
Credit
Agreement
or
the
other
Loan
Documents
or
at
law
or
in
equity,
or
to
do
any
and
all
of
the
foregoing,immediately
at
any
time
after
the
occurrence
of
a
Default
or
an
Event
of
Default
under
the
Credit
Agreement
or
the
other
Loan
Documents.(d)
Ratification
.
Each
Loan
Party
hereby
(i)
restates,
ratifies,
and
reaffirms
all
of
its
obligations
and
covenants
set
forth
in
the
CreditAgreement
and
the
other
Loan
Documents
to
which
it
is
a
party
effective
as
of
the
date
hereof
and
(ii)
restates
and
renews
each
and
every
representation
andwarranty
heretofore
made
by
it
in
the
Credit
Agreement
and
the
other
Loan
Documents
as
fully
as
if
made
on
the
date
hereof
and
with
specific
reference
to
thisAgreement
and
any
other
Loan
Documents
executed
or
delivered
in
connection
herewith
(except
with
respect
to
representations
and
warranties
made
as
of
anexpressed
date,
in
which
case
such
representations
and
warranties
shall
be
true
and
correct
as
of
such
date).(e)
No
Default
.
To
induce
Lenders
to
enter
into
this
Agreement,
Borrower
hereby
acknowledges
and
agrees
that,
as
of
the
date
hereof,and
after
giving
effect
to
the
terms
hereof,
there
exists
(i)
no
Default
or
Event
of
Default
and
(ii)
no
right
of
offset,
defense,
counterclaim,
claim,
or
objection
infavor
of
Borrower
or
arising
out
of
or
with
respect
to
any
of
the
Loans
or
other
obligations
of
Borrower
owed
to
Lenders
under
the
Credit
Agreement
or
any
otherLoan
Document.(f)
Counterparts
.
This
Agreement
may
be
executed
in
any
number
of
counterparts
and
by
different
parties
hereto
in
separatecounterparts,
each
of
which
when
so
executed
and
delivered
shall
be
deemed
to
be
an
original
and
all
of
which
counterparts,
taken
together,
shall
constitute
but
oneand
the
same
instrument.(g)
Fax
or
Other
Transmission
.
Delivery
by
one
or
more
parties
hereto
of
an
executed
counterpart
of
this
Agreement
via
facsimile,telecopy,
or
other
electronic
method
of
transmission
pursuant
to
which
the
signature
of
such
party
can
be
seen
(including,
without
limitation,
Adobe
Corporation’sPortable
Document
Format)
shall
have
the
same
force
and
effect
as
the
delivery
of
an
original
executed
counterpart
of
this
Agreement.
Any
party
delivering
anexecuted
counterpart
of
this
Agreement
by
facsimile
or
other
electronic
method
of
transmission
shall
also
deliver
an
original
executed
counterpart,
but
the
failureto
do
so
shall
not
affect
the
validity,
enforceability,
or
binding
effect
of
this
Agreement.(h)
Recitals
Incorporated
Herein
.
The
preamble
and
the
recitals
to
this
Agreement
are
hereby
incorporated
herein
by
this
reference.(i)
Section
References
.
Section
titles
and
references
used
in
this
Agreement
shall
be
without
substantive
meaning
or
content
of
anykind
whatsoever
and
are
not
a
part
of
the
agreements
among
the
parties
hereto
evidenced
hereby.2(j)
Further
Assurances
.
The
Loan
Parties
agree
to
take,
at
the
Loan
Parties’
expense,
such
further
actions
as
the
Administrative
Agentshall
reasonably
request
from
time
to
time
to
evidence
the
amendments
set
forth
herein
and
the
transactions
contemplated
hereby.(k)
Governing
Law
.
This
Agreement
shall
be
governed
by
and
construed
and
interpreted
in
accordance
with
the
internal
laws
of
theState
of
New
York
but
excluding
any
principles
of
conflicts
of
law
or
other
rule
of
law
that
would
cause
the
application
of
the
law
of
any
jurisdiction
other
than
thelaws
of
the
State
of
New
York.(l)
Severability
.
Any
provision
of
this
Agreement
which
is
prohibited
or
unenforceable
shall
be
ineffective
to
the
extent
of
suchprohibition
or
unenforceability
without
invalidating
the
remaining
provisions
hereof
in
that
jurisdiction
or
affecting
the
validity
or
enforceability
of
such
provisionin
any
other
jurisdiction.(m)
Reaffirmation
.
Each
Guarantor
(i)
consents
to
the
execution
and
delivery
of
this
Agreement,
(ii)
reaffirms
all
of
its
obligations
andcovenants
under
the
Loan
Documents
to
which
it
is
a
party,
and
(iii)
agrees
that
none
of
its
respective
obligations
and
covenants
shall
be
reduced
or
limited
by
theexecution
and
delivery
of
this
Agreement.[SIGNATURES
ON
FOLLOWING
PAGES]3IN
WITNESS
WHEREOF,
each
of
the
parties
hereto
has
caused
this
Agreement
to
be
duly
executed
by
its
duly
authorized
officer
as
of
the
day
and
yearfirst
above
written.BORROWER :LENDINGTREE, LLCBy:
/s/Gabriel
Dalporto
























Name:
Gabriel
Dalporto



Title:
CFO



PARENT AND GUARANTOR :LENDINGTREE, INC.By:
/s/Gabriel
Dalporto
























Name:
Gabriel
Dalporto



Title:
CFO



GUARANTORS :HOME LOAN CENTER, INC.By:
/s/Gabriel
Dalporto




























Name:
Gabriel
Dalporto



Title:
Treasurer



TREE.COM BU HOLDING COMPANY, INC.By:
/s/Gabriel
Dalporto
























Name:
Gabriel
Dalporto



Title:
TreasurerDEGREETREE, INC. (for
itself
and
as
successor
to
Tree
Home
Services,
Inc.)By:
/s/Gabriel
Dalporto




























Name:
Gabriel
Dalporto



Title:
Treasurer



ADMINISTRATIVE
AGENT
AND
LENDERS
:



SUNTRUST BANK ,
as
the
Administrative
Agent
and
a
LenderBy:
/s/
Brian
Guffin
























Name:
Brian
GuffinTitle:
DirectorBANK OF AMERICA, N.A. ,as
a
LenderBy:
/s/
Charles
R.
Dickerson
























Name:
Charles
R.
DickersonTitle:
SVPJPMORGAN CHASE BANK, N.A. ,as
a
LenderBy:
/s/
Justin
Kelley
























Name:
Justin
KelleyTitle:
Executive
DirectorFIFTH THIRD BANK,as
a
LenderBy:
/s/
Jim
Barber




























Name:
Jim
BarberTitle:
Vice
PresidentROYAL BANK OF CANADA,as
a
LenderBy:
/s/
Christian
Gutierrez




























Name:
Christian
GutierrezTitle:
Authorized
SignatoryEXHIBIT 10.31[***] - Confidential portions of this document have been redacted and filed separately with the Commission.PURCHASE AND SALE CONTRACT1.PARTIES.This
Purchase
and
Sale
Contract
(this
"Contract")
is
made
between
REXFORD
PARK
INVESTORS,
LLC,
a
Delaware
limited
liability
company("Seller"),
and
LENDINGTREE,
LLC,
a
Delaware
limited
liability
company
("Purchaser").2.PROPERTY.For
and
in
consideration
of
the
mutual
covenants
and
agreements
contained
herein
and
other
good
and
valuable
consideration,
the
receipt
and
sufficiencyof
which
is
hereby
acknowledged,
Seller
hereby
agrees
to
sell
and
convey
to
Purchaser,
and
Purchaser
hereby
agrees
to
purchase
and
take
from
Seller,
subject
toand
in
accordance
with
all
of
terms
and
conditions
of
this
Contract,
all
of
the
Seller's
right,
title,
and
interest
in
and
to
all
of
the
following
described
propertyincluding
any
and
all
rights
to
oil,
gas
and
other
minerals,
the
royalties,
bonuses,
rentals
and
all
other
rights
in
connection
with
the
same
(collectively,
the"Property"):2.1     Land. The
land
more
particularly
described
in
Exhibit
"A"
attached
hereto
and
incorporated
herein
by
reference
(the
"Land")
commonly
known
asRexford
Park
I
&
II
located
at
2100
and
2115
Rexford
Road,
Charlotte,
North
Carolina,
together
with
all
of
Seller's
right,
title
and
interest
in
and
to
all
easementsand
other
appurtenances
(if
any)
to
the
Land.2.2     Improvements. All
buildings,
structures
and
other
improvements
located
on
the
Land
and
equipment
serving
the
same
(collectively,
the"Improvements").
The
Land
and
Improvements
are
collectively
referred
to
herein
as
the
"Real
Property".2.3     Leases. The
Seller’s
interest
as
landlord
in,
to
and
under
all
leases
relating
to
the
Property,
or
any
portion
thereof,
as
amended
from
time
to
time,and
in
effect
on
the
date
of
Closing,
as
hereinafter
defined
(collectively,
the
"Leases")
and
all
guaranties
(if
any)
relating
to
the
Leases.2.4     Contracts . The
Seller’s
interest
as
the
owner
of
the
Property
in,
to
and
under
the
contracts
and
agreements
relating
to
the
Property
with
the
partiesidentified
in
Exhibit
"B"
or
are
hereafter
executed
by
Seller
in
accordance
with
Section
7.1.3
of
this
Contract,
which
in
either
case
remain
in
effect
on
the
date
ofClosing
(collectively,
the
"Property
Agreements"),
excluding
the
existing
management
and
leasing
agreements
which
will
be
terminated
at
or
prior
to
the
Closing.2.5     Tangible Property. All
tangible
personal
property
used
by
Seller
in
connection
with
the
ownership
or
operation
of
the
Improvements,
provided
thesame
are
now
owned
or
are
acquired
by
Seller
prior
to
the
Closing
(collectively,
the
"Tangible
Property").2.6     Intangible Property. To
the
extent
assignable
or
transferable,
all
plans
and
specifications
for
the
Improvements
and
any
permits,
approvals,licenses,
warranties
and
intangible
personal
property,
if
any,
relating
to
the
Property
(collectively,
the
"Intangible
Property").3. CONSIDERATION.3.1     Purchase Price; Earnest Money. The
purchase
price
for
the
Property
shall
be
Twenty-Four
Million
Nine
Hundred
Thousand
and
No/100
Dollars($24,900,000.00)
(the
"Purchase
Price"),
which
shall
be
paid
as
follows:(a)Five
Hundred
Thousand
Dollars
($500,000.00)
(the
"First
Deposit")
shall
be
deposited
by
Purchaser
into
escrow
with
Chicago
TitleInsurance
Company,
200
S.
Tryon
Street,
Suite
800,
Charlotte,
NC

28202,
Attention:
Scott
Mansfield
("Escrow
Agent")
inimmediately
available
funds
no
later
than
three
(3)
Business
Days
(as
defined
below)
after
the
execution
of
this
Contract
by
Purchaserand
Seller
(the
date
on
which
the
later
of
Seller
or
Purchaser
executes
this
Contract
and
delivers
a
copy
to
the
counterparty
is
called
the"Effective
Date");(b)An
additional
Five
Hundred
Thousand
Dollars
($500,000.00)
(the
"Second
Deposit")
in
immediately
available
funds
shall
be
depositedby
Purchaser
into
escrow
with
Escrow
Agent
no
later
than
three
(3)
Business
Days
after
the
expiration
of
the
Due
Diligence
Period
(asdefined
below);
and1(c)The
balance
of
the
Purchase
Price,
subject
to
the
adjustments,
credits
and
prorations
provided
in
this
Contract,
shall
be
deposited
byPurchaser
into
escrow
with
the
Escrow
Agent
in
immediately
available
funds
on
or
prior
to
the
Closing
Date
as
required
by
Section
9.3to
allow
for
the
consummation
of
the
Closing
pursuant
to
this
Contract
on
the
Closing
Date.The
First
Deposit
and
Second
Deposit
shall,
upon
receipt,
be
deposited
by
the
Escrow
Agent
into
a
non-interest
bearing
account
or,
if
elected
by
Purchaser,
in
aninterest-bearing
account,
with
such
interest
reportable
as
interest
earned
by
Purchaser.
If
the
Purchaser
fails
to
make
the
First
Deposit
as
required
underSection
3.1(a)
above,
then
this
Contract
shall
automatically
terminate
and
become
null
and
void,
and
neither
party
shall
have
any
further
rights
or
obligations
underthis
Contract.
The
First
Deposit
and
the
Second
Deposit,
when
made,
and
all
accrued
interest,
if
any,
on
such
deposits
are
collectively
called
the
"Earnest
Money."All
fees
or
costs
charged
by
Escrow
Agent
for
depositing
the
Earnest
Money
in
an
interest
bearing
account
shall
be
paid
by
Purchaser.
Seller
and
Purchaser
shallexecute
all
documents
reasonably
required
by
Escrow
Agent
in
connection
with
the
Earnest
Money.3.2     Further Application of Earnest Money. In
the
event
that
the
Closing
is
consummated,
all
Earnest
Money
will
be
applied
in
partial
satisfaction
ofthe
Purchase
Price.
If,
however,
the
Closing
is
not
consummated,
the
Earnest
Money
will
be
delivered
to
Seller
as
liquidated
damages
as
provided
in
Section
12.2or
returned
to
Purchaser
by
the
Escrow
Agent
as
elsewhere
expressly
provided
in
this
Contract.3.3     Dispute as to Earnest Money. The
Escrow
Agent
shall
hold
in
and
disburse
from
escrow
any
monies
and
documents
held
by
it
under
this
Contractin
accordance
with
the
terms
and
provisions
of
this
Contract.
The
Escrow
Agent
shall
not
be
liable
for
any
actions
taken
by
it
in
good
faith,
but
only
for
its
breachof
its
obligations
under
this
Contract,
negligence
or
willful
misconduct.
Each
party
agrees
to
indemnify
and
hold
the
Escrow
Agent
harmless
from
and
against
anyand
all
claims,
demands,
losses,
liabilities,
damages,
fees,
costs
and
expenses
(including
reasonable
attorneys’
fees
and
costs
through
all
trial,
appellate
and
post-judgment
levels
and
proceedings)
which
the
Escrow
Agent
may
incur
in
its
capacity
as
escrow
agent
under
this
Contract,
except
for
any
such
claim,
demand,
loss,liability,
damage,
fee,
cost
and/or
expense
incurred
as
a
result
of
the
Escrow
Agent’s
breach
of
its
obligations
under
this
Contract,
negligence
or
willfulmisconduct.
In
the
event
of
a
dispute
with
respect
to
the
right
to
receive
the
Earnest
Money,
the
Escrow
Agent
may
interplead
the
Earnest
Money
into
a
court
ofcompetent
jurisdiction.
All
reasonable
attorneys'
fees
and
costs
and
Escrow
Agent's
costs
and
expenses
incurred
in
connection
with
such
interpleader
will
beassessed
against
the
party
that
is
not
awarded
the
Earnest
Money
or,
if
the
Earnest
Money
is
distributed
in
part
to
both
parties,
then
in
the
inverse
proportion
ofsuch
distribution.3.4     Independent Consideration. Notwithstanding
anything
to
the
contrary
contained
herein,
One
Hundred
and
No/100
Dollars
($100.00)
of
theEarnest
Money
shall
be
paid
to
Seller
as
independent
consideration
for
entering
into
this
Contract
(the
“Independent
Consideration”),
and
shall
be
non-refundableto
Purchaser
in
all
events,
and
Seller
acknowledges
that
said
amount
is
adequate
consideration
therefor.
In
the
event
that
the
Earnest
Money
is
returned
toPurchaser
for
any
reason,
the
Independent
Consideration
shall
be
paid
to
Seller.4.TITLE AND SURVEY.4.1     Title Commitment and Documents . Purchaser
acknowledges
that
Seller
has
made
available
to
Purchaser
copies
of
the
following:
(a)
the
Owner'sPolicy
of
Title
Insurance
issued
in
connection
with
Seller's
acquisition
of
the
Land,
and
(b)
Seller’s
survey
of
the
Land
(such
survey
and
any
updated
surveyobtained
by
Purchaser
at
Purchaser
expense
are
collectively
called
the
"Survey").
Promptly
after
the
Effective
Date,
Purchaser
shall
order
from
Chicago
TitleInsurance
Company
(the
"Title
Company")
for
delivery
to
Purchaser
with
a
copy
to
Seller,
a
current
commitment
for
title
insurance
for
the
Real
Property
(the"Title
Commitment")
to
be
issued
by
the
Title
Company
to
Purchaser
in
the
amount
of
the
Purchase
Price,
setting
forth
the
matters
(the
"Title
Exceptions")
that
theTitle
Company
determines
affect
title
to
the
Real
Property.
Purchaser
shall
be
entitled
to
obtain
an
updated
Survey
of
the
Land
and
Improvements
and
certified
toSeller,
Purchaser
and
Purchaser’s
lender
(if
any).
The
updated
Survey
shall
be
obtained
by
Purchaser
at
Purchaser's
expense,
but
Seller
shall
provide
a
$600
creditto
Purchaser
at
Closing
to
defray
a
portion
of
the
surveying
costs.4.2     Review of Title Commitment, Survey and Exception Documents . Purchaser
will
have
from
the
Effective
Date
until
five
(5)
Business
Days
priorto
the
expiration
of
the
Due
Diligence
Period
("Title
Review
Period")
within
which
to
deliver
to
Seller
written
notice
specifying
Purchaser's
objections,
if
any,
tothe
Title
Commitment,
Title
Exceptions
and/or
matters
reflected
on
the
Survey,
provided,
however,
that
in
no
event
shall
Purchaser
have
the
right
to
object
to
anyof
the
matters
described
on
Exhibit
"C"
attached
hereto
(the
"Existing
Exceptions").
The
Purchaser's
objections
to
the
Title
Commitment,
Title
Exceptions
and/orSurvey
that
are
timely
raised
by
Purchaser
in
compliance
with
this
Section
4.2
are
collectively
called
the
"Title
Objections."24.3     Purchaser's Right to Terminate. If
Purchaser
timely
notifies
Seller
in
writing
of
Title
Objections
prior
to
the
expiration
of
the
Title
ReviewPeriod,
Seller
will,
within
five
(5)
Business
Days
after
Seller's
receipt
of
Purchaser's
notice
(such
5-Business
Day
period
is
called
the
"Seller
Notice
Period"),notify
Purchaser
in
writing
("Seller's
Title
Notice")
of
the
Title
Objections
that
Seller
will
attempt
to
cure
at
Seller's
sole
cost
and
expense
and/or
of
the
TitleObjections
that
Seller
cannot
or
will
not
cure
at
Seller's
expense;
provided,
however,
that
notwithstanding
anything
to
the
contrary
provided
herein,
Seller
shall
berequired
to
take
the
following
actions
regarding
any
Title
Objections
that
are
timely
raised
by
Purchaser:(a)



satisfy
all
mortgages,
deeds
of
trust,
liens
and
similar
monetary
encumbrances
on
the
Real
Property
(provided
the
same
are
in
a
liquidatedamount)
that
have
been
executed
by
Seller,
and
satisfy
or
transfer
to
bond
all
liens
that
arise
in
connection
with
any
work
or
services
performed
or
materials,supplies
or
other
property
delivered
to
the
Real
Property
at
the
request
of
Seller
and
all
judgments
in
a
liquidated
amount
against
Seller,
other
than
non-delinquenttaxes
and
assessments
(collectively,
"Seller's
Liens");(b)



pay
any
delinquent
taxes
or
other
amounts
then
due
and
payable
by
Seller
to
any
governmental
entity
and
relating
to
any
period
prior
to
theClosing
(but
Seller
shall
not
be
required
to
pay
any
such
amounts
that
are
payable
by
any
tenant
of
the
Property);
and(c)



cure
any
title
matters
adversely
affecting
the
marketability
of
the
Property
that
are
timely
objected
to
by
Purchaser
and
may
be
cured
at
orprior
to
the
Closing
with
the
expenditure
of
an
aggregate
amount
of
$25,000.00
or
less.The
Title
Objections
that
Seller
is
required
to
address
in
accordance
with
clauses
(a),
(b)
and
(c)
are
collectively
called
the
"Required
Cure
Items."
Failure
by
Sellerto
timely
respond
to
the
Purchaser's
Title
Objections
shall
be
deemed
Seller's
decision
not
to
cure
any
Title
Objections
other
than
the
Required
Cure
Items.
If
Sellerelects
within
the
Seller
Notice
Period
not
to
attempt
to
cure
any
of
the
Title
Objections
that
have
been
timely
raised
by
Purchaser
other
than
the
Required
CureItems,
Purchaser
has
the
option,
exercisable
by
the
delivery
of
written
notice
to
Seller
within
five
(5)
Business
Days
after
the
earlier
to
occur
of
the
receipt
ofSeller's
Title
Notice
or
the
expiration
of
the
Seller
Notice
Period
(the
"Purchaser
Notice
Period")
to
either
(i)
waive
the
uncured
Title
Objections,
in
which
eventthe
unsatisfied
Title
Objections
(other
than
the
Required
Cure
Items)
will
become
Permitted
Exceptions
(hereinafter
defined),
or
(ii)
terminate
this
Contract,
inwhich
event
the
Earnest
Money
will
be
returned
to
Purchaser
and
upon
such
return
neither
Seller
nor
Purchaser
will
have
any
further
obligations
under
thisContract
except
under
any
provisions
that
survive
the
termination
of
this
Contract
by
their
express
terms.
If
Purchaser
fails
to
notify
Seller
in
writing
before
theexpiration
of
the
Purchaser
Notice
Period
that
Purchaser
has
elected
to
terminate
this
Contract
pursuant
to
clause
(ii)
above,
then
Purchaser
shall
be
deemed
to
havewaived
and
accepted
the
uncured
Title
Objections
(other
than
the
Required
Cure
Items)
as
provided
in
clause
(i)
above.
If
after
Purchaser
has
given
its
notice
ofTitle
Objections
to
Seller,
the
Title
Company
issues
continuation
reports
or
other
written
evidence
indicating
any
new
Title
Exceptions
which
are
not
PermittedExceptions
and
Purchaser
delivers
written
notice
thereof
to
Seller
prior
to
the
earlier
to
occur
of
(x)
five
(5)
Business
Days
after
Purchaser's
receipt
of
suchcontinuation
report
or
other
written
evidence
or
(y)
the
Closing
Date,
then
this
Section
4.3
shall
apply
to
such
new
Title
Exceptions.(d)



