Exhibit 10.1

 

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JPMorgan Chase Bank, National Association
P.O.  Box 161
60 Victoria Embankment
London EC4Y 0JP
England

 

August 7, 2014

 

To:                             PHH Corporation
3000 Leadenhall Road
Mt. Laurel, NJ 08054
Attention:              President and Chief Executive Officer

 

Re:          Master Confirmation—Collared Accelerated Share Repurchase

 

This master confirmation (this “Master Confirmation”), dated as of August 7,
2014, is intended to set forth certain terms and provisions of certain
Transactions (each, a “Transaction”) entered into from time to time between J.P.
Morgan Securities LLC (“JPMS”), as agent for JPMorgan Chase Bank, National
Association, London Branch (“JPMorgan”), and PHH Corporation, a Maryland
corporation (“Counterparty”).  This Master Confirmation, taken alone, is neither
a commitment by either party to enter into any Transaction nor evidence of a
Transaction.  The additional terms of any particular Transaction shall be set
forth in (i) a Supplemental Confirmation in the form of Schedule A hereto (a
“Supplemental Confirmation”), which shall reference this Master Confirmation and
supplement, form a part of, and be subject to this Master Confirmation, and
(ii) a Trade Notification in the form of Schedule B hereto (a “Trade
Notification”), which shall reference the relevant Supplemental Confirmation and
supplement, form a part of, and be subject to such Supplemental Confirmation. 
This Master Confirmation, each Supplemental Confirmation and the related Trade
Notification together shall constitute a “Confirmation” as referred to in the
Agreement specified below.

 

The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”), as published by the International Swaps
and Derivatives Association, Inc., are incorporated into this Master
Confirmation.  This Master Confirmation, each Supplemental Confirmation and the
related Trade Notification evidence a complete binding agreement between
Counterparty and JPMorgan as to the subject matter and terms of each Transaction
to which this Master Confirmation, such Supplemental Confirmation and such Trade
Notification relate and shall supersede all prior or contemporaneous written or
oral communications with respect thereto.

 

This Master Confirmation, each Supplemental Confirmation and each Trade
Notification supplement, form a part of, and are subject to an agreement in the
form of the 2002 ISDA Master Agreement (the “Agreement”) as if JPMorgan and
Counterparty had executed the Agreement on the date of this Master Confirmation
(but without any Schedule except for (i) the election of New York law as the
governing law (without reference to its choice of law provisions) and (ii) the
election that subparagraph (ii) of Section 2(c) will not apply to the
Transactions).

 

The Transactions shall be the sole Transactions under the Agreement.  If there
exists any ISDA Master Agreement between JPMorgan and Counterparty or any
confirmation or other agreement between JPMorgan and Counterparty pursuant to
which an ISDA Master Agreement is deemed to exist between JPMorgan and
Counterparty, then notwithstanding anything to the contrary in such ISDA Master
Agreement, such confirmation or agreement or any other agreement to which
JPMorgan and Counterparty are parties, the Transactions shall not be considered
Transactions under, or otherwise governed by, such existing or deemed ISDA
Master Agreement, and the

 

JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association.
Main Office 1111 Polaris Parkway, Columbus, Ohio 43240
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 25 Bank Street, Canary Wharf, London E14 5JP
Authorised by the Office of the Comptroller of the Currency in the jurisdiction
of the USA.
Authorised by the Prudential Regulation Authority. Subject to regulation by the
Financial Conduct
Authority and to limited regulation by the Prudential Regulation Authority.
Details about the
extent of our regulation by the Prudential Regulation Authority are available
from us on request.

 

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occurrence of any Event of Default or Termination Event under the Agreement with
respect to either party or any Transaction shall not, by itself, give rise to
any right or obligation under any such other agreement or deemed agreement. 
Notwithstanding anything to the contrary in any other agreement between the
parties or their Affiliates, the Transactions shall not be “Specified
Transactions” (or similarly treated) under any other agreement between the
parties or their Affiliates.

 

All provisions contained or incorporated by reference in the Agreement shall
govern this Master Confirmation, each Supplemental Confirmation and each Trade
Notification except as expressly modified herein or in the related Supplemental
Confirmation.

 

If, in relation to any Transaction to which this Master Confirmation, a
Supplemental Confirmation and a Trade Notification relate, there is any
inconsistency between the Agreement, this Master Confirmation, such Supplemental
Confirmation, such Trade Notification and the Equity Definitions, the following
will prevail for purposes of such Transaction in the order of precedence
indicated: (i) such Trade Notification; (ii) such Supplemental Confirmation;
(iii) this Master Confirmation; (iv) the Equity Definitions; and (v) the
Agreement.

 

1.             Each Transaction constitutes a Share Forward Transaction for the
purposes of the Equity Definitions.  Set forth below are the terms and
conditions that, together with the terms and conditions set forth in the
Supplemental Confirmation and Trade Notification relating to any Transaction,
shall govern such Transaction.

 

General Terms.

 

 

 

 

 

Trade Date:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Buyer:

 

Counterparty

 

 

 

Seller:

 

JPMorgan

 

 

 

Shares:

 

The common stock of Counterparty, par value USD 0.01 per share (Exchange symbol
“PHH”).

 

 

 

Exchange:

 

The New York Stock Exchange

 

 

 

Related Exchange(s):

 

All Exchanges.

 

 

 

Prepayment/Variable Obligation:

 

Applicable

 

 

 

Prepayment Amount:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Prepayment Date:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Contract Fee:

 

For each Transaction, as set forth in the related Supplemental Confirmation. On
the Prepayment Date, Buyer shall pay Seller an amount in USD equal to the
Contract Fee in immediately available funds by wire transfer to an account
specified by Seller.

 

 

 

Valuation.

 

 

 

 

 

Hedge Period:

 

For each Transaction, the period from, and including, the first Exchange
Business Day immediately following the Trade Date for such Transaction to, and
including, the Hedge Completion Date for such Transaction.

 

 

 

 

 

For each Transaction, unless the Hedging Threshold Price as specified in the
Supplemental Confirmation for such Transaction is “Not Applicable”, if at any
time during the

 

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Hedge Period for such Transaction, the arithmetic average of the VWAP Prices for
each Exchange Business Day in such Hedge Period equals or exceeds such Hedging
Threshold Price, (i) JPMorgan shall have the right to terminate the Hedge Period
for such Transaction as of such time and (ii) the Calculation Agent may make
adjustments as are necessary in its commercially reasonable and good faith
opinion to the Minimum Share Threshold for such Transaction, the Maximum Share
Threshold for such Transaction and any other variable or term relevant to the
terms of such Transaction and, for the purposes of calculating the Number of
Shares to be Delivered for such Transaction, shall adjust the Prepayment Amount
for such Transaction, to preserve the fair value of such Transaction to JPMorgan
and ensure that JPMorgan’s, or its affiliate’s, initial theoretical delta for
such Transaction is equal to the number of Shares purchased by JPMorgan or such
affiliate during the Hedge Period for such Transaction at the time of such
termination.

 

 

 

Hedge Completion Date:

 

For each Transaction, as set forth in the related Trade Notification, to be the
Exchange Business Day on which JPMorgan, or an affiliate thereof, completes the
establishment of JPMorgan’s initial hedge position with respect to such
Transaction, as determined by JPMorgan in its sole discretion.

 

 

 

 

 

For each Transaction, JPMorgan shall deliver to Counterparty, no later than
5:00 p.m. (New York City time) on the Exchange Business Day immediately
following the Hedge Completion Date for such Transaction, a Trade Notification
for such Transaction, substantially in the form of Schedule B hereto, setting
forth, among other things, the Hedge Completion Date for such Transaction, the
Hedge Period Reference Price for such Transaction, the Minimum Shares for such
Transaction and the Maximum Shares for such Transaction.

 

 

 

Hedge Period Reference Price:

 

For each Transaction, the arithmetic average of the VWAP Prices for all of the
Exchange Business Days in the Hedge Period for such Transaction, subject to
“Valuation Disruption” below.

 

 

 

VWAP Price:

 

For any Exchange Business Day, the volume-weighted average price at which the
Shares trade as reported in the composite transactions for United States
exchanges and quotation systems, during the regular trading session for the
Exchange on such Exchange Business Day, excluding (i) trades that do not settle
regular way, (ii) opening (regular way) reported trades in the consolidated
system on such Exchange Business Day, (iii) trades that occur in the last ten
minutes before the scheduled close of trading on the Exchange on such Exchange
Business Day and ten minutes before the scheduled close of the primary trading
in the market where the trade is effected, and (iv) trades on such Exchange
Business Day that do not satisfy the requirements of Rule 10b-18(b)(3) under the
Securities

 

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Exchange Act of 1934, as amended (the “Exchange Act”), as determined in good
faith and in a commercially reasonable manner by the Calculation Agent (all such
trades other than any trades described in clauses (i) to (iv) above,
“Rule 10b-18 Eligible Transactions”). Counterparty acknowledges that the
Calculation Agent may refer to the Bloomberg Page “PHH US <Equity> AQR SEC” (or
any successor thereto), in its judgment, for such Exchange Business Day to
determine the VWAP Price.

 

 

 

Forward Price:

 

For each Transaction, the arithmetic average of the VWAP Prices for all of the
Exchange Business Days in the Calculation Period for such Transaction, subject
to “Valuation Disruption” below.

 

 

 

Forward Price Adjustment Amount:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Calculation Period:

 

For each Transaction, the period from, and including, the Calculation Period
Start Date for such Transaction to, and including, the Termination Date for such
Transaction.

 

 

 

Calculation Period Start Date:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Termination Date:

 

For each Transaction, the Scheduled Termination Date for such Transaction;
provided that JPMorgan shall have the right to designate any Exchange Business
Day on or after the First Acceleration Date to be the Termination Date for all
of such Transaction (an “Accelerated Termination Date”) by delivering notice to
Counterparty of any such designation prior to 6:00 p.m. (New York City time) on
the Exchange Business Day immediately following the designated Accelerated
Termination Date.

 

 

 

Scheduled Termination Date:

 

For each Transaction, as set forth in the related Supplemental Confirmation,
subject to postponement as provided in “Valuation Disruption” below.

 

 

 

First Acceleration Date:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Valuation Disruption:

 

The definition of “Market Disruption Event” in Section 6.3(a) of the Equity
Definitions is hereby amended by deleting the words “at any time during the
one-hour period that ends at the relevant Valuation Time, Latest Exercise Time,
Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” and
inserting the words “at any time on any Scheduled Trading Day during the Hedge
Period, the Calculation Period or Settlement Valuation Period” after the word
“material,” in the third line thereof.

 

 

 

 

 

Section 6.3(d) of the Equity Definitions is hereby amended by deleting the
remainder of the provision following the term “Scheduled Closing Time” in the
fourth line thereof.

 

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Notwithstanding anything to the contrary in the Equity Definitions, if a
Disrupted Day occurs (i) in the Hedge Period or the Calculation Period, the
Calculation Agent may, in its good faith and commercially reasonable discretion,
postpone the Scheduled Termination Date, or (ii) in the Settlement Valuation
Period, the Calculation Agent may extend the Settlement Valuation Period. The
Calculation Agent may also determine that (i) such Disrupted Day is a Disrupted
Day in full, in which case the VWAP Price for such Disrupted Day shall not be
included for purposes of determining the Hedge Period Reference Price, the
Forward Price or the Settlement Price, as the case may be, or (ii) such
Disrupted Day is a Disrupted Day only in part, in which case the VWAP Price for
such Disrupted Day shall be determined by the Calculation Agent based on
Rule 10b-18 Eligible Transactions in the Shares on such Disrupted Day taking
into account the nature and duration of the relevant Market Disruption Event,
and the weighting of the VWAP Price for the relevant Exchange Business Days
during the Hedge Period, the Calculation Period or the Settlement Valuation
Period, as the case may be, shall be adjusted in a commercially reasonable
manner by the Calculation Agent for purposes of determining the Hedge Period
Reference Price, the Forward Price or the Settlement Price, as the case may be,
with such adjustments based on, among other factors, the duration of any Market
Disruption Event and the volume, historical trading patterns and price of the
Shares. Any Exchange Business Day on which, as of the date hereof, the Exchange
is scheduled to close prior to its normal close of trading shall be deemed not
to be an Exchange Business Day; if a closure of the Exchange prior to its normal
close of trading on any Exchange Business Day is scheduled following the date
hereof, then such Exchange Business Day shall be deemed to be a Disrupted Day in
full.

 

 

 

 

 

If a Disrupted Day occurs during the Hedge Period for any Transaction, the
Calculation Period for any Transaction or the Settlement Valuation Period for
any Transaction, as the case may be, and each of the nine immediately following
Scheduled Trading Days is a Disrupted Day (a “Disruption Event”), then the
Calculation Agent, in its good faith and commercially reasonable discretion, may
deem such Disruption Event (and each consecutive Disrupted Day thereafter) to be
either (x) a Potential Adjustment Event in respect of such Transaction or (y) an
Additional Termination Event in respect of such Transaction, with Counterparty
as the sole Affected Party and such Transaction as the sole Affected
Transaction.

