Exhibit 10.1

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

PHH HOME LOANS, LLC

January 31, 2005

 

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Table of Contents

                      Page   ARTICLE I Definitions

 
           
Section 1.1
  Definitions     2  
 
           
Section 1.2
  Interpretation     13  
 
            ARTICLE II General Provisions

 
           
Section 2.1
  Form     14  
 
           
Section 2.2
  Company Name     14  
 
           
Section 2.3
  Registered Office; Registered Agent     15  
 
           
Section 2.4
  Place of Business     15  
 
           
Section 2.5
  Purpose; Nature of Business Permitted; Powers     15  
 
           
Section 2.6
  Business Transactions of a Member with the Company     16  
 
           
Section 2.7
  No State-Law Partnership     16  
 
           
Section 2.8
  Authorized Representatives     16  
 
           
Section 2.9
  Term     16  
 
           
Section 2.10
  D/B/As, Fictitious Names, Licenses and Regulatory Approvals     16  
 
           
Section 2.11
  Subsequent Capital Contributions     17   ARTICLE III Members

 
           
Section 3.1
  Members     20  
 
           
Section 3.2
  Admission of New Members     21  
 
           
Section 3.3
  Representations     21  
 
           
Section 3.4
  No Liability of Members     22  
 
           
Section 3.5
  Company Property     23  
 
           
Section 3.6
  Confidentiality     23  
 
            ARTICLE IV Capital Contributions

 
           
Section 4.1
  Capital Structure     24  
 
           
Section 4.2
  Capital Contributions     24  
 
           
Section 4.3
  Additional Provisions Concerning Capital Contributions     24  
 
           
Section 4.4
  Capital Accounts     25  

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                      Page  
 
           
Section 4.5
  Return of Capital Contributions     26  
 
           
Section 4.6
  Loans From Members     26  
 
            ARTICLE V Allocations and Distributions

 
           
Section 5.1
  Allocations of Net Income and Net Loss     26  
 
           
Section 5.2
  Adjustments and Special Allocations     27  
 
           
Section 5.3
  Net Loss Limitation     28  
 
           
Section 5.4
  Other Allocation Rules     29  
 
           
Section 5.5
  Tax Allocations; Code Section 704(c)     29  
 
           
Section 5.6
  Distributions     30  
 
            ARTICLE VI Management

 
           
Section 6.1
  Managing Member     30  
 
           
Section 6.2
  Board of Advisors     32  
 
           
Section 6.3
  Actions Requiring Board Approval     34  
 
           
Section 6.4
  Company Resources     37  
 
           
Section 6.5
  Advisors Have No Managerial Authority     37  
 
           
Section 6.6
  Devotion of Time     37  
 
           
Section 6.7
  Officers     38  
 
           
Section 6.8
  Remuneration; Reimbursement     38  
 
           
Section 6.9
  Approval of Annual Business Plan     38  
 
           
Section 6.10
  Reports     38  
 
            ARTICLE VII Changes in Law; Financial Reporting

 
           
Section 7.1
  Compliance with Law; Changes in Law     39  
 
           
Section 7.2
  Consolidation     41  
 
           
Section 7.3
  Certain Actions     41  
 
            ARTICLE VIII Termination of Relationship

 
           
Section 8.1
  Cendant Termination Events     41  
 
           
Section 8.2
  Effects of a Cendant Termination Event     43  
 
           
Section 8.3
  PHH Termination Event     46  
 
           
Section 8.4
  Two Year Termination, Special Termination Event and 25-Year Termination     47
 

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                      Page  
 
           
Section 8.5
  Effect of Termination Events     51  
 
            ARTICLE IX Dissolution and Winding Up

 
           
Section 9.1
  Events Causing Dissolution     51  
 
           
Section 9.2
  Winding Up     52  
 
           
Section 9.3
  Compensation of Liquidating Trustee     53  
 
           
Section 9.4
  Distribution of Company Property and Proceeds of Sale Thereof     53  
 
           
Section 9.5
  Company Termination     54  
 
           
Section 9.6
  Final Audit     54  
 
            ARTICLE X Transfers and Assignment of Interests

 
           
Section 10.1
  Consent Required for Transfer     55  
 
           
Section 10.2
  Withdrawal     56  
 
            ARTICLE XI Fiscal Matters; Books and Records

 
           
Section 11.1
  Bank Accounts; Investments     56  
 
           
Section 11.2
  Records Required by Act; Right of Inspection     56  
 
           
Section 11.3
  Books and Records of Account     57  
 
           
Section 11.4
  Expenses     57  
 
           
Section 11.5
  Tax Returns and Information     57  
 
           
Section 11.6
  Delivery of Audited Financial Statements to Members     57  
 
           
Section 11.7
  Audits     58  
 
           
Section 11.8
  Fiscal Year     58  
 
           
Section 11.9
  Tax Elections     58  
 
           
Section 11.10
  Tax Matters Member     58  
 
            ARTICLE XII Indemnification and Insurance

 
           