If
Seller
shall
have
elected
to
attempt
to
cure
the
Title
Objections
(other
than
the
Required
Cure
Items)
and
does
not
cure
such
TitleObjections
by
the
date
on
which
the
Closing
is
to
occur,
then
Purchaser
shall
have
the
right
(exercisable
within
five
(5)
Business
Days
of
Seller's
notification
of
itsinability
to
cure
or,
if
no
such
notification
is
delivered
by
Seller,
on
or
prior
to
the
Closing
Date)
to
terminate
this
Contract,
in
which
event
the
Earnest
Money
willbe
returned
to
Purchaser
and
upon
such
return
neither
Seller
nor
Purchaser
will
have
any
further
obligations
under
this
Contract
except
under
any
provisions
thatsurvive
the
termination
of
this
Contract
by
their
express
terms.
If
Purchaser
does
not
terminate
this
Contract
in
accordance
with
the
immediately
precedingsentence,
then
Purchaser
shall
be
deemed
to
have
elected
to
accept
the
uncured
Title
Objections
(other
than
the
Required
Cure
Items)
and
to
purchase
the
Propertysubject
thereto,
with
no
adjustment,
abatement
or
offset
to
the
Purchase
Price
as
a
result
of
the
existence
of
such
uncured
Title
Objections.
Notwithstandinganything
to
the
contrary
provided
herein,
Seller
shall
be
entitled
to
cure
any
Title
Objections
at
the
Closing
through
the
use
of
the
Closing
proceeds
or
otherwise.4.4     Permitted Exceptions. For
purposes
of
this
Contract
the
term
"Permitted
Exceptions"
will
mean,
collectively,
the
following:
(a)
all
ExistingExceptions,
(b)
all
Title
Exceptions
to
which
Purchaser
has
not
timely
objected,
and
(c)
all
Title
Objections
which
Purchaser
has
waived,
accepted
or
is
deemed
tohave
waived
or
accepted
(other
than
the
Required
Cure
Items,
which
Seller
shall
be
obligated
to
remove
at
or
prior
to
the
Closing)
under
this
Section
4
.5. DUE DILIGENCE PERIOD.5.1     Items to be Delivered by Seller. Within
five
(5)
Business
Days
after
the
Effective
Date,
Seller
shall
make
available
to
Purchaser
(through
awebsite
or
any
other
method)
copies
of
the
items
described
on
Exhibit
"D"
relating
to
the
Property
to
the
extent
in
Seller’s
possession
or
control
(collectively,
the"Seller's
Deliverables").35.2     Items Available to Purchaser. Seller
shall
make
available
to
Purchaser,
promptly
after
Purchaser's
request
therefor,
such
other
items
ofinformation
relating
to
the
Property
reasonably
requested
by
Purchaser
that
are
in
Seller's
possession
or
control
and
that
relate
exclusively
to
the
Property;provided,
however,
in
no
event
shall
Seller
be
required
to
make
available
to
Purchaser
books,
records
or
files
(whether
in
a
printed
or
electronic
format)
that
consistof
or
contain
any
of
the
following
except
to
the
extent
the
same
are
included
in
the
Seller's
Deliverables:
appraisals;
strategic
plans,
budgets,
forecasts
and
similarforward-looking
information
for
the
Property;
internal
analyses;
information
regarding
the
Property
that
is
embedded
in
information
concerning
the
business,affairs
and/or
property
of
any
affiliate
of
Seller;
information
related
to,
or
obtained
by
Seller
in
connection
with,
Seller's
purchase
of
the
Property
or
any
financingof
the
Property;
communications
and
information
related
to
the
marketing
of
the
Property
for
sale
or
any
other
sales
contract
relating
to
the
Property;communications
and
information
pertaining
to
any
sale
of
the
Property,
including
any
materials
provided
to
any
prospective
purchaser
by
Seller;
internalcommunications
among
employees
of
Seller
and/or
any
affiliate
of
Seller;
communications
or
historical
information
pertaining
to
the
Leases
and
the
PropertyAgreements
(or
the
negotiation
thereof)
excluding
(a)
any
correspondence
regarding
any
default
or
alleged
default
by
Seller
or
a
Tenant
that,
in
either
case,
has
notbeen
cured
or
(b)
information
relating
to
any
open
Property
expense
billings.5.3     Due Diligence Period. During
the
period
(the
"Due
Diligence
Period")
commencing
with
the
Effective
Date
and
ending
at
5:00
pm,
Eastern
time,on
the
date
that
is
forty
(40)
days
after
the
Effective
Date
(the
"Termination
Date"),
Purchaser
will
have
the
option
and
right
to
conduct
such
investigations,inspections,
analyses,
surveys,
tests,
examinations,
studies,
and
appraisals
of
the
Property
and
to
research
and
examine
all
governmental
records,
zoning,development
rights
and
other
public
information
relating
to
the
Property,
as
Purchaser
deems
necessary
or
desirable,
at
Purchaser's
sole
cost
and
expense,
todetermine
if
the
Property
is
suitable
for
Purchaser's
purposes;
provided,
however,
any
entry
onto,
or
physical
examination,
inspection
or
testing
of,
the
Property(a)
must
be
scheduled
in
advance
with
Seller
and
comply
with
the
provisions
of
Section
5.4
,
(b)
may
be
performed
only
after
the
delivery
by
Purchaser
of
theinsurance
certificate
required
under
Section
5.4
,
and
(c)
shall
be
subject
to,
and
must
be
conducted
in
full
compliance
with,
the
terms
of
the
Leases
and
thisContract.
Purchaser
shall
deliver
to
Seller
copies
of
all
third
party
inspection
reports
received
by
Purchaser
or
any
other
written
notices
received
by
Purchaseridentifying
any
potential
violations
of
law
promptly
after
receipt
by
Purchaser
of
such
third
party
inspection
reports
or
other
notices.
Upon
any
termination
of
thisContract,
Purchaser
shall
deliver
to
Seller,
without
recourse
to
Purchaser,
a
copy
of
any
third
party
written
reports
received
by
Purchaser
as
a
result
of
the
activitiesof
or
on
behalf
of
Purchaser
to
the
extent
a
copy
has
not
previously
been
delivered
to
Seller.
Purchaser
shall
cause
to
be
repaired
any
physical
damage
to
theProperty
caused
by
any
entry
on
the
Property
and/or
any
activities
performed
by,
for
or
on
behalf
of
Purchaser
under
this
Section
5
and
shall
restore
the
Property
tothe
condition
existing
immediately
prior
to
such
entry
and/or
exercise
of
such
activities.
The
obligations
of
Purchaser
under
this
Section
5.3
shall
survive
theClosing
or
earlier
termination
of
this
Contract.5.4     Access. To
facilitate
the
Purchaser's
physical
inspections
under
Section
5.3
but
subject
to
the
rights
of
the
tenants
under
the
Leases
and
the
fullcompliance
with
all
terms
and
conditions
of
the
Leases,
from
the
later
to
occur
of
the
Effective
Date
or
the
delivery
of
the
insurance
certificate
required
below
untilthe
Closing
or
the
earlier
termination
of
this
Contract,
Seller
will
provide
Purchaser
and
Purchaser's
agents,
consultants,
inspectors
and
representatives
reasonableaccess
to
the
Real
Property
upon
at
least
one
(1)
Business
Day's
prior
written
or
email
notice
from
Purchaser
to
Seller
(but
in
no
event
less
than
24
hours'
advancenotice);
provided,
however,
that
(a)
Seller
shall
have
the
right
to
accompany
any
person
entering
the
Real
Property
for
or
on
behalf
of
Purchaser,
(b)
Purchasershall
have
no
right
to
conduct
any
physical
testing,
boring,
sampling
or
removal
without
the
specific
prior
written
consent
of
Seller
after
the
submission
byPurchaser
to
Seller
of
a
work
plan,
which
work
plan
Seller
may
modify,
limit
or
disapprove
in
its
reasonable
discretion
within
three
(3)
Business
Days
followingreceipt
of
Purchaser’s
request,
failing
which
Seller
shall
be
deemed
to
have
approved
the
work
plan,
(c)
prior
to
any
entry
onto
the
Real
Property,
Purchaser
mustprovide
to
Seller
an
insurance
certificate
evidencing
that
Purchaser
has
at
least
$1,000,000
of
public
liability
insurance
that
names
Seller
as
an
additional
insuredwith
respect
to
the
Property,
(d)
during
the
Due
Diligence
Period,
Purchaser
shall
have
the
right
to
conduct
tenant
interviews
with
any
of
the
current
tenants
leasing3,000
square
feet
or
more
of
the
Property,
subject
to
at
least
three
(3)
Business
Days'
advance
written
or
email
notice
by
Purchaser
to
Seller
and,
at
Seller’s
request,Seller’s
participation
in
any
such
interview,
(e)
notwithstanding
the
foregoing,
the
parties
acknowledge
that
Purchaser’s
broker
has
a
relationship
with
the
tenantCampus
Crest
(which
tenant
is
currently
attempting
to
sublease
its
premises
or
assign
its
lease)
and
that
Purchaser
desires
to
relocate
or
terminate
Campus
Crest’slease
following
Closing,
and
that
Purchaser’s
broker
shall
have
the
right
to
communicate
and
negotiate
with
Campus
Crest
without
prior
notice
to
Seller,
providedany
offer
or
agreement
that
Purchaser
makes
or
enters
into
with
Campus
Crest
shall
be
conditioned
upon
Purchaser
acquiring
the
Property
at
Closing
and
shall
notaffect
in
any
way
any
obligations
or
liabilities
of
Campus
Crest
or
the
lease
guarantor
to
Seller
(whether
such
obligations
or
liabilities
arise
before
or
after
theClosing),
and
(f)
except
as
provided
in
the
foregoing
subparagraphs
(d)
and
(e),
Purchaser
shall
not
have
the
right
to
communicate
with
any
of
the
tenants
of
theProperty
without
the
specific
prior
written
or
email
consent
of
Seller,
and
Seller
shall
have
the
right
to
participate
in
any
communications
allowed
by
Seller.
Allrequests
for
any
entry
on
the
Real
Property
shall
be
made
to
Mr.
Bradley
Safchik,
786-464-8327
(office);
305-951-1134
(mobile),
or
such
other
representative
ofSeller
that
may
hereafter
be
designated
by
Seller.
Purchaser
will
use
all
commercially
reasonable
efforts
to
minimize
interference
with
the
tenants
under
the
Leasesor
their
operations
at
the
Real
Property.45.5     Indemnity. Purchaser
agrees
to
indemnify,
defend
and
hold
Seller
and
its
affiliates
and
their
respective
agents,
members,
partners,
shareholders,directors,
officers,
employees
and
representatives,
harmless
from
and
against
any
liens,
claims,
demands,
damages,
losses
and/or
expenses
(including,
withoutlimitation,
reasonable
attorneys'
fees),
suffered
or
incurred
by
Seller
or
its
affiliates
or
their
respective
agents,
members,
partners,
shareholders,
directors,
officers,employees
and
representatives,
as
a
result
of,
arising
out
of,
or
in
connection
with,
Purchaser
or
Purchaser's
agents
or
representatives
exercising
any
rights
set
forthin
this
Section
5
or
arising
from
Purchaser
or
its
agents
or
representatives
otherwise
entering
upon
the
Real
Property,
except
to
the
extent
arising
from
thenegligence
or
willful
misconduct
of
Seller
or
its
agents,
members,
partners,
directors,
officers
or
representatives;
provided,
however,
that
the
foregoing
indemnityshall
not
be
applicable
to
any
liens,
claims,
demands,
damages,
losses
or
expenses
resulting
solely
from
the
discovery
of
any
existing
condition
on,
or
informationrelating
to,
the
Property.
Purchaser
will
repair
or
cause
to
be
repaired
any
damage
caused
by
Purchaser
or
Purchaser's
agents
or
representatives
in
the
conduct
ofthe
review
and/or
inspection
contemplated
hereunder.
The
indemnification
and
other
obligations
of
Purchaser
in
this
Section
5.5
will
survive
the
Closing
or
earliertermination
of
this
Contract.5.6     Option to Terminate. If
Purchaser
is
not
satisfied,
in
Purchaser's
sole
and
absolute
discretion,
with
the
condition
of
the
Property,
or
if
Purchaserdetermines,
in
Purchaser's
sole
and
absolute
discretion,
that
the
Property
is
unsuitable
for
Purchaser's
purposes,
or
if
Purchaser,
in
Purchaser's
sole
and
absolutediscretion,
elects
not
to
proceed
with
the
transaction
contemplated
by
this
Contract,
then
Purchaser
may
terminate
this
Contract
by
giving
written
notice
to
Sellerbefore
5
pm,
Eastern
time,
on
the
Termination
Date.
In
the
event
that
Purchaser
terminates
this
Contract
in
strict
compliance
with
the
provisions
of
this
Section
5.6,
the
Earnest
Money
will
be
returned
to
Purchaser
(except
that
the
Independent
Consideration
shall
be
paid
to
Seller)
and
the
parties
will
have
no
further
obligationsunder
this
Contract
except
for
return
of
the
Earnest
Money
and
any
obligations
that
expressly
survive
the
termination
of
this
Contract.
If
Purchaser
fails
to
notifySeller
in
writing
before
5
pm,
Eastern
time,
on
the
Termination
Date
that
Purchaser
has
elected
to
terminate
this
Contract,
then
Purchaser
shall
no
longer
have
anytermination
rights
under
this
Section
5.6
,
the
Earnest
Money
shall
be
nonrefundable
except
as
otherwise
expressly
provided
in
this
Contract,
and
the
parties
shallproceed
to
close
the
transaction
contemplated
hereby
subject
to
and
in
accordance
with
the
terms
of
this
Contract.Seller
acknowledges
that
Purchaser
is
seeking
certain
Incentives
(defined
below)
in
connection
with
its
acquisition
of
the
Property
and
operation
of
its
businesstherein,
and
that
Purchaser
is
not
obligated
to
acquire
the
Property
without
such
Incentives.

If
such
Incentives
are
not
finally
approved
by
Purchaser
during
theDue
Diligence
Period,
then
Purchaser
may
elect
to
terminate
this
Contract
in
accordance
with
the
foregoing
provisions
of
this
Section
5.6
.

For
the
purposeshereof,
“Incentives”
shall
mean
any
state,
local
and
other
economic
incentives
or
other
benefits
from
various
state,
local,
utility
and
non-profit
agencies
thatPurchaser
or
any
other
person,
agency,
or
entity
may
seek
to
obtain
for
Purchaser’s
benefit,
including
but
not
limited
to
property
tax
rebates,
credits,
abatements,and
cash
grants.5.7 




Property Agreements .
Purchaser
shall
notify
Seller
in
writing
prior
to
the
expiration
of
the
Due
Diligence
Period
of
those
Property
Agreementsthat
Purchaser
elects
to
assume
at
the
Closing;
provided
that
any
Property
Agreements
which
cannot
be
terminated
by
their
terms
or
cannot
be
terminated
without
apenalty
shall
be
required
to
be
assumed
by
Purchaser
at
Closing.
Seller
shall
terminate
all
Property
Agreements
(insofar
as
they
affect
the
Property)
other
thanProperty
Agreements
that
Purchaser
elects
to
assume
or
is
required
to
assume
under
this
Contract.
Seller
shall
not
be
required
to
pay
any
termination
fee
or
penaltyin
connection
with
the
termination
of
any
Property
Agreement.6.REPRESENTATIONS AND WARRANTIES.6.1     Seller's Representations and Warranties. Seller
makes
the
following
warranties
and
representations
to
Purchaser
as
of
the
Effective
Date,
andsuch
representations
and
warranties
will
be
updated
at
Closing
as
provided
in
Section
6.2
below:6.1.1     Organization. Seller
is
duly
formed,
validly
existing
and
in
good
standing
under
the
laws
of
the
state
of
its
organization.6.1.2     Authority. Seller
has
the
requisite
power
and
authority,
has
taken
all
actions
required
by
its
organizational
documents
and
applicablelaw,
and
has
obtained
all
necessary
consents,
to
execute
and
deliver
this
Contract
and
to
consummate
the
transactions
contemplated
in
this
Contract.
Theperson
signing
this
Contract
on
behalf
of
Seller
is
authorized
to
do
so.
The
performance
of
this
Contract
by
Seller
will
not
result
in
any
breach
of,
orconstitute
any
default
under,
any
agreement,
document,
instrument,
or
other
obligation
to
which
Seller
is
a
party
or
by
which
Seller
or
the
Property
isbound.6.1.3     Pending Actions. To
Seller's
Knowledge
(as
defined
below),
there
are
no
pending
or
threatened
actions,
suits,
arbitrations
orgovernment
investigations
or
any
unsatisfied
orders
or
judgments
against
Seller,
which,
if
adversely
determined,
could
individually
or
in
the
aggregate(a)
materially
interfere
with
the
consummation
of
the
transaction
contemplated
by
this
Contract,
or
(b)
have
a
material
adverse
impact
on
the
Property.
ToSeller's
Knowledge,
Seller
has5not
received
notice
of
any
pending
or
threatened
condemnation
or
similar
proceeding
affecting
the
Property
or
any
part
thereof.6.1.4     Leases .
(a)
The
only
Leases
in
effect
as
of
the
Effective
Date
are
with
the
tenants
identified
on
Exhibit
"B"
;
(b)
except
as
set
forth
onExhibit
"B"
,
(i)
all
tenant
improvements
required
under
all
Leases
in
existence
on
the
Effective
Date
and
the
Additional
Leases
(as
defined
below)
to
beconstructed
by
Seller
have
been
completed,
and
(ii)
all
brokerage
commissions
payable
under
the
Leases
in
existence
on
the
Effective
Date
and
theAdditional
Leases
have
been
paid,
(c)
except
as
set
forth
in
the
Campus
Crest
Lease,
no
Tenant
under
any
of
the
Leases
(each,
a
"Tenant")
has
any
optionor
right
of
first
offer
to
purchase
the
Property;
(d)
except
as
set
forth
in
the
Leases,
no
Tenant
has
any
right
or
option
to
lease
additional
space
in
theProperty,
extend
the
term
of
such
Lease,
put
back
to
the
landlord
any
space
currently
subject
to
such
Tenant's
Lease
or
terminate
any
Lease,
(e)
no
writtennotice
of
default
has
been
given
or
received
by
Seller
with
respect
to
any
Lease
that
in
either
case
remains
uncured;
(f)
except
as
set
forth
on
Exhibit
"B",no
Tenant
has
paid
rent
for
more
than
one
month
in
advance;
(g)
Seller
has
provided
or
will
provide
in
accordance
with
Section
5.1
or
Section
7.1.3
,
asapplicable,
of
this
Contract
true
and
correct
copies
of
the
Leases
to
Purchaser;
(h)
except
as
set
forth
in
Exhibit
"B"
,
Seller
has
not
released
or
dischargedin
writing
any
guarantor
under
any
lease
guaranty
pertaining
to
the
Leases
except
as
set
forth
in
the
Leases;
(i)
attached
to
this
Contract
as
Exhibit
“M”
isa
rent
roll
for
the
Leases
(the
“Rent
Roll”),
but
Seller
only
represents
that
the
Rent
Roll
consists
of
the
rent
roll
used
by
Seller
in
its
management
of
theProperty
supplemented
by
information
on
two
(2)
additional
Leases
(one
with
Medflow
Holdings,
LLC
and
the
other
with
Blacka
Jessup
&
HendersonLLP)
that
have
been
circulated
for
execution
but
have
not
been
fully
executed
on
the
Effective
Date
(the
"Additional
Leases"),
and
Seller
makes
nofurther
representations
regarding
the
accuracy
of
the
Rent
Roll;
and
(j)
attached
to
this
Contract
as
Exhibit
"N"
is
a
list
of
security
deposits
currently
heldby
Seller
under
the
Leases.
6.1.5     Property Agreements .
The
only
contracts
and
agreements
pertaining
to
the
Real
Property
in
effect
as
of
the
Effective
Date
that
willcontinue
to
be
in
effect
after
the
Closing
are
with
the
parties
identified
in
Exhibit
"B"
.
To
Seller's
Knowledge,
Seller
has
received
no
written
notice
ofdefault
from
any
service
provider
that
remains
uncured,
no
written
notice
of
default
has
been
sent
by
Seller
to
a
service
provider
and,
to
Seller’sknowledge,
all
Property
Agreements
are
in
full
force
and
effect.
Seller
has
provided,
or
will
provide
in
accordance
with
Section
5.1
or
Section
7.1.3
,
asapplicable,
of
this
Contract,
true
and
correct
copies
of
the
Property
Agreements
to
Purchaser.6.1.6     Bankruptcy . There
are
no
attachments,
executions,
assignments
for
the
benefit
of
creditors
or
proceedings
under
any
bankruptcy
orother
debtor
relief
laws
pending,
or
to
Seller's
Knowledge
threatened,
against
Seller
or
its
interest
in
the
Property
nor
are
any
of
the
foregoingcontemplated
by
Seller.6.1.7     FIRPTA . Seller
is
not
a
"foreign
person"
within
the
meaning
of
Section
1445(f)(3)
of
the
Internal
Revenue
Code,
as
amended.6.1.8     Terrorist Organizations Lists . Seller
is
not,
and
is
not
acting,
directly
or
indirectly,
for
or
on
behalf
of,
any
person
named
by
theUnited
States
Treasury
Department
as
a
Specifically
Designated
National
and
Blocked
Person,
or
for
or
on
behalf
of
any
person
designated
in
ExecutiveOrder
13224
as
a
person
who
commits,
threatens
to
commit,
or
supports
terrorism.
Seller
is
not
engaged
in
the
transaction
contemplated
by
this
Contractdirectly
or
indirectly
on
behalf
of,
or
facilitating
such
transaction
directly
or
indirectly
on
behalf
of,
any
such
person.6.1.9     Violations . To
Seller's
Knowledge
as
of
the
Effective
Date,
Seller
has
not
received
any
written
notices
from
any
governmental
authorityof
any
uncured
zoning,
building,
environmental
protection,
clean
air,
pollution,
fire
or
health
code
violations
with
respect
to
the
Property
or
uncuredviolations
of
any
federal,
state
or
local
law
pertaining
to
the
Property.6.1.10 




Possessory Rights .
Except
as
granted
under
the
Leases
or
the
Permitted
Exceptions,
Seller
has
not
granted
to
any
person
or
entity
anypossessory
interest
in
or
right
to
use
any
portion
of
the
Property.6.1.11 




Third Party Commitments .
Except
for
the
Permitted
Exceptions,
Leases
and
Property
Agreements
and
as
otherwise
expresslypermitted
hereunder,
Seller
has
not
made
any
commitment
to
any
governmental
authority,
utility
company,
Tenant,
or
to
any
other
entity,
organization,group
or
individual,
that
in
any
instance
would
be
binding
upon
the
Property
or
the
Purchaser
after
Closing.6.1.12 




Tangible Property .
Seller
owns
the
Tangible
Property
free
and
clear
of
mortgages,
pledges,
liens,
security
interests
or
otherencumbrances
other
than
those
that
will
be
satisfied
or
released
at
Closing
and
all
claims
or
rights
of
others
other
than
the
rights
of
Tenants
and
theirsuccessors
and
assigns
under
the
Leases.6As
used
in
this
Contract,
the
term
"Seller's
Knowledge"
means
the
actual
knowledge
of
Bradley
Safchik,
without
imposing
any
duty
of
investigation
or
personalliability
on
such
individual,
and
shall
not
include
any
imputed,
implied
or
constructive
knowledge
of
such
individual.
Seller
represents
and
warrants
that
theforegoing
individual
is
the
representative
of
Seller
that
is
most
likely
to
have
knowledge
concerning
the
matters
represented
by
Seller
in
this
Section
6.1
.6.2     Survival of Seller's Representations and Warranties. Seller
shall
promptly
notify
Purchaser
in
writing
if,
to
Seller's
Knowledge,
any
facts,circumstances
or
events
occur
after
the
Effective
Date
that
would
make
any
of
the
representations
or
warranties
contained
in
Section
6.1
untrue
at
the
Closing.
Ifany
of
the
representations
or
warranties
of
Seller
contained
in
this
Contract,
as
updated
as
permitted
under
this
Contract,
are
not
made
accurate
by
Seller
on
or
priorto
the
Closing,
Purchaser
may
elect,
as
its
sole
remedy
(unless
the
same
were
made
inaccurate
by
a
willful
act
of
Seller
in
violation
of
this
Contract
by
Seller,
inwhich
case
Section
12.1
shall
be
applicable),
to
terminate
this
Contract
prior
to
the
Closing,
in
which
event
the
Earnest
Money
shall
be
returned
to
Purchaser
andthe
parties
shall
have
no
further
obligations
under
this
Contract
except
for
those
obligations
that
survive
termination
by
their
express
terms.
If
Purchaser
does
notelect
to
terminate
this
Contract,
then
the
representations
and
warranties
of
Seller
shall
be
updated
at
Closing
to
reflect
all
matters
disclosed
by
Seller.
Therepresentations
and
warranties
of
Seller
set
forth
in
Section
6.1
,
as
they
may
be
updated
at
Closing,
(i)
shall
survive
Closing
and
expire
two
hundred
seventy
(270)days
after
the
Closing
Date
(the
"Survival
Period")
except
to
the
extent,
and
only
to
the
extent,
if
any,
that
Purchaser
shall
have
given
Seller
written
notice
duringsuch
Survival
Period
which
describes
in
reasonable
detail
the
breach
or
alleged
breach
of
such
representations
and
warranties
by
Seller
and,
if
curable,
the
curativeactions
requested
by
Purchaser,
and
which
provides
Seller
with
a
reasonable
period
of
time,
not
less
than
thirty
(30)
days,
in
which
to
resolve
such
matters
to
thereasonable
satisfaction
of
Purchaser;
and
(ii)
shall
expire
and
be
of
no
further
force
and
effect
two
(2)
years
after
the
day
the
cause
of
action
accrues
(which
theparties
agree
will
be
the
Closing
Date)
with
respect
to
any
matters
timely
disclosed
in
a
written
notice
delivered
by
Purchaser
to
Seller
under
subsection
(i)
hereof.Seller
shall
have
no
liability
to
Purchaser
for
a
breach
of
any
representation
or
warranty
unless
written
notice
containing
a
description
of
the
specific
nature
of
suchbreach
shall
have
been
given
by
Purchaser
to
Seller
prior
to
the
expiration
of
the
Survival
Period.
Furthermore,
notwithstanding
anything
to
the
contrary
containedin
this
Contract,
if
the
Closing
shall
have
occurred:
(a)
Seller
shall
have
no
liability
(and
Purchaser
shall
make
no
claim
against
Seller)
for
a
breach
of
anyrepresentation
or
warranty
or
any
other
obligation
of
Seller
under
this
Contract
or
any
document
executed
by
Seller
in
connection
with
this
Contract,
unless
thevalid
claims
for
actual
damages
incurred
due
to
such
breaches
collectively
exceed
$25,000.00;
(b)
the
liability
of
Seller
for
a
breach
of
a
representation
or
warrantyunder
Section
6.1
or
the
Seller
Bringdown
Certificate
(as
defined
in
Section
9.2.1
below)
shall
in
no
event
exceed,
in
the
aggregate,
the
amount
of
Seven
HundredFifty
Thousand
and
No/100
Dollars
($750,000.00);
and
(c)
in
no
event
shall
Seller
be
liable
for
any
consequential
or
punitive
damages,
except
in
the
case
of
fraud.Seller
covenants
and
agrees
that
from
and
after
the
Closing
until
the
last
day
of
the
Survival
Period,
Seller
shall
maintain
a
minimum
net
worth
as
determined
inaccordance
with
generally
accepted
accounting
principles
of
not
less
than
Seven
Hundred
Fifty
Thousand
and
No/100
Dollars
($750,000.00);
provided,
however,that
if
any
written
claim
is
made
and
delivered
to
Seller
prior
to
the
last
day
of
the
Survival
Period,
Seller
shall
continue
to
maintain,
until
such
claim
has
beenfinally
adjudicated
or
settled
and
paid
to
the
extent
required
by
such
judgment
or
settlement,
a
net
worth
of
not
less
than
the
lesser
of
(i)
$750,000
or
(ii)

125%
ofthe
reasonable
amount
required
to
satisfy
such
claim.
Seller’s
obligations
under
this
Section
6.2
shall
survive
the
Closing.6.3     Purchaser's Representations and Warranties. Purchaser
makes
the
following
warranties
and
representations
to
Seller,
which
warranties
andrepresentations
shall
be
deemed
to
have
been
remade
by
Purchaser
at
the
Closing
and
shall
survive
the
Closing
for
the
Survival
Period:6.3.1     Organization. Purchaser
is
duly
organized,
validly
existing
and
in
good
standing
under
the
laws
of
the
state
of
its
organization.6.3.2     Authority. Purchaser
has
the
requisite
power
and
authority,
has
taken
all
actions
required
by
its
organizational
documents
andapplicable
law,
and
has
obtained
all
necessary
consents,
to
execute
and
deliver
this
Contract
and
to
consummate
the
transactions
contemplated
in
thisContract.
The
person
signing
this
Contract
on
behalf
of
Purchaser
is
authorized
to
do
so.
Performance
of
this
Contract
by
Purchaser
will
not
result
in
anybreach
of,
or
constitute
any
default
under,
any
agreement
or
other
instrument
to
which
Purchaser
is
a
party
or
by
which
Purchaser
is
bound.6.3.3     Bankruptcy . There
are
no
attachments,
executions,
assignments
for
the
benefit
of
creditors
or
proceedings
under
any
bankruptcy
orother
debtor
relief
laws
pending,
or
to
the
actual
knowledge
of
Purchaser
threatened,
against
Purchaser
nor
are
any
of
the
foregoing
contemplated
byPurchaser.6.3.4     Terrorist Organizations Lists . Purchaser
is
not
acting,
directly
or
indirectly,
for
or
on
behalf
of
any
person
named
by
the
United
StatesTreasury
Department
as
a
Specifically
Designated
National
and
Blocked
Person,
or
for
or
on
behalf
of
any
person
designated
in
Executive
Order
13224
asa
person
who
commits,
threatens
to
commit,
or7supports
terrorism.
Purchaser
is
not
engaged
in
the
transaction
contemplated
by
this
Contract
directly
or
indirectly
on
behalf
of,
or
facilitating
suchtransaction
directly
or
indirectly
on
behalf
of,
any
such
person.6.3.5     No Litigation .
There
is
no
litigation
pending
or,
to
Purchaser’s
knowledge,
threatened
against
Purchaser,
which
if
adversely
determinedwould
materially
adversely
affect
Purchaser’s
ability
to
enter
into
or
perform
this
Contract.7. SELLER’S COVENANTS .7.1     Covenants regarding Property .
Between
the
Effective
Date
and
the
Closing,
Seller
shall:7.1.1     Maintain Property .
Maintain
the
portions
of
the
Property
that
Seller
is
required
to
maintain
under
the
Leases
in
the
ordinary
course
ofbusiness
consistent
with
the
practices
and
procedures
of
Seller
in
effect
as
of
the
Effective
Date,
ordinary
wear
and
tear
and
damage
from
casualty
orcondemnation
excepted;
provided,
however,
that
notwithstanding
the
foregoing,
Seller
shall
have
no
obligation
to
cure
any
violation
of
any
law,ordinance
or
other
governmental
requirement
or
any
physical
condition
that
would
give
rise
to
a
violation
of
any
law,
ordinance
or
other
governmentalrequirement,
whether
the
same
exists
as
of
the
Effective
Date
or
prior
to
Closing
(each
a
"Violation")
except
for
any
Violations
that,
in
the
reasonabledetermination
of
Seller,
can
be
cured
prior
to
the
Closing
by
an
aggregate
expenditure
of
$100,000
or
less
and
for
which
Seller
has
received,
prior
to
theClosing,
written
notice
from
the
relevant
governmental
authority
that
the
Violation
exists.
Seller
shall
promptly
send
to
Purchaser
a
copy
of
all
writtennotices
of
a
Violation
it
receives
from
relevant
governmental
authorities.
If
(a)
any
written
notice
of
a
Violation
is
received
by
Purchaser
after
theexpiration
of
the
Due
Diligence
Period
that
(i)
does
not
result
from
any
communications
by
the
Purchaser
or
its
agents
or
representatives
with
the
relevantgovernmental
authority
and
(ii)
does
not
relate
to
a
matter
that
Purchaser
knew
constituted
a
violation
of
law
prior
to
the
expiration
the
Due
DiligencePeriod
as
a
result
of
the
identification
of
such
matter
in
a
third
party
report
or
a
written
notice
received
by
Purchaser,
and
(b)
  Seller
is
not
obligated
tocure
such
noticed
Violation
in
accordance
with
the
foregoing
provisions,
then
Purchaser
shall
have
the
right
to
terminate
this
Contract
by
deliveringwritten
notice
thereof
to
Seller
within
five
(5)
Business
Days
following
Purchaser’s
receipt
of
the
written
notice
of
the
Violation
if
Seller
does
not,
atSeller's
option,
agree
either
(i)
to
cure
the
violation
at
Seller's
cost
and,
if
the
cure
has
not
been
completed
by
Closing,
deposit
in
escrow
with
the
TitleCompany
the
reasonably
estimated
unpaid
cost
therefor
for
disbursement
in
payment
of
the
costs
of
Seller's
curative
action
(with
any
undisbursed
sumsbe
disbursed
to
Seller
upon
the
completion
of
the
curative
action),
or
(ii)
to
provide
a
credit
to
Purchaser
at
Closing
in
an
amount
equal
to
the
reasonablyunpaid
estimated
cost
to
cure
the
violation.
If
Seller
elects
to
provide
a
credit
pursuant
to
clause
(ii)
above,
then
Seller
shall
have
no
further
obligation
inconnection
with
the
Violation
and
Purchaser
shall
be
responsible
for
the
cure
thereof.7.1.2     Insurance .
Maintain
all
casualty,
liability,
and
hazard
insurance
currently
in
force
with
respect
to
the
Property
or
other
replacementinsurance
that
is
reasonably
comparable
to
the
existing
insurance;
and7.1.3     Property Operation .
Between
the
Effective
Date
and
the
date
which
is
five
(5)
Business
Days
prior
to
the
expiration
of
the
DueDiligence
Period
(the
“Seller
Discretion
Period”),
Seller
may
lease,
operate,
manage,
and
enter
into
contracts
with
respect
to
the
Property
in
the
ordinarycourse
of
business
consistent
with
the
practices
and
procedures
of
Seller
prior
to
the
date
hereof,
subject
to
the
limitations
contained
below
in
this
Section7.1.3
.
During
the
Seller
Discretion
Period,
Seller
shall
(i)
promptly
notify
Purchaser
in
writing
of
the
commencement
of
any
negotiations
pertaining
tothe
modification
of
any
existing
Leases
or
Property
Agreements
or
the
execution
of
any
new
Leases
or
Property
Agreements
that
will
affect
the
Propertyafter
the
Closing,
(ii)
promptly
send
to
Purchaser
a
copy
of
all
written
offers,
letters
of
intent,
leases,
lease
amendments,
contracts
and
contractamendments,
in
each
case,
that
pertain
to
the
modification
of
any
existing
Lease
or
Property
Agreement
or
any
new
Lease
or
Property
Agreement
that
arereceived
from
or
sent
to
Seller,
other
than
any
such
documents
sent
between
Seller
and
any
of
its
affiliates
or
any
employees,
counsel,
agents
or
advisorsof
Seller
or
any
of
its
affiliates,
and
(iii)
prior
to
the
expiration
of
the
Seller
Discretion
Period,
send
Purchaser
a
true
and
complete
copy
of
anymodifications
of
any
Lease
or
Property
Agreement
or
new
Leases
or
Property
Agreements
that
Seller
enters
into
accompanied
by
a
statement
of
allPurchaser
Leasing
Costs
(as
defined
in
Section
10.3.4
)
that
Purchaser
would
be
responsible
for
under
Section
10.3.4
hereof.
Seller
hereby
notifiesPurchaser
that
the
Additional
Leases
have
been
sent
to
the
tenants
thereunder
for
execution.
Following
the
expiration
of
the
Seller
Discretion
Period,Seller
shall
not
enter
into
any
new
lease,
Lease
modification,
Property
Agreement
modification
or
contract
that
cannot
be
terminated
prior
to
the
Closingwithout
the
prior
written
approval
of
Purchaser
(which
approval
may
be
given
or
withheld
in
Purchaser’s
sole
discretion).
Notwithstanding
the
foregoing,in
no
event
(even
during
the
Seller
Discretion
Period)
shall
Seller
(a)

apply
any
tenant
security
deposits
unless
the
applicable
lease
is
terminated
and
thetenant
thereunder
has
vacated
its
premises,
(b)
initiate
any
zoning
reclassification
of
the
Property
or
seek
any
variance
under
existing
zoning
ordinancesapplicable
to
the
Property,
or
(c)
impose
any
additional
restrictive
covenants
or8encumbrances
on
the
Property
(other
than
exceptions
to
be
removed
by
Closing)
or
execute
or
file
any
subdivision
plat
affecting
the
Property.
IfPurchaser
fails
to
give
Seller
notice
of
its
approval
or
disapproval,
together
with
the
reason
for
any
disapproval,
of
any
proposed
action
requiring
itsapproval
under
this
Section
7.1.3
within
three
(3)
Business
Days
after
Seller
notifies
Purchaser
in
writing
of
the
proposed
action,
then
Purchaser
shall
bedeemed
to
have
given
its
disapproval.
The
representations
and
warranties
of
Seller
shall
be
updated
at
Closing
to
reflect
any
leases
and
contracts
executedby
Seller
as
permitted
by
the
provisions
of
this
Section
7.1.3
.
Seller
shall
promptly
provide
to
Purchaser
copies
of
all
documents
executed
by
Sellerpursuant
to
this
Section
7.1.3
.7.2     Marketing of Property .
Between
the
Effective
Date
and
the
Closing,
Seller
shall
not
market
the
Property
for
sale
and
shall
not
accept
or
negotiateany
letter
of
intent
to
sell
the
Property
or
sales
agreement
with
respect
to
the
Property
(other
than
this
Contract).7.3     Estoppels and SNDAs .
7.3.1 