 

 

 

Settlement Terms.

 

 

 

 

 

Settlement Procedures:

 

For each Transaction:

 

 

 

 

 

(i)    if the Number of Shares to be Delivered for such Transaction is positive,
Physical Settlement shall be

 

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applicable to such Transaction; provided that the “Representation and Agreement”
contained in Section 9.11 of the Equity Definitions shall be modified by
excluding any representations therein relating to restrictions, obligations,
limitations or requirements under applicable securities laws arising as a result
of the fact that Counterparty is the Issuer of the Shares; or

 

 

 

 

 

(ii)   if the Number of Shares to be Delivered for such Transaction is negative,
then the Counterparty Settlement Provisions in Annex A hereto shall apply to
such Transaction.

 

 

 

Number of Shares to be Delivered:

 

For each Transaction, a number of Shares (rounded down to the nearest whole
number) equal to (i) the Prepayment Amount for such Transaction, divided by
(ii)(A) the Forward Price for such Transaction minus (B) the Forward Price
Adjustment Amount for such Transaction; provided that the Number of Shares to be
Delivered shall not be less than the Minimum Shares and not greater than the
Maximum Shares. The Number of Shares to be Delivered on the Settlement Date for
any Transaction shall be reduced, but not below zero, by any Shares delivered
pursuant to “Initial Share Delivery” and “Minimum Share Delivery” below. For the
avoidance of doubt, if the Forward Price Adjustment Amount for any Transaction
is a negative number, clause (ii) of the immediately preceding sentence shall be
equal to (A) the Forward Price for such Transaction, plus (B) the absolute value
of the Forward Price Adjustment Amount.

 

 

 

Excess Dividend Amount:

 

For the avoidance of doubt, all references to the Excess Dividend Amount shall
be deleted from Section 9.2(a)(iii) of the Equity Definitions.

 

 

 

Settlement Date:

 

For each Transaction, if the Number of Shares to be Delivered for such
Transaction is positive, the date that is one Settlement Cycle immediately
following the Termination Date for such Transaction.

 

 

 

Settlement Currency:

 

USD

 

 

 

Initial Share Delivery:

 

For each Transaction, JPMorgan shall deliver a number of Shares equal to the
Initial Shares for such Transaction to Counterparty on the Initial Share
Delivery Date for such Transaction in accordance with Section 9.4 of the Equity
Definitions, with such Initial Share Delivery Date deemed to be a “Settlement
Date” for purposes of such Section 9.4.

 

 

 

Initial Share Delivery Date:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Initial Shares:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Minimum Share Delivery:

 

For each Transaction, JPMorgan shall deliver a number of Shares equal to the
excess, if any, of the Minimum Shares over the Initial Shares on the Minimum
Share Delivery

 

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Date for such Transaction in accordance with Section 9.4 of the Equity
Definitions, with such Minimum Share Delivery Date deemed to be a “Settlement
Date” for purposes of such Section 9.4.

 

 

 

Minimum Share Delivery Date:

 

For each Transaction, the date one Settlement Cycle immediately following the
Hedge Completion Date for such Transaction.

 

 

 

Minimum Shares:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Minimum Share Threshold:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Maximum Shares:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Maximum Share Threshold:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Hedging Threshold Price:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Share Adjustments.

 

 

 

 

 

Potential Adjustment Event:

 

In addition to the events described in Section 11.2(e) of the Equity
Definitions, it shall constitute an additional Potential Adjustment Event if
(x) the Scheduled Termination Date for any Transaction is postponed pursuant to
“Valuation Disruption” above (including, for the avoidance of doubt, pursuant to
Section 7 hereof), (y) a Regulatory Disruption as described in Section 7 occurs
or (z) a Disruption Event occurs. In the case of any event described in clause
(x), (y) or (z) above occurs, the Calculation Agent may, in its commercially
reasonable discretion and acting in good faith, adjust any relevant terms of
such Transaction as necessary to preserve as nearly as practicable the fair
value of such Transaction to JPMorgan prior to such postponement, Regulatory
Disruption or Disruption Event, as the case may be.

 

 

 

Excess Dividend:

 

Any dividend or distribution on the Shares (other than any dividend or
distribution of the type described in Section 11.2(e)(i) or
Section 11.2(e)(ii)(A) of the Equity Definitions or any Extraordinary Dividend).
“Extraordinary Dividend” means the per Share cash dividend or distribution, or a
portion thereof, declared by Counterparty on the Shares that is classified by
the board of directors of Counterparty as an “extraordinary” dividend.

 

 

 

Consequences of Excess Dividend:

 

The declaration by the Issuer of any Excess Dividend, the ex-dividend date for
which occurs or is scheduled to occur during the Relevant Dividend Period for
any Transaction, shall, at JPMorgan’s election acting in good faith and a
commercially reasonable manner, either (x) constitute an Additional Termination
Event in respect of such Transaction, with Counterparty as the sole Affected

 

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Party and such Transaction as the sole Affected Transaction or (y) result in an
adjustment, by the Calculation Agent, to the Minimum Shares, Minimum Share
Threshold, Maximum Shares or Maximum Share Threshold as the Calculation Agent
reasonably determines appropriate to preserve the fair value of such Transaction
after taking into account such Excess Dividend.

 

 

 

Method of Adjustment:

 

Calculation Agent Adjustment

 

 

 

Relevant Dividend Period:

 

For each Transaction, the period from, and including, the Trade Date for such
Transaction to, and including, the Relevant Dividend Period End Date for such
Transaction.

 

 

 

Relevant Dividend Period End Date:

 

For each Transaction, if the Number of Shares to be Delivered for such
Transaction is negative, the last day of the Settlement Valuation Period;
otherwise, the Termination Date for such Transaction.

 

 

 

Extraordinary Events.

 

 

 

 

 

Consequences of Merger Events:

 

 

 

 

 

(a) Share-for-Share:

 

Modified Calculation Agent Adjustment

 

 

 

(b) Share-for-Other:

 

Cancellation and Payment

 

 

 

(c) Share-for-Combined:

 

Component Adjustment

 

 

 

Tender Offer:

 

Applicable; provided that (a) Section 12.1(l) of the Equity Definitions shall be
amended by (i) deleting the parenthetical in the fifth line thereof,
(ii) replacing “that” in the fifth line thereof with “whether or not such
announcement” and (iii) adding immediately after the words “Tender Offer” in the
fifth line thereof “, and any publicly announced change or amendment to such an
announcement (including, without limitation, the announcement of an abandonment
of such intention)” and (b) Sections 12.3(a) and 12.3(d) of the Equity
Definitions shall each be amended by replacing each occurrence of the words
“Tender Offer Date” by “Announcement Date.”

 

 

 

 

 

Notwithstanding anything to the contrary in Section 12.1(d) of the Equity
Definitions, in respect of any Transaction, JPMorgan and Counterparty agree that
for purposes of determining whether any event has resulted in any entity or
person purchasing, or otherwise obtaining or having the right to obtain (as such
concepts are used in Section 12.1(d) of the Equity Definitions), greater than
10% of the outstanding voting shares of the Issuer, voting shares of the Issuer
that such entity or person has purchased, or otherwise obtained or has the right
to obtain, prior to the Trade Date for such Transaction (as determined by the
Calculation Agent in accordance with Section 12.1(d) of the Equity Definitions)
shall be disregarded.

 

 

 

Consequences of Tender Offers:

 

 

 

 

 

(a) Share-for-Share:

 

Modified Calculation Agent Adjustment

 

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(b) Share-for-Other:

 

Modified Calculation Agent Adjustment

 

 

 

(c) Share-for-Combined:

 

Modified Calculation Agent Adjustment

 

 

 

Nationalization, Insolvency or Delisting:

 

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

 

 

 

Additional Disruption Events:

 

 

 

 

 

(a) Change in Law:

 

Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is
hereby amended by (i) replacing the phrase “the interpretation” in the third
line thereof with the phrase “, or public announcement of, the formal or
informal interpretation” and (ii) replacing the word “Shares” where it appears
in clause (X) thereof with the words “Hedge Positions”; provided further that
Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the
parenthetical beginning after the word “regulation” in the second line thereof
with the words “(including, for the avoidance of doubt and without limitation,
(x) any tax law or (y) adoption or promulgation of new regulations authorized or
mandated by existing statute)”.

 

 

 

(b) Failure to Deliver:

 

Applicable

 

 

 

(c) Insolvency Filing:

 

Applicable

 

 

 

(d) Loss of Stock Borrow:

 

Applicable

 

 

 

Maximum Stock Loan Rate:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Hedging Party:

 

JPMorgan

 

 

 

Determining Party:

 

JPMorgan

 

 

 

(e) Hedging Disruption:

 

Applicable

 

 

 

Hedging Party:

 

JPMorgan

 

 

 

Determining Party:

 

JPMorgan

 

 

 

(f) Increased Cost of Hedging:

 

Applicable

 

 

 

Hedging Party:

 

JPMorgan

 

 

 

Determining Party:

 

JPMorgan

 

 

 

(g) Increased Cost of Stock Borrow:

 

Applicable

 

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Initial Stock Loan Rate:

 

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

 

Hedging Party:

 

JPMorgan

 

 

 

Determining Party:

 

JPMorgan

 

 

 

Hedging Adjustments:

 

For the avoidance of doubt, whenever the Calculation Agent is called upon to
make an adjustment pursuant to the terms of this Confirmation or the Equity
Definitions to take into account the effect of an event, the Calculation Agent
shall make such adjustment by reference to the effect of such event on JPMorgan,
assuming that JPMorgan maintains a commercially reasonable Hedge Position.

 

 

 

Determining Party Provisions:

 

Following any determination or calculation by the Determining Party hereunder,
upon a written request by Counterparty, the Determining Party will promptly (but
in any event within three Exchange Business Days) provide to Counterparty a
report displaying in reasonable detail the basis for such determination or
calculation, as the case may be, it being understood and agreed that the
Determining Party shall not be obligated to disclose any proprietary or
confidential models or any other confidential or proprietary information, in
each case, used by it for such determination or calculation.

 

 

 

Non-Reliance/Agreements and Acknowledgements Regarding Hedging
Activities/Additional Acknowledgements:

 

Applicable

 

 

 

2.             Calculation Agent.

 

JPMorgan; provided that, following the occurrence of an Event of Default
described in Section 5(a)(vii) of the Agreement with respect to which JPMorgan
is the Defaulting Party, Counterparty shall have the right to designate a
nationally recognized third-party dealer in over-the-counter corporate equity
derivatives to act as the Calculation Agent. Whenever the Calculation Agent is
required to act or to exercise judgment in any way with respect to any
Transaction hereunder, it will do so in good faith and in a commercially
reasonable manner.

 

 

 

 

 

Following any determination or calculation by the Calculation Agent hereunder,
upon a written request by Counterparty, the Calculation Agent will promptly (but
in any event within three Exchange Business Days) provide to Counterparty a
report displaying in reasonable detail the basis for such determination or
calculation, as the case may be, it being understood that the Calculation Agent
shall not be obligated to disclose any proprietary or confidential models or any
other confidential or proprietary information, in each case, used by it for such
determination or calculation.

 

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3.                                      Account Details.

 

(a)                                 Account for payments to Counterparty:

 

Bank:                                          JPMorgan Chase Bank, N.A.

ABA#:                                      021000021

Acct No.:                         323-018688

Beneficiary:         PHH Corporation

Ref:                                                    ASR

 

Account for delivery of Shares to Counterparty:

 

Delivery by DTC to Counterparty’s transfer agent.

 

(b)                                 Account for payments to JPMorgan:

 

Bank:                                          JPMorgan Chase Bank, N.A., New
York

ABA#:                                      021000021

Acct No.:                         099997979

Swift Code:            CHASUS33XXX

Beneficiary:   JPMorgan Chase Bank, N.A.

Ref:                                                    OTC Derivatives

 

Account for delivery of Shares to JPMorgan:

 

DTC 0352

 

4.                                      Offices.

 

(a)                                 The Office of Counterparty for each
Transaction is: Inapplicable, Counterparty is not a Multibranch Party.

 

(b)                                 The Office of JPMorgan for each Transaction
is: London

 

JPMorgan Chase Bank, National Association
London Branch
P.O.  Box 161
60 Victoria Embankment
London EC4Y 0JP
England

 

5.                                      Notices.

 

(a)                                 Address for notices or communications to
Counterparty:

 

PHH Corporation
3000 Leadenhall Road

Mailstop PCFI
Mt. Laurel, NJ 08054
Attention:                                         Hugo Arias, Vice President &
Interim Treasurer
Telephone No.:             (856) 917-0108
Facsimile No.:                   (856) 917-4278
Email Address:              hugo.arias@phh.com

 

(b)                                 Address for notices or communications to
JPMorgan:

 

JPMorgan Chase Bank, National Association
EDG Marketing Support
Email:            edg_notices@jpmorgan.com

edg_ny_corporate_sales_support@jpmorgan.com

Facsimile No:                      1-866-886-4506

 

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With a copy to:

 

Attention:                                         Jason Shrednick
Title:                                                                   
Executive Director
Telephone No.:             212-622-6392
Facsimile No.:                   917-464-6770
Email Address:              jason.shrednick@jpmorgan.com

 

6.                                      Representations, Warranties and
Agreements.

 

(a)                                 Additional Representations, Warranties and
Covenants of Each Party.  In addition to the representations, warranties and
covenants in the Agreement, each party represents, warrants and covenants to the
other party that:

 

(i)                                     It is an “eligible contract participant”
(as such term is defined in the Commodity Exchange Act, as amended).

