Exhibit 10.1

 

EXECUTION COPY

 

AMENDMENT No. 1 to

LETTER AGREEMENT

 

This Amendment No. 1 to Letter Agreement (this “Amendment”) is made as of this
27th day of April, 2012 by and among PHH Mortgage Corporation (“PHH”) and the
Federal National Mortgage Association (“Fannie Mae”).

 

WHEREAS, PHH and Fannie Mae have previously entered into that certain Extension
of Committed Purchase Facility for Early Funding Letter Agreement, dated as of
December 15, 2011 (the “Letter Agreement”); and

 

WHEREAS, PHH and Fannie Mae now desire to amend the Letter Agreement on the
terms and conditions set forth herein.

 

NOW, THEREFORE,                             in consideration of the foregoing
recitals and the mutual covenants and agreements herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, PHH and Fannie Mae agree as follows:

 

Section 1.  New Section of Letter Agreement.  The Letter Agreement is hereby
amended by adding a new section 1A, as follows:

 

“1A.                       Definitions.  As used herein, the following terms
shall have the following meanings:

 

“Applicable Law” shall mean all provisions of statutes, rules, regulations, and
orders of governmental bodies or regulatory agencies applicable to a Person, and
all orders and decrees of all courts and arbitrators in proceedings or actions
in which the Person in question is a party.

 

“Available Borrowing Capacity” shall mean committed borrowing capacity which may
be drawn (taking into account required reserves and discounts) upon or has been
drawn upon by PHH Corporation or any of its Subsidiaries under committed
Mortgage Warehouse Facilities.

 

“Capital Lease” shall mean, as applied to any Person, any lease of any property
(whether real, personal, or mixed) by that Person as lessee which, in accordance
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of that Person.

 

“Consolidated Net Worth” shall mean, at any date of determination, all amounts
which would be included on a balance sheet of PHH Corporation and its
Consolidated Subsidiaries under stockholders’ equity as of such date in

 

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accordance with GAAP.

 

“Consolidated Subsidiaries” shall mean all Subsidiaries of PHH Corporation that
are required to be consolidated with PHH Corporation for financial reporting
purposes in accordance with GAAP.

 

“Existing Mortgage Warehouse Facilities” shall mean the mortgage warehouse
facilities and mortgage warehouse conduits of PHH and its Subsidiaries in place
as of March 30, 2012.

 

“GAAP” shall mean generally accepted accounting principles consistently applied
(except for accounting changes in response to FASB releases or other
authoritative pronouncements) provided, however, that all calculations made
pursuant to Sections 5(a)(ix) and 5(a)(x) hereof and the related definitions
shall have been computed based on generally accepted accounting principles as
are in effect on June 25, 2010.

 

“Government-Sponsored Enterprise” shall mean (i) Fannie Mae, (ii) Freddie Mac,
(iii) Ginnie Mae, or (iv) any other U.S. Department of Housing and Urban
Development entity.

 

“Guaranty” shall mean, as to any Person, any direct or indirect obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, Capital
Lease, dividend or other monetary obligation (“primary obligation”) of any other
Person (the “primary obligor”) in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services, in each case, primarily for the purpose of
assuring the owner of any such primary obligation of the repayment of such
primary obligation or (d) as a general partner of a partnership or a joint
venturer of a joint venture in respect of indebtedness of such partnership or
such joint venture which is treated as a general partnership for purposes of
Applicable Law. The amount of any Guaranty shall be deemed to be an amount equal
to the stated or determinable amount (or portion thereof) of the primary
obligation in respect of which such Guaranty is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder); provided that the
amount of any Guaranty shall be limited to the extent necessary so that such
amount does not exceed the value of the assets of such Person (as reflected on a
consolidated balance sheet of such Person prepared in accordance with GAAP) to

 

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which any creditor or beneficiary of such Guaranty would have recourse.
Notwithstanding the foregoing definition, the term “Guaranty” shall not include
any direct or indirect obligation of a Person as a general partner of a general
partnership or a joint venturer of a joint venture in respect of Indebtedness of
such general partnership or joint venture, to the extent such Indebtedness is
contractually non-recourse to the assets of such Person as a general partner or
joint venturer (other than assets comprising the capital of such general
partnership or joint venture).

 

“Indebtedness” shall mean (i) all indebtedness, obligations and other
liabilities of PHH Corporation and its Subsidiaries which are, at the date as of
which Indebtedness is to be determined, includable as liabilities in a
consolidated balance sheet of PHH Corporation and its Subsidiaries, other than
(w) accounts payable, accrued expenses and derivatives transactions entered into
in the ordinary course of business pursuant to hedging programs, (x) advances
from clients obtained in the ordinary course of the relocation management
services business of PHH Corporation and its Subsidiaries, (y) current and
deferred income taxes and other similar liabilities and (z) minority interest,
plus (ii) without duplicating any items included in Indebtedness pursuant to the
foregoing clause (i) (but excluding reinsurance obligations of Atrium Insurance
Corporation and its successors and assigns), the maximum aggregate amount of all
liabilities of PHH Corporation or any of its Subsidiaries under any Guaranty,
indemnity or similar undertaking given or assumed of, or in respect of, the
indebtedness, obligations or other liabilities, assets, revenues, income or
dividends of any Person other than PHH Corporation or one of its Subsidiaries
and (iii) all other obligations or liabilities of PHH Corporation or any of its
Subsidiaries in relation to the discharge of the obligations of any Person other
than PHH Corporation or one of its Subsidiaries.