After
the
expiration
of
the
Due
Diligence
Period,
Seller
shall
use
commercially
reasonable
efforts
to
obtain
and
deliver
to
Purchaser,prior
to
Closing,
an
estoppel
letter
in
substantially
the
form
attached
hereto
as
Exhibit
"E"
executed
by
each
of
the
Tenants;
provided,
however,
that
if
anyTenant
is
permitted
under
the
terms
of
its
Lease
to
provide
less
information
or
to
otherwise
make
different
statements
or
provide
a
different
form
ofestoppel
certification,
then
if
the
tenant
refuses
to
provide
an
estoppel
letter
in
the
form
of
Exhibit
"E"
,
Seller
shall
use
commercially
reasonable
efforts
toobtain
an
estoppel
certificate
in
accordance
with
the
relevant
Lease.
Any
estoppel
letter
in
substantially
the
form
of
Exhibit
"E"
or
that
complies
with
theprovisions
of
the
relevant
Lease
is
called
a
"
Tenant Estoppel ".
Commercially
reasonable
efforts
shall
not
include
the
payment
of
any
sums
by
Seller
toany
Tenant,
the
incurrence
of
any
other
liability
to
any
Tenant,
or
the
granting
of
any
other
concession
to
any
Tenant.7.3.2 



Within
five
(5)
days
after
the
delivery
by
Purchaser
to
Seller
of
a
completed
subordination,
non-disturbance
and
subordination
form
forany
Lease,
Seller
shall
send
to
the
Tenants
under
any
Leases
identified
by
Purchaser,
for
execution
by
each
of
the
relevant
Tenants,
a
subordination,
non-disturbance
and
attornment
agreement
("SNDA")
in
favor
of
Purchaser's
lender
on
Purchaser's
lender's
standard
form;
provided,
however,
thatnotwithstanding
the
foregoing
(a)
in
no
event
shall
Seller
be
required
to
send
an
SNDA
to
any
Tenant
prior
to
the
expiration
of
the
Due
Diligence
Period,and
(b)
the
failure
of
any
such
Tenant
to
execute
and
deliver
an
SNDA
shall
not
affect
any
of
the
obligations
of
the
Purchaser
under
this
Contract
or
be
acondition
to
Purchaser's
obligation
to
close
the
purchase
of
the
Property.
Purchaser
acknowledges
and
agrees
that
this
Contract
and
the
Purchaser'sobligations
hereunder
are
not
contingent
upon
the
receipt
by
Purchaser
of
loan
or
other
financing
in
connection
with
the
Property
regardless
of
theprovisions
of
this
Section
7.3.2
or
any
reference
in
this
Contract
to
any
lender
of
or
loan
to
Purchaser.8. "AS IS" SALE .8.1     Seller's Deliveries .
Except
as
otherwise
expressly
provided
in
this
Contract
or
in
the
Seller
Documents
(defined
in
Section
8.2
below),
any
and
allmaterials,
reports,
studies
or
other
items
furnished
by
Seller
or
on
Seller's
behalf,
whether
or
not
required
by
the
terms
of
this
Contract
(including
but
not
limited
tothe
Seller's
Deliverables)
are
delivered
without
representation
or
warranty,
express
or
implied,
by
Seller
as
to
the
truth,
accuracy
and
completeness
thereof,
and
anyreliance
thereon
by
the
Purchaser
shall
be
at
Purchaser's
own
risk,
without
any
recourse
against
Seller
and
subject
to
Purchaser's
independent
examination.8.2     AS-IS SALE . PURCHASER
HEREBY
ACKNOWLEDGES
AND
AGREES
THAT
THE
SALE
OF
THE
PROPERTY
HEREUNDER
IS
ANDWILL
BE
MADE
ON
AN
"AS
IS,
WHERE
IS
AND
WITH
ALL
FAULTS"
BASIS
SUBJECT,
HOWEVER,
TO
THE
EXPRESS
REPRESENTATIONS
OFSELLER
CONTAINED
IN
THIS
CONTRACT
OR
THE
DEED
(AS
DEFINED
BELOW)
OR
OTHER
CLOSING
DOCUMENTS.
THE
OCCURRENCE
OFCLOSING
SHALL
CONSTITUTE
AN
ACKNOWLEDGMENT
BY
PURCHASER
THAT
THE
PROPERTY
WAS
ACCEPTED
WITHOUT
PRESENTATIONOR
WARRANTY,
EXPRESS
OR
IMPLIED
EXCEPT
FOR
THE
REPRESENTATIONS
CONTAINED
IN
THIS
CONTRACT
OR
THE
DEED
OR
OTHERCLOSING
DOCUMENTS
EXECUTED
BY
SELLER
(THE
DEED
AND
SUCH
OTHER
CLOSING
DOCUMENTS
ARE
COLLECTIVELY
CALLED
THE"SELLER
DOCUMENTS").
EXCEPT
FOR
THE
WRITTEN
REPRESENTATIONS
SPECIFICALLY
SET
FORTH
IN
THIS
CONTRACT
OR
THE
SELLERDOCUMENTS,
SELLER
HEREBY
SPECIFICALLY
NEGATES
AND
DISCLAIMS
ANY
REPRESENTATIONS,
WARRANTIES
OR
GUARANTEES
OFANY
KIND
OR
CHARACHTER,
WHETHER
EXPRESS
OR
IMPLIED,
ORAL
OR
WRITTEN,
PAST,
PRESENT,
FUTURE
OR
OTHERWISE,
AS
TO,CONCERNING
OR
WITH
REPSECT
TO
THE
PROPERTY,
ITS
CONDITION
(PHYSICAL,
FINANCIAL
OR
OTHERWISE),
THE
OPERAITON
OF,ACCESS
TO,
OR
THE
FITNESS
FOR
ANY
SPECIFIC
PURPOSE
OR
USE,
MERCHANTABILITY,
HABITABILITY,
OR
THE
LIE
AND
TOPOGRAPHY,OF
ALL
OR
ANY
PORTION
OF
THE
PROPERTY,
THE
EXISTENCE,
LOCATION
OR
AVAILABILITY
OF
UTILITY
LINES
FOR
WATER,
SEWER,DRAINAGE,
ELECTRICITY
OR
ANY
OTHER
UTILITY,
THE
INCOME-PRODUCING
POTENTIAL
OF
THE
PROPERTY,
THE
LAWS,9REGULATIONS
AND
RULES
APPLICABLE
TO
THE
PROPERY
OR
THE
COMPLIANCE
(OR
NON-COMPLIANCE)
OF
THE
PROPERTY
THEREWITH,ANY
ENVIRONMENTAL
LAWS,
REGULATIONS
AND
RULES
(OR
OTHER
LAWS
RELATIVE
TO
HAZARDOUS
MATERIALS)
APPLICABLE
TO
THEPROPERTY
OR
THE
COMPLIANCE
(OR
NON-COMPLIANCE)
OF
THE
PROPERTY
THEREWITH,
THE
QUANITY,
QUALITY
OR
CONDITION
OFTHE
ARTICLES
OF
PERSONAL
PROPERTY
INCLUDED
IN
THE
TRANSACTIONS
CONTEMPLATED
HEREBY,
THE
PERMITTED
USE
OF
THEPROPERTY
OR
ANY
PART
THEREOF
OR
ANY
OTHER
AMTTER
OR
THING
AFFECTING
OR
RELATING
TO
THE
PROPERTY
OR
THETRANSACTIONS
CONTEMPLATED
HEREBY.
PURCHASER
ACKNOWLEDGES
THAT
PURCHASER
HAS
NOT
RELIED
ON
SELLER'S
SKILL
ORJUDGMENT
TO
SELECT
OR
FURNISH
THE
PROPERTY
FOR
ANY
PARTICULAR
PURPOSE,
AND
THAT
SELLER
MAKES
NO
WARRANTY
THATTHE
PROPERTY
IS
FIT
FOR
ANY
PARTICULAR
PURPOSE.
WITHOUT
LIMITING
ANY
EXPRESS
REPRESENTATIONS
CONTAINED
IN
THISCONTRACT
OR
THE
SELLER
DOCUMENTS,
PURCHASE
FUTHER
ACKNOWLEDGES
AND
AGREES
THAT
(1)
ALL
INFORMATION
PROVIDED
ORTO
BE
PROVIDED
WITH
RESPECT
TO
THE
PROPERTY
(INCLUDING,
WITHOUT
LIMITATION,
THE
SELLER'S
DELIVERABLES)
WAS
OR
WILL
BEOBTAINED
FROM
A
VARIETY
OF
SOURCES
AND
(A)
SUCH
INFORMAITON
HAS
BEEN
AND
WILL
BE
PROVIDED
WITHOUT
ANY
RECOURSETO
OR
LIABILITY
OF
SELLER
OR
THE
PREPARES
THEREOF,
AND
(B)
SELLER
(I)
HAS
NOT
MADE
ANY
INDEPENDENT
INVESTIGATION
ORVERIFICATION
OF
SUCH
INFORMATION
AND
)II)
HAS
NOT
MADE
ANY
EXPRESS
OR
IMPLIED,
ORAL
OR
WRITTEN,
REPRESENTATIONS
ASTO
ANY
SUCH
INFORMATION
OR
THE
ACCURACY,
COMPLETENESS,
FORM
OR
CONTENT
OF
SUCH
INFORMATION,
(2)
THE
PURCHASEPRICE
REFLECTS
THE
"AS-IS"
NATURE
OF
THIS
SALE
AND
ANY
FAULTS,
LIABILTIES,
DEFECTS
OR
OTHER
ADVERSE
MATTERS
THAT
MAYBE
ASSOCIATED
WITH
THE
PROPERTY,
(3)
PURCHASER'S
DECISION
TO
PURCHASE
THE
PROPERTY
SHALL
BE
BASED
SOLELY
ON
THETERMS
OF
THIS
CONTRACT
AND
PURCHASER'S
INDEPENDENT
EVALUATION
OF
THE
PROPERTY,
AND
(4)
ANY
INFORMATION
(INCLUDING,WITHOUT
LIMITAITONS,
THE
SELLER'S
DELIVERABLES)
HERETOFORE
OR
HEREAFTER
PROVIDED
BY
SELLER
TO
PURCHASER
SHALL
BEFOR
INFORMATIONAL
PURPOSES
ONLY,
AND
PURCHSER
SHALL
NOT
RELY
UPON
ANY
SUCH
INFORMATION.
PURCHASER
HEREBYRELEASES
SELLER
AND
ITS
AFFILIATES
AND
THEIR
RESPECTIVE
EMPLOYEES,
AGENTS
AND
ATTORNEYS
FROM
ALL
OBLIGATIONS
ANDLIABILITIES
WITH
RESPECT
TO
ALL
SUCH
INFORMATION
(INCLUDING,
WITHOUT
LIMITAITON,
THE
SELLER'S
DELIVERABLES)
EXCEPT
ASOTHERWISE
EXPRESSLY
PROVIDED
IN
THIS
CONTRACT,
AND
THE
CLOSING
STATEMENT
SHALL
INCLUDE
A
RATIFICATION
ANDCONFIRMATION
OF
SUCH
RELEASE
AS
OF
THE
CLOSING
DATE.
PURCHASER
ACKNOWLEDGES
AND
AGREES
THAT,
EXCEPT
AS
EXPRESSLYPROVIDED
IN
THIS
CONTRACT,
SELLER
SHALL
BE
UNDER
NO
DUTY
TO
MAKE
ANY
AFFIRMATIVE
DISCLOSURE
REGARDING
ANY
MATTERWHICH
MAY
BE
KNOWN
TO
SELLER,
OR
ITS
OFFICERS,
DIRECTORS,
CONTRACTORS,
AGENTS
OR
EMPLOYEES.8.3 



NOTWITHSTANDING
THE
FOREGOING,
THE
PURCHASER’S
RELEASE
OF
SELLER
AND
WAIVER
AS
SET
FORTH
IN
SECTION
8.2SHALL
NOT
CONSTITUTE
A
RELEASE
OR
WAIVER
BY
PURCHASER
NOR
PERTAIN
TO
ANY
CLAIM
OR
CAUSE
OF
ACTION
BY
PURCHASERAGAINST
SELLER,
TO
THE
EXTENT
THAT
SUCH
A
CLAIM
OR
CAUSE
OF
ACTION
BY
PURCHASER
OTHERWISE
EXISTS,
FOR
(A)
FRAUD
ORWILLFUL
MISrEPRESENTATION,
OR
(B)
A
BREACH
BY
SELLER
OF
THIS
CONTRACT
OR
ANY
SELLER
DOCUMENTS,
INCLUDING
A
BREACHOF
ANY
REPRESENTATION
OR
WARRANTY
EXPRESSLY
SET
FORTH
IN
THIS
CONTRACT,
OR
(C)
ANY
TORT
CLAIMS
MADE
OR
BROUGHT
BYA
THIRD
PARTY
UNRELATED
TO
PURCHASER
WHICH
ARISE
ON
ACCOUNT
OF
EVENTS
THAT
OCCURRED
AT
THE
PROPERTY
PRIOR
TOCLOSING,
OR
(D)
ANY
CLAIMS
MADE
OR
CAUSES
OF
ACTION
BROUGHT
BY
ANY
GOVERNMENTAL
AUTHORITY
OR
OTHER
THIRD-PARTY(UNAFFILIATED
WITH
THE
PURCHASER)
WITH
RESPECT
TO
HAZARDOUS
MATERIALS
DEPOSITED
OR
PLACED
IN,
AT,
OR
UNDER
THEPROPERTY
BY
SELLER,
OR
(E)
ANY
CLAIMS
MADE
OR
CAUSES
OF
ACTION
BROUGHT
BY
ANY
THIRD
PARTY
UNRELATED
TO
PURCHASERALLEGING
A
DEFAULT
OR
BREACH
BY
SELLER
WHICH
IS
ALLEGED
TO
HAVE
OCCURRED
PRIOR
TO
THE
CLOSING
DATE
UNDER
ANYCONTRACT,
AGREEMENT
OR
LEASE
TO
WHICH
SELLER
AND
ANY
SUCH
CLAIMANT
WERE
PARTIES.
NOTHING
CONTAINED
IN
THISSECTION
8.3
SHALL
IMPLY
THAT
PURCHASER
HAS
ANY
RIGHT
TO
ANY
CLAIM
OR
CAUSE
OF
ACTION
FOR
ANY
OF
THE
MATTERSDESCRIBED
IN
THIS
SECTION
8.3
.8.4     SURVIVAL . THE
PROVISIONS
OF
THIS
SECTION
8
SHALL
SURVIVE
THE
CLOSING
OR
EARLIER
TERMINATION
OF
THISCONTRACT.9. CLOSING.9.1     Closing Date. The
consummation
of
this
transaction
(the
"Closing")
will
take
place
through
an
escrow
with
the
Title
Company
on
that
date
that
isthirty
(30)
days
after
the
expiration
of
the
Due
Diligence
Period
or
such
earlier
date
to
which
the
parties
may
agree
in
writing;
provided,
however,
that
if
allconditions
to
Purchaser's
obligations
to
fund
and
close
the
purchase
contemplated
hereby
have
been
satisfied
or
waived
in
writing
by
Purchaser,
then
Purchaserupon
at
least
five
(5)
Business
Days'10written
notice
to
Seller
shall
be
entitled
to
accelerate
the
Closing
to
such
earlier
Business
Day
as
may
be
mutually
acceptable
to
Seller
and
Purchaser.
The
date
onwhich
the
Closing
is
required
to
occur
(or
if
the
Closing
occurs,
the
date
on
which
the
Closing
occurs)
is
called
the
"Closing
Date."
The
Closing
shall
beaccomplished
through
the
delivery
of
the
closing
documents
and
funds
in
escrow
to
the
Title
Company,
without
the
need
for
either
Seller
or
Purchaser
to
be
presentat
the
Closing.
All
documents
delivered
in
escrow
to
the
Title
Company
by
Seller
and
Purchaser
shall
be
released
from
escrow
and
delivered
to
the
other
party
atthe
Closing.9.2     Seller's Closing Obligations . At
or
prior
to
the
Closing,
Seller
will
do,
or
cause
to
be
done,
the
following:9.2.1 



Seller
will
execute,
acknowledge
(if
necessary),
and
deliver
in
escrow
to
the
Title
Company,
for
delivery
to
Purchaser
at
the
Closing,
thefollowing
documents:(a)



a
Special
Warranty
Deed
conveying
the
Land
and
the
Improvements
in
the
form
and
substance
of
Exhibit
"G"
(the
"Deed");(b)



an
Assignment
and
Assumption
of
Lessor's
Interest
in
Leases
in
the
form
and
substance
of
Exhibit
"H"
;(c)



a
Bill
of
Sale
and
General
Assignment
in
the
form
and
substance
of
Exhibit
"I"
;(d)



a
Certificate
of
Non-Foreign
Status
in
the
form
and
substance
of
Exhibit
"J"
;(e)



a
notification
of
change
of
ownership
in
the
form
and
substance
of
Exhibit
"K"
;(f)



an
affidavit
in
the
form
of
Exhibit
"L"
;(g)



any
form
required
from
the
Seller
by
law
in
connection
with
the
delivery
of
the
Deed
and
the
payment
of
any
transfer
taxes;(h)



a
document
pursuant
to
which
Seller
confirms
its
liability
for
all
unpaid
amounts
of
the
Seller
Leasing
Costs
pursuant
to
Section
10.3.4
andindemnifies
Purchaser
with
respect
thereto;(i)



a
certificate
of
Seller
confirming
that
its
representations
and
warranties
set
forth
in
this
Contract,
as
updated
in
accordance
with
thisContract,
are
correct
in
all
material
respects
as
if
made
on
the
Closing
Date
or
noting
any
exceptions,
but
such
certificate
shall
expressly
provide
that
therepresentations
and
warranties
are
subject
to
the
provisions
of
Section
6.2
hereof
(the
"Seller
Bringdown
Certificate");(j)



a
closing
statement
setting
forth
the
Purchase
Price,
the
costs
payable
in
connection
with
the
transaction
contemplated
hereby,
thedisbursements
hereunder
and
otherwise
conforming
to
the
requirements
of
this
Contract;
and(k)



all
such
additional
documents
as
may
be
reasonably
required
by
the
Title
Company
and
consistent
with
this
Contract
to
consummate
thesale
of
the
Property
pursuant
to
this
Contract.9.2.2 



Seller
will
terminate,
as
of
the
Closing
Date,
all
management
and
leasing
agreements
relating
to
the
Real
Property
and
all
PropertyAgreements
which
Purchaser
does
not
elect
to
assume
(except
for
those
which
Purchaser
is
required
to
assume
pursuant
to
the
terms
of
this
Contract);9.2.3 



Seller
shall
deliver
to
the
Title
Company
all
documents
that
may
be
reasonably
required
by
the
Title
Company
to
evidence
the
dueorganization
and
good
standing
of
Seller,
the
power
and
authority
of
Seller
to
convey
the
Property,
and
the
authority
of
each
signatory
for
Seller
toexecute
this
Contract,
the
Deed
and
the
other
closing
documents.9.2.4 



Seller
will
deliver
possession
of
the
Property
to
Purchaser
upon
the
consummation
of
the
Closing
free
and
clear
of
all
possessory
rightsother
than
the
tenants
and
other
occupants
under
the
Leases,
but
subject
to
the
Permitted
Exceptions.9.2.5 



Seller
will
deliver
to
Purchaser
within
two
(2)
Business
Days
after
the
Closing,
the
following
to
the
extent
in
Seller's
possession
orcontrol:
original
Leases,
original
Property
Agreements,
Seller's
lease
files,
and
any
transferable
permits
held
by
Seller
pertaining
to
the
operation
of
theProperty.119.2.6 



Seller
will
pay
all
costs
required
to
be
paid
by
Seller
pursuant
to
Section
10.1
of
this
Contract.All
documents
required
to
be
delivered
by
Seller
must
be
delivered
in
escrow
to
the
Title
Company
no
later
than
5:00
p.m.
(local
time
at
the
closing
office
of
theTitle
Company)
on
the
Business
Day
immediately
preceding
the
Closing
Date.9.3     Purchaser's Closing Obligations. At
or
prior
to
the
Closing,
Purchaser
will
do,
or
cause
to
be
done,
the
following:9.3.1 



Purchaser
will
pay
to
Seller
the
Purchase
Price,
as
adjusted
in
accordance
with
the
express
provisions
of
this
Contract;9.3.2 



Purchaser
will
execute
and
deliver
to
the
Title
Company
in
escrow,
for
delivery
to
Seller
at
Closing,
the
following:
(a)
counterparts
ofthe
documents
described
in
Section
9.2
requiring
Purchaser's
signature,
(b)
a
closing
statement
setting
forth
the
Purchase
Price,
the
costs
payable
inconnection
with
the
transaction
contemplated
hereby,
the
disbursements
hereunder
and
otherwise
conforming
to
the
requirements
of
this
Contract,
(c)
acertificate,
duly
executed
by
Purchaser,
confirming
that
its
representations
and
warranties
set
forth
in
this
Contract
are
correct
as
if
made
on
the
ClosingDate,
(d)

a
document
pursuant
to
which
Purchaser
assumes
liability
for
all
unpaid
amounts
of
the
Purchaser
Leasing
Costs
pursuant
to
Section
10.3.4
andindemnifies
Seller
with
respect
thereto,
and
(e)
any
instruments
reasonably
necessary
to
consummate
the
sale
of
the
Property
pursuant
to
this
Contract(including,
by
way
of
example,
evidence
of
the
authority
of
the
signatory
for
Purchaser
to
consummate
the
Closing).9.3.3 



Purchaser
will
pay
all
costs
required
to
be
paid
by
Purchaser
pursuant
to
Section
10.1
of
this
Contract.All
documents
required
to
be
delivered
by
Purchaser
must
be
delivered
in
escrow
to
the
Title
Company
no
later
than
5:00
p.m.
(local
time
at
the
closing
office
ofthe
Title
Company)
on
the
Business
Day
immediately
preceding
the
Closing
Date.
All
funds
required
to
be
paid
by
Purchaser
pursuant
to
this
Contract
must
bedelivered
in
escrow,
in
immediately
available
funds,
no
later
than
2:00
p.m.
(local
time
at
the
Title
Company)
on
the
Closing
Date.10.COSTS, PRORATIONS AND ADJUSTMENTS.10.1     Expenses. Seller
will
pay
for
one-half
of
the
escrow
fees
charged
by
the
Title
Company
for
the
purchase/sale
transaction
(but
not
any
fees
relatingto
any
Exchange,
as
defined
below),
any
curative
title
action
required
of
Seller
under
this
Contract,
the
commission
of
Brokers
due
pursuant
to
Seller’s
separateagreement
with
Brokers,
Seller's
attorneys'
fees
to
prepare
the
Deed,
a
$600
credit
in
connection
with
the
updated
Survey
pursuant
to
Section
4.1
,
and
any
transfertaxes
or
revenue
stamps
in
connection
with
the
recording
of
the
Deed.
Purchaser
will
pay
for
the
costs
charged
by
the
Title
Company
for
the
issuance
of
theowner's
title
policy
contemplated
thereby
(the
"Owner’s
Title
Policy"),
all
of
the
costs
charged
by
the
Title
Company
for
extended
coverage,
any
title
insurancecoverage
for
any
lender,
and
all
endorsements
to
the
Owner’s
Title
Policy
or
any
loan
policy,
all
fees,
costs,
expenses
and
other
sums
relating
to
any
loan
appliedfor
and/or
obtained
by
Purchaser,
all
fees
and
costs
relating
to
the
Purchaser's
examination
and
investigation
of
the
Property,
all
fees
of
Escrow
Agent
relating
toplacing
the
deposit
in
an
interest-bearing
account,
all
recording
fees,
one-half
(1/2)
of
the
escrow
fees
charged
by
the
Title
Company
for
the
purchase/saletransaction,
the
cost
of
any
updated
Survey
obtained
by
Purchaser
and
all
revisions
thereto,
and
all
of
the
fees
charged
by
the
Title
Company
for
handling
anyExchange
or
any
loan
transaction.
Seller
and
Purchaser
will
be
responsible
for
the
fees
and
expenses
of
their
respective
attorneys,
consultants
and
advisors.10.2     Taxes and Assessments. Seller
will
pay
all
installments
of
real
estate
taxes
that
are
due
and
payable
prior
to
the
Closing.
Purchaser
shall
beresponsible
for
the
payment
of
all
general
real
estate
taxes
that
become
due
after
the
Closing.
Taxes
shall
be
prorated
as
of
the
Apportionment
Time
(as
definedbelow)
on
a
calendar
year
basis
(i.e.,
based
on
any
tax
bill
issued
by
the
governing
authority
issued
during
the
calendar
year
in
which
Closing
occurs
despite
thefact
that
such
tax
bill
may
be
for
a
fiscal
year
and
not
such
calendar
year).
"Apportionment
Time"
shall
mean
the
Closing
Date.
Purchaser
shall
not
receive
a
creditfor
any
special
assessments,
or
installments
thereof,
that
are
levied
or
are
first
due
and
payable
after
the
Closing
and
Purchaser
shall
be
responsible
for
all
suchspecial
assessments
or
installments
thereof.10.3     Prorations and Adjustments. The
prorations
and
adjustments
to
the
Purchase
Price
set
forth
in
this
Section
10.3
shall
be
made
between
Sellerand
Purchaser
and
included
in
the
closing
statement.
All
prorations
shall
be
made
on
a
per
diem
basis
as
of
the
Apportionment
Time
(as
defined
above).10.3.1 



Current
rents,
advance
rentals,
operating
expenses,
additional
rent
and
other
charges
actually
paid
by
tenants
under
the
Leases,
andcharges
under
the
Property
Agreements
to
be
assumed
by
Purchaser
shall
be
prorated
as
of
the
Apportionment
Time.1210.3.2 



The
parties
shall
use
commercially
reasonable
efforts
to
cause
all
utility
providers
to
perform
a
meter
reading
as
close
to
the
ClosingDate
as
is
practicable.
Purchaser
shall
arrange
for
the
provision
of
all
utility
services
in
Purchaser's
name
from
and
after
the
Closing,
so
that
such
utilityservices
are
no
longer
provided
in
Seller's
name.
Seller
shall
be
entitled
to
a
refund
of
all
utility
deposits
made
by
or
on
behalf
Seller,
and
Purchaser
shallmake
its
own
deposits
directly
with
the
utility
provider.
Seller
shall
receive
a
credit
for
all
deposits
made
by
or
on
behalf
of
Seller
to
the
extent
the
sameremain
on
deposit
for
the
benefit
of
Purchaser.10.3.3 