 

(ii)                                  Each party acknowledges that the offer and
sale of each Transaction to it is intended to be exempt from registration under
the Securities Act of 1933, as amended (the “Securities Act”), by virtue of
Section 4(2) thereof.  Accordingly, each party represents and warrants to the
other that (A) it has the financial ability to bear the economic risk of its
investment in each Transaction and is able to bear a total loss of its
investment, (B) it is an “accredited investor” as that term is defined under
Regulation D under the Securities Act and (C) the disposition of each
Transaction is restricted under this Master Confirmation, the Securities Act and
state securities laws.

 

(b)                                 Additional Representations, Warranties and
Covenants of Counterparty.  In addition to the representations, warranties and
covenants in the Agreement, Counterparty represents, warrants and covenants to
JPMorgan that:

 

(i)                                     As of the Trade Date for each
Transaction hereunder, Counterparty is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland.  Each of
this Master Confirmation and the Supplemental Confirmation for such Transaction
has been duly authorized, executed and delivered by Counterparty and (assuming
due authorization, execution and delivery thereof by JPMorgan) this Master
Confirmation, as supplemented by such Supplemental Confirmation, constitutes a
valid and legally binding obligation of Counterparty.  Counterparty has all
corporate power to enter into this Master Confirmation, such Supplemental
Confirmation and the Trade Notification for such Transaction and to consummate
the transactions contemplated hereby and thereby and to purchase the Shares and
deliver any Settlement Shares in accordance with the terms hereof and thereof.

 

(ii)                                  As of the Trade Date for each Transaction
hereunder, the execution and delivery by Counterparty of, and the performance by
Counterparty of its obligations under, this Master Confirmation and the
Supplemental Confirmation for such Transaction, and the consummation of the
transactions herein and therein contemplated, do not conflict with or violate
(A) any provision of the articles of incorporation or by-laws of Counterparty,
(B) any statute or order, rule, regulation or judgment of any court or
governmental agency or body having jurisdiction over Counterparty in any
material respect or (C) any material contractual restriction binding on or
affecting Counterparty.

 

(iii)                               As of the Trade Date for each Transaction
hereunder, all governmental and other consents that are required to have been
obtained by Counterparty with respect to performance, execution and delivery of
this Master Confirmation and the Supplemental Confirmation for such Transaction
have been obtained and are in full force and effect and all conditions of any
such consents have been complied with.

 

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(iv)                              As of the Trade Date for each Transaction
hereunder, (A) such Transaction is being entered into pursuant to a publicly
disclosed Share buy-back program and its Board of Directors has approved the use
of derivatives to effect the Share buy-back program, and (B) there is no
internal policy of Counterparty that would prohibit Counterparty from entering
into any aspect of such Transaction, including, without limitation, the
purchases of Shares to be made pursuant to such Transaction.

 

(v)                                 As of the Trade Date for each Transaction
hereunder, the purchase or writing of such Transaction and the transactions
contemplated hereby will not violate Rule 13e-1 or Rule 13e-4 under the Exchange
Act.

 

(vi)                              As of the Trade Date for each Transaction
hereunder, it is not entering into such Transaction (A) on the basis of, and is
not aware of, any material non-public information regarding Counterparty or the
Shares, (B) in anticipation of, in connection with, or to facilitate, a
distribution of its securities, a self tender offer or a third-party tender
offer in violation of the Exchange Act or (C) to create actual or apparent
trading activity in the Shares (or any security convertible into or exchangeable
for the Shares) or to raise or depress or otherwise manipulate the price of the
Shares (or any security convertible into or exchangeable for the Shares).

 

(vii)                           Counterparty (A) is capable of evaluating
investment risks independently, both in general and with regard to all
transactions and investment strategies involving a security or securities;
(B) will exercise independent judgment in evaluating the recommendations of any
broker-dealer or its associated persons, unless it has otherwise notified the
broker-dealer in writing; and (C) has total assets of at least USD 50,000,000 as
of the date hereof.

 

(viii)                        As of the Trade Date for each Transaction
hereunder, Counterparty is in compliance in all material respects with its
reporting obligations under the Exchange Act and its most recent Annual Report
on Form 10-K, together with all reports subsequently filed by it through such
Trade Date pursuant to the Exchange Act, taken together and as amended and
supplemented to the date of this representation, do not, as of their respective
filing dates, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

 

(ix)                              Counterparty has made, and will make, all
filings required to be made by it with the Securities and Exchange Commission,
any securities exchange or any other regulatory body with respect to each
Transaction.

 

(x)                                 The Shares are not, and Counterparty will
not cause the Shares to be, subject to a “restricted period” (as defined in
Regulation M promulgated under the Exchange Act) at any time during any
Regulation M Period (as defined below) for any Transaction unless Counterparty
has provided written notice to JPMorgan of such restricted period not later than
the Scheduled Trading Day immediately preceding the first day of such
“restricted period”; Counterparty acknowledges that any such notice may cause a
Disrupted Day to occur pursuant to Section 6(c) below; accordingly, Counterparty
acknowledges that its delivery of such notice must comply with the standards set
forth in Section 8 below.  Counterparty is not currently contemplating any
“distribution” (as defined in Regulation M promulgated under the Exchange Act)
of Shares, or any security for which Shares are a “reference security” (as
defined in Regulation M promulgated under the Exchange Act).  “Regulation M
Period” means, for any Transaction, (A) the Relevant Period (as defined below)
for such Transaction, (B) the Settlement Valuation Period, if any, for such
Transaction and (C) the Seller Termination Purchase Period (as defined below),
if any, for such Transaction.  “Relevant Period” means, for any Transaction, the
period commencing on the first day of the Hedge Period for such Transaction and
ending on the later of (1) the earlier of (x) the Scheduled Termination Date and
(y) the last Additional Relevant Day (as specified in the related Supplemental
Confirmation) for such Transaction, or such earlier day as elected by JPMorgan
and communicated to

 

13

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Counterparty on such day (or, if later, the First Acceleration Date without
regard to any acceleration thereof pursuant to “Special Provisions for
Acquisition Transaction Announcements” below) and (2) if Section 15 is
applicable to such Transaction, the date on which all deliveries owed pursuant
to Section 15 have been made.

 

(xi)                              As of the Trade Date, the Prepayment Date, the
Initial Share Delivery Date, the Minimum Share Delivery Date, the Settlement
Date, any Cash Settlement Payment Date and any Settlement Method Election Date
for each Transaction, Counterparty is not “insolvent” (as such term is defined
under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States
Code) (the “Bankruptcy Code”)) and on the relevant date, Counterparty would be
able to purchase a number of Shares with a value equal to the Prepayment Amount
in compliance with the laws of the jurisdiction of Counterparty’s incorporation.

 

(xii)                           Counterparty is not, and after giving effect to
each Transaction will not be, required to register as an “investment company” as
such term is defined in the Investment Company Act of 1940, as amended.

 

(xiii)                        Other than the Master Confirmation—Uncollared
Accelerated Share Repurchase Agreement of even date herewith between JPMorgan
and Counterparty (the “Uncollared ASR Agreement”), Counterparty has not entered,
and will not enter, into any repurchase transaction with respect to the Shares
(or any security convertible into or exchangeable for the Shares) (including,
without limitation, any agreements similar to the Transactions described herein)
where any initial hedge period, calculation period, relevant period, settlement
valuation period or seller termination purchase period (each however defined) in
such other transaction will overlap at any time (including, without limitation,
as a result of extensions in such initial hedge period, calculation period,
relevant period, settlement valuation period or seller termination purchase
period as provided in the relevant agreements) with any Relevant Period, any
Settlement Valuation Period (if applicable) or any Seller Termination Purchase
Period (if applicable) under this Master Confirmation.  In the event that the
initial hedge period, relevant period, calculation period or settlement
valuation period in any other transaction overlaps with any Relevant Period, any
Settlement Valuation Period (if applicable) or any Seller Termination Purchase
Period (if applicable) under this Master Confirmation as a result of any
postponement of the Scheduled Termination Date or extension of the Settlement
Valuation Period pursuant to “Valuation Disruption” above or any analogous
provision in such other transaction, Counterparty shall promptly amend such
other transaction (excluding the Uncollared ASR Agreement) to avoid any such
overlap. Notwithstanding the foregoing, nothing in this Section 6(b)(xii) shall
prohibit or apply to the repurchase of Shares by Counterparty from holders of
awards granted under Counterparty’s equity incentive plans for the purpose of
paying the tax withholding obligations arising from vesting of, or paying the
exercise price in connection with the exercise of, or reacquiring Shares as a
result of the forfeiture of, any such awards (collectively, “Permitted
Purchases”).

 

(xiv)                       Counterparty shall, at least one day prior to the
first day of the Hedge Period, the Settlement Valuation Period, if any, or the
Seller Termination Purchase Period, if any, for any Transaction, notify JPMorgan
of the total number of Shares purchased in Rule 10b-18 purchases of blocks
pursuant to the once-a-week block exception set forth in paragraph (b)(4) of
Rule 10b-18 under the Exchange Act (“Rule 10b-18”) by or for Counterparty or any
of its “affiliated purchasers” (as defined in Rule 10b-18) during each of the
four calendar weeks preceding such day and during the calendar week in which
such day occurs (“Rule 10b-18 purchase” and “blocks” each being used as defined
in Rule 10b-18), which notice shall be substantially in the form set forth in
Schedule C hereto.

 

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(xv)                          As of the Trade Date for each Transaction
hereunder, and as of the date of any election with respect to any Transaction
hereunder, there has not been any Merger Announcement (as defined below).

 

(c)                                  Additional Representations, Warranties and
Covenants of JPMorgan.  In addition to the representations, warranties and
covenants in the Agreement, JPMorgan represents, warrants and covenants to
Counterparty that:

 

(i)                                     JPMorgan agrees to use commercially
reasonable efforts, during the Calculation Period and any Settlement Valuation
Period (as defined in Annex A) for any Transaction, to make all purchases of
Shares in connection with such Transaction in a manner that would comply with
the limitations set forth in clauses (b)(1), (b)(2), (b)(3) and (b)(4) and
(c) of Rule 10b-18, as if such rule were applicable to such purchases and taking
into account any applicable Securities and Exchange Commission no-action letters
as appropriate, and subject to any delays between the execution and reporting of
a trade of the Shares on the Exchange and other circumstances beyond JPMorgan’s
control; provided that, during the Calculation Period, the foregoing agreement
shall not apply to purchases made to dynamically hedge for JPMorgan’s own
account or the account of its affiliate(s) the optionality arising under a
Transaction (including, for the avoidance of doubt, timing optionality);
provided further that, without limiting the generality of the first sentence of
this Section 6(c)(i), JPMorgan shall not be responsible for any failure to
comply with Rule 10b-18(b)(3) to the extent any transaction that was executed
(or deemed to be executed) by or on behalf of Counterparty or an “affiliated
purchaser” (as defined under Rule 10b-18) pursuant to a separate agreement is
not deemed to be an “independent bid” or an “independent transaction” for
purposes of Rule 10b-18(b)(3).

 

(ii)                                  In connection with each Transaction,
JPMorgan represents and warrants to Counterparty that it has not, at any time on
or before the Trade Date for such Transaction, discussed any offsetting
transaction(s) in respect of such Transaction with any third party.

 

(iii)                               Within one Exchange Business Day of
purchasing any Shares on behalf of Counterparty pursuant to the once-a-week
block exception set forth in paragraph (b)(4) of Rule 10b-18, JPMorgan shall
notify Counterparty of the total number of Shares so purchased.

 

(iv)                              On the first Exchange Business Day of each
week, JPMorgan shall provide weekly reports (the “Weekly Reports”) in connection
with such Transaction to Counterparty and to such other persons or agents of
Counterparty as Counterparty shall reasonably designate in writing, by
electronic mail to Counterparty or its designee. Each Weekly Report shall
include the ADTV in the Shares for each Scheduled Trading Day during the
immediately preceding week (as defined and determined in accordance with
Rule 10b-18, as defined herein), the VWAP Price for each such Scheduled Trading
Day and the high and low price on each such Scheduled Trading Day. For the
avoidance of doubt and notwithstanding anything to the contrary in the two
immediately preceding sentences, the VWAP Price for purposes of this Master
Confirmation shall be determined pursuant to the language opposite the caption
“VWAP Price” in Section 1 of this Master Confirmation under the heading
“Valuation” and not on the basis of, or by reference to, the VWAP Price set
forth in any Weekly Report.