 

“Mortgage Warehouse Facilities” shall mean (i) the Existing Mortgage Warehouse
Facilities and (ii) each other credit facility or conduit for the warehousing or
gestation of mortgages that provides financing to PHH Corporation or any of its
Subsidiaries.

 

“Person” shall mean any natural person, corporation, division of a corporation,
partnership, limited liability company, trust, joint venture, association,
company, estate, unincorporated organization or government or any agency or
political subdivision thereof.

 

“Securitization Indebtedness” shall mean Indebtedness incurred by any structured
bankruptcy-remote Subsidiary of PHH Corporation which does not permit or provide
for recourse to PHH Corporation or any Subsidiary of PHH Corporation (other than
such structured bankruptcy-remote Subsidiary) or any property or asset of PHH
Corporation or any Subsidiary of PHH Corporation

 

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(other than the property or assets of such structured bankruptcy-remote
Subsidiary).

 

“Subsidiary” shall mean, with respect to any Person, any corporation,
association, joint venture, partnership or other business entity (whether now
existing or hereafter organized) of which at least a majority of the voting
stock or other ownership interests having ordinary voting power for the election
of directors (or the equivalent) is, at the time as of which any determination
is being made, owned or controlled by such Person or one or more subsidiaries of
such Person or by such Person and one or more subsidiaries of such Person. 
Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Amendment shall refer to a Subsidiary or Subsidiaries of
PHH Corporation.

 

“Tangible Net Worth” shall mean, at any date of determination, Consolidated Net
Worth minus the aggregate book value of all intangible assets of PHH Corporation
and its Consolidated Subsidiaries as of such date in accordance with GAAP.”

 

Section 2.                   Modification of Letter Agreement.  (a)        
Section 5(a)(iii) of the Letter Agreement is hereby deleted in its entirety and
replaced with the word “RESERVED”.

 

(b)                                 Section 5(a)(vi) of the Letter Agreement is
hereby deleted in its entirety and replaced with the following:

 

“(vi) a “Repurchase Trigger Event” as defined in Master Agreement  no. MP04624
by and between Fannie Mae and PHH;”

 

(c)                                  Section 5(a)(vii) of the Letter Agreement
is hereby amended by deleting the term “and” at the end of such Section.

 

(d)                                 Section 5(a)(viii) of the Letter Agreement
is hereby amended by changing the “.” at the end of such Section to a “;”.

 

(e)                                  Section 5(a) of the Letter Agreement is
hereby amended by adding the following text immediately following
Section 5(a)(viii) of the Letter Agreement:

 

“(ix)                        the Consolidated Net Worth on the last day of any
fiscal quarter of PHH Corporation after April 27, 2012, being less than US$1
billion;

 

(x)                                 on the last day of each fiscal quarter of
PHH Corporation, the ratio of Indebtedness to Tangible Net Worth being in excess
of 6.5 to 1.0;

 

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(xi)                              the failure by PHH Corporation and its
Subsidiaries to maintain aggregate Available Borrowing Capacity of at least US$1
billion at all times (excluding committed or uncommitted loan purchase
arrangements or other funding arrangements from Fannie Mae related to the Early
Funding Agreements or otherwise, and any warehouse capacity provided by
Government-Sponsored Enterprises), provided, that no more than US$500 million of
such capacity is in respect of facilities that are exclusively gestation
facilities; and

 

(xii)                           (i) a default in payment shall be made with
respect to any Indebtedness of PHH Corporation or any of its Subsidiaries (other
than Securitization Indebtedness) where the amount or amounts of such
Indebtedness exceeds US$25 million (or its equivalent thereof in any other
currency) in the aggregate; or (ii) default in payment or performance shall be
made with respect to any Indebtedness of PHH Corporation or any of its
Subsidiaries (other than Securitization Indebtedness) where the amount or
amounts of such Indebtedness exceeds US$25 million (or its equivalent thereof in
any other currency) in the aggregate, if the effect of such default is to result
in the acceleration of the maturity of such Indebtedness; or (iii) any other
circumstance shall arise (other than the mere passage of time) by reason of
which PHH Corporation or any Subsidiary of PHH Corporation is required to redeem
or repurchase, or offer to holders the opportunity to have redeemed or
repurchased, any such Indebtedness (other than Securitization Indebtedness)
where the amount or amounts of such Indebtedness exceeds US$25 million (or its
equivalent thereof in any other currency) in the aggregate; provided that clause
(iii) shall not apply to secured Indebtedness that becomes due as a result of a
voluntary sale of the property or assets securing such Indebtedness or
Indebtedness that is redeemed or repurchased at the option of PHH Corporation or
any of its Subsidiaries or with respect to any Indebtedness that is convertible,
in whole or in part, into shares of capital stock of PHH Corporation and/or cash
based on any formula(s) that reference the trading price of shares of capital
stock of PHH Corporation, any payment for settlement (whether in cash or
otherwise) upon conversion thereof and provided, further, that clauses (ii) and
(iii) shall not apply to any Indebtedness of any Subsidiary issued and
outstanding prior to the date such Subsidiary became a Subsidiary of PHH
Corporation (other than Indebtedness issued in connection with, or in
anticipation of, such Subsidiary becoming a Subsidiary of PHH Corporation) if
such default or circumstance arises solely as a result of a “change of control”
provision applicable to such

 

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Indebtedness which becomes operative as a result of the acquisition of such
Subsidiary by PHH Corporation or any of its Subsidiaries.”