Unapplied
security
deposits
existing
under
the
Leases
as
of
the
Closing
shall
be
credited
to
Purchaser
at
Closing.10.3.4 



Subject
to
the
last
sentence
of
this
Section
10.3.4
,
any
tenant
improvements,
allowances,
third
party
leasing
commissions
and
all
costsand
reimbursements
payable
by
the
landlord
to
or
on
behalf
of
the
tenant
that
are
paid
or
incurred
by
Seller
after
the
Effective
Date
of
this
Contract
withrespect
to
leases,
lease
renewals,
lease
expansions,
lease
modifications
or
other
rental
agreements
executed
after
the
Effective
Date
in
accordance
withSection
7.1.3
,
excluding
the
Additional
Leases,
shall
be
paid
by
Purchaser
at
or
after
Closing.
All
of
the
foregoing
amounts
are
called
the
"PurchaserLeasing
Costs."
The
Purchaser
Leasing
Costs
shall
not
include
any
tenant
improvements,
allowances
or
third
party
leasing
commissions
that,
in
each
case,relate
to
the
primary
term
of
the
Additional
Leases
or
of
the
Lease
with
Peachtree
Providence
Partners,
LLC
(the
"Peachtree
Lease"),
all
of
which
shall
beSeller
Leasing
Costs
(but
the
Purchaser
Leasing
Costs
shall
include
any
and
all
costs,
fees
or
expenses
that
are
payable
under
or
in
connection
with
any
ofthe
Leases
(including,
without
limitation,
the
Additional
Leases
and
the
Peachtree
Lease)
after
the
Closing
that
relate
to
any
election
by
the
landlord
underany
Lease
to
move
the
tenant
or
that
relate
to
any
extension
or
renewal
option
under
such
Leases).
Seller
shall
receive
a
credit
at
Closing
for
suchPurchaser
Leasing
Costs
paid
by
Seller
on
or
prior
to
the
Closing
Date.
At
the
Closing,
Purchaser
shall
execute
and
deliver
to
Seller
a
document
pursuantto
which
Purchaser
assumes
liability
for
all
unpaid
amounts
of
the
Purchaser
Leasing
Costs
and
indemnifies
Seller
with
respect
thereto.
Any
tenantimprovements,
allowances
and
third
party
leasing
commissions
that
relate
to
Leases
executed
prior
to
the
Effective
Date
(as
the
same
may
have
beenmodified
by
any
lease
renewals,
lease
expansions,
lease
modifications
or
other
rental
agreements
executed
prior
to
the
Effective
Date)
and
the
AdditionalLeases,
exclusive
of
the
Purchaser
Leasing
Costs
and
any
costs,
fees
or
expenses
relating
to
extensions
or
renewal
terms
not
exercised
prior
to
theEffective
Date,
shall
be
paid
for
by
Seller
at
or
prior
to
the
Closing.
All
of
the
foregoing
amounts
payable
by
Seller
are
called
the
"Seller
Leasing
Costs."At
the
Closing,
Seller
shall
execute
and
deliver
to
Purchaser
a
document
pursuant
to
which
Purchaser
confirms
it
liability
for
all
unpaid
amounts
of
theSeller
Leasing
Costs
and
indemnifies
Purchaser
with
respect
thereto.
The
terms
of
this
Section
10.3.4
shall
survive
Closing.10.3.5 



If
on
the
Closing
Date,
any
Tenant
is
delinquent
in
the
payment
of
rent,
including
any
additional
rent
billed
but
unpaid
at
the
time
ofClosing,
said
delinquent
rent
shall
remain
the
property
of
Seller
and
no
proration
with
respect
thereto
shall
be
made
at
Closing.
Purchaser
will
use
itsreasonable
efforts
to
collect
such
delinquent
rent;
provided,
however,
that
Purchaser
shall
not
be
required
to
commence
any
legal
action
to
collect
suchsums.
If
Purchaser
does
not
elect
to
file
a
lawsuit
on
Seller's
behalf
(in
which
event
all
matters
in
such
lawsuit
relating
to
any
sums
due
to
Seller
will
becontrolled
solely
by
Seller),
then
Seller
reserves
the
right
to
file
a
lawsuit
for
damages
against
the
applicable
tenant
for
any
delinquent
rent,
and
Purchasershall
reasonably
cooperate
with
Seller
in
connection
therewith
at
no
expense
to
Purchaser.
For
a
period
of
six
(6)
months
following
the
Closing
(or
suchadditional
period
of
time
during
which
Seller
is
pursuing
a
claim
in
court
against
the
applicable
tenant,
if
such
claim
is
commenced
during
the
6
monthperiod),
Purchaser
shall
not
modify
any
Lease
in
any
way
that
affects
any
sums
that
may
be
due
to
Seller.
Seller
shall
have
the
right
to
contact
tenants
torequest
payment
of
delinquent
rentals
after
the
Closing
Date
and
to
institute
legal
proceedings,
at
Seller’s
sole
expense,
to
collect
and
retain
suchdelinquent
rentals.
If
Purchaser
collects
any
sums
from
Tenants,
following
the
application
of
any
sums
collected
from
any
Tenant
to
the
monthly
rentalobligations
accruing
on
or
after
the
Closing
Date,
Purchaser
shall
remit
the
balance
thereof,
if
any,
to
Seller,
less
all
reasonable
direct
out-of-pocket
costsof
collection
actually
incurred
by
Purchaser
in
connection
with
the
collection
of
the
sums
due
to
Seller.
All
sums
received
by
Purchaser
after
Closing
fromany
tenants
attributable
to
the
period
prior
to
the
Closing
Date
shall
be
deemed
to
be
held
in
trust
by
Purchaser
for
Seller
for
application
as
provided
inthis
Section.10.3.6 



Purchaser
will
obtain
its
own
insurance
from
and
after
the
Closing.
Seller
shall
be
entitled
to
cancel
its
insurance
at
Closing
and
shallbe
entitled
to
all
unearned
premiums
thereon.10.4     Adjustment. To
the
extent
that
errors
are
discovered
in,
or
additional
information
becomes
available
with
respect
to,
the
prorations
and
allocationsmade
at
Closing,
Seller
and
Purchaser
agree
to
make
such
post-Closing
adjustments
as
may
be
necessary
to
correct
any
inaccuracy;
however,
all
prorations
will
befinal
thirty
(30)
days
after
Closing
except
as
otherwise13provided
in
Section
10.5
below,
and
except
that
if
the
tax
bill
issued
in
the
year
in
which
Closing
occurs
is
not
available
prior
to
the
Closing,
then
post-Closingadjustments
for
such
tax
bill
will
be
final
ninety
(90)
days
after
the
tax
bill
is
issued.10.5     Additional Rent .
Reconciliations
of
taxes,
insurance
charges
and
other
expenses
owed
by
tenants
of
the
Property
for
the
calendar
year
(or
fiscalyear
if
different
from
the
calendar
year)
in
which
Closing
occurs
shall
be
prepared
by
Purchaser
with
the
cooperation
of
Seller
within
ninety
(90)
days
followingthe
end
of
such
year
in
accordance
with
the
requirements
set
forth
in
the
Leases
and
as
provided
in
this
Section
10.5
.
The
proration
between
the
parties
of
incomereceived
from
tenants
from
reconciliations
of
expenses
under
the
Leases
shall
be
calculated
based
on
the
expenses
for
such
year,
the
sums
collected
from
tenants(inclusive
of
payments
made
by
each
tenant
after
any
reconciliation
statements
are
delivered
to
the
tenants)
and
the
expenses
paid
by
each
party
with
respect
toeach
party’s
period
of
ownership
of
Property.
Purchaser
shall
provide
to
Seller
an
accounting
of
the
reconciliations
and
receipts
from
tenants.
Any
sums
due
toeither
party
as
a
result
of
any
reconciliation
shall
be
promptly
paid
to
the
other
party,
but
in
no
event
shall
any
sums
due
to
Seller
be
paid
later
than
ten
(10)Business
Days
after
receipt
of
the
reconciliation
payment
from
relevant
tenant.10.6     Disputes with Respect to Adjustments . If
Seller
and
Purchaser,
each
acting
reasonably
and
in
good
faith,
cannot
resolve
any
issue
with
respectto
the
adjustments
described
in
this
Section
10
,
they
shall
submit
such
issue
for
binding
resolution
by
a
nationally
recognized
accounting
firm
mutually
acceptableto
both
parties
(the
"Accounting
Firm").
The
parties
shall
bear
equally
all
fees
and
expenses
of
the
Accounting
Firm
in
connection
with
the
resolution
of
such
issue,and
each
party
shall
bear
its
own
legal,
accounting
and
other
fees
and
expenses
incurred
in
connection
with
the
resolution
of
the
issue
by
the
Accounting
Firm.Such
resolution
shall
be
final
and
binding
on
the
parties
and
judgment
may
be
entered
upon
such
resolution
in
any
court
having
jurisdiction
thereof.
Seller
andPurchaser
agree
that
the
proceeding
described
in
this
Section
10.6
shall
be
conducted
in
Charlotte,
North
Carolina.10.7     Survival . The
provisions
of
this
Section
10
will
survive
Closing.11. CONDITIONS TO PURCHASER'S AND SELLER'S CLOSING OBLIGATIONS .11.1     Conditions to Purchaser's Obligations . In
addition
to
any
other
conditions
to
Closing
set
forth
in
this
Contract,
Purchaser's
obligation
to
fundthe
Purchase
Price
and
close
this
transaction
is
subject
to
the
satisfaction
or
waiver
by
Purchaser,
in
its
sole
and
absolute
discretion,
of
the
following
conditions:11.1.1 



As
of
Closing,
the
representations
and
warranties
of
Seller
in
Section
6.1
,
subject
to
the
updates
and
exceptions
thereto
permitted
underthis
Contract,
shall
be
true
and
correct
in
all
material
respects;
and11.1.2 



Seller
shall
have
performed,
observed
and
complied
with
all
covenants,
agreements
and
conditions
required
by
this
Contract
to
beperformed,
observed
and
complied
with
by
Seller
prior
to,
or
as
of,
the
Closing.11.1.3     Seller
shall
have
delivered
to
Purchaser,
at
least
five
(5)
Business
Days
prior
to
the
Closing,
Acceptable
Tenant
Estoppels
(as
definedbelow)
from
tenants
leasing
at
least
seventy
percent
(70%)
of
the
space
in
the
Property
that
is
subject
to
a
Lease,
which
must
include
Acceptable
TenantEstoppels
from
the
following
Tenants
(the
"Required
Tenants"):
(a)
Campus
Crest
Lease,
LLC,
(b)
Medflow
Holdings,
LLC,
(c)
Wells
Fargo
Bank,
N.A.,(d)
Dickey
McCamey,
(e)
KSQ
Architects,
PC,
and
(f)
Edwin
M.
Rollins
Company.
An
“Acceptable
Tenant
Estoppel”
means
a
Tenant
Estoppel
executedby
a
Tenant
that
is
(i)

is
dated
not
more
than
thirty
(30)
days
prior
to
the
Closing
Date,
(ii)
states
that
the
Lease
is
in
effect,
(iii)
does
not
indicate
that
adefault
exists
under
the
relevant
Lease
on
the
part
of
the
landlord,
and
(iv)
does
not
contain
any
information
that
deviates
in
any
material
respect
from
theinformation
contained
in
the
rent
roll
delivered
by
Seller
to
Purchaser
as
a
part
of
Seller's
Deliverables.
Notwithstanding
the
foregoing,
in
the
event
Sellerdelivers
the
Acceptable
Tenant
Estoppels
from
the
Required
Tenants
but
cannot
for
any
reason
obtain
a
sufficient
number
of
Acceptable
Tenant
Estoppelsfrom
other
Tenants
so
as
to
meet
the
foregoing
condition,
then
Seller
may,
at
its
option,
elect
to
deliver
to
Purchaser
at
or
prior
to
the
Closing
a
certificateor
certificates
of
Seller
in
the
form
of
Exhibit
"F"
(the
“Seller
Estoppel”)
with
respect
to
Tenants
leasing
up
to
fifteen
percent
(15%)
of
the
space
in
theProperty
that
is
subject
to
a
Lease
and
thereupon
the
foregoing
precedent
condition
in
this
Section
11.1.3
shall
be
deemed
satisfied;
provided,
however,
inno
event
may
Seller
provide
a
Seller
Estoppel
on
behalf
of
a
Required
Tenant.
Seller’s
liability
under
each
such
Seller’s
certificate
delivered
in
order
tomeet
the
condition
set
forth
in
this
Section
11.1.3
shall
expire
and
be
of
no
further
force
or
effect
on
the
earlier
of
(A)
two
hundred
seventy
(270)
daysfollowing
the
Closing
Date
except
to
the
extent,
and
only
to
the
extent,
if
any,
that
Purchaser
shall
have
delivered
to
Seller
written
notice
during
such270‑period
that
describes
in
reasonable
detail
a
breach
or
alleged
breach
by
Seller
of
such
Seller
Estoppel,
and
(B)
the
date
that
Purchaser
receives
anAcceptable
Tenant
Estoppel
from
the
applicable
Tenant.1411.1.4 



The
Title
Company
has
committed
to
issue
the
Owner’s
Title
Policy
upon
the
delivery
of
all
documents
required
to
be
delivered
byPurchaser,
payment
of
all
costs
required
to
be
paid
by
Purchaser,
and
the
satisfaction
of
all
conditions
required
to
be
satisfied
by
the
Purchaser.If
any
of
the
conditions
set
forth
in
this
Section
are
not
satisfied
as
of
the
Closing
Date,
then
Purchaser
shall
have
the
option,
in
its
sole
and
absolute
discretion,
to(i)
waive
the
condition
and
proceed
to
close
the
purchase
of
the
Property
contemplated
herein
and
accept
the
Property
without
the
satisfaction
of
such
conditionswith
no
reduction
in
the
Purchase
Price
or
(ii)
(A)
if
the
failure
to
satisfy
the
condition
results
from
the
default
of
Seller,
exercise
an
available
remedy
for
default
asprovided
in
Section
12.1
below,
or
(B)
if
the
failure
to
satisfy
the
condition
does
not
result
from
the
default
of
Seller,
terminate
this
Contract,
in
which
event
theEarnest
Money
will
be
returned
to
Purchaser,
and
the
parties
will
have
no
further
obligations
under
this
Contract
except
for
any
obligations
that
survive
terminationof
this
Contract
by
their
express
terms.
If
Purchaser
fails
to
deliver
written
notice
of
its
election
prior
to
the
Closing,
then
Purchaser
shall
be
deemed
to
haveelected
to
proceed
under
clause
(i)
above.11.2     Conditions to Seller's Obligations . In
addition
to
any
other
conditions
to
Closing
set
forth
in
this
Contract,
Seller's
obligation
to
close
thistransaction
is
subject
to
the
satisfaction
or
waiver
by
Seller,
in
its
sole
and
absolute
discretion,
of
the
following
conditions:11.2.1 



As
of
Closing,
the
representations
and
warranties
of
Purchaser
contained
in
Section
6.3
shall
be
true
and
correct;
and11.2.2 



Purchaser
shall
have
performed,
observed
and
complied
with
all
covenants,
agreements
and
conditions
required
by
this
Contract
to
beperformed,
observed
and
complied
with
by
Purchaser
prior
to,
or
as
of,
the
Closing.If
any
of
such
conditions
are
not
satisfied
as
of
the
Closing
Date,
then
Seller
shall
have
the
option,
in
its
sole
and
absolute
discretion,
to
(i)
exercise
its
remediesunder
Section
12.2
,
or
(ii)
waive
the
condition
and
proceed
to
close
the
sale
of
the
Property
contemplated
herein.
If
Seller
fails
to
deliver
written
notice
of
itselection
prior
at
or
prior
to
the
Closing,
then
Seller
shall
be
deemed
to
have
elected
to
proceed
under
clause
(ii)
above.12.REMEDIES.12.1     Default by Seller. If
the
transaction
contemplated
herein
is
not
consummated
because
of
a
default
on
the
part
of
Seller
that
is
not
cured
within
five(5)
Business
Days
after
written
notice
from
Purchaser
(or
if
such
default
does
not
consist
of
a
willful
action
of
Seller
and
cannot
reasonably
be
cured
within
such
5Business
Day
period,
within
such
additional
time,
not
to
exceed
an
additional
five
(5)
Business
Days
as
may
be
reasonably
necessary
to
cure
the
default),
thenPurchaser
may
elect,
as
its
sole
remedy,
in
Purchaser's
sole
and
absolute
discretion,
by
written
notice
to
Seller
to
either:
(a)
terminate
this
Contract
and
receive
thereturn
of
the
Earnest
Money
and
a
reimbursement
from
Seller
of
all
Purchaser’s
reasonable
and
documented
out-of-pocket
expenses
actually
incurred
in
connectionwith
this
Contract
(collectively,
"Purchaser’s
Transaction
Expenses")
up
to
a
maximum
reimbursement
of
$250,000.00,
in
which
event
this
Contract
shallterminate,
the
Earnest
Money
shall
be
refunded
to
Purchaser
by
the
Escrow
Agent,
and
upon
the
receipt
by
Purchaser
of
the
Earnest
Money
and
Purchaser’sTransaction
Expenses
neither
party
shall
have
any
further
obligations
under
this
Contract
except
under
any
provisions
that
survive
the
termination
of
this
Contractby
their
express
terms;
(b)
waive
the
default
and
close
on
and
take
title
to
the
Property
on
the
Closing
Date
subject
to
such
default
without
any
reduction
in
thePurchase
Price;
or
(c)

seek
specific
performance
of
this
Contract
provided
that
written
notice
of
Purchaser's
intent
to
seek
specific
performance
is
delivered
toSeller
within
thirty
(30)
days
after
the
date
set
forth
in
this
Contract
for
the
Closing
and
the
specific
performance
action
is
actually
filed
within
sixty
(60)
days
afterthe
date
set
forth
in
this
Contract
for
the
Closing.
If
written
notice
of
Purchaser's
intent
to
seek
specific
performance
is
not
delivered
to
Seller
within
such
thirty(30)
day
period,
or
if
such
written
notice
is
given
but
a
specific
performance
action
is
not
filed
prior
to
the
expiration
of
such
sixty
(60)
day
period,
then
Purchasershall
been
conclusively
deemed
to
have
elected
to
obtain
a
return
of
the
Earnest
Money,
payment
of
the
Purchaser’s
Transaction
Expenses
and
to
terminate
thisContract
as
provided
in
(a)
above.
Purchaser
waives
and
relinquishes
the
right
to
any
other
remedy
other
than
as
specified
in
this
Section
12.1
.
Notwithstandingthe
foregoing,
or
any
other
provision
in
this
Contract
to
the
contrary,
(i)
if
the
transaction
contemplated
herein
is
not
consummated
because
of
a
default
on
the
partof
Seller
that
is
not
cured
within
five
(5)
Business
Days
after
written
notice
from
Purchaser,
(ii)
Purchaser
seeks
specific
performance
in
full
compliance
with
theforegoing
provisions,
and
(iii)
Seller
voluntarily
transfers
and
conveys
the
Property
or
any
portion
thereof
to
another
party
that
makes
specific
performanceunavailable
to
Purchaser,
Purchaser
may
bring
an
action
for
Purchaser’s
damages
resulting
from
such
transfer
that
will
be
deemed
to
include
the
excess
ofconsideration
received
by
Seller
in
connection
with
Seller’s
transfer
and
conveyance
of
Property
to
a
party
other
than
Purchaser
in
excess
of
the
Purchase
Price
andPurchaser
will
receive
a
refund
of
the
Earnest
Money.
The
exercise
by
Purchaser
of
any
of
the
remedies
set
forth
in
this
Section
12.1
shall
not
limit
or
affect
theliability
of
Seller
under
any
indemnities
contained
in
this
Contract,
any
obligations
of
Seller
that
survive
the
termination
of
this
Contract
by
their
express
terms,
orthe
right
of
either
party
to
recover
attorneys'
fees,
costs
and
expenses
as
provided
in
Section
12.3
below.1512.2     Default by Purchaser. If
the
transaction
contemplated
herein
is
not
consummated
because
of
a
default
on
the
part
of
Purchaser
that
is
not
curedwithin
five
(5)
Business
Days
after
written
notice
from
Seller,
or
Purchaser
defaults
in
any
of
its
obligations
hereunder
(including,
without
limitation,
a
breach
in
arepresentation,
warranty
or
covenant)
that
is
not
cured
within
five
(5)
Business
Days
after
written
notice
from
Seller
(or
if
such
default
does
not
consist
of
a
willfulaction
of
Purchaser
and
cannot
reasonably
be
cured
within
such
5
Business
Day
period,
within
such
additional
time,
not
to
exceed
an
additional
five
(5)
BusinessDays
as
may
be
reasonably
necessary
to
cure
the
default),
then
Seller
shall
have
the
right,
as
Seller's
sole
and
exclusive
remedy
except
as
provided
below,
toreceive
the
Earnest
Money
as
liquidated
damages
and
in
full
and
final
settlement
of
any
claims
or
damages
that
Seller
has
or
may
have
against
Purchaser
except
asprovided
below,
and
upon
the
receipt
by
Seller
of
the
Earnest
Money
this
Contract
shall
terminate
and
be
of
no
further
force
or
effect,
except
with
respect
to
thoseindemnities
and
obligations
of
Purchaser
set
forth
in
this
Contract
which
survive
termination
by
their
express
terms.
It
is
agreed
that
the
damages
that
will
besustained
by
Seller
in
the
event
of
the
Purchaser's
default
under
this
Contract
are
difficult
or
impossible
to
accurately
ascertain
and
the
Earnest
Money
is
a
fair
andreasonable
estimate
of
such
damages
thereof
and
is
intended
not
as
a
penalty,
but
as
liquidated
damages.
The
receipt
by
Seller
of
liquidated
damages
shall
not
limitor
affect
the
liability
of
Purchaser
under
any
indemnities
contained
in
this
Contract,
any
obligations
of
Purchaser
that
survive
the
termination
of
this
Contract
bytheir
express
terms
or
the
right
of
either
party
to
recover
attorneys'
fees,
costs
and
expenses
as
provided
in
Section
12.3
below.12.3     Attorneys' Fees and Costs. In
the
event
either
party
to
this
Contract
commences
legal
action
of
any
kind
to
enforce
or
interpret
the
terms
andconditions
of
this
Contract
or
any
of
the
closing
documents,
the
prevailing
party
in
such
litigation
will
be
entitled
to
collect
from
the
other
party
all
costs,
expensesand
attorneys'
fees
incurred
in
connection
with
such
action.
This
Section
12.3
shall
survive
Closing
or
termination
of
this
Contract.13.     RISK OF LOSS, DESTRUCTION, AND CONDEMNATION.13.1     Risk of Loss. Except
as
otherwise
provided
in
this
Contract,
Seller
shall
bear
the
risk
of
loss
for
damage
to
the
Property,
or
any
part
thereof,
fromthe
execution
of
this
Contract
through
the
Closing.
Upon
Closing,
full
risk
of
loss
with
respect
to
the
Property
will
pass
to
Purchaser.
If
the
Real
Property
or
anymaterial
portion
thereof
is
damaged
by
any
cause
of
whatsoever
nature
prior
to
the
Closing,
Seller
will
promptly
give
Purchaser
written
notice
of
such
damage
andSeller's
reasonable
estimate
of
the
cost
to
repair
such
damage.13.2     Casualty.13.2.1     Major Damage .
If
the
cost,
in
the
reasonable
judgment
of
a
contractor
selected
by
Seller
and
reasonably
acceptable
to
Purchaser
(eachan
"Acceptable
Contractor"),
for
repairing
any
such
damage
exceeds
$500,000,
Purchaser
will
have
the
option,
in
Purchaser's
sole
and
absolute
discretion,exercisable
by
written
notice
delivered
to
Seller
within
five
(5)
Business
Days
of
Seller's
delivery
to
Purchaser
of
notice
of
the
damage
and
the
cost
torepair
the
same
but
in
all
events
prior
to
the
Closing,
to
terminate
this
Contract.
If
the
scheduled
Closing
Date
is
less
than
five
(5)
Business
Daysfollowing
Seller's
delivery
of
notice
to
Purchaser
of
the
damage
and
the
cost
to
repair
the
same,
at
Purchaser's
option
the
Closing
shall
be
delayed
to
allowPurchaser
to
have
five
(5)
Business
Days
to
deliver
a
written
termination
notice
in
accordance
with
the
foregoing
provisions.
In
the
event
of
thetermination
of
this
Contract
by
Purchaser
under
this
Section
13.2.1
,
the
Earnest
Money
will
be
promptly
refunded
to
Purchaser
and
thereafter
neitherparty
will
have
any
further
duties
or
obligations
hereunder
except
under
provisions
which
survive
the
termination
of
this
Contract
by
their
express
terms.If
Purchaser
does
not
exercise
such
right
to
terminate
prior
to
the
Closing
within
the
period
set
forth
above,
then
Seller
shall
convey
the
Property
toPurchaser,
in
its
damaged
condition,
without
reduction
of
the
Purchase
Price,
in
which
event
(a)
Seller
at
Closing
shall
assign
to
Purchaser
all
of
Seller'sright,
title
and
interest
in
and
to
any
claims
Seller
may
have
under
the
property
insurance
policies
relating
to
such
damage
to
the
Real
Property
excludingany
claims
for
Seller's
Allocated
Proceeds
(as
defined
below),
(b)
Seller
at
Closing
will
pay
to
Purchaser
any
property
insurance
proceeds
actuallycollected
by
Seller
prior
to
the
Closing
and
the
applicable
amount
of
Seller's
deductible
pursuant
to
the
relevant
property
damage
policy
that
arecollectively
in
excess
of
Seller's
Allocated
Proceeds,
and
(c)
Seller
will
have
no
liability
or
obligation
to
repair
the
Property.13.2.2     Minor Damage. If
the
cost,
in
the
reasonable
judgment
of
an
Acceptable
Contractor,
for
repairing
any
such
damage
(exclusive
ofrepairs
required
to
be
made
by
tenants
under
the
Leases)
does
not
exceed
$500,000.00,
then
(a)
Seller
shall
convey
the
Property
to
Purchaser
on
theClosing
Date
in
its
damaged
condition
without
reduction
of
the
Purchase
Price
except
that
Purchaser
at
Closing
shall
receive
a
credit
for
any
propertyinsurance
proceeds
actually
collected
by
Seller
prior
to
the
Closing
and
the
applicable
amount
of
Seller's
deductible
pursuant
to
the
relevant
propertydamage
policy
that
are
collectively
in
excess
of
Seller's
Allocated
Proceeds,
(b)
Seller
at
Closing
shall
assign
to
Purchaser
all
of
Seller's
right,
title
andinterest
in
and
to
any
claims
Seller
may
have
under
the
property
insurance
policies
relating
to
such16damage
to
the
Real
Property
excluding
any
claims
for
Seller's
Allocated
Proceeds,
and
(c)
Seller
will
have
no
liability
or
obligation
to
repair
or
replace
theProperty.13.2.3     Seller's Allocated Proceeds . Notwithstanding
anything
to
the
contrary
provided
in
this
Contract,
Seller
shall
have
the
right
to
receiveand
retain
from
the
insurance
proceeds
(whether
such
proceeds
are
paid
prior
to
or
after
the
Closing)
all
portions
of
the
"Seller's
Allocated
Proceeds”
(ashereinafter
defined)
that
are
in
excess
of
the
applicable
insurance
policy
deductibles.
If
prior
to
the
Closing
Seller
shall
not
have
received
insuranceproceeds
equal
to
the
amount
by
which
Seller's
Allocated
Proceeds
exceeds
the
applicable
insurance
policy
deductibles,
then
within
five
(5)
BusinessDays
after
Purchaser's
receipt
of
any
insurance
proceeds
and
written
documentation
evidencing
the
Seller's
Allocated
Proceeds
Purchaser
shall
pay
toSeller
an
amount
equal
to
the
unpaid
Seller
Allocated
Proceeds
in
excess
of
the
applicable
insurance
policy
deductibles.
The
provisions
of
thisSection
13.2.3
shall
survive
the
Closing.
"Seller's
Allocated
Proceeds"
means
with
respect
to
any
casualty,
collectively:
(a)
the
reasonable,
out-of-pocketcosts
(including
reasonable
attorneys'
fees)
incurred
by
Seller
in
connection
with
the
settlement
of
any
insurance
claim
with
respect
to
such
casualty;
(b)the
proceeds
of
any
rental
loss,
business
interruption
or
similar
insurance
that
are
allocable
to
the
period
prior
to
the
Apportionment
Time;
and
(c)
thereasonable,
out-of-pocket
costs
incurred
by
Seller
in
stabilizing,
securing
and/or
restoring
the
Property
following
such
casualty
as
required
by
any
Lease.13.3     Condemnation. If
any
condemnation
or
eminent
proceedings
are
commenced
with
respect
to
all
or
any
material
portion
of
the
Real
Property
priorto
the
Closing,
Purchaser
may
at
Purchaser's
election
terminate
this
Contract
prior
to
the
Closing
by
written
notice
to
Seller
within
five
(5)
Business
Days
afterPurchaser
has
been
notified
of
the
commencement
of
the
condemnation
or
eminent
domain
proceedings.
In
the
event
of
such
termination,
the
Earnest
Money
shallbe
returned
to
Purchaser
and
upon
such
return
neither
Seller
nor
Purchaser
will
have
any
further
obligations
under
this
Contract
except
under
any
provisions
thatsurvive
the
termination
of
this
Contract
by
their
express
terms.
If
Purchaser
does
not
exercise
such
right
to
terminate
prior
to
the
Closing
within
the
periodprescribed,
then
Seller
shall
at
Closing
assign
to
Purchaser
all
right,
title
and
interest
of
Seller
in
and
to
any
award
made
in
connection
with
such
condemnation
oreminent
domain
proceedings
and
pay
to
Purchaser
any
proceeds
thereof
received
prior
to
the
Closing
excluding
any
portion
thereof
that
is
allocable
to
loss
of
useof
the
Property
prior
to
the
Apportionment
Time;
provided,
however,
the
Closing
shall
not
be
delayed
by
reason
of
any
such
proceedings
and
the
Purchase
Priceshall
not
be
reduced
as
a
result
thereof.
A
portion
of
the
Property
shall
be
deemed
to
be
material
under
this
Section
13.3
only
if
an
Acceptable
Contractor’sreasonable
estimate
of
the
diminution
in
value
of
the
Property
resulting
from
the
eminent
domain
proceedings
exceeds
$225,000.00.13.4     Closing . Purchaser
shall
have
no
further
rights
against
Seller
after
the
Closing
in
connection
with
any
damage
to
the
Property
or
anycondemnation
or
eminent
domain
proceeding.14.     REAL ESTATE COMMISSIONS AND FEES.Seller
represents
and
warrants
to
Purchaser
that
Seller
has
not
dealt
with,
or
entered
into
any
agreement
with,
any
real
estate
broker,
agent,
finder,
or
anyparty
in
connection
with
the
transaction
contemplated
hereby
other
than
Trinity
("Seller’s
Broker")
and
Jones
LaSalle
Brokerage,
Inc.
("Purchaser's
Broker,"together
with
Seller's
Broker,
the
"Brokers").
Purchaser
hereby
represents
and
warrants
to
Seller
that
Purchaser
has
not
dealt
with,
or
entered
into
any
agreementwith,
any
real
estate
broker,
agent,
finder,
or
any
party
in
connection
with
the
transaction
contemplated
hereby
other
than
the
"Brokers".
Seller
shall
pay
to
Brokersany
commission
payable
in
connection
with
the
closing
of
the
sale
under
this
Contract
pursuant
to
a
separate
agreement
between
or
among
Seller
and
Brokers.Each
party
hereby
indemnifies
and
agrees
to
hold
the
other
party
harmless
for,
from
and
against
any
loss,
liability,
damage,
cost,
or
expense
(including,
withoutlimitation,
reasonable
attorneys'
fees)
paid
or
incurred
by
the
other
party
by
reason
of
a
breach
of
the
representation
and
warranty
or
any
agreement
made
by
suchindemnifying
party
under
this
Section
14
.
The
provisions
of
this
Section
14
will
survive
the
Closing
or
termination
of
this
Contract.15.     NOTICES.15.1     Written Notice. All
notices,
demands
and
requests
which
may
be
given
or
which
are
required
to
be
given
by
either
party
to
the
other
party
underthis
Contract
must
be
in
writing
and
must
be
sent
by
United
States
certified
or
registered
mail,
postage
fully
prepaid,
return
receipt
requested,
or
by
electronic
mail(email),
or
by
Federal
Express
or
a
similar
nationally
recognized
overnight
courier
service,
or
by
facsimile
with
a
confirmation
copy
delivered
by
a
nationallyrecognized
overnight
courier
service.
Notice
will
be
considered
effective
on
actual
receipt
(or,
if
delivery
of
any
properly
addressed
notice
is
refused
or
is
unable
tobe
delivered,
upon
the
date
of
such
refusal
or
the
attempted
delivery).
Notice
sent
by
facsimile
will
be
effective
on
the
actual
receipt
of
the
facsimile
(not
the
dateof
the
receipt
of
the
confirmation
copy).
The
respective
attorneys
for
Seller
and
Purchaser
are
authorized
to
give
and
receive
any
notices
required
or
permitted
to
besent
hereunder.1715.2     Addresses. The
addresses
for
proper
notice
under
this
Contract
are
as
follows:Seller:Purchaser:

Rexford
Park
Investors,
LLCc/o
Greenstreet
Real
Estate
Partners,
L.P.Attn:
Jeffrey
A.
Safchik2601
S.
Bayshore
Drive,
Suite
900Miami,
FL
33133Office:
(305)
858-4225Facsimile:
(305)
858-2334Email:
jsafchik@greenstreetpartners.comLendingTree,
LLC11115
Rushmore
DriveCharlotte,
NC
28277Attn:
CFOCopy
to:
General
CounselEmail:
Gabriel.Dalporto@lendingtree.comand
Katharine.Pierce@lendingtree.comwith
a
copy
to:with
a
copy
to:Sherry
A.
Stanley,
P.A.6821
Camarin
St.Coral
Gables,
FL
33146Attn:
Sherry
A.
Stanley,
Esq.Facsimile:
305-514-0606Email:
sstanley@sastanleylaw.comMoore
&
Van
Allen,
PLLC100
N.
Tryon
Street,
Suite
4700Charlotte,
NC
28202Attn:
Evan
BassEmail:
evanbass@mvalaw.comESCROW
AGENT:
Chicago
Title
Insurance
Company200
S.
Tryon
Street,
Suite
800Charlotte,
NC

28202Attention:
Scott
MansfieldEmail:
scott.mansfield@ctt.com
Either
party
may
from
time
to
time
by
written
notice
delivered
in
accordance
with
Section
15.1
designate
a
different
address
to
the
other
party.16.NO ASSIGNMENT.Neither
party
shall
be
entitled
to
assign
this
Contract
without
the
prior
written
consent
of
the
other
party;
provided,
however,
that
Purchaser
may
assignthis
Contract,
without
Seller's
consent,
to
an
entity
controlled
by
or
under
common
control
with
Purchaser
so
long
as
such
assignee
assumes
in
writing
allobligations
of
Purchaser
hereunder
and
Purchaser
delivers
to
Seller
a
copy
of
such
fully
executed
assignment
and
assumption
(which
shall
set
forth
the
relationshipof
the
assignee
to
Purchaser
)
at
least
five
(5)
Business
Days
prior
to
Closing.
Purchaser
shall
remain
liable
under
this
Contract
following
any
assignment.17.MISCELLANEOUS.17.1     Entire Agreement. This
Contract
contains
the
entire
agreement
between
the
parties
relating
to
the
transaction
contemplated
hereby
and
all
prioror
contemporaneous
agreements,
understandings,
representations
or
statements,
oral
or
written,
are
superseded
hereby.17.2     Gender and Number. Words
of
any
gender
used
in
this
Contract
will
be
construed
to
include
any
other
gender
and
words
in
the
singular
numberwill
be
construed
to
include
the
plural,
and
vice
versa,
unless
the
context
requires
otherwise.17.3     Captions. The
captions
used
in
connection
with
the
sections
and
subsections
of
this
Contract
are
for
convenience
of
reference
only
and
will
not
bedeemed
define,
describe,
expand
or
limit
the
meaning
of
the
language
of
this
Contract.17.4     Successors and Assigns. This
Contract
will
be
binding
upon
and
inure
to
the
benefit
of
the
parties
hereto
and
their
respective
legalrepresentatives,
successors
and
permitted
assigns.
No
third
party,
other
than
Escrow
Agent,
shall
be
a
third
party
beneficiary
of
this
Contract.17.5     Counterparts. This
Contract
may
be
executed
by
Seller
and
Purchaser
in
separate
identical
counterparts
or
counterpart
signature
pages
attached
tothe
same
Contract,
and
such
counterparts,
when
taken
together,
or
this
Contract
with
all
counterpart
signature
pages
will
constitute
but
one
and
the
sameinstrument.
The
parties
authorize
each
other
to
detach
and
combine
original
signature
pages
and
consolidate
them
into
a
single
original
agreement.
A
copy
of
thisContract
or
counterpart
hereof18executed
by
any
person
or
entity
that
is
transmitted
by
facsimile,
email
or
other
electronic
means
shall
have
the
same
binding
legal
effect
as
an
originally
signedcopy
of
this
Contract.17.6     Controlling Law; Venue. This
Contract
will
be
construed
under,
governed
by
and
enforced
in
accordance
with
the
laws
of
the
State
of
NorthCarolina,
without
reference
to
the
laws
of
any
other
state.
Venue
for
any
litigation
relating
to
this
Contract
shall
be
in
Mecklenburg
County,
North
Carolina.17.7     Exhibits. All
exhibits
,
schedules,
attachments,
annexed
instruments
and
addenda
referred
to
herein
will
be
considered
a
part
hereof
for
allpurposes
with
the
same
force
and
effect
as
if
set
forth
in
full
herein.17.8     No Rule of Construction. Seller
and
Purchaser
have
each
been
represented
by
counsel
and
both
Seller
and
Purchaser
have
participated
in
thenegotiations
and
preparation
of
this
Contract.
Therefore,
this
Contract
will
be
deemed
to
be
drafted
by
both
Seller
and
Purchaser,
and
no
rule
of
construction
willbe
invoked
respecting
the
authorship
of
this
Contract.
Accordingly,
should
any
provision
of
this
Contract
require
judicial
interpretation,
the
court
interpreting
orconstruing
such
provision
shall
not
apply
the
rule
of
construction
that
a
document
or
any
provision
thereof
is
to
be
construed
more
strictly
against
one
party
as
aresult
of
the
authorship
of
such
provision.17.9     Severability. All
agreements
and
covenants
contained
in
this
Contract
are
severable.
In
the
event
any
provision
contained
herein
is
held
to
beinvalid
by
any
court,
this
Contract
will
be
interpreted
as
if
such
invalid
provision
were
not
contained
herein
and
all
remaining
provisions
of
this
Contract
shallremain
in
full
force
and
effect.17.10     Construction of Words. The
word
"any"
will
be
construed
as
"any
and
all."
The
word
"including"
will
be
construed
as
"including
but
not
limitedto."
The
words
"herein",
"hereof",
"hereunder"
and
other
words
of
similar
import
shall
refer
to
this
entire
Contract
and
not
to
any
particular
article,
section
orparagraph
of
this
Contract
unless
otherwise
specifically
provided.17.11     Time of Essence. Time
is
important
to
both
Seller
and
Purchaser
in
the
performance
of
this
Contract,
and
both
parties
have
agreed
that
time
is
ofthe
essence
under
all
provisions
of
this
Contract.17.12     Time Periods. All
time
periods
shall
be
measured
in
calendar
days
unless
otherwise
specified
to
the
contrary,
except
that
if
the
final
date
of
anyperiod
specified
in
this
Contract
falls
upon
a
day
which
is
not
a
Business
Day,
then,
and
in
such
event,
the
time
of
such
period
will
be
extended
to
the
next
BusinessDay.
Whenever
used
in
this
Contract,
"Business
Day"
means
any
day,
other
than
a
Saturday
or
Sunday,
on
which
banks
are
open
for
the
transaction
of
bankingbusiness
in
Charlotte,
North
Carolina,
and
Miami,
Florida.17.13     Waivers; Modifications . No
waiver,
modification,
amendment,
discharge,
or
change
of
this
Contract
shall
be
valid
unless
the
same
is
in
writingand
signed
by
the
party
against
which
the
enforcement
of
such
modification,
waiver,
amendment,
discharge,
or
change
is
sought.17.14     No Recordation . Neither
this
Contract
nor
any
memorandum,
affidavit
or
other
document
referencing
this
Contract
shall
be
recorded
by
or
atthe
request
of
Purchaser
in
any
public
records.
Should
Purchaser
ever
record
or
attempt
to
record
this
Contract,
or
a
memorandum,
affidavit
or
other
documentreferencing
this
Contract,
then,
notwithstanding
anything
herein
to
the
contrary,
said
recordation
or
attempt
at
recordation
shall
constitute
a
default
by
Purchaserand,
in
addition
to
the
other
remedies
provided
for
herein,
Seller
shall
be
entitled
to
all
rights
available
at
law
or
in
equity.17.15     No Survival Except as Specified . Except
as
otherwise
expressly
provided
in
this
Contract,
no
agreements
and
other
obligations
of
Seller
andPurchaser
in
this
Contract
shall
survive
the
Closing
and
no
action
based
on
any
provision
that
does
not
survive
the
Closing
shall
be
commenced
after
the
Closing.17.16     Survival . The
provisions
of
Sections
17
shall
survive
any
termination
of
this
Contract
and
shall
survive
the
Closing.18.     CONFIDENTIALITY.Purchaser
and
Seller
each
hereby
agree
to
hold
all
information
related
to
this
transaction
in
strict
confidence,
and
will
not
disclose
same
to
any
personother
than
affiliates,
partners,
members,
directors,
officers,
employees
and
agents
of
each,
or
to
consultants,
attorneys,
accountants,
lenders,
banks
or
other
thirdparties
working
with
the
respective
party
in
connection
with
the
transaction
who
need
to
know
such
information
for
the
purpose
of
performing
the
respectiveparty’s
obligations
under
this
Contract
and
consummating
the
transactions
contemplated
hereby
(the
persons
or
entities
to
which
a
respective
party
is
permitted
todisclose19are
collectively
called
such
party’s
"Representatives")
provided
that
all
such
Representatives
agree
to
hold
such
information
in
strict
confidence
in
accordance
withthis
Section
18
(with
Purchaser
and
Seller
each
being
liable
for
any
disclosure
in
violation
of
this
Section
18
by
any
of
their
respective
Representatives),
except
thatnotwithstanding
the
foregoing,
(a)
Seller,
Purchaser
and
their
Representatives
shall
be
allowed
to
disclose
information
pertaining
to
the
transaction
as
may
beappropriate
to
comply
with
its
obligations
under
this
Contract,
to
satisfy
any
conditions
precedent
to
the
Closing,
and
as
may
otherwise
be
reasonably
appropriatein
connection
with
the
transaction,
and
(b)
Purchaser
shall
be
allowed
to
identify
itself
as
a
potential
acquirer
of
the
Property
in
connection
with
obtaininginformation
and
reports
from
third
parties
other
than
tenants.
Prior
to
Closing,
any
release
to
the
public
of
information
with
respect
to
the
matters
set
forth
in
thisContract
will
be
made
only
in
the
form
approved
by
Purchaser
and
Seller
and
their
respective
counsel.
This
Section
18
shall
survive
any
termination
of
theContract
and
shall
supersede
and
replace
the
obligations
of
either
party
under
any
separate
confidentiality
or
non-disclosure
agreement
executed
by
such
party(which
are
hereby
terminated
and
of
no
further
force
or
effect);
provided,
however,
that
the
terms
and
conditions
of
this
Section
18
shall
terminate
upon
theconveyance
of
the
Property
to
Purchaser
pursuant
to
this
Contract.
Notwithstanding
anything
to
the
contrary,
Purchaser
and
Seller
may
each
disclose
informationand
the
terms
of
this
transaction
in
response
to
lawful
process
or
subpoena
or
other
valid
or
enforceable
order
of
a
court
of
competent
jurisdiction
or
as
otherwiserequired
by
law
(including
as
required
by
Purchaser
under
any
applicable
Securities
and
Exchange
Commission
rules
or
regulations)
provided
that,
to
the
extent
notprohibited
by
law,
the
disclosing
party
shall
deliver
written
notice
to
the
other
party
promptly
upon
receipt
of
any
legal
process,
subpoena,
or
order
and
in
advanceof
any
disclosure
in
order
to
enable
such
other
party
to
attempt
to
limit
or
eliminate
the
required
disclosure
or
require
confidential
treatment
of
any
disclosedinformation.19.     IRS REPORTING REQUIREMENTS.For
the
purpose
of
complying
with
any
information
reporting
requirements
or
other
rules
and
regulations
of
the
Internal
Revenue
Service
("IRS")
that
areor
may
become
applicable
as
a
result
of
or
in
connection
with
the
transaction
contemplated
by
this
Contract,
including,
but
not
limited
to,
any
requirements
setforth
in
proposed
Income
Tax
Regulation
Section
1.6045-4
and
any
final
or
successor
version
thereof
(collectively
the
"IRS
Reporting
Requirements"),
Seller
andPurchaser
hereby
designate
and
appoint
the
Title
Company
to
act
as
the
"Reporting
Person"
(as
that
term
is
defined
in
the
IRS
Reporting
Requirements)
to
beresponsible
for
complying
with
any
IRS
Reporting
Requirements.
The
Title
Company
hereby
acknowledges
and
accepts
such
designation
and
appointment
andagrees
to
fully
comply
with
any
IRS
Reporting
Requirements
that
are
or
may
become
applicable
as
a
result
of
or
in
connection
with
the
transaction
contemplatedby
this
Contract.
Without
limiting
the
responsibility
and
obligations
of
the
Title
Company
as
the
Reporting
Person,
Seller
and
Purchaser
hereby
agree
to
complywith
any
provisions
of
the
IRS
Reporting
Requirements
that
are
not
identified
therein
as
the
responsibility
of
the
Reporting
Person.
The
provisions
of
thisSection
19
will
survive
the
Closing.20.     Tax Deferred Exchange .20.1     Cooperation . Seller
agrees
to
reasonably
cooperate
with
Purchaser,
at
no
expense
or
liability
to
Seller,
to
allow
Purchaser
to
effectuate
a
1031
taxdeferred
exchange
("Exchange")
in
connection
with
the
Real
Property;
provided,
however,
that
such
cooperation
shall
be
subject
to
the
provisions
of
Section
20.2below
and
in
no
event
shall
Seller
be
obligated
to
take
any
action
that
would
delay
the
Closing
or
result
in
any
increased
obligations
or
liabilities
to
the
Seller.Seller
consents
to
the
assignment
of
this
Contract
by
the
Purchaser
to
an
exchange
accommodator
for
the
sole
purpose
of
completing
such
Exchange.
It
is
expresslyagreed
by
the
parties
hereto
that
Purchaser's
inability
to
obtain
the
desired
tax
treatment
for
any
Exchange
shall
not
affect
the
enforceability
of
this
Contract
andthat
nothing
herein
shall
be
construed
as
a
representation
or
warranty
by
a
party
that
the
other
party
will,
in
fact,
be
eligible
for
any
of
the
benefits
of
an
Exchange.20.2     Additional Agreements . Purchaser
shall
bear
all
costs
of
the
Exchange.
Purchaser
hereby
agrees
to
indemnify,
defend
and
hold
the
Sellerharmless
from
and
against
all
liabilities
(including,
without
limitation,
Seller's
attorneys'
fees
and
costs)
arising
as
a
result
of
the
Exchange
that
would
not
havearisen
had
the
Purchaser
not
closed
the
transaction
contemplated
hereby
as
part
of
a
like-kind
Exchange.
Anything
in
this
Section
to
the
contrary
notwithstanding:(i)
Seller
makes
no
representation
or
warranty
to
Purchaser
as
to
the
effectiveness
or
tax
impact
of
any
proposed
Exchange;
(ii)
in
no
event
shall
Seller
be
requiredto
take
title
to
any
exchange
or
replacement
property;
(iii)
Purchaser
shall
provide
to
Seller
copies
of
all
documents
that
are
to
be
executed
by
Seller
no
less
thanseven
(7)
Business
Days
prior
to
the
Closing
Date;
(iv)
in
no
event
shall
completion
of
any
such
Exchange
be
a
cause
or
excuse
for
any
delay
in
the
Closing;
(v)Seller
shall
be
required
to
incur
any
costs
or
expenses
or
incur
any
additional
liabilities
or
obligations
in
order
to
accommodate
any
Exchange
requested
by
thePurchaser
or
any
exchange
facilitator;
and
(vi)
Purchaser
agrees
to
use
a
qualified
intermediary
to
conduct
the
Exchange.[Signature
Page
Follows]20IN
WITNESS
WHEREOF,
this
Purchase
and
Sale
Contract
was
executed
as
of
the
respective
dates
set
forth
below:
SELLER :REXFORD
PARK
INVESTORS,
LLC,
a
Delaware
limited
liability
companyDate:
October
17,
2016By:
/s/
Jeffrey
A.
Safchik
































Name:
Jeffrey
A.
SafchikTitle:
President
PURCHASER :LENDINGTREE,
LLC,
a
Delaware
limited
liability
companyDate:
October
17,
2016By:


/s/
Gabriel
Dalporto



































Name:
Gabriel
DalportoTitle:
Chief
Financial
Officer21JOINDER
BY
ESCROW
AGENTThe
undersigned,
Chicago
Title
Insurance
Company
(referred
to
in
this
Contract
as
the
"Escrow
Agent"),
hereby
acknowledges
that
it
received
thisContract
executed
by
Seller
and
Purchaser
on
the
_____
day
of
October,
2016,
and
accepts
the
obligations
of
Escrow
Agent
as
set
forth
herein.
Escrow
Agentagrees
that
it
will
hold
the
Earnest
Money
in
accordance
with
this
Contract.CHICAGO TITLE INSURANCE COMPANYBy:
_______________________________________________________



























Name:Title:Schedule
of
Exhibits
:Exhibit
"A"Exhibit
"B"Exhibit
"C"Exhibit
"D"Exhibit
"E"Exhibit
"F"Exhibit
"G"Exhibit
"H"Exhibit
"I"Exhibit
"J"Exhibit
"K"Exhibit
"L"Exhibit
"M"Exhibit
"N"-
-
-
-
-
-
-
-
-
-
-
-
-
-Legal
DescriptionTenants
and
Third
Parties
under
Property
Agreements
and
Information
Pertaining
to
the
LeasesExisting
ExceptionsSeller's
DeliverablesEstoppel
LetterSeller
Estoppel
LetterSpecial
Warranty
DeedAssignment
and
Assumption
of
Lessor's
Interest
in
LeasesBill
of
Sale
and
General
AssignmentCertificate
of
Non-Foreign
StatusNotification
LetterSeller's
AffidavitRent
RollSecurity
DepositsEXHIBIT "A"LEGAL DESCRIPTION OF THE LANDParcel
One:TOGETHER
WITH
THE
REAL
PROPERTY
DESCRIBED
ON
THE
FOLLOWING
PAGE:1Parcel
Two:2[***] - Confidential portions of this document have been redacted and filed separately with the Commission.EXHIBIT "B"TENANTS AND THIRD PARTIES UNDER PROPERTY AGREEMENTSAND INFORMATION PERTAINING TO THE LEASESTenants and Information Pertaining to the Leases :Tenants as of Effective Date:[***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***]Tenant improvements not yet completed:[***][***][***]Unpaid brokerage commissions:[***][***][***][***][***][***]Tenants that have paid rent for more than one month in advance:[***][***]Third Parties under Property Agreements :[***][***][***][***][***][***][***][***][***][***][***]1EXHIBIT "C"EXISTING EXCEPTIONS1.



Taxes
and
assessments,
or
installments
thereof,
that
are
not
yet
due
and
payable;2.The
Leases
and
any
memoranda
(or
short
forms)
thereof
and
the
rights
and
claims
of
all
tenants
thereunder
and
their
successors,
assigns
and
subtenants;3.



The
following
exceptions:(a)The
lien
of
all
taxes
for
the
year
of
Closing,
which
are
due
and
payable
but
not
yet
delinquent,
and
subsequent
years;(b)Building
restriction
lines,
easements,
and
any
other
matters
shown
on
map
or
plat
recorded
in
Map
Book
24,
Page
679;(c)Title
to
that
portion
of
the
Land
within
the
bounds
of
Rexford
Road;(d)intentionally
omitted;(e)Riparian
rights
of
others
incident
to
any
branches,
creeks,
streams
or
other
waters
coursing
the
Land;(f)Easement(s)
or
right(s)-of-way
in
favor
of
the
City
of
Charlotte
recorded
in
Book
4321,
Page
312;(g)Rights
or
claims
of
AT&T
Wireless
PCS,
LLC
in
possession
as
tenant
under
an
unrecorded
lease,
a
Memorandum
or
Short
Form
evidencingsame
being
recorded
in
Book
16430,
Page
297;(h)Easement(s)
or
right(s)-of-way
in
favor
of
the
City
of
Charlotte
recorded
in
Book
3161,
Page
256;(i)Easement(s)
or
right(s)-of-way
in
favor
of
the
City
of
Charlotte
recorded
in
Book
4321,
Page
306;(j)Easement(s)
or
right(s)-of-way
in
favor
of
Duke
Power
Company
recorded
in
Book
3941,
Page
540;(k)Easement(s)
or
right(s)-of-way
in
favor
of
Duke
Power
Company
recorded
in
Book
3947,
Page
805;(l)Easement(s)
or
right(s)-of-way
in
favor
of
Southern
Bell
Telephone
and
Telegraph
Company
recorded
in
Book
878,
Page
306;
and(m)Easement(s)
or
right(s)-of-way
in
favor
of
ICG
Access
Services,
Inc.
recorded
in
Book
7773,
Page
523;(n)Driveway
Easement
Number
One
and
Driveway
Easement
Number
Two
as
reserved
in
deed
recorded
in
Book
4400,
Page
73;
as
assigned
inBook
4703,
Page
325,
as
to
Driveway
Easement
No.
One;
and
further
assigned
in
recorded
in
Book
4453,
Page
521,
as
to
Driveway
EasementNo.
Two;
and(o)The
following
maters
(s)
as
shown
on
survey
by
Jimmy
F.
Cain,
PLS,
dated
November
12,
2015,
and
any
easement(s)
or
right(s)-of-wayassociated
therewith:



a.
Various
utility
lines
with
manholes;
drainage
inlets;
fire
hydrants;
security
lights;
power
poles;
water
meters;
water
valves;
powerboxes;
and
telephone
pedestals
located
on
the
Land;
andb.



Drainage
pond
located
in
the
northern
portion
of
Parcel
Two.4.All
matters
that
are
revealed
by
the
following
survey
of
the
Property:
Survey
prepared
by
Jimmy
F.
Cain,
PLS,
dated
November
12,
20155.All
zoning
and
governmental
restrictions
and/or
regulations
pertaining
to
the
Property;16.Any
fees
and
charges
(such
as
license
fees)
required
to
be
paid
by
any
Tenant
of
the
Property
pursuant
to
its
Lease;
and7.