 

(v)                                 As of the Trade Date for each Transaction
hereunder, JPMorgan is a national banking association duly organized, validly
existing and in good standing under the laws of the United States. Each of this
Master Confirmation and the Supplemental Confirmation for such Transaction has
been duly authorized, executed and delivered by JPMorgan and (assuming due
authorization, execution and delivery thereof by Counterparty) this Master
Confirmation, as supplemented by such Supplemental Confirmation, constitutes a
valid and legally binding obligation of JPMorgan. JPMorgan has all corporate
power to enter into this Master Confirmation and such Supplemental Confirmation
and to consummate the transactions contemplated hereby and thereby and to sell
the Shares and deliver any Settlement Shares in accordance with the terms hereof
and thereof.

 

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(d)                                 Additional Tax Representations, Warranties
and Covenants of JPMorgan.

 

(i)             For the purpose of Section 3(f) of the Agreement, JPMorgan
represents that JPMorgan is the beneficial owner of all payments for, under or
in connection with each Transaction.

 

(ii)          For the purpose of Section 4(a)(i) of the Agreement, JPMorgan
agrees to deliver to Counterparty correct and properly executed United States
Internal Revenue Service Form W-9 from JPMorgan Chase Bank, National Association
(doing business as JPMorgan), in form and substance reasonably satisfactory to
Counterparty, at the following times: (i) upon execution of this Master
Confirmation, (ii) promptly upon reasonable demand by Counterparty and
(iii) promptly upon learning that any such form previously provided by JPMorgan
has become obsolete or incorrect.

 

7.                                      Regulatory Disruption.  In the event
that JPMorgan concludes in good faith and in a reasonable manner that, based on
the advice of counsel, it is appropriate with respect to any legal, regulatory
or self-regulatory requirements or related policies and procedures (whether or
not such requirements, policies or procedures similarly applicable to equity
derivatives transactions and consistently applied are imposed by law or have
been voluntarily adopted by JPMorgan), for it to refrain from or decrease any
market activity on any Scheduled Trading Day or Days during the Hedge Period,
the Calculation Period or, if applicable, the Settlement Valuation Period,
JPMorgan may by written notice to Counterparty elect to deem that a Market
Disruption Event has occurred and will be continuing on such Scheduled Trading
Day or Days.  For the avoidance of doubt, JPMorgan may take into account any
hedging (including the unwind of any hedge position) and settlement activity in
connection with the 2009 Bond Hedge, the 2009 Warrant, and the Other ASR
Agreement (each as defined below) in determining whether it would be appropriate
for it to so refrain from or decrease any market activity.

 

8.                                      10b5-1 Plan.  Counterparty represents,
warrants and covenants to JPMorgan that:

 

(a)                                 Counterparty is entering into this Master
Confirmation and each Transaction hereunder in good faith and not as part of a
plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act
(“Rule 10b5-1”) or any other antifraud or anti-manipulation provisions of the
federal or applicable state securities laws and that it has not entered into or
altered and will not enter into or alter any corresponding or hedging
transaction or position with respect to the Shares other than the Uncollared ASR
Agreement.  Counterparty acknowledges that it is the intent of the parties that
each Transaction entered into under this Master Confirmation comply with the
requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 and each
Transaction entered into under this Master Confirmation shall be interpreted to
comply with the requirements of Rule 10b5-1(c).

 

(b)                                 During the Hedge Period, the Calculation
Period and the Settlement Valuation Period, if any, for any Transaction and in
connection with the delivery of any Alternative Delivery Units for any
Transaction, JPMorgan (or its agent or Affiliate) may effect transactions in
Shares in connection with such Transaction.  The timing of such transactions by
JPMorgan, the price paid or received per Share pursuant to such transactions and
the manner in which such transactions are made, including, without limitation,
whether such transactions are made on any securities exchange or privately,
shall be within the sole judgment of JPMorgan.  Counterparty acknowledges and
agrees that all such transactions shall be made in JPMorgan’s sole judgment and
for JPMorgan’s own account.

 

(c)                                  Counterparty does not have, and shall not
attempt to exercise, any control or influence over how, when or whether JPMorgan
(or its agent or Affiliate) makes any “purchases or sales” (within the meaning
of Rule 10b5-1(c)(1)(i)(B)(3)) in connection with any Transaction, including,
without limitation, over how, when or whether JPMorgan (or its agent or
Affiliate) enters into any hedging transactions.  Counterparty represents and
warrants that it has consulted with its own advisors as to the legal aspects of
its adoption and implementation of this Master Confirmation, each Supplemental
Confirmation and each Trade Notification under Rule 10b5-1.

 

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(d)                                 Counterparty acknowledges and agrees that
any amendment, modification, waiver or termination of this Master Confirmation,
any Supplemental Confirmation or any Trade Notification must be effected in
accordance with the requirements for the amendment or termination of a “plan” as
defined in Rule 10b5-1(c).  Without limiting the generality of the foregoing,
any such amendment, modification, waiver or termination shall be made in good
faith and not as part of a plan or scheme to evade the prohibitions of
Rule 10b-5, and no such amendment, modification or waiver shall be made at any
time at which Counterparty or any officer, director, manager or similar person
of Counterparty is aware of any material non-public information regarding
Counterparty or the Shares.

 

(e)                                  Counterparty shall not, directly or
indirectly, communicate any information relating to the Shares or any
Transaction (including, without limitation, any notices required by
Section 10(a)) to any employee of JPMorgan or JPMS, other than as set forth in
the Communications Procedures attached as Annex B hereto.

 

9.                                      Counterparty Purchases.  Counterparty
(or any “affiliate” or “affiliated purchaser” as defined in Rule 10b-18) shall
not, without the prior written consent of JPMorgan, directly or indirectly
(including, without limitation, by means of a derivative instrument) purchase,
offer to purchase, place any bid or limit order that would effect a purchase of,
or commence any tender offer relating to, any Shares (or equivalent interest,
including, without limitation, a unit of beneficial interest in a trust or
limited partnership or a depository share), listed contracts on the Shares or
securities that are convertible into, or exchangeable or exercisable for Shares
(including, without limitation, any Rule 10b-18 purchases of blocks (as defined
in Rule 10b-18)) during any Relevant Period, any Settlement Valuation Period (if
applicable) or any Seller Termination Purchase Period (if applicable), under
this Master Confirmation. Nothing in this Section 9 shall prohibit or apply to
Permitted Purchases or to any acquisition, exercise, exchange or other
transaction in connection with any awards under any equity incentive plan or
program of Counterparty.

 

10.                               Special Provisions for Merger Transactions. 
Notwithstanding anything to the contrary herein or in the Equity Definitions:

 

(a)                                 Counterparty agrees that it:

 

(i)                                     will not during the period commencing on
the Trade Date for any Transaction and ending on the last day of the Relevant
Period or, if applicable, the later of the last day of the Settlement Valuation
Period and the last day of the Seller Termination Purchase Period, for such
Transaction make or, to the extent within Counterparty’s reasonable control, 
permit to be made, any public announcement (as defined in Rule 165(f) under the
Securities Act) of any Merger Transaction or potential Merger Transaction (a
“Merger Announcement”) unless such Merger Announcement is made prior to the
opening or after the close of the regular trading session on the Exchange for
the Shares;

 

(ii)                                  shall promptly (but in any event prior to
the next opening of the regular trading session on the Exchange) notify JPMorgan
following any such Merger Announcement that such Merger Announcement has been
made; and

 

(iii)                               shall promptly (but in any event prior to
the next opening of the regular trading session on the Exchange) provide
JPMorgan with written notice specifying (i) Counterparty’s average daily
Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar
months immediately preceding the announcement date of any Merger Transaction or
potential Merger Transaction that were not effected through JPMorgan or its
Affiliates and (ii) the number of Shares purchased pursuant to the proviso in
Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months
preceding the announcement date of any Merger Transaction or potential Merger
Transaction.  Such written notice shall be deemed to be a certification by
Counterparty to JPMorgan that such information is true and correct.  In
addition, Counterparty shall promptly notify JPMorgan of the earlier to occur of
the completion of such transaction and the completion of the vote by target
shareholders.

 

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(b)                                 Counterparty acknowledges that any such
Merger Announcement or delivery of a notice with respect thereto may cause the
terms of any Transaction to be adjusted or such Transaction to be terminated;
accordingly, Counterparty acknowledges that its delivery of such notice must
comply with the standards set forth in Section 8 above.

 

(c)                                  Upon the occurrence of any Merger
Announcement (whether made by Counterparty or a third party), JPMorgan may
acting in a commercially reasonable manner (i) make adjustments to the terms of
any Transaction, including, without limitation, the Scheduled Termination Date
or the Forward Price Adjustment Amount, and/or suspend the Hedge Period, the
Calculation Period and/or any Settlement Valuation Period or (ii) treat the
occurrence of such Merger Announcement as an Additional Termination Event with
Counterparty as the sole Affected Party and the Transactions hereunder as the
Affected Transactions and with the amount under Section 6(e) of the Agreement
determined taking into account the fact that the Calculation Period or
Settlement Valuation Period, as the case may be, had fewer Scheduled Trading
Days than originally anticipated.

 

“Merger Transaction” means any merger, acquisition or similar transaction
involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the
Exchange Act.

 

11.                               Special Provisions for Acquisition Transaction
Announcements.  Notwithstanding anything to the contrary herein or in the Equity
Definitions:

 

(a)                                 If an Acquisition Transaction Announcement
occurs on or prior to the Settlement Date for any Transaction, then the
Calculation Agent shall make such commercially reasonable adjustments to the
exercise, settlement, payment or any other terms of such Transaction as the
Calculation Agent determines appropriate (including, without limitation and for
the avoidance of doubt, adjustments that would allow the Number of Shares to be
Delivered to be less than zero), at such time or at multiple times as the
Calculation Agent determines appropriate, to account for the economic effect on
such Transaction of such event (including adjustments to account for changes in
volatility, expected dividends, stock loan rate, value of any commercially
reasonable Hedge Positions in connection with the Transaction and liquidity
relevant to the Shares or to such Transaction).  If an Acquisition Transaction
Announcement occurs after the Trade Date, but prior to the First Acceleration
Date of any Transaction, the First Acceleration Date shall be the date of such
Acquisition Transaction Announcement.  If the Number of Shares to be Delivered
for any settlement of any Transaction is a negative number, then the terms of
the Counterparty Settlement Provisions in Annex A hereto shall apply.

 

(b)                                 “Acquisition Transaction Announcement” means
(i) the announcement of an Acquisition Transaction or an event that, if
consummated, would result in an Acquisition Transaction, (ii) an announcement
that Counterparty or any of its subsidiaries has entered into an agreement, a
letter of intent or an understanding designed to result in an Acquisition
Transaction, (iii) the announcement of the intention to solicit or enter into,
or to explore strategic alternatives or other similar undertaking that may
include, an Acquisition Transaction, (iv) any other announcement that in the
reasonable judgment of the Calculation Agent is reasonably likely to result in
an Acquisition Transaction, or (v) any announcement of any change or amendment
to any previous Acquisition Transaction Announcement (including any announcement
of the abandonment of any such previously announced Acquisition Transaction,
agreement, letter of intent, understanding or intention).  For the avoidance of
doubt, announcements as used in the definition of Acquisition Transaction
Announcement refer to any public announcement whether made by the Issuer or a
third party.

 

(c)                                  “Acquisition Transaction” means (i) any
Merger Event (for purposes of this definition the definition of Merger Event
shall be read with the references therein to “100%” being replaced by “30%” and
references to “50%” being replaced by “75%” and without reference to the clause
beginning immediately following the definition of Reverse Merger therein to the
end of such definition), Tender Offer or Merger Transaction or any other
transaction involving the merger of Counterparty with or into any third party,
(ii) the sale or transfer of all or substantially all of the assets of
Counterparty, (iii) a recapitalization, reclassification, binding share exchange
or other

 

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similar transaction with respect to Counterparty, (iv) any acquisition by
Counterparty or any of its subsidiaries where the aggregate consideration
transferable by Counterparty or its subsidiaries exceeds 50% of the market
capitalization of Counterparty (measured as of the relevant date of
announcement), (v) any lease, exchange, transfer, disposition (including,
without limitation, by way of spin-off or distribution) of assets (including,
without limitation, any capital stock or other ownership interests in
subsidiaries) or other similar event by Counterparty or any of its subsidiaries
where the aggregate consideration transferable or receivable by or to
Counterparty or its subsidiaries exceeds 30% of the market capitalization of
Counterparty (measured as of the relevant date of announcement) or (vi) any
transaction in which Counterparty or its board of directors has a legal
obligation to make a recommendation to its shareholders in respect of such
transaction (whether pursuant to Rule 14e-2 under the Exchange Act or
otherwise), in each case, excluding the acquisition or sale of mortgage
servicing rights or mortgage loans acquired or sold in the ordinary course of
Counterparty’s business.