 

(f)                                   Section 5(b)(i) of the Letter Agreement is
hereby amended by deleting the term “and” at the end of such Section.

 

(g)                                  Section 5(b)(ii) of the Letter Agreement is
hereby amended by changing the “.” at the end of such Section to a “; and”.

 

(h)                                 Section 5(b) of the Letter Agreement is
hereby amended by adding the following text immediately following
Section 5(b)(ii) of the Letter Agreement:

 

“(iii)                         the termination of each As Soon As Pooled Sale
Agreement between Fannie Mae and PHH and each As Soon As Pooled Plus Agreement
between Fannie Mae and PHH.

 

(i)                                     Section 8 of the Letter Agreement is
hereby deleted in its entirety and replaced with the following:

 

“8.  No Publicity.  Neither party shall, in the course of performance of this
Letter Agreement or thereafter, use the other party’s name in any advertising or
promotional materials without the prior written consent of the other party,
which consent shall not be unreasonably withheld.”

 

(j)                                    Section 5(a)(i) of the Letter Agreement
is hereby amended by inserting “or Termination Event” immediately after “Event
of Default”.

 

(k)                                 Section 2(d) of the Letter Agreement is
hereby deleted in its entirety and replaced with the following:

 

“(d)                           For the avoidance of doubt, this Letter Agreement
is intended to create a binding commitment by Fannie Mae to purchase mortgage
loans and pools of mortgage loans from PHH pursuant to the terms of the Early
Funding Agreements, and as such, any provisions in the Early Funding Agreements
that relate to:

 

(i) an Early Funding Agreement not being construed as conferring the right to
PHH to deliver mortgage loans or pools of mortgage loans to Fannie Mae or an
obligation of Fannie Mae to accept such deliveries;

 

(ii) an Early Funding Agreement not being a commitment of funds to PHH; or

 

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(iii) the ability of either party to terminate or cancel an Early Funding
Agreement at any time in the absence of a Termination Event or an Event of
Default, as applicable, under such Early Funding Agreement;

 

shall be superseded by this Letter Agreement, provided, however, that except as
set forth above, this Letter Agreement does not otherwise modify the terms and
provisions of the Early Funding Agreements, including, without limitation, the
procedures, and requirements of the initiation or completion of the delivery and
sale of mortgage loans and pools of mortgage loans pursuant to the Early Funding
Agreements or the ability of either party to declare an Event of Default or
Termination Event under the Early Funding Agreements and exercise any rights and
remedies arising therefrom.”

 

Section 3.  No Further Changes.  The terms of the Letter Agreement, except as
modified by this Amendment, shall otherwise remain unchanged and in full force
and effect.

 

Section 4.  Miscellaneous.

 

(a)                                 Governing Law. This Amendment shall be
construed in accordance with, and governed by, the laws of the State of New
York, without giving effect to the conflict of law principles thereof (except
for Section 5-1401 of the New York General Obligations Law).

 

(b)                                 Counterparts.  This Amendment may be signed
in two or more counterparts, each of which is deemed an original and all of
which will constitute one agreement binding on all parties.  The parties agree
that this Amendment will be considered signed when the signature of a party is
delivered by facsimile or electronic mail transmission.  Such facsimile or
electronic mail signature shall be treated in all respects as having the same
effect as an original signature.

 

(c)                                  Amendments and Waivers.  This Amendment
constitutes the entire agreement between the parties hereto relating to the
subject matter hereof and supersedes all prior or contemporaneous agreements and
understandings, written or oral, relating to such subject matter.  No term of
this Amendment may be waived, modified or amended except in a writing signed by
the party against whom enforcement of such waiver, modification or amendment is
sought.

 

(d)                                 Severability.  Wherever possible, each
provision of this Amendment shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Amendment
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Amendment.

 

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(e)                                  Confidentiality and Publicity.  Neither
party shall, in the course of performance of this Amendment or thereafter, use
the other party’s name in any advertising or promotional materials without the
prior written consent of the other party, which consent shall not be
unreasonably withheld.

 

IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to Letter
Agreement as of the date first written above.

 

PHH MORTGAGE CORPORATION

 

 

By:

/s/ Richard J. Bradfield

 

 

 

Name: Richard J. Bradfield

 

 

 

Title: Senior Vice President and Treasurer

 

 

 

 

FANNIE MAE

 

 

By:

/s/ David C. Benson

 

 

David C. Benson

 

 

Executive Vice President — Capital Markets

 

 

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