Any
matters
resulting
from
Purchaser's
actions
or
entry
onto
the
Property.2EXHIBIT "D"SELLER'S DELIVERABLES1.The
Owner's
Policy
of
Title
Insurance
issued
in
connection
with
Seller's
acquisition
of
the
Land;2.Plans
and
specifications
of
the
Improvements;3.Operating
statements
from
2014,
2015
and
YTD
2016;4.Property
condition
reports
or
maintenance
reports
prepared
by
third
party
inspections
or
engineers
on
behalf
of
Seller
regarding
the
Improvements
and/orHVAC
servicing
said
Improvements;5.Survey
of
the
Property
prepared
for
Seller;6.Any
written
correspondence
with
Seller
and
any
governmental
entity
regarding
any
streetscape
plans
or
drainage
improvement
plans
relative
to
theProperty;7.A
copy
of
all
Leases;8.A
copy
of
all
Property
Agreements;
and9.Environmental
reports
prepared
for
Seller
relative
to
the
Property.1EXHIBIT "E"ESTOPPEL LETTERAttn:________________________________________________________________________















The
undersigned,
_____________ ,
a
_____________
(the
“
Tenant
”),
hereby
certifies
to
________________________





and
its
affiliates
(collectively,“
Purchaser
”)
and
Purchaser's
lenders
(“
Lenders
”)
(collectively,
the
“
Interested
Parties
”)
the
following:(1)



The
Tenant
is
the
tenant
under
that
certain
______________,
whereby
the
Tenant
is
leasing
certain
premises
containing
approximately
______square
feet
and
located
at
____________________
(the
“
Premises
”)
in
the
building
(“
Building
”)
commonly
known
as
____________,
from
_______________,as
landlord
(the
“
Landlord
”),
successor-in-interest
to
______________.
A
true,
correct
and
complete
copy
of
the
lease,
including
all
amendments,
supplements,modifications
and
assignments
(collectively,
the
“
Lease
”)
is
attached
hereto
as
Exhibit
A
.(2)



The
Lease
is
in
full
force
and
effect
and
has
not
been
modified,
amended,
supplemented
or
assigned,
except
as
set
forth
in
the
attached
Exhibit
A
.The
Lease
is
the
entire
agreement
between
the
Landlord
and
the
Tenant
with
respect
to
the
Premises
and
there
are
no
other
agreements
(written
or
oral)
betweenthe
Landlord
and
the
Tenant
other
than
the
Lease.(3)



Tenant
has
performed
all
of
its
current
obligations
under
the
Lease
and
Tenant
is
not
in
default
under
the
Lease.
Tenant
has
not
received
any
noticefrom
Landlord
of
a
default
by
Tenant
under
the
Lease,
and,
to
Tenant's
knowledge,
there
are
no
events
which
have
occurred
that
with
the
giving
of
notice
or
thepassage
of
time
or
both,
would
result
in
a
default
by
Tenant
under
the
Lease.(4)



There
are
no
uncured
defaults
on
the
part
of
the
Landlord
under
the
Lease,
Tenant
has
not
sent
any
notice
of
default
under
the
Lease
to
the
Landlord,and
there
are
no
events
which
have
occurred
that,
with
the
giving
of
notice
or
the
passage
of
time
or
both,
would
result
in
a
default
by
Landlord
thereunder,
and
atthe
present
time
Tenant
has
no
claim
against
Landlord
under
the
Lease.(5)



The
current
term
of
the
Lease
is
scheduled
to
expire
on
_____________.
The
Tenant
has
the
following
options
to
renew
the
term
of
the
Lease:_____________.(6)



The
current
monthly
base
rent
under
the
Lease
is
$____________________.
The
Tenant
has
paid
rent
under
the
Lease
through____________________.
Tenant
has
no
charge,
lien,
claim
of
set-off
or
defense
against
rents
or
other
charges
due
or
to
become
due
under
the
Lease
or
otherwiseunder
any
of
the
terms,
conditions,
or
covenants
contained
therein.(7)



Except
for
___________________________,
Tenant
has
not
paid,
and
from
and
after
the
date
hereof,
Tenant
will
not
pay,
any
rent
under
the
Leasefor
more
than
thirty
(30)
days
in
advance
of
its
due
date.(8)



Tenant
has
not
received
any
concession
(rental
or
otherwise)
except
as
set
forth
in
the
Lease,
nor
is
Tenant
aware
or
have
knowledge
of
any
futureconcession
(rental
or
otherwise),
in
connection
with
renting
the
Premises
except
as
set
forth
in
the
Lease.(9)



No
commission
or
other
payment
is
currently
due
to
any
real
estate
broker
by
Tenant
in
connection
with
the
leasing
of
the
Premises
to
Tenant
andthere
are
no
agreements,
oral
or
written,
under
which
real
estate
broker
is
entitled
to
any
future
payment
or
commission
by
Tenant
in
connection
with
the
leasing
ofthe
Premises
to
Tenant
except
as
follows:_________________.(10)



[Tenant
is
required
under
the
Lease
to
pay
its
pro
rata
share
of
operating
expenses
over
the
operating
expenses
for
the
base
year
of______________,
and
is
currently
paying
an
estimated
amount
of
$_________
per
month.
TO
BE
INCLUDED
ONLY
IF
APPLICABLE]1(11)



The
Landlord
is
holding
a
security
deposit
under
the
Lease
in
the
amount
of
_____________.
Tenant
has
not
received
any
notice
from
Landlordthat
all
or
any
portion
of
the
security
deposit
has
been
applied
against
any
of
Tenant's
obligations
under
the
Lease.(12)



There
is
not
pending
nor
threatened
against
or
contemplated
by
Tenant,
any
petition
of
bankruptcy,
whether
voluntary
or
otherwise,
any
assignmentfor
the
benefit
of
creditors,
or
any
petition
seeking
reorganization
or
arrangements
under
the
federal
bankruptcy
laws
or
those
of
any
state.(13)



Tenant
has
not
subleased
any
part
of
the
Premises
and
Tenant
occupies,
and
is
in
sole
possession
of
the
Premises,
except
asfollows:____________________________.(14)



Tenant
has
accepted
the
Premises
and
Landlord
has
completed
all
construction,
alterations
and
improvements
required
under
the
terms
of
the
Leaseto
be
completed
by
Landlord
except
as
set
forth
below
and
has
paid
any
and
all
allowances
or
inducements
which
are
payable
by
Landlord
under
the
Lease
exceptas
follows:___________________________________.(15)



Tenant
has
no
options
or
rights
of
first
offer
or
refusal
with
respect
to
purchasing
all
or
any
portion
of
the
Building
or
the
renting
of
additionalspace
in
the
Building
except
as
follows:
____________________.
Tenant
has
no
right
or
option
to
terminate
its
Lease
with
respect
to
all
or
any
portion
of
thePremises
except
as
set
forth
in
the
Lease.This
Estoppel
Certificate
is
being
provided
by
the
undersigned,
as
Tenant,
to
the
Interested
Parties.
Tenant
agrees
that
the
information
and
representationscontained
herein
may
be,
and
is
being,
relied
upon
by
the
Interested
Parties;
and
all
such
persons
shall
be
entitled
to
rely
on
and
to
have
the
benefit
of
theassurances
to
matters
set
forth
in
this
certification.
Where
no
information
has
been
inserted
on
any
blank
hereof,
the
blank
shall
be
deemed
to
read
“NONE”.The
person
executing
this
certification
on
behalf
of
Tenant
is
duly
authorized
to
and
has
the
legal
capacity
execute
this
certification,
and
this
certificationis
and
shall
be
binding
on
the
Tenant,
its
successors,
assigns
and
representatives
and
any
party
claiming
through
or
under
Tenant
and
shall
inure
to
the
benefit
ofPurchaser
and
Lenders.WITNESS
the
following
signature:____________________,a
___________________







By:
_____________________________




















Name:
__________________________



















Its:
_____________________________




















Date:



________________________2EXHIBIT "F"SELLER ESTOPPEL LETTER_______________To:



_________________________________________________________



The
undersigned,
Rexford
Park
Investors,
LLC,
a
Delaware
limited
liability
company
(the
“
Landlord
”),
hereby
certifies
to___________________________and
its
affiliates
(collectively,
“
Purchaser
”)
and
Purchaser's
lenders
(“
Lenders
”)
(collectively,
the
“
Interested
Parties
”)
thefollowing:1.____________________________
(the
"Tenant")
is
the
tenant
under
that
certain
______________,
whereby
the
Tenant
is
leasing
certain
premisescontaining
approximately
______ square
feet
and
located
at
____________________
(the
“
Premises
”)
in
the
building
(“
Building
”)
commonly
knownas
____________,
from
Landlord,
as
landlord[
successor-in-interest
to
______________].
A
true,
correct
and
complete
copy
of
the
lease,
including
allamendments,
supplements,
modifications
and
assignments
(collectively,
the
“
Lease
”)
is
attached
hereto
as
Exhibit
A
.2.The
Lease
is
in
full
force
and
effect
and
has
not
been
modified,
amended,
supplemented
or
assigned,
except
as
set
forth
in
the
attached
Exhibit
A
.
TheLease
is
the
entire
agreement
between
the
Landlord
and
the
Tenant
with
respect
to
the
Premises
and
there
are
no
other
agreements
(written
or
oral)between
the
Landlord
and
the
Tenant
other
than
the
Lease.3.Neither
the
Landlord
nor,
to
the
Landlord’s
Knowledge
(as
defined
below),
the
Tenant
is
in
default
under
the
Lease.4.The
current
term
of
the
Lease
is
scheduled
to
expire
on
_____________.
The
Tenant
has
the
following
options
to
renew
the
term
of
the
Lease:_____________.5.The
current
monthly
base
rent
under
the
Lease
is
$_______________.
The
Tenant
has
paid
rent
under
the
Lease
through
______________________.Tenant
has
no
charge,
lien,
claim
of
set-off
or
defense
against
rents
or
other
charges
due
or
to
become
due
under
the
Lease
or
otherwise
under
any
of
theterms,
conditions,
or
covenants
contained
therein.6.Landlord
has
not
received
from
Tenant
any
rent
under
the
Lease
for
more
than
thirty
(30)
days
in
advance
of
its
due
date.7.Landlord
has
not
provided
any
concession
(rental
or
otherwise)
except
as
set
forth
in
the
Lease,
nor
to
Landlord's
Knowledge
does
any
future
concession(rental
or
otherwise)
exist
in
favor
of
Tenant
in
connection
with
renting
the
Premises
except
as
set
forth
in
the
Lease.8.No
commission
or
other
payment
is
currently
due
to
any
real
estate
broker
by
Landlord
in
connection
with
the
primary
term
of
the
Lease
and
there
are
noagreements,
oral
or
written,
under
which
real
estate
broker
is
entitled
to
any
future
payment
or
commission
by
Landlord
in
connection
with
the
leasing
ofthe
Premises
to
Tenant
except
as
follows:
_____________________.9.[Tenant
is
required
under
the
Lease
to
pay
its
pro
rata
share
of
operating
expenses
over
the
operating
expenses
for
the
base
year
of
______________,
andis
currently
paying
an
estimated
amount
of
$_________
per
month.
TO
BE
INCLUDED
ONLY
IF
APPLICABLE]10.The
Landlord
is
holding
a
security
deposit
under
the
Lease
in
the
amount
of
_____________.
Landlord
has
not
provided
any
notice
to
Tenant
that
all
orany
portion
of
the
security
deposit
has
been
applied
against
any
of
Tenant's
obligations
under
the
Lease
except
as
follows:___________________.111.To
Landlord's
Knowledge,
there
is
not
pending
nor
threatened
against
Tenant
any
petition
of
bankruptcy,
whether
voluntary
or
otherwise,
any
assignmentfor
the
benefit
of
creditors,
or
any
petition
seeking
reorganization
or
arrangements
under
the
federal
bankruptcy
laws
or
those
of
any
state.12.To
Landlord's
Knowledge,
Tenant
has
not
subleased
any
part
of
the
Premises
and
Tenant
occupies,
and
is
in
sole
possession
of
the
Premises,
except
asfollows:____________________________.13.Tenant
has
accepted
the
Premises
and
Landlord
has
completed
all
construction,
alterations
and
improvements
required
under
the
terms
of
the
Lease
to
becompleted
by
Landlord
except
as
set
forth
below
and
has
paid
any
and
all
allowances
or
inducements
which
are
payable
by
Landlord
under
the
Leaseexcept
as
follows:___________________________________.14.Tenant
has
no
options
or
rights
of
first
offer
or
refusal
with
respect
to
purchasing
all
or
any
portion
of
the
Building
or
the
renting
of
additional
space
in
theBuilding
except
as
follows:
____________________.
Tenant
has
no
right
or
option
to
terminate
its
Lease
with
respect
to
all
or
any
portion
of
thePremises
except
as
set
forth
in
the
Lease.This
Estoppel
Certificate
is
being
provided
by
the
undersigned,
as
Landlord,
to
the
Interested
Parties.
Landlord
agrees
that
the
information
andrepresentations
contained
herein
may
be,
and
is
being,
relied
upon
by
the
Interested
Parties;
and
all
such
persons
shall
be
entitled
to
rely
on
and
to
have
the
benefitof
the
assurances
to
matters
set
forth
in
this
certification
subject
to
the
terms
and
conditions
contained
herein.
Where
no
information
has
been
inserted
on
any
blankhereof,
the
blank
shall
be
deemed
to
read
“NONE”.“Landlord’s
Knowledge”
means
the
actual
knowledge
of
Bradley
Safchik,
without
imposing
any
duty
of
investigation
or
personal
liability
on
suchindividual,
and
shall
not
include
any
imputed,
implied
or
constructive
knowledge
of
such
individual.Notwithstanding
anything
to
the
contrary
provided
herein,
the
liability
of
Landlord
hereunder
shall
terminate
on
the
first
to
occur
of
(i)
two
hundredseventy
days
(270)
after
the
acquisition
of
the
property
by
Purchaser
except
to
the
extent,
and
only
to
the
extent,
if
any,
that
Purchaser
shall
have
given
Sellerwritten
notice
during
such
270-day
period
which
describes
in
reasonable
detail
the
breach
or
alleged
breach
of
such
representations
and
warranties
by
Seller
or
(ii)delivery
of
a
tenant
estoppel
executed
by
the
Tenant
that
is
consistent
with
the
matters
set
forth
herein.



Very
truly
yours,REXFORD
PARK
INVESTORS,
LLCBy:



_____________________________Name:Title:2EXHIBIT "G"SPECIAL WARRANTY DEEDExcise
Tax:
__________________________________________________________________________________________Tax
Parcel
ID
No.
________________________________
Verified
by
_____________________________________
Countyon
the
____
day
of___________________,
20____
By:
______________________________________________________



Mail/Box
to:
_________________________________________________________________________________________



This
instrument
was
prepared
by:
_________________________________________________________________________



Brief
description
for
the
Index:
___________________________________________________________________________



THIS
DEED,
made
this
the
_____
day
of_________________________,
20_____,
by
and
betweenGRANTOR:_________________________________________________________________________________________



whose
mailing
address
is
________________________________________________________________
and_________________________________________________________________________________________



whose
mailing
address
is
_____________________________________________________________________



(herein
referred
to
collectively
as
“
Grantor ”)
andGRANTEE:_________________________________________________________________________________________



whose
mailing
address
is
_________________________________________________________________
and_________________________________________________________________________________________



whose
mailing
address
is
_____________________________________________________________________



(herein
referred
to
collectively
as
“
Grantee ”)
and[Include mailing address for each Grantor and Grantee; marital status of each individual Grantor and Grantee; and type of entity, e.g., corporation, limitedliability company, for each non-individual Grantor and Grantee.]W
I
T
N
E
S
S
E
T
H:For
valuable
consideration
from
Grantee
to
Grantor,
the
receipt
and
sufficiency
of
which
is
hereby
acknowledged,
Grantor
hereby
gives,
grants,
bargains,
sells
andconveys
unto
Grantee
in
fee
simple,
subject
to
the
Permitted
Exceptions
hereinafter
provided,
if
any,
the
following
described
property
located
in
the
City
ofCharlotte,
County
of
Mecklenburg,
State
of
North
Carolina,
more
particularly
described
as
follows:See
Exhibit A attached
hereto
and
made
a
part
hereofSaid
property
having
been
previously
conveyed
to
Grantor
by
instrument(s)
recorded
in
Book
_____,
Page
_____,
and
being
reflected
on
plat(s)
recorded
inMap/Plat
Book
_____,
page/slide
_____.All
or
a
portion
of
the
property
herein
conveyed
___
includes
or
___

does
not
include
the
primary
residence
of
a
Grantor.TO
HAVE
AND
TO
HOLD
unto
Grantee,
together
with
all
privileges
and
appurtenances
thereunto
belonging,
in
fee
simple,
subject
to
the
Permitted
Exceptionshereinafter
and
hereinabove
provided,
if
any.And
Grantor
hereby
warrants
that,
except
for
the
Permitted
Exceptions,
(a)
Grantor
has
done
nothing
to
impair
the
title
as
received
by
Grantor
and
(b)
Grantor
willforever
warrant
and
defend
the
title
against
the
lawful
claims
of
all
persons
claiming
by,
through
or
under
Grantor.1This
conveyance
is
made
subject
to
the
following
Permitted
Exceptions:See
Exhibit B attached
hereto
and
made
a
part
hereofAll
references
to
Grantor
and
Grantee
as
used
herein
shall
include
the
parties
as
well
as
their
heirs,
successors
and
assigns,
and
shall
include
the
singular,
plural,masculine,
feminine
or
neuter
as
required
by
context.IN
WITNESS
WHEREOF,
the
Grantor
has
duly
executed
the
foregoing
as
of
the
day
and
year
first
above
written.GRANTOR:REXFORD
PARK
INVESTORS,
LLC,a
Delaware
limited
liability
companyBy:________________________________________________________



Name:
Jeffrey
A.
SafchikTitle:
President



State
of
____________________County
of
__________________I
certify
that
the
following
person(s)
personally
appeared
before
me
this
day,
each
acknowledging
to
methat
he
or
she
signed
the
foregoing
document
as
the
________________
of
Rexford
Park
Investors,
LLC,
aDelaware
limited
liability
company,
on
behalf
of
that
company:__________________________________________________________________Such
individual(s)
are
personally
known
to
me
or
produced
____________
as
identification.Date:
_______________
__________________________________________















































_______________________________Notary
Public















































Notary’s
Printed
or
Typed
NameMy
Commission
Expires:____________________(Official/Notarial
Seal)2EXHIBIT
ATO
SPECIAL
WARRANTY
DEEDTOGETHER
WITH
THE
REAL
PROPERTY
DESCRIBED
ON
THE
FOLLOWING
PAGE:34EXHIBIT
BTO
SPECIAL
WARRANTY
DEED5EXHIBIT "H"ASSIGNMENT
AND
ASSUMPTION
OFLEASES,
GUARANTIES
AND
LEASE
COMMISSION
AGREEMENTSTHIS
ASSIGNMENT
is
made
and
entered
into
as
of
this
____
day
of
____________________,
2016,
by
and
between
REXFORD
PARKINVESTORS,
LLC,
a
Delaware
limited
liability
company
(hereinafter
referred
to
as
"Assignor")
and
LENDINGTREE,
LLC,
a
Delaware
limited
liability
company(hereinafter
referred
to
as
"Assignee").W
I
T
N
E
S
S
E
T
H
:WHEREAS,
contemporaneously
with
the
execution
and
delivery
of
this
Assignment,
Assignor
has
sold
and
conveyed
to
Assignee
all
those
tractsor
parcels
of
land
more
particularly
described
in
Exhibit
A
attached
hereto
and
incorporated
herein
by
reference,
together
with
all
improvements
thereon
and
allrights,
easements
and
appurtenances
thereto
(hereinafter
collectively
referred
to
as
the
"Property");WHEREAS,
in
connection
with
such
conveyance
of
the
Property,
Assignor
and
Assignee
have
agreed
that
Assignor
shall
transfer
and
assign
toAssignee
all
right,
title
and
interest
of
Assignor
in
and
to
all
leases,
subleases
and
other
occupancy
agreements
(hereinafter
collectively
referred
to
as
the
"Leases")in
force
and
effect
at
the
date
hereof,
whether
or
not
of
record,
for
the
use
or
occupancy
of
any
portion
of
the
Property,
as
described
in
Exhibit
B
attached
heretoand
incorporated
herein
by
reference,
all
guaranties
(hereinafter
collectively
referred
to
as
the
"Guaranties")
of
the
obligations
of
the
tenants
under
the
Leases
asdescribed
in
Exhibit
C
attached
hereto,
all
security
deposits
(hereinafter
collectively
referred
to
as
the
"Security
Deposits")
and
prepaid
rents
and
other
sums
(the"Prepaid
Sums")
as
described
in
Exhibit
D
attached
hereto,
the
receipt
of
which
is
hereby
acknowledged
by
Assignee,
and
all
lease
commission
agreements(hereinafter
collectively
referred
to
as
the
"Lease
Commission
Agreements")
as
described
in
Exhibit
E
attached
hereto;WHEREAS,
Assignor
and
Assignee
have
further
agreed
that
Assignee
shall
expressly
assume
all
of
the
obligations
of
Assignor
arising
undereach
of
the
Leases
and
Lease
Commission
Agreements
from
and
after
(but
not
before)
the
date
of
this
Assignment,
including,
without
limitation,
all
obligationsunder
the
Leases
with
respect
to
Security
Deposits;NOW,
THEREFORE,
for
and
in
consideration
of
Ten
Dollars
($10.00),
the
mutual
covenants
contained
herein
and
other
good
and
valuableconsideration,
the
receipt
and
sufficiency
of
which
are
hereby
acknowledged
by
each
party
hereto,
Assignor
and
Assignee
hereby
agree
as
follows:1.




Transfer
and
Assignment
.
Assignor
hereby
sells,
transfers,
assigns,
delivers
and
conveys
to
Assignee,
its
successors
and
assigns,
subject
tothe
permitted
title
exceptions
set
forth
in
Exhibit
F
attached
hereto
and
made
a
part
hereof,
all
right,
title
and
interest
of
Assignor
in,
to
and
under
the
Leases,
theGuaranties,
the
Security
Deposits
and
the
Lease
Commission
Agreements.2.




Assumption
of
Obligations
.
Assignee
hereby
assumes
and
agrees
to
observe
and
perform
all
of
the
obligations
and
duties
of
Assignor
undereach
of
the
Leases
and
the
Lease
Commission
Agreements
(excluding
any
obligations
under
the
Lease
Commission
Agreements
for
commissions
in
connectionwith
the
primary
terms
of
the
Leases)
for
that
period
of
time
from
and
after,
but
not
before,
the
date
of
this
Assignment,
including
without
limitation,
all
covenantsand
obligations
of
Assignor
with
respect
to
the
Security
Deposits
and
Prepaid
Sums.3.




Governing
Law
.
This
instrument
shall
be
governed
by
and
construed
in
accordance
with
the
internal
laws
of
the
State
of
North
Carolina,without
reference
to
the
conflicts
of
laws
or
choice
of
law
provisions
thereof.4.




Binding
Effect
.
This
instrument
shall
be
binding
upon
and
shall
inure
to
the
benefit
of
the
parties
hereto
and
their
respective
heirs,executors,
administrators,
legal
representatives,
successors
and
assigns.(Signatures
on
following
page)1IN
WITNESS
WHEREOF,
each
of
Assignor
and
Assignee
has
caused
this
Assignment
to
be
executed
under
seal
by
its
duly
authorized
signatoryas
of
the
day
and
year
first
above
written.ASSIGNOR:REXFORD
PARK
INVESTORS,
LLC,
a
Delaware
limited
liability
companyBy:
__________________________________________________________







Name:
Jeffrey
A.
SafchikTitle:
PresidentASSIGNEE:LENDINGTREE,
LLC,
a
Delaware
limited
liability
companyBy:__________________________________________________________Name:
____________________________________________________



Title:
_____________________________________________________



2EXHIBIT
A
TO
ASSIGNMENT
AND
ASSUMPTION
OF
LEASES
AND
GUARANTIESTOGETHER
WITH
THE
REAL
PROPERTY
DESCRIBED
ON
THE
FOLLOWING
PAGE:34EXHIBIT
B
TO
ASSIGNMENT
AND
ASSUMPTION
OF
LEASES
AND
GUARANTIES[LEASES]5EXHIBIT
C
TO
ASSIGNMENT
AND
ASSUMPTION
OF
LEASES
AND
GUARANTIES[GUARANTIES]6EXHIBIT
D
TO
ASSIGNMENT
AND
ASSUMPTION
OF
LEASES
AND
GUARANTIES[SECURITY
DEPOSITS]7EXHIBIT
E
TO
ASSIGNMENT
AND
ASSUMPTION
OF
LEASES
AND
GUARANTIES[LEASE
COMMISSION
AGREEMENTS]8EXHIBIT "I"BILL
OF
SALE
AND
GENERAL
ASSIGNMENTTHIS
BILL
OF
SALE
AND
GENERAL
ASSIGNMENT
(this
"Assignment")
is
made
as
of
the
___
day
of
____________________,
2016,
by
REXFORDPARK
INVESTORS,
LLC,
a
Delaware
limited
liability
company
(hereinafter
referred
to
as
"Assignor"),
to
LENDINGTREE,
llc,
a
Delaware
limited
liabilitycompany
(hereinafter
referred
to
as
"Assignee").W
I
T
N
E
S
S
E
T
H:WHEREAS,
contemporaneously
with
the
execution
and
delivery
of
this
Assignment,
Assignor
has
sold,
conveyed
and
assigned
to
Assignee
all
of
itsright,
title
and
interest
in
and
to
the
real
property
described
in
Exhibit
A
attached
hereto
and
by
this
reference
made
a
part
hereof,
together
with
all
improvementsthereon
(the
"Improvements")
and
all
rights,
easements
and
appurtenances
thereto
(hereinafter
collectively
referred
to
as
the
"Property");
andWHEREAS,
Assignor
has
agreed
to
convey
to
Assignee
assign
to
Assignee
all
of
Assignor's
right,
title
and
interest
in
and
to
all
assignable
guaranties
andwarranties
in
connection
with
the
Improvements
and
to
certain
property,
contract
rights
and
other
matters
more
fully
described
below
subject
to
the
terms
andconditions
hereinafter
set
forth.NOW,
THEREFORE,
for
and
in
consideration
of
the
sum
of
Ten
and
No/100
Dollars
($10.00)
and
other
good
and
valuable
consideration,
in
hand
paid,the
receipt
and
sufficiency
of
which
are
hereby
acknowledged,
Assignor,
subject
to
the
terms
hereof,
hereby
conveys,
assigns,
transfers,
and
sells
to
Assignee,without
recourse,
the
following:(1)



All
tangible
personal
property
owned
and
used
by
Seller
in
connection
with
the
ownership
or
operation
of
the
Improvements;(2)



All
right,
title
and
interest
of
Assignor
in,
to
and
under
the
contracts
identified
on
Exhibit
B
attached
hereto
(collectively,
the
"Contracts");(3)



All
Assignor's
right,
title,
and
interest
in
and
to
all
transferable
architectural,
mechanical,
engineering,
and
other
plans
and
specifications,including
site
plans,
floor
plans,
drawings,
schematics,
and
surveys,
relating
to
the
Property;(4)



All
Assignor's
right,
title
and
interest
in
and
to
all
transferable
certificates,
permissions,
consents,
authorizations,
variances,
waivers,licenses,
approvals,
and
other
permits
from
any
governmental
authority
in
respect
of
the
Property
and
held
by
Seller;
and(5)



All
the
right,
title,
interest,
claim
and
demand
which
Assignor
has
in
the
guaranties
and
warranties
described
on
Exhibit
B
attached
heretoand
incorporated
herein
by
this
reference
(collectively,
the
"Warranties")
in
connection
with
the
Improvements
to
the
extent
assignable.
Notwithstanding
anythingto
the
contrary
contained
herein,
if
any
Warranty
cannot
be
assigned
by
Assignor,
Assignor
agrees
to
fully
cooperate
with
Assignee
(at
no
cost
to
Assignor)
toenforce
the
terms
of
the
Warranty
on
behalf
of
Assignee
if
Assignor
is
so
allowed
to
enforce
such
Warranty.Notwithstanding
anything
to
the
contrary
contained
herein,
this
Assignment
(a)
shall
not
apply
to
any
portion
of
the
Warranties
or
other
rights
orinstruments
described
herein
which
apply
to
Improvements
not
located
on
the
Property
and
(b)
shall
be
subject
and
subordinate
to
Assignor's
assignment,
if
any,
ofany
Warranties
or
other
rights
or
instruments
described
herein
to
any
tenants
of
the
Property
under
leases
with
Assignor
as
of
the
date
hereof.All
tangible
personal
property
is
conveyed,
assigned,
transferred
and
sold
in
its
"AS
IS",
"WHERE
IS"
condition.
Assignor
hereby
disclaims
any
and
allwarranties
in
connection
with
the
tangible
personal
property
transferred
hereby,
including
without
limitation,
any
warranty
of
fitness
for
a
particular
purpose.Assignee
hereby
assumes
and
agrees
to
observe
and
perform
all
of
the
obligations
and
duties
of
Assignor
under
each
of
the
Contracts
for
that
period
oftime
from
and
after,
but
not
before,
the
date
of
this
Assignment.(Signature
on
following
page)



1IN
WITNESS
WHEREOF,
Assignor
has
duly
executed
this
Assignment
the
day
and
year
first
above
written.ASSIGNOR:REXFORD
PARK
INVESTORS,
LLC,
a
Delaware
limited
liability
companyBy:
__________________________________________________________



























Name:
Jeffrey
A.
SafchikTitle:
President



2EXHIBIT
A
TO
ASSIGNMENT
OF
GUARANTIES
AND
WARRANTIESTOGETHER
WITH
THE
REAL
PROPERTY
DESCRIBED
ON
THE
FOLLOWING
PAGE:34EXHIBIT
B
TO
GENERAL
ASSIGNMENTGUARANTIES
AND
WARRANTIES5EXHIBIT "J"CERTIFICATE OF NON-FOREIGN STATUSSection
1445
of
the
Internal
Revenue
Code
provides
that
a
transferee
of
a
U.S.
real
property
interest
must
withhold
tax
if
the
transferor
is
a
foreign
person.
For
U.S.tax
purposes
(including
section
1445),
the
owner
of
a
disregarded
entity
(which
has
legal
title
to
a
U.S.
real
property
interest
under
local
law)
will
be
the
transferorof
the
property
and
not
the
disregarded
entity.
To
inform
the
transferee
that
withholding
of
tax
is
not
required
upon
the
disposition
of
a
U.S.
real
property
interestby
the
transferor,
the
undersigned
hereby
certifies
the
following
on
behalf
of
the
transferor:1.



The
undersigned,
MG
Real
Estate
Partners
L.P.
("MG")
is
a
company
formed
and
existing
under
the
laws
of
the
State
of
Delaware,
is
not
a
foreigncorporation,
foreign
partnership,
foreign
trust,
or
foreign
estate
(as
those
terms
are
defined
in
the
Internal
Revenue
Code
and
Income
Tax
Regulations);2.



MG
is
not
a
disregarded
entity
as
defined
in
§1.1445-2(b)(2)(iii);3.



MG's
U.S.
employer
identification
number
is
_________________;
and4.