 

12.                               Acknowledgments.

 

(a)                                 The parties hereto intend for:

 

(i)                                     each Transaction to be a “securities
contract” as defined in Section 741(7) of the Bankruptcy Code and a “forward
contract” as defined in Section 101(25) of the Bankruptcy Code, and the parties
hereto to be entitled to the protections afforded by, among other Sections,
Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 555, 556, 560 and 561 of
the Bankruptcy Code;

 

(ii)                                  the Agreement to be a “master netting
agreement” as defined in Section 101(38A) of the Bankruptcy Code;

 

(iii)                               a party’s right to liquidate, terminate or
accelerate any Transaction, net out or offset termination values or payment
amounts, and to exercise any other remedies upon the occurrence of any Event of
Default or Termination Event under the Agreement with respect to the other party
or any Extraordinary Event that results in the termination or cancellation of
any Transaction to constitute a “contractual right” (as defined in the
Bankruptcy Code); and

 

(iv)                              all payments for, under or in connection with
each Transaction, all payments for the Shares (including, for the avoidance of
doubt, payment of the Prepayment Amount) and the transfer of such Shares to
constitute “settlement payments” and “transfers” (as defined in the Bankruptcy
Code).

 

(b)                                 Counterparty acknowledges that:

 

(i)                                     during the term of any Transaction,
JPMorgan and its Affiliates may buy or sell Shares or other securities or buy or
sell options or futures contracts or enter into swaps or other derivative
securities in order to establish, adjust or unwind its hedge position with
respect to such Transaction;

 

(ii)                                  JPMorgan and its Affiliates may also be
active in the market for the Shares and Share-linked transactions other than in
connection with hedging activities in relation to any Transaction including,
without limitation, hedging (including the unwind of any hedge position) and
settlement activity in connection with the Master Terms and Conditions for
Convertible Bond Hedging Transactions dated September 23, 2009 between JPMorgan
and Counterparty (the “2009 Bond Hedge”), the Master Terms and Conditions for
Warrants dated September 23, 2009 between JPMorgan and Counterparty (the “2009
Warrant”) and the Master Confirmation—Uncollared Accelerated Share Repurchase of
even date herewith between JPMorgan and Counterparty (the “Other ASR
Agreement”);

 

(iii)                               JPMorgan shall make its own determination as
to whether, when or in what manner any hedging or market activities in
Counterparty’s securities shall be conducted and shall do

 

19

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so in a manner that it deems appropriate to hedge its price and market risk with
respect to the Forward Price and the VWAP Price;

 

(iv)                              any market activities of JPMorgan and its
Affiliates with respect to the Shares may affect the market price and volatility
of the Shares, as well as the Hedge Period Reference Price, the Forward Price,
VWAP Price and Settlement Price, each in a manner that may be adverse to
Counterparty; and

 

(v)                                 each Transaction is a derivatives
transaction in which it has granted JPMorgan an option; JPMorgan may purchase
shares for its own account at an average price that may be greater than, or less
than, the price paid by Counterparty under the terms of the related Transaction.

 

13.                               No Collateral, Netting or Setoff. 
Notwithstanding any provision of the Agreement or any other agreement between
the parties to the contrary, the obligations of Counterparty hereunder are not
secured by any collateral.  Obligations under any Transaction shall not be
netted, recouped or set off (including pursuant to Section 6 of the Agreement)
against any other obligations of the parties, whether arising under the
Agreement, this Master Confirmation, any Supplemental Confirmation or any Trade
Notification, or under any other agreement between the parties hereto, by
operation of law or otherwise, and no other obligations of the parties shall be
netted, recouped or set off (including pursuant to Section 6 of the Agreement)
against obligations under any Transaction, whether arising under the Agreement,
this Master Confirmation, any Supplemental Confirmation or any Trade
Notification, or under any other agreement between the parties hereto, by
operation of law or otherwise, and each party hereby waives any such right of
setoff, netting or recoupment.

 

14.                               Delivery of Shares.  Notwithstanding anything
to the contrary herein, JPMorgan may, by prior notice to Counterparty, satisfy
its obligation to deliver any Shares or other securities on any date due (an
“Original Delivery Date”) by making separate deliveries of Shares or such
securities, as the case may be, at more than one time on or prior to such
Original Delivery Date, so long as the aggregate number of Shares and other
securities so delivered on or prior to such Original Delivery Date is equal to
the number required to be delivered on such Original Delivery Date.

 

15.                               Alternative Termination Settlement.  In the
event that (a) an Early Termination Date (whether as a result of an Event of
Default or a Termination Event) occurs or is designated with respect to any
Transaction or (b) any Transaction is cancelled or terminated upon the
occurrence of an Extraordinary Event (except as a result of (i) a
Nationalization, Insolvency or Merger Event in which the consideration to be
paid to holders of Shares consists solely of cash, (ii) a Merger Event or Tender
Offer that is within Counterparty’s control, or (iii) an Event of Default in
which Counterparty is the Defaulting Party or a Termination Event in which
Counterparty is the Affected Party other than an Event of Default of the type
described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a
Termination Event of the type described in Section 5(b) of the Agreement, in
each case that resulted from an event or events outside Counterparty’s control),
if either party would owe any amount to the other party pursuant to
Section 6(d)(ii) of the Agreement or any Cancellation Amount pursuant to
Article 12 of the Equity Definitions (any such amount, a “Payment Amount”),
then, in lieu of any payment of such Payment Amount, unless Counterparty makes
an election to the contrary no later than the Early Termination Date or the date
on which such Transaction is terminated or cancelled, Counterparty or JPMorgan,
as the case may be, shall deliver to the other party a number of Shares (or, in
the case of a Nationalization, Insolvency or Merger Event, a number of units,
each comprising the number or amount of the securities or property that a
hypothetical holder of one Share would receive in such
Nationalization, Insolvency or Merger Event, as the case may be (each such unit,
an “Alternative Delivery Unit”)) with a value equal to the Payment Amount, as
determined by the Calculation Agent in good faith and in a commercially
reasonable manner over a commercially reasonable period of time (and the parties
agree that, in making such determination of value, the Calculation Agent may
take into account a number of factors, including, without limitation, the market
price of the Shares or Alternative Delivery Units on the Early Termination Date
or the date of early cancellation or termination, as the case may be, and, if
such delivery is made by JPMorgan, the prices at which JPMorgan purchases Shares
or Alternative Delivery Units to fulfill its delivery obligations under this
Section 15); provided that in determining the composition of any Alternative
Delivery Unit, if the relevant Nationalization, Insolvency or Merger Event
involves a choice of consideration to be received by holders, such holder shall
be deemed

 

20

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to have elected to receive the maximum possible amount of cash; and provided
further that Counterparty may elect that the provisions of this Section 15 above
providing for the delivery of Shares or Alternative Delivery Units, as the case
may be, shall not apply only if Counterparty represents and warrants to
JPMorgan, in writing on the date it notifies JPMorgan of such election, that, as
of such date, Counterparty is not aware of any material non-public information
regarding Counterparty or the Shares and is making such election in good faith
and not as part of a plan or scheme to evade compliance with the federal
securities laws.  If delivery of Shares or Alternative Delivery Units, as the
case may be, pursuant to this Section 15 is to be made by Counterparty,
paragraphs 2 through 7 of Annex A hereto shall apply as if (A) such delivery
were a settlement of such Transaction to which Net Share Settlement applied,
(B) the Cash Settlement Payment Date were the Early Termination Date or the date
of early cancellation or termination, as the case may be, and (C) the Forward
Cash Settlement Amount were equal to (x) zero minus (y) the Payment Amount owed
by Counterparty.  For the avoidance of doubt, if Counterparty validly elects for
the provisions of this Section 15 relating to the delivery of Shares or
Alternative Delivery Units, as the case may be, not to apply to any Payment
Amount, the provisions of Article 12 of the Equity Definitions, or the
provisions of Section 6(d)(ii) of the Agreement, as the case may be, shall
apply.  If delivery of Shares or Alternative Delivery Units, as the case may be,
is to be made by JPMorgan pursuant to this Section 15, the period during which
JPMorgan purchases Shares or Alternative Delivery Units to fulfill its delivery
obligations under this Section 15 shall be referred to as the “Seller
Termination Purchase Period.”

 

16.                               Calculations and Payment Date upon Early
Termination.  The parties acknowledge and agree that in calculating (a) the
Close-Out Amount pursuant to Section 6 of the Agreement and (b) the amount due
upon cancellation or termination of any Transaction (whether in whole or in
part) pursuant to Article 12 of the Equity Definitions as a result of an
Extraordinary Event, JPMorgan may (but need not) determine such amount based on
(i) expected losses assuming a commercially reasonable (including, without
limitation, with regard to reasonable legal and regulatory guidelines) risk bid
were used to determine loss or (ii) the price at which one or more market
participants would offer to sell to the Seller a block of shares of Common Stock
equal in number to the Seller’s hedge position in relation to the Transaction. 
Notwithstanding anything to the contrary in Section 6(d)(ii) of the Agreement or
Article 12 of the Equity Definitions, all amounts calculated as being due in
respect of an Early Termination Date under Section 6(e) of the Agreement or upon
cancellation or termination of the relevant Transaction under Article 12 of the
Equity Definitions will be payable on the day that notice of the amount payable
is effective; provided that if Counterparty elects to receive or deliver Shares
or Alternative Delivery Units in accordance with Section 15, such Shares or
Alternative Delivery Units shall be delivered on a date selected by JPMorgan as
promptly as practicable.

 

17.                               Limit on Beneficial Ownership.
 Notwithstanding anything to the contrary in this Master Confirmation,
Counterparty acknowledges and agrees that, on any day, JPMorgan shall not be
obligated to receive from Counterparty any Shares, and Counterparty shall not be
entitled to deliver to JPMorgan any Shares, to the extent (but only to the
extent) that after such transactions JPMorgan’s ultimate parent entity would
directly or indirectly “beneficially own” (as such term is defined for purposes
of Section 13(d) of the Exchange Act) at any time on such day in excess of 8% of
the outstanding Shares.  Any purported receipt of Shares shall be void and have
no effect to the extent (but only to the extent) that after such receipt,
JPMorgan’s ultimate parent entity would directly or indirectly so beneficially
own in excess of 8% of the outstanding Shares.  If, on any day, any receipt of
Shares by JPMorgan is not effected, in whole or in part, as a result of this
Section 17, Counterparty’s obligations to deliver such Shares shall not be
extinguished and any such delivery shall be effected over time by Counterparty
as promptly as JPMorgan determines, such that after any such delivery,
JPMorgan’s ultimate parent entity would not directly or indirectly beneficially
own in excess of 8% of the outstanding Shares.

 

18.                               Maximum Share Delivery.  Notwithstanding
anything to the contrary in this Master Confirmation, in no event shall JPMorgan
be required to deliver any Shares, or any Shares or other securities comprising
Alternative Delivery Units, in respect of any Transaction in excess of the
Maximum Number of Shares set forth in the Supplemental Confirmation for such
Transaction.

 

21

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19.                               Additional Termination Events.

 

(a)                                 The occurrence of an event described in
paragraph III of Annex B hereto will constitute an Additional Termination Event,
with Counterparty as the sole Affected Party and the Transactions specified in
such paragraph III as the Affected Transactions.

 

(b)                                 Notwithstanding anything to the contrary in
Section 6 of the Agreement, if a Termination Price is specified in the
Supplemental Confirmation for any Transaction, then an Additional Termination
Event will occur without any notice or action by JPMorgan or Counterparty if the
price of the Shares on the Exchange on two consecutive Exchange Business Days
falls below such Termination Price, with Counterparty as the sole Affected Party
and such Transaction as the sole Affected Transaction.

 

20.                               Non-confidentiality.  Neither party is
permitted to disclose the terms of this Master Confirmation and any Supplemental
Confirmation or Trade Notification, as applicable, other than any terms or
provisions as may have been disclosed in Counterparty’s 8K filing, or as
required to be disclosed in a judicial or administrative proceeding, or as or
required to be disclosed by law or regulation. Notwithstanding the foregoing,
JPMorgan and Counterparty hereby acknowledge and agree that, notwithstanding
anything else contained in this Master Confirmation or any Supplemental
Confirmation or Trade Notification, subject to Section 8(e), each is authorized
to disclose, without limitations, the tax treatment and tax structure (as such
terms are used in Code Section 6011 and the U.S. Treasury Regulations
promulgated thereunder) of the transactions contemplated in this Master
Confirmation and any Supplemental Confirmation or Trade Notification; provided
that this authorization to disclose such tax treatment and tax structure is not
intended to permit disclosure of any other information.

 

21.                               Counterparty Indemnification.  Counterparty
agrees to indemnify and hold harmless JPMorgan and its officers, directors,
employees, Affiliates, advisors, agents and controlling persons (each, an
“Indemnified Person”) from and against any and all losses, claims, damages and
liabilities, joint or several (collectively, “Obligations”), to which an
Indemnified Person may become subject arising out of or in connection with any
breach by Counterparty of the covenants and agreements set forth in this Master
Confirmation or any Supplemental Confirmation or any misrepresentation under
this Master Confirmation, any Supplemental Confirmation or any Trade
Notification, or any claim, litigation, investigation or proceeding relating
thereto, regardless of whether any of such Indemnified Person is a party
thereto, and to reimburse, within 30 days, upon written request, each such
Indemnified Person for any reasonable legal or other expenses incurred in
connection with investigating, preparation for, providing evidence for or
defending any of the foregoing; provided, however, that Counterparty shall not
have any liability to any Indemnified Person to the extent that such Obligations
(a) are finally determined by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnified Person (and
in such case, such Indemnified Person shall promptly return to Counterparty any
amounts previously expended by Counterparty hereunder) or (b) are trading losses
incurred by JPMorgan as part of its purchases or sales of Shares pursuant to
this Master Confirmation, any Supplemental Confirmation or any Trade
Notification (unless such trading losses are related to the breach of any
agreement, term or covenant herein).

 

22.                               Assignment and Transfer.  Notwithstanding
anything to the contrary in the Agreement, JPMorgan may assign any of its rights
or duties hereunder to any one or more of its Affiliates without the prior
written consent of Counterparty; provided that (x) unless the assignee’s
obligations hereunder are guaranteed on a full and unconditional basis by
JPMorgan Chase & Co., no such assignment may be made if such Affiliate’s credit
standing is materially weaker than the credit standing of JPMorgan at the time
of such assignment and (y) no such assignment may be made if such assignment
would be reasonably expected to have material, adverse tax consequences with
respect to Counterparty hereunder.  Notwithstanding any other provision in this
Master Confirmation to the contrary requiring or allowing JPMorgan to purchase,
sell, receive or deliver any Shares or other securities to or from Counterparty,
JPMorgan may designate any of its Affiliates to purchase, sell, receive or
deliver such Shares or other securities and otherwise to perform JPMorgan’s
obligations in respect of any Transaction and any such designee may assume such
obligations.

 

22

--------------------------------------------------------------------------------

 

JPMorgan may assign the right to receive Settlement Shares to any third party
who may legally receive Settlement Shares.  JPMorgan shall be discharged of its
obligations to Counterparty only to the extent of any such performance.  For the
avoidance of doubt, JPMorgan hereby acknowledges that notwithstanding any such
designation hereunder, to the extent any of JPMorgan’s obligations in respect of
any Transaction are not completed by its designee, JPMorgan shall be obligated
to continue to perform or to cause any other of its designees to perform in
respect of such obligations.

 

23.                               Amendments to the Equity Definitions.

 

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

 

(b)                                 Section 11.2(c) of the Equity Definitions is
hereby amended by (i) replacing the words “a diluting or concentrative” with
“an” in the fifth line thereof, (ii) adding the phrase “or such Transaction”
after the words “the relevant Shares” in the same sentence, (iii) deleting the
words “dilutive or concentrative” in the sixth to last line thereof, and
(iv) deleting the phrase “(provided that no adjustments will be made to account
solely for changes in volatility, expected dividends, stock loan rate or
liquidity relative to the relevant Shares)” and replacing it with the phrase
“(and, for the avoidance of doubt, adjustments may be made to account solely for
changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Shares).”

 

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

 

(d)                                 Section 12.6(a)(ii) of the Equity
Definitions is hereby amended by (i) deleting from the fourth line thereof the
word “or” after the word “official” and inserting a comma therefor, and
(ii) deleting the semi-colon at the end of subsection (B) thereof and inserting
the following words therefor “or (C) at JPMorgan’s option, the occurrence of any
of the events specified in Section 5(a)(vii) (1) through (9) of the ISDA Master
Agreement with respect to that Issuer.”

 

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

 

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

 

(ii)                                  replacing the phrase “neither the
Non-Hedging Party nor the Lending Party lends Shares” with the phrase “such
Lending Party does not lend Shares” in the penultimate sentence.

 

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

 

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

 

(ii)                                  (1) deleting subsection (C) in its
entirety, (2) deleting the word “or” immediately preceding subsection (C),
(3) deleting the penultimate sentence in its entirety and replacing it with the
sentence “The Hedging Party will determine the Cancellation Amount payable by
one party to the other” and (4) deleting clause (X) in the final sentence.

 

24.                               Extraordinary Dividend.  If Counterparty
declares any Extraordinary Dividend that has an ex-dividend date during the
period commencing on the Trade Date for any Transaction and ending of the last
day of the Relevant Period or, if applicable, the later of the last day of the
Settlement Valuation Period and the last day of the Seller Termination Purchase
Period, for such Transaction, then prior to or on the date on which such
Extraordinary Dividend is paid by Counterparty to holders of record,
Counterparty shall pay to JPMorgan, for each Transaction under this Master
Confirmation, an amount in cash equal to the product of

 

23

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(i) the amount of such Extraordinary Dividend and (ii) the theoretical short
delta number of shares as of the opening of business on the related ex-dividend
date, as determined by the Calculation Agent, required for JPMorgan to hedge its
exposure to such Transaction.

 

25.                               Status of Claims in Bankruptcy.  JPMorgan
acknowledges and agrees that none of this Master Confirmation, any Supplemental
Confirmation or any Trade Notification is intended to convey to JPMorgan rights
against Counterparty with respect to any Transaction that are senior to the
claims of common stockholders of Counterparty in any United States bankruptcy
proceedings of Counterparty; provided that nothing herein shall limit or shall
be deemed to limit JPMorgan’s right to pursue remedies in the event of a breach
by Counterparty of its obligations and agreements with respect to any
Transaction; provided further that nothing herein shall limit or shall be deemed
to limit JPMorgan’s rights in respect of any transactions other than any
Transaction.

 

26.                               Wall Street Transparency and Accountability
Act.  In connection with Section 739 of the Wall Street Transparency and
Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the
enactment of WSTAA or any regulation under the WSTAA, nor any requirement under
WSTAA or an amendment made by WSTAA, nor any similar legal certainty provision
in any legislation enacted, or rule or regulation promulgated, on or after the
date of this Master Confirmation, shall limit or otherwise impair either party’s
otherwise applicable rights to terminate, renegotiate, modify, amend or
supplement any Trade Notification, any Supplemental Confirmation, this Master
Confirmation or the Agreement, as applicable, arising from a termination event,
force majeure, illegality, increased costs, regulatory change or similar event
under any Trade Notification, any Supplemental Confirmation, this Master
Confirmation, the Equity Definitions incorporated herein, or the Agreement
(including, without limitation, rights arising from Change in Law, Loss of Stock
Borrow, Increased Cost of Stock Borrow, Hedging Disruption, Increased Cost of
Hedging, or Illegality).

 

27.                               Role of Agent.  Each party agrees and
acknowledges that (a) JPMS, an Affiliate of JPMorgan, has acted solely as agent
and not as principal with respect to this Master Confirmation and each
Transaction and (b) JPMS has no obligation or liability, by way of guaranty,
endorsement or otherwise, in any manner in respect of any Transaction
(including, if applicable, in respect of the settlement thereof).  Each party
agrees it will look solely to the other party (or any guarantor in respect
thereof) for performance of such other party’s obligations under any
Transaction.  JPMS is authorized to act as agent for JPMorgan.

 

28.                               Waiver of Jury Trial.  EACH PARTY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING RELATING TO THE AGREEMENT,
THIS MASTER CONFIRMATION, EACH SUPPLEMENTAL CONFIRMATION, EACH TRADE
NOTIFICATION, THE TRANSACTIONS HEREUNDER AND ALL MATTERS ARISING IN CONNECTION
WITH THE AGREEMENT, THIS MASTER CONFIRMATION, ANY SUPPLEMENTAL CONFIRMATION AND
ANY TRADE NOTIFICATION AND THE TRANSACTIONS HEREUNDER.  EACH PARTY (I) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH A
SUIT, ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(II) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO
THE TRANSACTIONS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS PROVIDED HEREIN.

 

29.                               Delivery or Receipt of Cash. For the avoidance
of doubt, other than payment of the Prepayment Amount and any payment pursuant
to Section 24 above, in each case, by Counterparty, nothing in this Master
Confirmation shall be interpreted as requiring Counterparty to cash settle any
Transaction, except in circumstances where cash settlement is within
Counterparty’s control (including, without limitation, where Counterparty elects
to deliver or receive cash, where Counterparty fails timely to elect to deliver
Settlement Shares pursuant Annex A hereof in settlement of any Transaction
hereunder or to deliver or receive Alternative Termination Delivery Units, or
where Counterparty has made settlement by delivery of Unregistered Settlement
Shares in accordance with Annex A hereof unavailable due to the occurrence of
events within its control) or in those circumstances in which holders of the
Shares would also receive cash.

 

24

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30.                               Counterparts.  This Master Confirmation may be
executed in any number of counterparts, all of which shall constitute one and
the same instrument, and any party hereto may execute this Master Confirmation
by signing and delivering one or more counterparts.

 

25

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[g183462kk05i001.jpg]

 

Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Master Confirmation and returning it to us.

 

 

Very truly yours,

 

 

 

J.P. MORGAN SECURITIES LLC, as agent for JPMorgan Chase Bank, National
Association

 

 

 

 

 

 

By:

/s/ Jason Shrednick

 

Authorized Signatory

 

Name: Jason Shrednick

 

 

 

 

Accepted and confirmed

 

as of the date first set

 

forth above:

 

 

 

PHH CORPORATION

 

 

 

 

 

 

 

By:

/s/ Glen A. Messina

 

 

Authorized Signatory

 

Name: Glen A. Messina, President and Chief Executive Officer

 

 

JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association.
Main Office 1111 Polaris Parkway, Columbus, Ohio 43240
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 25 Bank Street, Canary Wharf, London E14 5JP
Authorised by the Office of the Comptroller of the Currency in the jurisdiction
of the USA.
Authorised by the Prudential Regulation Authority. Subject to regulation by the
Financial Conduct
Authority and to limited regulation by the Prudential Regulation Authority.
Details about the
extent of our regulation by the Prudential Regulation Authority are available
from us on request.

 

--------------------------------------------------------------------------------

 

[g183462kk05i001.jpg]

 

SCHEDULE A

 

FORM OF SUPPLEMENTAL CONFIRMATION

 

JPMorgan Chase Bank, National Association
P.O.  Box 161
60 Victoria Embankment
London EC4Y 0JP
England

 

[                    ], 20[    ]

 

To:                             PHH Corporation
3000 Leadenhall Road
Mt. Laurel, NJ 08054
Attention:                                         President and Chief Executive
Officer

 

Re:                             Supplemental Confirmation—Collared Accelerated
Share Repurchase

 

The purpose of this Supplemental Confirmation is to confirm the terms and
conditions of the Transaction entered into between J.P. Morgan Securities LLC,
as agent for JPMorgan Chase Bank, National Association, London Branch
(“JPMorgan”), and PHH Corporation, a Maryland corporation (“Counterparty”) on
the Trade Date specified below.  This Supplemental Confirmation is a binding
contract between JPMorgan and Counterparty as of the relevant Trade Date for the
Transaction referenced below.

 

1.                                      This Supplemental Confirmation
supplements, forms part of, and is subject to the Master Confirmation, dated as
of August 7, 2014 (the “Master Confirmation”), between JPMorgan and
Counterparty, as amended and supplemented from time to time.  All provisions
contained in the Master Confirmation govern this Supplemental Confirmation
except as expressly modified below.

 

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

 

Trade Date:

 

[                    ], 20[    ]

 

 

 

Forward Price Adjustment Amount:

 

As set forth in the Trade Notification for the Transaction, to be an amount in
USD determined by reference to the Hedge Period Reference Price pursuant to the
table attached hereto as Annex A.

 

 

 

Calculation Period Start Date:

 

As set forth in the Trade Notification for the Transaction, to be the first
Exchange Business Day immediately following the Hedge Completion Date.

 

 

 

Scheduled Termination Date:

 

The [    ]th Scheduled Trading Day immediately following the Hedge Completion
Date.

 

 

 

First Acceleration Date:

 

The [    ]th Scheduled Trading Day immediately following the Hedge Completion
Date.

 

 

 

Prepayment Amount:

 

USD [                ]

 

JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association.
Main Office 1111 Polaris Parkway, Columbus, Ohio 43240
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 25 Bank Street, Canary Wharf, London E14 5JP
Authorised by the Office of the Comptroller of the Currency in the jurisdiction
of the USA.
Authorised by the Prudential Regulation Authority. Subject to regulation by the
Financial Conduct
Authority and to limited regulation by the Prudential Regulation Authority.
Details about the
extent of our regulation by the Prudential Regulation Authority are available
from us on request.