MG's
office
address
is
2601
S.
Bayshore
Drive,
Suite
900,
Miami,
FL
33133.The
undersigned
understands
that
this
certification
may
be
disclosed
to
the
Internal
Revenue
Service
by
transferee
and
that
any
false
statement
contained
hereincould
be
punished
by
fine,
imprisonment,
or
both.Under
penalties
of
perjury
I
declare
that
I
have
examined
this
certification
and
to
the
best
of
my
knowledge
and
belief
it
is
true,
correct,
and
complete,
and
I
furtherdeclare
that
I
have
authority
to
sign
this
document
on
behalf
of
MG.
MG REAL ESTATE PARTNERS L.P. ,a
Delaware
limited
partnershipBy:GREENSTREET
MANAGEMENT,
INC.,a
Delaware
corporation,
its
General
PartnerBy:________________________________Name:Title:*The
grantor
in
the
deed
is
Rexford
Park
Investors,
LLC,
which
is
a
disregarded
entity.
The
ultimate
owner
of
the
beneficial
interests
of
Rexford
ParkInvestors,
LLC
is
MG
Real
Estate
Partners
L.P.1EXHIBIT "K"NOTIFICATION LETTER[date
of
closing]Re:



Lease
relating
to
space
located
in
the
Rexford
Park
I
&
II,Charlotte,
North
CarolinaLadies
and
Gentlemen:Please
be
advised
that
effective
_____________________,
Rexford
Park
Investors,
LLC
("Transferor")
has
transferred
the
above-referenced
property
toLendingTree,
LLC
("Transferee").All
future
rental
payments
should
be
sent
to
the
following
address:The
contact
information
for
the
Purchaser
is
set
forth
below:Transferor:REXFORD
PARK
INVESTORS,
LLC,
a
Delaware
limited
liabilitycompanyBy:
________________________________Name:
Jeffrey
A.
SafchikTitle:
PresidentTransferee:LENDINGTREE,
LLC,
a
Delaware
limited
liability
companyBy:__________________________________Name:Title:1EXHIBIT "L"SELLER'S AFFIDAVITBEFORE
ME,
the
undersigned
authority
personally
appeared
Jeffrey
A.
Safchik
("Affiant"),
as
the
President
of
Rexford
Park
Investors,
LLC
("Seller"),who,
after
being
first
duly
sworn,
on
oath,
deposes
and
says
that
to
the
best
of
his
knowledge:1.



Affiant
is
the
President
of
Seller
and
is
fully
authorized
to
execute
all
documents
on
behalf
of
Seller
in
connection
with
the
sale
of
the
real
propertydescribed
on
Exhibit
A
attached
hereto
(the
"Property")
to
LendingTree,
LLC
("Purchaser").2.



There
have
been
no
construction,
repairs,
alterations
or
improvements
made,
ordered
or
contracted
to
be
made
on
or
to
the
Property,
nor
materialsordered
therefor,
by
Seller
within
the
last
one
hundred
twenty
(120)
days
which
have
not
been
paid
for,
and
there
are
no
outstanding
or
disputed
claims
for
anysuch
work
or
item,
except
as
follows:
___________________________________________.3.



Seller
has
not
and
will
not,
for
the
period
commencing
on
_______________
[insert
latest
commitment
date]
through
the
recording
of
the
deedexecuted
by
Seller
to
Purchaser
(such
period
is
called
the
"Gap
Period"),
encumber,
cause
any
defect
to
appear
in
the
title
to
the
Property,
or
convey
all
or
any
partof
the
Property
except
for
the
documents
executed
in
connection
with
the
sale
to
Purchaser.
Seller
agrees
to
hold
harmless
and
indemnify________________________
("Title
Company")
against
all
reasonable
costs,
expenses
and
attorneys'
fees
suffered
or
incurred
by
Title
Company
as
a
result
of
thefailure
of
Seller,
upon
receipt
of
written
notice
from
any
of
the
Title
Company,
to
promptly
remove,
bond
or
otherwise
dispose
of
any
such
encumbrance,
defect
orconveyance
that
may
arise
or
be
filed
against
the
Property
during
the
Gap
Period
as
a
result
of
any
breach
by
the
Seller
of
the
foregoing
agreement.4.



Seller
is
in
possession
of
the
Property
on
the
date
hereof
subject
only
to
the
rights
of
the
tenants
identified
on
Exhibit
B
attached
hereto
and
theirrespective
sublessees,
successors
and
assigns.5.



No
mortgages,
easements,
or
restrictions
have
been
executed
by
the
Seller
that
remain
unrecorded
except
as
follows,
and
copies
of
such
unrecordeddocuments
are
attached
hereto:
_________________________________________________.6.



No
bankruptcy
proceedings
have
been
filed
by
or
against
the
Seller.7.



There
are
no
pending
actions
or
proceedings
relating
to
the
Grantor
in
any
state
or
federal
court
in
the
United
States.
There
are
no
outstanding
state
orfederal
judgments
against
the
Grantor
or
the
Property.This
Affidavit
for
the
purpose
of
inducing
the
Title
Company
to
issue
owner
and
loan
title
insurance
policies
and/or
endorsements
in
connection
with
theconveyance
of
the
Property
by
Seller
to
Purchaser
in
connection
with
the
Property.
Seller
agrees
to
indemnify
and
hold
harmless
the
Title
Company
againstliability
resulting
from
its
reliance
upon
the
statements
made
herein
if
any
of
the
foregoing
statements
is
untrue
and
the
Seller
does
not
cure
the
same
within
ten(10)
days
after
written
notice.
The
individual
executing
this
Affidavit
may
be
subject
to
criminal
liability
for
perjury
if
any
statement
contained
herein
is
knowinglyfalse,
but
such
individual
shall
not
be
subject
to
any
monetary
or
other
civil
liability
to
Title
Company
under
or
in
connection
with
this
Seller's
Affidavit.1IN
WITNESS
WHEREOF,
the
foregoing
Affidavit
was
executed
by
the
undersigned
as
of
the
____
day
of
________________,
2016.REXFORD
PARK
INVESTORS,
LLC,
a
Delaware
limited
liability
companyBy:
_______________________________________________



























Name:
Jeffrey
A.
SafchikTitle:
PresidentSTATE
OF
FLORIDA











))
SS:COUNTY
OF
MIAMI-DADE







)The
foregoing
instrument
was
sworn
to,
subscribed
and
acknowledged
before
me
this
_____
day
of
_____________,
2016,
by
Jeffrey
A.
Safchik,
thePresident
of
Rexford
Park
Investors,
LLC,
on
behalf
of
that
limited
liability
company.
He
is
personally
known
to
me
or
has
produced
_______________________as
identification.
________________________________________Print
or
Stamp
Name:
______________________Notary
Public,
State
of
FloridaCommission
No.:My
Commission
Expires:2EXHIBIT APROPERTY DESCRIPTIONTOGETHER
WITH
THE
REAL
PROPERTY
DESCRIBED
ON
THE
FOLLOWING
PAGE:EXHIBIT BTENANTSEXHIBIT "M"RENT ROLL[see
attached]1234567EXHIBIT "N"SECURITY DEPOSITS[see
attached]12345EXHIBIT 10.32FIRST AMENDMENTTOPURCHASE AND SALE CONTRACTTHIS AMENDMENT TO PURCHASE AND SALE CONTRACT (this
“
Amendment
”)
is
made
and
entered
into
as
of
this
28
th
day
of
November,2016,
by
and
between
REXFORD PARK INVESTORS, LLC ,
a
Delaware
limited
liability
company
(“
Seller
”),
and
LENDINGTREE, LLC ,
a
Delawarelimited
liability
company
(
“
Purchaser
”).BACKGROUND :A.



Seller
and
Purchaser
are
parties
to
that
certain
Purchase
and
Sale
Contract
dated
October
17,
2016
(the
“
Contract
”),
whereby
Seller
has
agreed
tosell
to
Purchaser,
and
Purchaser
has
agreed
to
purchase
from
Seller,
subject
to
the
terms
therein,
certain
real
property
located
at
2100
and
2115
Rexford
Road
inCharlotte,
Mecklenburg
County,
North
Carolina,
as
more
particularly
described
in
the
Contract.B.



Pursuant
to
Section
5.3
of
the
Contract,
the
Due
Diligence
Period
(as
defined
in
the
Contract)
currently
expires
today,
November
28,
2016.C.



Purchaser
has
requested,
and
Seller
has
agreed,
to
extend
the
Due
Diligence
Period
until
5:00
p.m.
(EST)
on
November
30,
2016.D.



The
parties
desire
to
enter
into
this
Amendment
in
order
to
memorialize
the
foregoing.AGREEMENT :NOW THEREFORE ,
for
good
and
valuable
consideration,
the
receipt
and
sufficiency
of
which
are
hereby
acknowledged,
the
parties
hereto
do
herebyagree
as
follows:1.




Defined Terms .
All
defined
terms
used
herein,
as
indicated
by
the
initial
capitalization
thereof,
shall,
unless
otherwise
expressly
defined
herein,have
the
same
meaning
herein
as
is
ascribed
thereto
in
the
Contract.2.




Due Diligence Period .
Seller
and
Purchaser
hereby
amend
the
Contract
to
provide
that
the
Termination
Date
shall
be
November
30,
2016,
and
thatthe
Due
Diligence
Period
shall
expire
at
5:00
p.m.
(EST)
on
November
30,
2016.3.




Final Agreement; Ratification .
This
Amendment
and
the
Contract
represent
the
final
agreement
between
Seller
and
Purchaser
regarding
thesubject
matter
hereof
and
may
not
be
contradicted
by
evidence
of
prior,
subsequent
or
contemporaneous
oral
agreements
of
the
parties.
No
amendment
ormodification
hereto
shall
be
valid
and
binding
unless
expressed
in
writing
and
executed
by
both
parties
hereto.
In
the
event
of
a
conflict
between
the
terms
of
theContract
and
this
Amendment,
this
Amendment
shall
control
and
prevail.4.




Counterparts .
This
Amendment
may
be
executed
in
any
number
of
counterparts,
each
of
which
shall
be
deemed
to
be
an
original
and
all
of
whichtogether
shall
comprise
one
and
the
same
instrument.
Purchaser
and
Seller
agree
to
accept
a
digital
image
of
this
Amendment
as
true
and
correct
original
andadmissible
as
best
evidence
for
the
purposes
of
State
law,
Federal
Rule
of
Evidence
1002,
and
the
like
statutes
and
regulations.[signature page follows]IN WITNESS WHEREOF ,
the
parties
hereto
have
caused
this
Amendment
to
be
duly
executed
as
of
the
day
and
year
first
above
written.SELLER:REXFORD PARK INVESTORS, LLC ,a
Delaware
limited
liability
companyBy:
/s/
Jeffrey
A.
Safchik
























Name:



Jeffrey
A.
SafchikTitle:



PresidentPURCHASER:LENDINGTREE, LLC ,a
Delaware
limited
liability
companyBy:
/s/Gabriel
Dalporto
























Name:
Gabriel
Dalporto























Title:
Chief
Financial
Officer























Exhibit 10.35November
28,
2016Neil
Salvage11115
Rushmore
Dr.Charlotte,
NC
28277Dear
Neil,It
is
with
great
pleasure
that
I
offer
you
a
promotion
to
the
position
of
President,
LendingTree,
Inc.
(“LTI”).
I
am
very
excited
about
having
you
in
this
role.
Youremployer
will
continue
to
be
LendingTree,
LLC
(“LTL”
which
is
a
wholly-owned
subsidiary
of
LTI).
References
to
“Company”
in
this
letter
agreement
shall
beinterpreted
to
refer
to
LTI
and/or
LTL
as
applicable.As
President,
you
will
continue
to
report
directly
to
me,
and
you
will
continue
to
be
based
in
the
Company’s
headquarters
location
in
Charlotte,
North
Carolina.
Asyou
are
a
Section
16
Officer
of
the
Company,
this
position
change,
related
compensation
and
all
related
terms
of
employment
require
approval
by
the
Board
ofDirectors
of
the
Company
(the
“Board”
and
such
approval
(which
would
include
any
required
approvals
by
the
Board’s
Compensation
Committee)
is
the
“BoardApproval”).
It
is
our
plan
to
seek
that
approval
within
a
week
or
so
and
to
make
your
new
position
effective
at
the
time
of
such
Board
Approval.Upon
Board
Approval,
this
letter
agreement
will
provide
the
terms
and
conditions
for
your
employment
with
the
Company
through
January
1,
2019
(or
your
earliertermination
of
employment).Highlights
of
your
terms
of
employment
are
outlined
below,
each
of
which
would
become
operative
upon
Board
Approval:Base Pay: You
will
receive
an
annual
base
salary
of
$410,000.00
($15,769.23
bi-weekly),
which
can
be
modified
solely
in
the
discretion
of
the
Board’sCompensation
Committee.
You
will
be
paid
on
a
bi-weekly
basis.Bonus: You
are
eligible
to
receive
a
target
incentive
bonus
in
an
amount
up
to
100%
of
your
base
salary
based
on
performance
criteria
approved
by
the
Board’sCompensation
Committee,
beginning
with
the
fiscal
year
that
begins
on
January
1,
2017.
Payouts
can
be
greater
than
or
less
than
target
and
are
a
function
ofindividual
and
Company
performance
as
well
as
management
discretion
and
may
not
be
awarded
in
each
payment
period.
You
must
be
actively
employed
by
theCompany
on
the
date
bonuses
are
paid
in
order
to
receive
any
payment
for
which
you
are
eligible.
All
applicable
withholdings
and
deductions
will
be
made
fromsalary
and
bonuses
(and
other
compensation),
such
as
401(k)
contributions
(if
any),
Federal
and
State
taxes,
etc.Equity: 
Your
outstanding
equity
compensation
awards
shall
continue
to
be
governed
by
their
applicable
terms
and
conditions
except
as
modified
in
this
letteragreement.
In
connection
with
requesting
the
Board
Approval,
we
will
also
request
approval
for
a
promotional
equity
compensation
grant,
the
amount
of
which
wewill
determine
within
the
next
several
days.
In
addition,
you
will
be
considered
for
an
equity
compensation
grant
in
February
2018.
Benefits: 
You
will
be
eligible
to
participate
in
employee
benefits
that
are
available
to
similarly
situated
employees
of
the
Company.
The
Company
reserves
theright
to
modify
its
compensation
and
benefits
programs
at
any
time
(including
paid
time
off
and
retirement
benefits),
but
you
will
in
any
case
remain
eligible
toparticipate
in
those
benefits
that
are
available
to
similarly
situated
employees
of
the
Company.
In
the
event
of
a
conflict
between
a
statement
made
in
this
letteragreement
and
the
terms
and
conditions
of
the
Company’s
applicable
policies
and/or
benefits
plans,
the
actual
text
of
the
policy
or
plan
will
govern.Paid Time Off: You
will
continue
to
be
eligible
to
take
reasonable
amounts
of
time
off
with
pay
in
accordance
with
Company
policies
and
procedures.
Retirement:  You
will
remain
eligible
to
participate
in
the
Company's
Retirement
Savings
Plan
(a
401(k)
plan).
Severance: Your
employment
may
be
terminated
by
you
or
by
the
Company
at
any
time.
If
your
employment
is
terminated
by
the
Company
without
Cause
(asdefined
below)
or
if
you
resign
your
employment
for
Good
Reason
(as
defined
below),
you
will
be
eligible
to
receive
the
following
severance
benefits:(a)
an
aggregate
cash
amount
equal
to
your
then-annual
base
salary
(the
“Cash
Severance”);
and(b)
the
ability
to
exercise
your
then-vested
Company
stock
options
until
the
earlier
of
(1)
the
second
anniversary
of
your
termination
of
employment
or
(2)the
applicable
time
of
expiration
of
each
stock
option
as
specified
in
the
stock
option
agreement
or
underlying
equity
compensation
plan
(the
extension
ofexercisability
of
your
stock
options
together
with
the
Cash
Severance
are
the
“Severance
Benefits”).As
a
condition
to
receiving
any
Severance
Benefits,
you
must
execute
(and
not
revoke)
a
waiver
and
general
release
of
claims
agreement
in
favor
of
the
Companywithin
forty-five
(45)
days
following
the
effective
date
of
termination
of
your
employment
or
else
your
eligibility
to
receive
the
Severance
Benefits
shallimmediately
become
null
and
void.
If
such
agreement
becomes
effective
by
its
own
terms
within
not
more
than
55
days
after
your
termination
of
employment,
thenthe
first
Cash
Severance
installment
(in
an
amount
equal
to
two
months
of
your
annual
base
salary)
will
be
paid
to
you
on
the
60th
day
after
termination
of
youremployment
and,
for
the
ten
months
thereafter,
you
will
receive
pro-rata
installments
of
the
Cash
Severance
in
accordance
with
the
Company’s
regularly
scheduledpay
dates
for
its
employees.
It
is
intended
that
any
amounts
payable
hereunder
shall
comply
with
or
be
exempt
from
Section
409A
of
the
Internal
Revenue
Code
of1986
(“Section
409A”)
(including
under
Treasury
Regulation
§§
1.409A-1(b)(4)
(“short-term
deferrals”)
and
(b)(9)
(“separation
pay
plans,”
including
theexceptions
under
subparagraph
(iii)
and
subparagraph
(v)(D))
and
other
applicable
provisions
of
Treasury
Regulation
§§
1.409A-1
through
A-6).Should
you
obtain
other
employment
or
are
otherwise
compensated
for
services
during
the
one
year
period
following
your
termination
of
employment,
theCompany’s
obligation
to
make
Cash
Severance
payments
to
you
will
be
reduced
dollar
for
dollar
by
any
such
other
compensation
you
receive.
You
agree
to
informthe
Company
in
writing
promptly
of
your
employment
status
and
any
compensation
paid
to
or
be
paid
to
you
or
on
your
behalf.“Cause”
will
include
fraud,
dishonesty,
theft,
embezzlement,
misconduct
by
you
that
is
injurious
to
the
Company
or
any
of
its
affiliates,
conviction
of,
or
entry
of
aplea
of
guilty
or
nolo contendere to,
a
crime
that
constitutes
a
felony
or
other
crime
involving
moral
turpitude,
competition
with
the
Company
or
any
of
itsaffiliates,
unauthorized
use
of
any
trade
secrets
of
the
Company
or
any
of
its
affiliates
or
Company
confidential
information,
a
violation
of
any
policy,
code
orstandard
of
ethics
generally
applicable
to
employees
of
the
Company,
your
material
breach
of
fiduciary
duties
owed
to
the
Company,
your
excessive
andunexcused
absenteeism
unrelated
to
a
disability,
or,
following
written
notice
and
a
reasonable
opportunity
to
cure,
gross
neglect
by
you
of
the
duties
assigned
toyou.
Upon
termination
of
your
employment
for
Cause:
(i)
no
further
base
salary
will
be
paid
to
you
after
the
date
of
termination
and
no
annual
bonus
will
be
paidto
you
after
the
date
of
termination,
(ii)
you
will
forfeit
any
earned
but
unpaid
annual
bonus
relating
to
a
previously
completed
performance
year,
and
(iii)
you
willnot
be
eligible
to
receive
any
annual
bonus
relating
to
the
performance
year
in
which
your
employment
terminates.“Good
Reason”
is
defined
as
the
occurrence
of
any
of
the
following
actions
taken
by
the
Company
without
your
written
consent:
(i)
a
material
adverse
change
inthe
office
to
which
you
report
as
you
assume
this
role,
excluding
any
change
that
is
an
isolated
and
inadvertent
action
not
taken
in
bad
faith
and
that
is
remedied
bythe
Company
after
you
notify
us
or
that
occurs
due
to
internal
restructuring,
realignment
or
the
resignation,
promotion,
demotion
or
a
reorganization
of
managerswithin
the
Company;
(ii)
material
reduction
in
your
annual
base
salary;
or
(iii)
relocation
of
your
principal
place
of
business
more
than
50
miles
from
the
Charlotte,North
Carolina
metropolitan
area.
In
order
to
resign
your
employment
for
Good
Reason,
you
must
notify
the
Company
in
writing
within
fifteen
(15)
days
of
theinitial
existence
of
any
event
falling
under
the
foregoing
clauses
(i)
through
(iii)
and
such
notice
shall
describe
in
detail
the
facts
and
circumstances
explaining
whyyou
believe
a
Good
Reason
event
has
occurred.
The
Company
shall
then
have
sixty
(60)
days
following
its
receipt
of
such
notice
to
cure
or
remedy
such
allegedGood
Reason
event
such
that
Good
Reason
will
not
be
deemed
to
exist
for
such
event.
If
the
event
remains
uncured
or
is
not
remedied
by
the
Company
within
suchsixty
(60)
day
period
and
if
your
employment
has
not
otherwise
been
terminated,
then
a
termination
of
your
employment
for
Good
Reason
shall
automaticallyoccur
on
the
first
business
day
following
the
end
of
such
sixty
(60)
day
cure/remedy
period.Change in Control :
You
will
receive
benefits
described
in
a
change
in
control
letter
issued
by
the
Company
to
certain
executives
of
the
Company,
as
the
samemay
be
revised
from
time
to
time
(the
“CIC
Letter”).
In
the
event
the
conditions
for
you
to
receive
severance
benefits
under
the
CIC
Letter
occur
(disregarding
thecontingencies
relating
to
a
general
release
of
claims
in
favor
of
the
Company
and
restrictive
covenants
to
be
included
therein),
you
will
be
entitled
to
receive
theseverance
benefits
described
in
the
CIC
Letter
(subject
to
the
contingencies
stated
therein),
and
the
preceding
section
of
this
letter
agreement
describing
severancebenefits
will
not
apply.
The
prohibitions
on
Competing
Activity
(as
defined
below)
and
solicitations
of
customers
and
employees
discussed
below
will
continue
toapply
notwithstanding
any
lesser
restrictions
set
forth
in
the
CIC
Letter.Section 409A :
For
purposes
of
Section
409A,
each
of
the
payments
that
may
be
made
under
this
letter
agreement
shall
be
deemed
to
be
a
separate
payment.
Youand
the
Company
agree
to
negotiate
in
good
faith
to
make
amendments
to
this
letter,
as
the
parties
mutually
agree
are
necessary
or
desirable
to
avoid
the
impositionof
taxes,
penalties
or
interest
under
Section
409A.
Neither
you
nor
the
Company
shall
have
the
right
to
accelerate
or
defer
the
delivery
of
any
such
payments
orbenefits
except
(i)
where
payment
may
be
made
within
a
certain
period
of
time,
the
timing
of
payment
within
such
period
will
be
in
the
sole
discretion
of
theCompany,
and
(ii)
to
the
extent
specifically
permitted
or
required
by
Section
409A.
To
the
extent
any
nonqualified
deferred
compensation
payment
to
you
could
bepaid
in
one
or
more
of
your
taxable
years
depending
upon
you
completing
certain
employment-related
actions,
then
any
such
payments
will
commence
or
occur
inthe
later
taxable
year
to
the
extent
required
by
Section
409A.
With
respect
to
the
time
of
payments
of
any
amounts
under
the
letter
that
are
“deferredcompensation”
subject
to
Section
409A,
references
in
this
letter
to
“termination
of
employment”
(and
substantially
similar
phrases)
shall
mean
“separation
fromservice”
within
the
meaning
of
Section
409A.
Notwithstanding
anything
in
this
letter
to
the
contrary,
if
you
are
considered
a
“specified
employee”
under
Section409A
upon
your
separation
from
service
and
if
payment
of
any
amounts
on
account
of
your
separation
from
service
under
this
letter
is
required
to
be
delayed
for
aperiod
of
six
months
after
separation
from
service
in
order
to
avoid
taxation
under
Section
409A,
payment
of
such
amounts
shall
be
delayed
as
required
by
Section409A,
and
the
accumulated
amounts
shall
be
paid
in
a
lump
sum
payment,
without
interest,
within
five
business
days
after
the
end
of
the
six-month
delay
period.
Ifyou
die
during
the
six
month
delay
period
prior
to
the
payment
of
benefits,
the
amounts
withheld
on
account
of
Section
409A
shall
be
paid
to
the
personalrepresentative
of
your
estate
within
60
days
after
the
date
of
your
death.
While
it
is
intended
that
all
payments
and
benefits
provided
to
you
under
this
letter
orotherwise
will
be
exempt
from
or
comply
with
Section
409A,
the
Company
makes
no
representation
or
covenant
to
ensure
that
such
payments
and
benefits
areexempt
from
or
compliant
with
Section
409A.
The
Company
will
have
no
liability
to
you
or
any
other
party
if
a
payment
or
benefit
under
this
letter
or
otherwise
ischallenged
by
any
taxing
authority
or
is
ultimately
determined
not
to
be
so
exempt
or
compliant.
You
further
understand
and
agree
that
you
will
be
entirelyresponsible
for
any
and
all
taxes
imposed
on
you
as
a
result
of
this
letter.The
Company
is
an
at-will
employer,
and
subject
to
the
terms
of
this
letter
agreement,
it
reserves
the
right
to
change
the
terms
and
conditions
of
employment,including
but
not
limited
to
termination,
demotion,
promotion,
transfer,
compensation,
benefits,
duties
and
location
of
work.
All
employment
with
the
Company
isat-will
and
either
you
or
the
Company
may
conclude
the
employment
relationship
at
any
time,
with
or
without
cause
or
advance
notice
(except
as
otherwiseprovided
in
this
letter
agreement).This
“at-will”
paragraph
contains
the
entire
agreement
between
you
and
the
Company
regarding
the
right
and
ability
of
either
you
or
the
Company
to
terminateyour
employment.
This
“at-will”
employment
relationship
can
only
be
modified
in
a
written
agreement
which
has
been
executed
by
the
Company’s
ChiefExecutive
Officer.By
signing
this
letter
agreement,
you
agree
and
acknowledge
that
you
will
not,
while
employed
by
the
Company
and
for
two
years
thereafter:a.Engage
in
any
Competitive
Activity
(as
defined
below)
within
the
Prohibited
Territory
(as
defined
below);
or
assist
anyone
else
in
engaging
inCompetitive
Activity
within
the
Prohibited
Territory.i.“Competitive
Activity”
means
competing
against
the
Company
by
performing
the
same
or
substantially
similar
work
as
you
performed
onbehalf
of
the
Company
at
any
time
during
the
last
twelve
(12)
months
of
employment
with
the
Company
in
a
Prohibited
Territory
for
anentity
engaged
in
the
Business
(as
defined
below).
Notwithstanding
the
preceding,
owning
the
stock
or
options
to
acquire
stock
totaling
lessthan
5%
of
the
outstanding
shares
in
a
public
company
shall
not
constitute,
by
itself,
Competitive
Activity.ii.“Business”
means:
(a)
a
business
of
marketing,
selling,
and/or
providing
services
related
to
internet-based
loan
brokerage
or
online
leadgeneration
for
financial
services
products
and/or
home
services
products;
and
(b)
the
business
engaged
in
by
the
Company
as
of
your
lastday
of
employment
with
the
Company.iii.“Prohibited
Territory”
means:
a)
each
city
and
county
(or
equivalent
local
unit
of
government)
where
you
assisted
the
Company
toengage
in
the
Business
at
any
time
during
the
last
(12)
months
of
your
employment
with
the
Company;
and
b)
any
territory
assigned
toyou
by
the
Company
at
any
time
during
the
last
twelve
(12)
months
of
your
employment
with
the
Company.b.Solicit
customers
with
whom
you
have
business
dealings
as
part
of
your
work
for
the
Company
to
be
customers
of
products
or
services
that
arecompetitive
with
the
products
or
services
of
the
Company.
c.Solicit
or
attempt
to
persuade
other
Company
employees
to
leave
the
Company.
The
above
restrictions
are
intended
to
protect
important
legitimate
business
interests
of
the
Company
and
are
not
meant
to
prevent
you
from
obtaining
future
workor
earning
a
living.
You
understand
that
if
you
do
not
adhere
to
these
restrictions,
the
Company
will
have
the
right
to
seek
enforcement
and
remedy.
If
you
choose
to
accept
the
terms
of
this
offer,
please
sign
below
and
return
to
Claudette
Parham,
the
Company’s
Chief
People
Officer.
This
letter
agreementconstitutes
the
entire
agreement
of
the
parties
with
respect
to
the
subject
matter
and,
upon
Board
Approval,
supersedes
any
and
all
prior
agreements
whetherwritten
or
oral
including
without
limitation
your
previous
employment
letter
agreements
with
the
Company,
dated
August
2,
2013
and
January
15,
2015.
Again,
I
am
excited
to
continue
our
working
relationship
with
you
in
this
key
role.Sincerely,/s/
Douglas
LebdaDouglas
LebdaChairman
&
Chief
Executive
OfficerAgreed
and
Accepted:



