 

A-1

--------------------------------------------------------------------------------

 

Prepayment Date:

 

[                    ], 20[    ]

 

 

 

Initial Shares:

 

[      ] Shares; provided that if, in connection with the Transaction, JPMorgan
is unable (after using commercially reasonable efforts) to borrow or otherwise
acquire a number of Shares equal to the Initial Shares for delivery to
Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on
the Initial Share Delivery Date shall be reduced to such number of Shares that
JPMorgan is able to so borrow or otherwise acquire; provided further that if the
Initial Shares are reduced as provided in the preceding proviso, then JPMorgan
shall use commercially reasonable efforts to borrow or otherwise acquire an
additional number of Shares equal to the shortfall in the Initial Shares
delivered on the Initial Share Delivery Date and shall deliver such additional
Shares as promptly as practicable, and all Shares so delivered shall be
considered Initial Shares. All Shares delivered to Counterparty in respect of
the Transaction pursuant to this paragraph shall be the “Initial Shares” for
purposes of “Number of Shares to be Delivered” in the Master Confirmation.

 

 

 

Initial Share Delivery Date:

 

[                    ], 20[    ]

 

 

 

Minimum Shares:

 

[                    ]

 

 

 

Minimum Share Threshold:

 

USD[         ]

 

 

 

Maximum Shares:

 

[                    ]

 

 

 

Maximum Share Threshold:

 

USD[         ]

 

 

 

Hedging Threshold Price:

 

[The price per Share equal to the quotient of (A) the Prepayment Amount divided
by (B) the product of the percentage contained in the definition of the Minimum
Share Threshold and the Initial Shares.] [Not Applicable]

 

 

 

Maximum Stock Loan Rate:

 

[      ] basis points per annum

 

 

 

Initial Stock Loan Rate:

 

[      ] basis points per annum

 

 

 

Maximum Number of Shares:

 

[      ] Shares

 

 

 

Contract Fee:

 

USD [      ]

 

 

 

Termination Price:

 

USD [      ] per Share

 

 

 

Additional Relevant Days:

 

The [      ] Exchange Business Days immediately following the Calculation
Period.

 

 

 

Reserved Shares:

 

Notwithstanding anything to the contrary in the Master Confirmation, as of the
date of this Supplemental Confirmation, the Reserved Shares shall be equal to
[      ] Shares.

 

3.                                      Counterparty represents and warrants to
JPMorgan that neither it nor any “affiliated purchaser” (as defined in
Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to
the proviso in Rule 10b-

 

A-2

--------------------------------------------------------------------------------

 

18(b)(4) under the Exchange Act during either (i) the four full calendar weeks
immediately preceding the Trade Date or (ii) during the calendar week in which
the Trade Date occurs, except as set forth in any notice delivered pursuant to
Section 6(b)(xv) of the Master Confirmation.

 

4.                                      This Supplemental Confirmation may be
executed in any number of counterparts, all of which shall constitute one and
the same instrument, and any party hereto may execute this Supplemental
Confirmation by signing and delivering one or more counterparts.

 

A-3

--------------------------------------------------------------------------------

 

ANNEX A

 

Hedge Period Reference Price

 

Forward Price Adjustment Amount

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

USD

[      ]

 

USD

[      ]

 

The Forward Price Adjustment Amounts appearing in the table above are for those
Hedge Period Reference Prices that appear exactly in the relevant row of such
table.  For Hedge Period Reference Prices falling between the amounts appearing
in such row, the Forward Price Adjustment Amount will be calculated by the
Calculation Agent using linear interpolation.  If the Forward Price Adjustment
Amount is otherwise not determinable pursuant to the immediately preceding
sentence, because the Hedge Period Reference Price is less than USD[     ], or
greater than USD[     ], the Forward Price Adjustment Amount will be determined
using linear extrapolation.

 

A-4

--------------------------------------------------------------------------------

 

[g183462kk07i001.jpg]

 

Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Supplemental Confirmation and returning it to us.

 

 

Very truly yours,

 

 

 

J.P. MORGAN SECURITIES LLC, as agent for JPMorgan Chase Bank, National
Association

 

 

 

 

 

 

By:

 

 

Authorized Signatory

 

Name:

 

 

 

 

Accepted and confirmed

 

as of the Trade Date:

 

 

 

PHH CORPORATION

 

 

 

 

 

 

 

By:

 

 

 

Authorized Signatory

 

Name:

 

 

JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association.
Main Office 1111 Polaris Parkway, Columbus, Ohio 43240
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 25 Bank Street, Canary Wharf, London E14 5JP
Authorised by the Office of the Comptroller of the Currency in the jurisdiction
of the USA.
Authorised by the Prudential Regulation Authority. Subject to regulation by the
Financial Conduct
Authority and to limited regulation by the Prudential Regulation Authority.
Details about the
extent of our regulation by the Prudential Regulation Authority are available
from us on request.

 

A-5

--------------------------------------------------------------------------------

 

[g183462kk07i001.jpg]

 

SCHEDULE B

 

FORM OF TRADE NOTIFICATION

 

JPMorgan Chase Bank, National Association
P.O.  Box 161
60 Victoria Embankment
London EC4Y 0JP
England

 

[                    ], 20[    ]

 

To:                             PHH Corporation
3000 Leadenhall Road
Mt. Laurel, NJ 08054
Attention:                                         President and Chief Executive
Officer

 

Re:                             Trade Notification—Collared Accelerated Share
Repurchase

 

The purpose of this Trade Notification is to notify you of certain terms in the
Transaction entered into between J.P. Morgan Securities LLC, as agent for
JPMorgan Chase Bank, National Association, London Branch (“JPMorgan”), and PHH
Corporation, a Maryland corporation (“Counterparty”) on the Trade Date specified
below.

 

This Trade Notification supplements, forms part of, and is subject to the
Supplemental Confirmation dated as of [                    ], 20[    ] (the
“Supplemental Confirmation”) between JPMorgan and Counterparty, as amended and
supplemented from time to time.  The Supplemental Confirmation is subject to the
Master Confirmation dated as of August 7, 2014 (the “Master Confirmation”)
between JPMorgan and Counterparty, as amended and supplemented from time to
time.

 

Hedge Completion Date:

 

[                    ], 20[    ]

 

 

 

Calculation Period Start Date:

 

[                    ], 20[    ]

 

 

 

Hedge Period Reference Price:

 

USD [      ]

 

 

 

Forward Price Adjustment Amount:

 

USD [      ]

 

 

Very truly yours,

 

 

 

J.P. MORGAN SECURITIES LLC, as agent for JPMorgan Chase Bank, National
Association

 

 

 

 

 

 

By:

 

 

Authorized Signatory

 

Name:

 

JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association.
Main Office 1111 Polaris Parkway, Columbus, Ohio 43240
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 25 Bank Street, Canary Wharf, London E14 5JP
Authorised by the Office of the Comptroller of the Currency in the jurisdiction
of the USA.
Authorised by the Prudential Regulation Authority. Subject to regulation by the
Financial Conduct
Authority and to limited regulation by the Prudential Regulation Authority.
Details about the
extent of our regulation by the Prudential Regulation Authority are available
from us on request.

 

B-1

--------------------------------------------------------------------------------

 

SCHEDULE C

 

FORM OF CERTIFICATE OF RULE 10B-18 PURCHASES

 

[Letterhead of Counterparty]

 

JPMorgan Chase Bank, National Association

c/o J.P. Morgan Securities LLC

383 Madison Avenue

7th Floor

New York, New York 10172

 

Re:                             Collared Accelerated Share Repurchase

 

Ladies and Gentlemen:

 

In connection with our entry into the Master Confirmation, dated as of August 7,
2014, between J.P. Morgan Securities LLC, as agent for JPMorgan Chase Bank,
National Association, London Branch, and PHH Corporation, a Maryland
corporation, as amended and supplemented from time to time (the “Master
Confirmation”), we hereby represent that set forth below is the total number of
shares of our common stock purchased by or for us or any of our affiliated
purchasers in Rule 10b-18 purchases of blocks (all as defined in Rule 10b-18
under the Securities Exchange Act of 1934) pursuant to the once-a-week block
exception set forth in Rule 10b-18(b)(4) during the four full calendar weeks
immediately preceding the first day of the [Hedge Period][Settlement Valuation
Period][Seller Termination Purchase Period] (as defined in the Master
Confirmation) and the week during which the first day of such [Hedge
Period][Settlement Valuation Period][Seller Termination Purchase Period] occurs.

 

Number of Shares:

 

We understand that you will use this information in calculating trading volume
for purposes of Rule 10b-18.

 

Very truly yours,

 

PHH CORPORATION

 

 

 

 

 

 

By:

 

 

Authorized Signatory

 

Name:

 

 

C-1

--------------------------------------------------------------------------------

 

ANNEX A

 

COUNTERPARTY SETTLEMENT PROVISIONS

 

1.                                      The following Counterparty Settlement
Provisions shall apply to any Transaction to the extent indicated under the
Master Confirmation:

 

Settlement Currency:

 

USD

 

 

 

Settlement Method Election:

 

Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby
amended by deleting the word “Physical” in the sixth line thereof and replacing
it with the words “Net Share” and (ii) the Electing Party may make a settlement
method election only if the Electing Party represents and warrants to JPMorgan
in writing on the date it notifies JPMorgan of its election that, as of such
date, the Electing Party is not aware of any material non-public information
regarding Counterparty or the Shares and is electing the settlement method in
good faith and not as part of a plan or scheme to evade compliance with the
federal securities laws.

 

 

 

Electing Party:

 

Counterparty

 

 

 

Settlement Method Election Date:

 

The earlier of (i) the Scheduled Termination Date and (ii) the second Exchange
Business Day immediately following the Accelerated Termination Date (in which
case the election under Section 7.1 of the Equity Definitions shall be made no
later than 10 minutes prior to the open of trading on the Exchange on such
second Exchange Business Day), as the case may be.

 

 

 

Default Settlement Method:

 

Cash Settlement

 

 

 

Forward Cash Settlement Amount:

 

An amount equal to (a) the Number of Shares to be Delivered, multiplied by
(b) the Settlement Price.

 

 

 

Settlement Price:

 

An amount equal to the sum of the average of the VWAP Prices for the Exchange
Business Days in the Settlement Valuation Period, plus USD [0.    ], subject to
Valuation Disruption as specified in the Master Confirmation (in each case, plus
interest on such amount during the Settlement Valuation Period at the rate of
interest for Counterparty’s long term, unsecured and unsubordinated
indebtedness, as determined by the Calculation Agent).

 

 

 

Settlement Valuation Period:

 

A number of Scheduled Trading Days selected by JPMorgan in its reasonable
discretion, beginning on the Scheduled Trading Day immediately following the
earlier of (i) the Scheduled Termination Date or (ii) the Exchange Business Day
immediately following the Termination Date.

 

 

 

Cash Settlement:

 

If Cash Settlement is applicable, then Buyer shall pay to JPMorgan the absolute
value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.

 

 

 

Cash Settlement Payment Date:

 

The Exchange Business Day immediately following the last day of the Settlement
Valuation Period.

 

Annex A-1

--------------------------------------------------------------------------------

 

Net Share Settlement Procedures:

 

If Net Share Settlement is applicable, Net Share Settlement shall be made in
accordance with paragraphs 2 through 7 below.

 

2.                                      Net Share Settlement shall be made by
delivery on the Cash Settlement Payment Date of a number of Shares satisfying
the conditions set forth in paragraph 3 below (the “Registered Settlement
Shares”), or a number of Shares not satisfying such conditions (the
“Unregistered Settlement Shares”), in either case with a value equal to 101% (in
the case of Registered Settlement Shares) or 105% (in the case of Unregistered
Settlement Shares) of the absolute value of the Forward Cash Settlement Amount,
with such Shares’ value based on the value thereof to JPMorgan (which value
shall, in the case of Unregistered Settlement Shares, take into account a
commercially reasonable illiquidity discount), in each case as determined by the
Calculation Agent in good faith and a commercially reasonable manner.  If all of
the conditions for delivery of either Registered Settlement Shares or
Unregistered Settlement Shares have not been satisfied, Cash Settlement shall be
applicable in accordance with paragraph 1 above notwithstanding Counterparty’s
election of Net Share Settlement.

 

3.                                      Counterparty may only deliver Registered
Settlement Shares pursuant to paragraph 2 above if:

 

(a)                                 a registration statement covering public
resale of the Registered Settlement Shares by JPMorgan (the “Registration
Statement”) shall have been filed with the Securities and Exchange Commission
under the Securities Act and been declared or otherwise become effective on or
prior to the date of delivery, and no stop order shall be in effect with respect
to the Registration Statement; a printed prospectus relating to the Registered
Settlement Shares (including, without limitation, any prospectus supplement
thereto, the “Prospectus”) shall have been delivered to JPMorgan, in such
quantities as JPMorgan shall reasonably have requested, on or prior to the date
of delivery;

 

(b)                                 the form and content of the Registration
Statement and the Prospectus (including, without limitation, any sections
describing the plan of distribution) shall be satisfactory to JPMorgan;

 

(c)                                  as of or prior to the date of delivery,
JPMorgan and its agents shall have been afforded a reasonable opportunity to
conduct a due diligence investigation with respect to Counterparty customary in
scope for underwritten offerings of equity securities and the results of such
investigation are satisfactory to JPMorgan, in its discretion; and

 

(d)                                 as of the date of delivery, an agreement
(the “Underwriting Agreement”) shall have been entered into with JPMorgan in
connection with the public resale of the Registered Settlement Shares by
JPMorgan substantially similar to underwriting agreements customary for
underwritten offerings of equity securities, in form and substance satisfactory
to JPMorgan, which Underwriting Agreement shall include, without limitation,
provisions substantially similar to those contained in such underwriting
agreements relating, without limitation, to the indemnification of, and
contribution in connection with the liability of, JPMorgan and its Affiliates
and the provision of customary opinions, accountants’ comfort letters and
lawyers’ negative assurance letters.