/s/
Neil
Salvage

























November
29,
2016Neil
Salvage



























Date



















































Exhibit 10.36November
28,
2016Neil
SalvagePresident,
LendingTree,
Inc.Dear
Neil:This
letter
is
to
notify
you
of
a
valuable
additional
benefit
for
certain
employees
of
LendingTree,
LLC
(“
LTL ”
which
is
a
wholly-owned
subsidiary
ofLendingTree,
Inc.
(“
Company
”))
that
was
adopted
by
the
Compensation
Committee
of
the
Company
Board
of
Directors
in
the
event
there
is
a
Change
of
Controlat
the
Company.Should
a
Change
of
Control
occur,
all
Company
equity
issued
to
you
would
immediately
fully
vest.
There
is
no
action
you
need
to
take
-
the
accelerated
vestingwould
automatically
occur
upon
a
Change
of
Control.In
addition,
if
there
is
a
Change
of
Control
and
you
(a)
resign
for
Good
Reason
or
(b)
your
employment
is
terminated
without
Cause
and
for
reasons
unrelated
toperformance
(and
other
than
as
a
result
of
your
death
or
disability),
during
the
twelve
(12)
month
period
following
the
Change
of
Control,
you
will
receive
aseverance
payment
of
two
(2)
years
of
base
salary.
For
the
purposes
of
a
Change
of
Control,
this
severance
payment
would
replace
any
payment
under
theCompany’s
general
severance
plan
or
other
arrangement
to
which
you
would
otherwise
be
entitled.
There
is
no
requirement
to
mitigate
this
severance
payment.The
severance
payment
described
above
is
contingent
upon
your
signing
a
general
release
of
claims
in
favor
of
the
Company
and
such
release
of
claims
becomingirrevocable
prior
to
the
date
of
payment.
Such
release
will
contain
restrictive
covenants
(substantially
in
the
form
attached)
in
effect
for
one
year
following
yourtermination
date
including
a
non-compete
provision
and
restrictions
on
solicitation
of
employees
and
customers.You
must
execute
(and
not
revoke)
such
general
release
of
claims
within
forty-five
(45)
days
following
the
effective
date
of
a
qualifying
termination
of
youremployment
or
else
your
eligibility
to
receive
the
benefits
described
in
this
letter
shall
immediately
become
null
and
void.
If
such
general
release
of
claimsbecomes
effective
on
a
timely
basis
by
its
own
terms,
then
the
severance
payment
will
be
paid
to
you
on
the
60th
day
after
termination
of
your
employment.
It
isintended
that
any
amounts
payable
hereunder
shall
comply
with
or
be
exempt
from
Section
409A
of
the
Internal
Revenue
Code
of
1986
(“Section
409A”)(including
under
Treasury
Regulation
§§
1.409A-1(b)(4)
(“short-term
deferrals”)
and
(b)(9)
(“separation
pay
plans,”
including
the
exceptions
under
subparagraph(iii)
and
subparagraph
(v)(D))
and
other
applicable
provisions
of
Treasury
Regulation
§§
1.409A-1
through
A-6).
For
purposes
of
Section
409A,
each
of
thepayments
that
may
be
made
under
this
letter
shall
be
deemed
to
be
a
separate
payment.
You
and
the
Company
agree
to
negotiate
in
good
faith
to
make
amendmentsto
this
letter,
as
the
parties
mutually
agree
are
necessary
or
desirable
to
avoid
the
imposition
of
taxes,
penalties
or
interest
under
Section
409A.
Neither
you
nor
theCompany
shall
have
the
right
to
accelerate
or
defer
the
delivery
of
any
such
payments
or
benefits
except
(i)
where
payment
may
be
made
within
a
certain
period
oftime,
the
timing
of
payment
within
such
period
will
be
in
the
sole
discretion
of
the
Company,
and
(ii)
to
the
extent
specifically
permitted
or
required
by
Section409A.
To
the
extent
any
nonqualified
deferred
compensation
payment
to
you
could
be
paid
in
one
or
more
of
your
taxable
years
depending
upon
you
completingcertain
employment-related
actions,
then
any
such
payments
will
commence
or
occur
in
the
later
taxable
year
to
the
extent
required
by
Section
409A.
With
respectto
the
time
of
payments
of
any
amounts
under
the
letter
that
are
“deferred
compensation”
subject
to
Section
409A,
references
in
this
letter
to
“termination
ofemployment”
(and
substantially
similar
phrases)
shall
mean
“separation
from
service”
within
the
meaning
of
Section
409A.
Notwithstanding
anything
in
this
letterto
the
contrary,
if
you
are
considered
a
“specified
employee”
under
Section
409A
upon
your
separation
from
service
and
if
payment
of
any
amounts
on
account
ofyour
separation
from
service
under
this
letter
is
required
to
be
delayed
for
a
period
of
six
months
after
separation
from
service
in
order
to
avoid
taxation
underSection
409A,
payment
of
such
amounts
shall
be
delayed
as
required
by
Section
409A,
and
the
accumulated
amounts
shall
be
paid
in
a
lump
sum
payment,
withoutinterest,
within
five
business
days
after
the
end
of
the
six-month
delay
period.
If
you
die
during
the
six-month
delay
period
prior
to
the
payment
of
benefits,
theamounts
withheld
on
account
of
Section
409A
shall
be
paid
to
the
personal
representative
of
your
estate
within
60
days
after
the
date
of
your
death.
While
it
isintended
that
all
payments
and
benefits
provided
to
you
under
this
letter
or
otherwise
will
be
exempt
from
or
comply
with
Section
409A,
the
Company
makes
norepresentation
or
covenant
to
ensure
that
such
payments
and
benefits
are
exempt
from
or
compliant
with
Section
409A.
TheCompany
will
have
no
liability
to
you
or
any
other
party
if
a
payment
or
benefit
under
this
letter
or
otherwise
is
challenged
by
any
taxing
authority
or
is
ultimatelydetermined
not
to
be
so
exempt
or
compliant.
You
further
understand
and
agree
that
you
will
be
entirely
responsible
for
any
and
all
taxes
imposed
on
you
as
aresult
of
this
letter.This
letter
does
not
create
an
employment
contract
or
affect
the
right
of
the
Company
or
LTL
to
terminate
your
employment,
or
change
the
terms
and
conditions
ofsuch
employment,
at
any
time
and
without
notice.Sincerely,/s/
Claudette
ParhamClaudette
ParhamChief
People
OfficerDefinitionsFor
the
purposes
of
this
letter,
the
following
definitions
apply:

"
Cause"
means
gross
negligence
in
carrying
out
your
duties
for
the
Company
or
any
breach
of
fiduciary
duties
to
the
Company,
conviction
of,
or
plea
of
guilty
orno
contest
to
any
felony,
any
act
of
fraud
or
embezzlement,
material
violation
of
a
Company
policy
or
any
unauthorized
use
or
disclosure
of
confidentialinformation
or
trade
secrets
of
the
Company
or
its
affiliates,
or
failure
to
cooperate
in
any
Company
investigation.
Neither
bad
judgment
nor
mere
negligence
noran
act
of
omission
reasonably
believed
by
you
to
have
been
in,
or
not
opposed
to,
the
interests
of
the
Company,
shall
constitute
examples
of
gross
negligence.References
to
“Company”
in
this
definition
include
the
Company
and
any
affiliate
of
the
Company."
Change
of
Control
"
results
when:
(i)
any
person
or
entity
who
is
not
a
controlling
shareholder
as
of
the
date
of
this
letter
becomes
a
beneficial
owner,
directly
orindirectly,
of
securities
of
the
Company
representing
fifty
percent
or
more
of
the
total
voting
power
of
all
of
the
Company's
then
outstanding
voting
securities,
(ii)
amerger
or
consolidation
of
the
Company
in
which
the
Company's
voting
securities
immediately
prior
to
the
merger
or
consolidation
do
not
represent,
or
are
notconverted
into
securities
that
represent,
a
majority
of
the
voting
power
of
all
voting
securities
of
the
surviving
entity
immediately
after
the
merger
or
consolidation,or
(iii)
a
sale
of
all
or
substantially
all
of
the
assets
of
the
Company
or
a
liquidation
or
dissolution
of
the
Company.
For
purposes
of
defining
Change
of
Control,“Company”
refers
to
LendingTree,
Inc.
as
a
whole
and
does
not
apply
to
events
only
affecting
specific
businesses
or
subsidiaries
of
LendingTree,
Inc.“
Good
Reason
”
means
the
occurrence
of
any
of
the
following
without
your
written
consent:
(i)
a
material
adverse
change
in
your
title,
duties,
operationalauthorities
or
reporting
responsibilities
from
those
in
effect
immediately
prior
to
the
Change
in
Control,
excluding
for
this
purpose
any
such
change
that
is
anisolated
and
inadvertent
action
not
taken
in
bad
faith
and
that
is
remedied
by
the
Company
promptly
after
receipt
of
notice
thereof
and
further
excluding
a
changein
your
reporting
officer
due
to
internal
restructuring,
realignment,
or
the
resignation,
promotion,
demotion,
or
a
reorganization
of
managers
within
the
Company(or
affiliate),
(ii)
a
material
reduction
in
your
annual
base
salary,
or
(iii)
a
relocation
of
your
principal
place
of
business
more
than
50
miles
from
your
currentoffice.In
order
to
resign
your
employment
for
Good
Reason,
you
must
notify
the
Company
in
writing
within
fifteen
(15)
days
of
the
initial
existence
of
any
event
fallingunder
clauses
(i)
through
(iii)
and
such
notice
shall
describe
in
detail
the
facts
and
circumstances
explaining
why
you
believe
a
Good
Reason
event
has
occurred.The
Company
shall
then
have
sixty
(60)
days
following
its
receipt
of
such
notice
to
cure
or
remedy
such
alleged
Good
Reason
event
such
that
Good
Reason
willnot
be
deemed
to
exist
for
such
event.
If
the
event
remains
uncured
or
is
not
remedied
by
the
Company
within
such
sixty
(60)
day
period
and
if
your
employmenthas
not
otherwise
been
terminated,
then
a
termination
of
your
employment
for
Good
Reason
shall
automatically
occur
on
the
first
business
day
following
the
end
ofsuch
sixty
(60)
day
cure/remedy
period.Restrictive CovenantsIn
consideration
of
the
compensation
and
other
consideration
given
to
you
pursuant
to
the
provisions
of
this
letter,
you
understand
and
agree
that
the
purpose
ofthese
covenants
is
to
protect
legitimate
business
interests
of
the
Company
(and
its
affiliates),
and
is
not
intended
to
eliminate
your
post-employment
competitionwith
the
Company
per
se,
nor
is
it
intended
to
impair
or
infringe
upon
your
right
to
work,
earn
a
living,
or
acquire
and
possess
property
from
the
fruits
of
yourlabor.
You
hereby
acknowledge
that
the
post-employment
restrictions
set
forth
herein
are
reasonable
and
that
they
do
not,
and
will
not,
unduly
impair
your
abilityto
earn
a
living
after
the
termination
of
your
employment
with
Company
(or
any
affiliate).
You
shall
be
subject
to
and
agree
to
abide
by
the
restrictions
set
forth
inthis
Section.1.Definitions.The
following
capitalized
terms
shall
have
the
meanings
assigned
to
them
below:i.
"
Competitive
Services
"
means
Internet-based
loan
origination,
Internet-based
loan
brokerage,
Internet-based
real
estate
brokerageservices,
or
any
other
services
that
Company
(or
any
affiliate)
is
engaged
in
as
of
the
Determination
Date.ii.
"Determination
Date
"
means
the
date
of
termination
of
your
employment
with
the
Company
(or
any
affiliate)
for
any
reasonwhatsoever
or
any
earlier
date
(during
your
employment)
of
an
alleged
breach
of
the
Restrictive
Covenants
by
you.iii.
"Person" means
any
individual
or
any
corporation,
partnership,
joint
venture,
limited
liability
company,
association
or
other
entity
orenterprise.iv.
"
Principal
Or
Representative
"
means
a
principal,
owner,
partner,
shareholder,
joint
venturer,
investor,
member,
trustee,
director,officer,
manager,
employee,
agent,
representative
or
consultant.v.
"
Protected
Customers
"
means
any
Person
to
whom
the
Company
(or
any
affiliate)
has
sold
its
services
or
solicited
to
sell
its
servicesduring
the
twelve
(12)
months
prior
to
the
Determination
Date;
provided,
however,
that
Protected
Customer
shall
not
include
any
Person
with
which
youcan
reasonably
demonstrate
that
you
had
a
pre-existing
professional
relationship
prior
to
the
commencement
of
your
employment
with
the
Company
(orany
affiliate).vi.
"
Protected
Employees
"
means
employees
of
the
Company
(or
any
affiliate)
who
were
employed
by
the
Company
(or
any
affiliate)
atany
time
within
six
months
prior
to
the
Determination
Date
and
with
whom
you
had
direct,
personal
and
continuing
dealings
on
behalf
of
the
Company(or
any
affiliate)
or
whom
you
directly
supervised.vii.
"
Restricted
Period
"
means
the
period
of
your
employment
with
Company
(or
any
affiliate)
and
a
period
extending
one
year
from
thetermination
of
your
employment
with
Company
(or
any
affiliate).2.Non-solicitation
of
Protected
Employees
.
You
understand
and
agree
that
the
relationship
between
the
Company
and
each
of
its
Protected
Employeesconstitutes
a
valuable
asset
of
the
Company
and
may
not
be
converted
to
your
own
use.
Accordingly,
you
hereby
agree
that
during
the
Restricted
Periodyou
shall
not
directly
or
indirectly
on
your
own
behalf
or
as
a
Principal
or
Representative
of
any
Person
or
otherwise
solicit
or
induce
any
ProtectedEmployee
to
terminate
his
or
her
employment
relationship
with
the
Company
or
to
enter
into
employment
with
any
other
Person.
References
to“Company”
in
this
definition
include
the
Company
and
any
affiliate
of
the
Company.3.Restriction
on
Relationships
with
Protected
Customers
.
You
understand
and
agree
that
the
relationship
between
the
Company
and
each
of
its
ProtectedCustomers
constitutes
a
valuable
asset
of
the
Company
and
may
not
be
converted
to
your
own
use.
Accordingly,
you
hereby
agree
that,
during
theRestricted
Period,
you
shall
not,
without
the
prior
written
consent
of
LendingTree,
Inc.,
directly
or
indirectly,
on
your
own
behalf
or
as
a
Principal
orRepresentative
of
any
Person,
solicit,
divert,
take
away
or
attempt
to
solicit,
divert
or
take
away
a
Protected
Customer
for
the
purpose
of
providing
orselling
Competitive
Services;
provided,
however,
that
the
prohibition
of
this
covenant
shall
apply
only
to
Protected
Customers
with
whom
you
hadMaterial
Contact
on
the
Company's
behalf
during
the
twelve
(12)
months
immediately
preceding
the
Determination
Date.
For
purposes
of
this
Section,you
had
"
Material
Contact
"
with
a
Protected
Customer
if
(a)
you
had
direct
business
dealings
with
the
Protected
Customer
on
the
Company's
behalf
or(b)
you
were
responsible
for
supervising
or
coordinating
the
dealings
between
the
Company
and
the
Protected
Customer.
References
to
“Company”
inthis
definition
include
the
Company
and
any
affiliate
of
the
Company.4.Covenant
not
to
Compete
.
You
agree
and
covenant
that
during
the
Restrictive
Period
you
will
not,
without
LendingTree,
Inc.’s
prior
written
consent,which
may
be
granted
or
withheld
in
the
sole
discretion
of
LendingTree,
Inc,,
directly
or
indirectly,
(i)
for
yourself;
(ii)
as
a
consultant,
manager,supervisor,
employee
or
owner;
or
(iii)
as
an
independent
contractor,
engage
in
activities
related
to
Competitive
Services
for
any
Person
which
markets,sells
or
otherwise
provides
Competitive
Services
in
the
geographical
areas
in
which
the
Company
(or
any
affiliate)
does
business;
provided, however ,
thatthe
ownership
by
you
of
not
more
than
five
percent
(5%)
of
the
shares
of
any
publicly
traded
class
of
stock
of
any
corporation
shall
not
be
deemed,
in
andof
itself,
to
violate
the
foregoing
prohibitions.5.ENFORCEMENT
OF
RESTRICTED
COVENANTS.i.Rights
and
Remedies
upon
Breach
.
In
the
event
you
breach,
or
threaten
to
commit
a
breach
of,
any
of
the
provisions
of
the
Restrictive
Covenants,the
Company
shall
have
the
right
and
remedy
to
enjoin,
preliminarily
and
permanently,
you
from
violating
or
threatening
to
violate
the
RestrictiveCovenants
and
to
have
the
Restrictive
Covenants
specifically
enforced
by
any
court
of
competent
jurisdiction,
it
being
agreed
that
any
breach
orthreatened
breach
of
the
Restrictive
Covenants
would
cause
irreparable
injury
to
the
Company
and
that
money
damages
would
not
provide
anadequate
remedy
to
the
Company.
Such
right
and
remedy
shall
be
in
addition
to,
and
not
in
lieu
of,
any
other
rights
and
remedies
available
to
theCompany
at
law
or
in
equity.
In
addition,
the
Restricted
Period
shall
be
extended
for
the
period
of
any
such
breach
or
threatened
breach.ii.Severability
of
Covenants
.
You
acknowledge
and
agree
that
the
Restrictive
Covenants
are
reasonable
and
valid
in
time
and
scope
and
in
all
otherrespects.
The
covenants
set
forth
in
this
Section
shall
be
considered
and
construed
as
separate
and
independent
covenants.
Should
any
part
orprovision
of
any
covenant
be
held
invalid,
void
or
unenforceable
in
any
court
of
competent
jurisdiction,
such
invalidity,
voidness
or
unenforceabilityshall
not
render
invalid,
void
or
unenforceable
any
other
part
or
provision
contained
herein.
If
any
portion
of
the
foregoing
provisions
is
found
to
beinvalid
or
unenforceable
by
a
court
of
competent
jurisdiction
because
its
duration,
the
territory,
the
definition
of
activities
or
the
definition
ofinformation
covered
is
considered
to
be
invalid
or
unreasonable
in
scope,
the
invalid
or
unreasonable
term
shall
be
redefined,
or
a
new
enforceableterm
provided,
such
that
the
intent
of
the
Company
and
you
in
agreeing
to
the
provisions
of
this
Agreement
will
not
be
impaired
and
the
provision
inquestion
shall
be
enforceable
to
the
fullest
extent
of
the
applicable
laws.6.Confidentiality
.
You
agree
to
keep
secret
and
retain
in
strictest
confidence,
and
shall
not
use
for
the
benefit
of
yourself
or
others
or
disclose
to
others,
anyconfidential
and
proprietary
information
of
the
Company,
including
but
not
limited
to
information
and
materials
relating
to
the
internal
operations
of
theCompany,
its
processes
and
procedures,
trade
“know-how”,
sales,
marketing
and
distribution
methods
and
strategies,
suppliers,
customers,
prospectivecustomers,
services,
terms
of
contracts,
pricing
policies,
business
plans,
research
and
development
projects
and
any
and
all
other
business
affairs
of
theCompany
(collectively,
“ Confidential
Information
” ).
Confidential
Information
does
not
include
any
information
or
material
generally
available
to
thepublic.
You
agree
that
the
existence
of
and
the
terms
and
provisions
of
this
Agreement
shall
remain
and
be
kept
strictly
confidential.
This
confidentialityprovision
applies
to
and
expressly
prohibits
all
communications
to
any
person
or
entity,
including,
without
limitation,
communications
to
any
present,former
or
future
Company
employee.
References
to
“Company”
in
this
definition
include
the
Company
and
any
affiliate
of
the
Company.Exhibit 21.1SUBSIDIARIES OF LENDINGTREE, INC.NameJurisdiction ofFormationLendingTree,
LLCDETree
BU
Holding
Company,
Inc.DEDegreeTree,
Inc.DEIron
Horse
Holdings,
LLCDERexford
Office
Holdings,
LLCDEHome
Loan
Center,
Inc.CAHLC
Escrow,
Inc.CALT
Real
Estate,
Inc.DEExhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe
hereby
consent
to
the
incorporation
by
reference
in
the
Registration
Statement
on
Form
S-3
(No.
333-207718)
and
on
Form
S-8
(No.
333-197952
and
No.
333-182670)
of
LendingTree,
Inc.
of
our
report
dated
February
28,
2017
relating
to
the
financial
statements
and
the
effectiveness
of
internal
control
over
financialreporting,
which
appears
in
this
Form
10-K./s/
PricewaterhouseCoopers
LLPCharlotte,
North
CarolinaFebruary
28,
2017Exhibit 31.1CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICERPURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a) OF THESECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I,
Douglas
R.
Lebda,
certify
that:1.



I
have
reviewed
this
annual
report
on
Form
10-K
for
the
period
ended
December
31,
2016
of
LendingTree,
Inc.;2.Based
on
my
knowledge,
this
report
does
not
contain
any
untrue
statement
of
a
material
fact
or
omit
to
state
a
material
fact
necessary
to
make
thestatements
made,
in
light
of
the
circumstances
under
which
such
statements
were
made,
not
misleading
with
respect
to
the
period
covered
by
this
report;3.Based
on
my
knowledge,
the
financial
statements,
and
other
financial
information
included
in
this
report,
fairly
present
in
all
material
respects
thefinancial
condition,
results
of
operations
and
cash
flows
of
the
registrant
as
of,
and
for,
the
periods
presented
in
this
report;4.The
registrant's
other
certifying
officer(s)
and
I
are
responsible
for
establishing
and
maintaining
disclosure
controls
and
procedures
(as
defined
inExchange
Act
Rules
13a-15(e)
and
15d-15(e))
and
internal
control
over
financial
reporting
(as
defined
in
Exchange
Act
Rules
13a-15(f)
and
15d-15(f))for
the
registrant
and
have:a)Designed
such
disclosure
controls
and
procedures,
or
caused
such
disclosure
controls
and
procedures
to
be
designed
under
our
supervision,
toensure
that
material
information
relating
to
the
registrant,
including
its
consolidated
subsidiaries,
is
made
known
to
us
by
others
within
thoseentities,
particularly
during
the
period
in
which
this
report
is
being
prepared;b)Designed
such
internal
control
over
financial
reporting,
or
caused
such
internal
control
over
financial
reporting
to
be
designed
under
oursupervision,
to
provide
reasonable
assurance
regarding
the
reliability
of
financial
reporting
and
the
preparation
of
financial
statements
forexternal
purposes
in
accordance
with
generally
accepted
accounting
principles;c)Evaluated
the
effectiveness
of
the
registrant's
disclosure
controls
and
procedures
and
presented
in
this
report
our
conclusions
about
theeffectiveness
of
the
disclosure
controls
and
procedures,
as
of
the
end
of
the
period
covered
by
this
report
based
on
such
evaluation;
andd)Disclosed
in
this
report
any
change
in
the
registrant's
internal
control
over
financial
reporting
that
occurred
during
the
registrant's
most
recentfiscal
quarter
(the
registrant's
fourth
fiscal
quarter
in
the
case
of
an
annual
report)
that
has
materially
affected,
or
is
reasonably
likely
tomaterially
affect,
the
registrant's
internal
control
over
financial
reporting;
and5.The
registrant's
other
certifying
officer(s)
and
I
have
disclosed,
based
on
our
most
recent
evaluation
of
internal
control
over
financial
reporting,
to
theregistrant's
auditors
and
the
audit
committee
of
the
registrant's
board
of
directors
(or
persons
performing
the
equivalent
functions):a)All
significant
deficiencies
and
material
weaknesses
in
the
design
or
operation
of
internal
control
over
financial
reporting
which
are
reasonablylikely
to
adversely
affect
the
registrant's
ability
to
record,
process,
summarize
and
report
financial
information;
andb)Any
fraud,
whether
or
not
material,
that
involves
management
or
other
employees
who
have
a
significant
role
in
the
registrant's
internal
controlover
financial
reporting.Dated:
February
28,
2017  /s/ DOUGLAS R. LEBDA

Douglas
R.
Lebda

Chairman and Chief Executive Officer(principal executive officer)Exhibit 31.2CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICERPURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a) OF THESECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I,
Gabriel
Dalporto,
certify
that:1.I
have
reviewed
this
annual
report
on
Form
10-K
for
the
period
ended
December
31,
2016
of
LendingTree,
Inc.;2.Based
on
my
knowledge,
this
report
does
not
contain
any
untrue
statement
of
a
material
fact
or
omit
to
state
a
material
fact
necessary
to
make
thestatements
made,
in
light
of
the
circumstances
under
which
such
statements
were
made,
not
misleading
with
respect
to
the
period
covered
by
this
report;3.Based
on
my
knowledge,
the
financial
statements,
and
other
financial
information
included
in
this
report,
fairly
present
in
all
material
respects
thefinancial
condition,
results
of
operations
and
cash
flows
of
the
registrant
as
of,
and
for,
the
periods
presented
in
this
report;4.The
registrant's
other
certifying
officer(s)
and
I
are
responsible
for
establishing
and
maintaining
disclosure
controls
and
procedures
(as
defined
inExchange
Act
Rules
13a-15(e)
and
15d-15(e))
and
internal
control
over
financial
reporting
(as
defined
in
Exchange
Act
Rules
13a-15(f)
and
15d-15(f))for
the
registrant
and
have:a)Designed
such
disclosure
controls
and
procedures,
or
caused
such
disclosure
controls
and
procedures
to
be
designed
under
our
supervision,
toensure
that
material
information
relating
to
the
registrant,
including
its
consolidated
subsidiaries,
is
made
known
to
us
by
others
within
thoseentities,
particularly
during
the
period
in
which
this
report
is
being
prepared;b)Designed
such
internal
control
over
financial
reporting,
or
caused
such
internal
control
over
financial
reporting
to
be
designed
under
oursupervision,
to
provide
reasonable
assurance
regarding
the
reliability
of
financial
reporting
and
the
preparation
of
financial
statements
forexternal
purposes
in
accordance
with
generally
accepted
accounting
principles;c)Evaluated
the
effectiveness
of
the
registrant's
disclosure
controls
and
procedures
and
presented
in
this
report
our
conclusions
about
theeffectiveness
of
the
disclosure
controls
and
procedures,
as
of
the
end
of
the
period
covered
by
this
report
based
on
such
evaluation;
andd)Disclosed
in
this
report
any
change
in
the
registrant's
internal
control
over
financial
reporting
that
occurred
during
the
registrant's
most
recentfiscal
quarter
(the
registrant's
fourth
fiscal
quarter
in
the
case
of
an
annual
report)
that
has
materially
affected,
or
is
reasonably
likely
tomaterially
affect,
the
registrant's
internal
control
over
financial
reporting;
and5.The
registrant's
other
certifying
officer(s)
and
I
have
disclosed,
based
on
our
most
recent
evaluation
of
internal
control
over
financial
reporting,
to
theregistrant's
auditors
and
the
audit
committee
of
the
registrant's
board
of
directors
(or
persons
performing
the
equivalent
functions):a)All
significant
deficiencies
and
material
weaknesses
in
the
design
or
operation
of
internal
control
over
financial
reporting
which
are
reasonablylikely
to
adversely
affect
the
registrant's
ability
to
record,
process,
summarize
and
report
financial
information;
andb)Any
fraud,
whether
or
not
material,
that
involves
management
or
other
employees
who
have
a
significant
role
in
the
registrant's
internal
controlover
financial
reporting.Dated:
February
28,
2017  /s/ GABRIEL DALPORTO

Gabriel
Dalporto

Chief Financial Officer(principal financial officer)Exhibit 32.1CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICERPURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I,
Douglas
R.
Lebda,
certify,
pursuant
to
18
U.S.C.
Section
1350,
as
adopted
pursuant
to
Section
906
of
the
Sarbanes-Oxley
Act
of
2002,
that
to
myknowledge:(1)the
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
December
31,
2016
of
LendingTree,
Inc.
(the
"Report")
which
this
statement
accompanies
fullycomplies
with
the
requirements
of
Section
13(a)
or
15(d)
of
the
Securities
Exchange
Act
of
1934
(15
U.S.C.
78m
or
78o(d));
and(2)the
information
contained
in
the
Report
fairly
presents,
in
all
material
respects,
the
financial
condition
and
results
of
operations
of
LendingTree,
Inc.



Dated:February
28,
2017
/s/ DOUGLAS R. LEBDA  


Douglas
R.
Lebda

Chairman and Chief Executive Officer(principal executive officer)Exhibit 32.2CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICERPURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I,
Gabriel
Dalporto,
certify,
pursuant
to
18
U.S.C.
Section
1350,
as
adopted
pursuant
to
Section
906
of
the
Sarbanes-Oxley
Act
of
2002,
that
to
my
knowledge:(1)the
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
December
31,
2016
of
LendingTree,
Inc.
(the
"Report")
which
this
statement
accompanies
fullycomplies
with
the
requirements
of
Section
13(a)
or
15(d)
of
the
Securities
Exchange
Act
of
1934
(15
U.S.C.
78m
or
78o(d));
and(2)the
information
contained
in
the
Report
fairly
presents,
in
all
material
respects,
the
financial
condition
and
results
of
operations
of
LendingTree,
Inc.



Dated:February
28,
2017
/s/ GABRIEL DALPORTO 


Gabriel
Dalporto

Chief Financial Officer(principal financial officer)