 

4.                                      If Counterparty delivers Unregistered
Settlement Shares pursuant to paragraph 2 above:

 

(a)                                 all Unregistered Settlement Shares shall be
delivered to JPMorgan (or any Affiliate of JPMorgan designated by JPMorgan)
pursuant to the exemption from the registration requirements of the Securities
Act provided by Section 4(2) thereof;

 

(b)                                 as of or prior to the date of delivery,
JPMorgan and any potential purchaser of any such shares from JPMorgan (or any
Affiliate of JPMorgan designated by JPMorgan) identified by JPMorgan shall be
afforded a commercially reasonable opportunity to conduct a due diligence
investigation with respect to Counterparty customary in scope for private
placements of equity securities (including, without limitation, the right to
have made available to them for inspection all financial and other records,
pertinent corporate documents and other information reasonably requested by
them); provided that prior to receiving or being granted access to any such
information, any such potential purchaser may be required by Counterparty to
enter into a customary nondisclosure agreement with Counterparty in respect of
any such due diligence investigation);

 

(c)                                  as of the date of delivery, Counterparty
shall enter into an agreement (a “Private Placement Agreement”) with JPMorgan
(or any Affiliate of JPMorgan designated by JPMorgan) in connection with the
private

 

Annex A-2

--------------------------------------------------------------------------------

 

placement of such shares by Counterparty to JPMorgan (or any such Affiliate) and
the private resale of such shares by JPMorgan (or any such Affiliate),
substantially similar to private placement purchase agreements customary for
private placements of equity securities, in form and substance commercially
reasonably satisfactory to JPMorgan, which Private Placement Agreement shall
include, without limitation, provisions substantially similar to those contained
in such private placement purchase agreements relating, without limitation, to
the indemnification of, and contribution in connection with the liability of,
JPMorgan and its Affiliates and the provision of customary opinions,
accountants’ comfort letters and lawyers’ negative assurance letters, and shall
provide for the payment by Counterparty of all reasonable fees and expenses of
JPMorgan (and any such Affiliate) in connection with such resale, including,
without limitation, all reasonable fees and documented expenses of counsel for
JPMorgan, and shall contain representations, warranties, covenants and
agreements of Counterparty reasonably necessary or advisable to establish and
maintain the availability of an exemption from the registration requirements of
the Securities Act for such resales; and

 

(d)                                 in connection with the private placement of
such shares by Counterparty to JPMorgan (or any such Affiliate) and the private
resale of such shares by JPMorgan (or any such Affiliate), Counterparty shall,
if so requested by JPMorgan, prepare, in cooperation with JPMorgan, a private
placement memorandum in form and substance reasonably satisfactory to JPMorgan.

 

5.                                      JPMorgan, itself or through an Affiliate
(the “Selling Agent”) or any underwriter(s), will sell all, or such lesser
portion as may be required hereunder, of the Registered Settlement Shares or
Unregistered Settlement Shares and any Makewhole Shares (as defined below)
(together, the “Settlement Shares”) delivered by Counterparty to JPMorgan
pursuant to paragraph 6 below commencing on the Cash Settlement Payment Date and
continuing until the date on which the aggregate Net Proceeds (as such term is
defined below) of such sales, as determined by JPMorgan, is equal to the
absolute value of the Forward Cash Settlement Amount (such date, the “Final
Resale Date”).  If the proceeds of any sale(s) made by JPMorgan, the Selling
Agent or any underwriter(s), net of any fees and commissions (including, without
limitation, underwriting or placement fees) customary for similar transactions
under the circumstances at the time of the offering, together with carrying
charges and expenses incurred in connection with the offer and sale of the
Shares (including, without limitation, the covering of any over-allotment or
short position (syndicate or otherwise)) (the “Net Proceeds”) exceed the
absolute value of the Forward Cash Settlement Amount, JPMorgan will refund, in
USD, such excess to Counterparty on the date that is three (3) Currency Business
Days following the Final Resale Date, and, if any portion of the Settlement
Shares remains unsold, JPMorgan shall return to Counterparty on that date such
unsold Shares.

 

6.                                      If the Calculation Agent determines that
the Net Proceeds received from the sale of the Registered Settlement Shares or
Unregistered Settlement Shares or any Makewhole Shares, if any, pursuant to this
paragraph 6 are less than the absolute value of the Forward Cash Settlement
Amount (the amount in USD by which the Net Proceeds are less than the absolute
value of the Forward Cash Settlement Amount being the “Shortfall” and the date
on which such determination is made, the “Deficiency Determination Date”),
Counterparty shall on the Exchange Business Day next succeeding the Deficiency
Determination Date (the “Makewhole Notice Date”) deliver to JPMorgan, through
the Selling Agent, a notice of Counterparty’s election that Counterparty shall
either (i) pay an amount in cash equal to the Shortfall on the day that is one
Currency Business Day after the Makewhole Notice Date, or (ii) deliver
additional Shares.  If Counterparty elects to deliver to JPMorgan additional
Shares, then Counterparty shall deliver additional Shares in compliance with the
terms and conditions of paragraph 3 or paragraph 4 above, as the case may be
(the “Makewhole Shares”), on the first Clearance System Business Day which is
also an Exchange Business Day following the Makewhole Notice Date in such number
as the Calculation Agent reasonably believes would have a market value on that
Exchange Business Day equal to the Shortfall.  Such Makewhole Shares shall be
sold by JPMorgan in accordance with the provisions above; provided that if the
sum of the Net Proceeds from the sale of the originally delivered Shares and the
Net Proceeds from the sale of any Makewhole Shares is less than the absolute
value of the Forward Cash Settlement Amount then Counterparty shall, at its
election, either make such cash payment or deliver to JPMorgan further Makewhole
Shares until such Shortfall has been reduced to zero.

 

7.                                      Notwithstanding the foregoing, in no
event shall the aggregate number of Settlement Shares for any Transaction be
greater than the Reserved Shares minus the amount of any Shares actually
delivered by Counterparty under any other Transaction under this Master
Confirmation (the result of such calculation, the “Capped Number”). 
Counterparty represents and warrants (which shall be deemed to be repeated on
each day that a Transaction is outstanding) that the Capped Number is equal to
or less than the number of Shares determined according to the following formula:

 

Annex A-3

--------------------------------------------------------------------------------

 

A — B

 

Where             A  =                          the number of authorized but
unissued shares of Counterparty that are not reserved for future issuance on the
date of the determination of the Capped Number; and

 

B  =                          the maximum number of Shares required to be
delivered to third parties if Counterparty elected Net Share Settlement of all
transactions in the Shares (other than Transactions in the Shares under this
Master Confirmation) with all third parties that are then currently outstanding
and unexercised.

 

“Reserved Shares” means initially, [      ] Shares.  The Reserved Shares may be
increased or decreased in a Supplemental Confirmation.

 

If at any time, as a result of this paragraph 7, Counterparty fails to deliver
to JPMorgan any Settlement Shares, Counterparty shall, to the extent that
Counterparty has at such time authorized but unissued Shares not reserved for
other purposes, promptly notify JPMorgan thereof and deliver to JPMorgan a
number of Shares not previously delivered as a result of this paragraph 7. 
Counterparty agrees to use commercially reasonable efforts to cause the number
of authorized but unissued Shares to be increased, if necessary, to an amount
sufficient to permit Counterparty to fulfill its obligation to deliver any
Settlement Shares.

 

Annex A-4

--------------------------------------------------------------------------------

 

ANNEX B

 

COMMUNICATIONS PROCEDURES

 

August 7, 2014

 

I.                                        Introduction

 

PHH Corporation (“Counterparty”) and J.P. Morgan Securities LLC, as agent for
JPMorgan Chase Bank, National Association, London Branch (“JPMorgan”), have
adopted these communications procedures (the “Communications Procedures”) in
connection with entering into the Master Confirmation (the “Master
Confirmation”), dated as of August 7, 2014, between JPMorgan and Counterparty
relating to Collared Accelerated Share Repurchase transactions.  These
Communications Procedures supplement, form part of, and are subject to the
Master Confirmation.

 

II.                                   Communications Rules

 

For each Transaction, from the Trade Date for such Transaction until the date
all payments or deliveries of Shares have been made with respect to such
Transaction, Counterparty and its Employees and Designees shall not engage in
any Program-Related Communication with, or disclose any Material Non-Public
Information to, any EDG Trading Personnel.  Except as set forth in the preceding
sentence, the Master Confirmation shall not limit Counterparty and its Employees
and Designees in their communication with Affiliates and Employees of JPMorgan,
including, without limitation, Employees who are EDG Permitted Contacts.

 

III.                              Termination

 

If, in the sole judgment of any EDG Trading Personnel or any Affiliate or
Employee of JPMorgan participating in any Communication with Counterparty or any
Employee or Designee of Counterparty, such Communication would not be permitted
by these Communications Procedures, such EDG Trading Personnel or Affiliate or
Employee of JPMorgan shall immediately terminate such Communication.  In such
case, or if such EDG Trading Personnel or Affiliate or Employee of JPMorgan
determines following completion of any Communication with Counterparty or any
Employee or Designee of Counterparty that such Communication was not permitted
by these Communications Procedures, such EDG Trading Personnel or such Affiliate
or Employee of JPMorgan shall promptly consult with his or her supervisors and
with counsel for JPMorgan regarding such Communication.  If, in the reasonable
judgment of JPMorgan’s counsel following such consultation, there is more than
an insignificant risk that such Communication could materially jeopardize the
availability of the affirmative defenses provided in Rule 10b5-1 under the
Exchange Act with respect to any ongoing or contemplated activities of JPMorgan
or its Affiliates in respect of any Transaction pursuant to the Master
Confirmation, it shall be an Additional Termination Event pursuant to
Section 19(a) of the Master Confirmation, with Counterparty as the sole Affected
Party and all Transactions under the Master Confirmation as Affected
Transactions.

 

IV.                               Definitions

 

Capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to them in the Master Confirmation.  As used herein, the following
words and phrases shall have the following meanings:

 

“Communication” means any contact or communication (whether written, electronic,
oral or otherwise) between Counterparty or any of its Employees or Designees, on
the one hand, and JPMorgan or any of its Affiliates or Employees, on the other
hand.

 

“Designee” means a person designated, in writing or orally, by Counterparty to
communicate with JPMorgan on behalf of Counterparty.

 

“EDG Permitted Contact” means any of Mr. David Aidelson, Mr. Gregory Batista,
Mr. Elliot Chalom, Mr. Steven Seltzer, Mr. Noah L. Wynkoop and Mr. Jason
Shrednick or any of their designees; provided that JPMorgan may amend the list
of EDG Permitted Contacts by delivering a revised list of EDG Permitted Contacts
to Counterparty.

 

Annex B-1

--------------------------------------------------------------------------------

 

“EDG Trading Personnel” means Mr. Graham Orton, Mr. Michael Tatro and any other
Employee of the public side of the Equity Derivatives Group of J.P. Morgan
Chase & Co.; provided that JPMorgan may amend the list of EDG Trading Personnel
by delivering a revised list of EDG Trading Personnel to Counterparty; and
provided further that, for the avoidance of doubt, the persons listed as EDG
Permitted Contacts are not EDG Trading Personnel.

 

“Employee” means, with respect to any entity, any owner, principal, officer,
director, employee or other agent or representative of such entity, and any
Affiliate of any of such owner, principal, officer, director, employee, agent or
representative.

 

“Material Non-Public Information” means information relating to Counterparty or
the Shares that (a) has not been widely disseminated by wire service, in one or
more newspapers of general circulation, by communication from Counterparty to
its shareholders or in a press release, or contained in a public filing made by
Counterparty with the Securities and Exchange Commission and (b) a reasonable
investor might consider to be of importance in making an investment decision to
buy, sell or hold Shares.  For the avoidance of doubt and solely by way of
illustration, information should be presumed “material” if it relates to such
matters as dividend increases or decreases, earnings estimates, changes in
previously released earnings estimates, significant expansion or curtailment of
operations, a significant increase or decline of orders, significant merger or
acquisition proposals or agreements, significant new products or discoveries,
extraordinary borrowing, major litigation, liquidity problems, extraordinary
management developments, purchase or sale of substantial assets and similar
matters.

 

“Program-Related Communication” means any Communication the subject matter of
which relates to the Master Confirmation or any Transaction under the Master
Confirmation or any activities of JPMorgan (or any of its Affiliates) in respect
of the Master Confirmation or any Transaction under the Master Confirmation.

 

Annex B-2

--------------------------------------------------------------------------------