Section 12.1
  Indemnification and Advancement of Expenses     59  
 
           
Section 12.2
  Insurance     60  
 
           
Section 12.3
  Limit on Liability of Members     61  
 
           
Section 12.4
  Indemnification by Managing Member     61  
 
           
Section 12.5
  No Additional Indemnification Rights     62  
 
            ARTICLE XIII Miscellaneous Provisions

 
           
Section 13.1
  Counterparts     62  

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                      Page  
 
           
Section 13.2
  Entire Agreement     62  
 
           
Section 13.3
  Partial Invalidity     62  
 
           
Section 13.4
  Amendment     62  
 
           
Section 13.5
  Binding Effect     63  
 
           
Section 13.6
  Negotiation and Mediation     63  
 
           
Section 13.7
  Governing Law     64  
 
           
Section 13.8
  Offset     64  
 
           
Section 13.9
  Effect of Waiver or Consent     64  
 
           
Section 13.10
  Notices     64  
 
           
Section 13.11
  No Consequential Damages     66  
 
           
Section 13.12
  Most Favored Nation     66  
 
           
Section 13.13
  Impossibility of Performance     66  

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Index of Defined Terms

              Page  
Act
    1  
Additional Capital Determination
    26  
Adjusted Capital Account
    2  
Advisor
    34  
Affiliate
    2  
Agreement
    1,2  
Annual Business Plan
    40  
Assignment
    2  
Authorized Representatives
    17  
Bankruptcy
    2  
Bankruptcy Event
    45  
Beneficial Owner
    3  
Board
    34  
Business Day
    3  
Capital Account
    26  
Capital Contribution
    3  
Cendant
    3  
Cendant Advisors
    34  
Cendant Designated Buyer
    45,50  
Cendant List
    45  
Cendant Member
    1  
Cendant Mobility
    3  
Cendant Mobility Offices
    3  
Cendant Owned Real Estate Offices
    3  
Cendant Put
    45  
Cendant Put Notice
    46  
Cendant Real Estate
    3  
Cendant Termination Event
    41  
Certificate of Formation
    1  
Change of Control
    3  
Closing Date
    4  
Code
    4  
Common Interest Percentage
    25  
Common Interests
    25  
Company
    1  
Company Expenses
    61  
Company Minimum Gain
    4  

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              Page  
Company Property or Properties
    4  
Company Regulatory Event
    5  
Confidential Information
    24  
Contributed Property
    5  
Contribution Agreement
    5  
Contribution Date
    19  
Contribution Notice
    18  
Control
    5  
Controlling Person
    5  
Customer
    5  
Depreciation
    5  
Dispute
    67  
Disputing Member
    67  
Distributable Net Income
    6  
Event of Dissolution
    54  
Fair Market Value
    6  
FHA
    6  
Fiscal Period
    6  
Fiscal Quarter
    6  
GAAP
    6  
Governmental Entity
    6  
Gross Asset Value
    6  
HUD
    8  
HUD-Manager
    34  
Indemnified Parties
    63  
Initial Capital Contribution
    25  
Initial Officers
    40  
Initial Operating Agreement
    1  
Insolvency
    8  
Interest
    8  
Investor Commitments
    8  
Lease
    8  
License Agreement
    8  
Liquidating Trustee
    55  
Loan Funding Facility
    8  
Losses
    8  
LTM Net Income
    47  
Major Action
    36  
Management Services Agreement
    8  
Managing Member
    9  
Master Sublease Agreement
    9  
Mediation Request
    67  
Member
    1,9  

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              Page  
Member Nonrecourse Debt
    9  
Member Nonrecourse Debt Minimum Gain
    9  
Member Nonrecourse Deductions
    9  
Members
    1  
Minimum Capital Requirements
    38  
Mobility Interim MSA
    9  
Mortgage Instrument
    10  
Mortgage Loan
    10  
Mortgage Loan Disclosure
    10  
Mortgage Loan Documents
    10  
Mortgage Loan Sale Agreement
    10  
Mortgage Note
    10  
Mortgaged Property
    10  
MSA
    10  
Net Income
    10  
Net Loss
    10  
New Member
    12  
Nonrecourse Deductions
    12  
Nonrecourse Liability
    12  
Non-Renewal Notice
    53  
Non-Renewal PHH Sale
    53  
Non-Renewal Put
    53  
NRT Interim MSA
    12  
Origination Channels
    12  
Other Indemnified Parties
    65  
Person
    12  
PHH
    12  
PHH Advisors
    34  
PHH Change of Control
    13  
PHH Interests
    47  
PHH Material Breach
    44  
PHH Member
    1  
PHH Regulatory Event
    12  
PHH Sale
    45  
PHH Sale Notice
    47  
PHH Termination Event
    48  
PIMI Contributed Assets
    19  
PMC
    12  
Proceeding
    13  
Purchase Notice
    49  
Purchase Price
    49  
Purchase Right
    49  
Put Date
    46  
Put Price
    45  

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              Page  
Regulatory Event Fee
    44  
Regulatory Order
    13  
Related Transaction
    33  
RESPA
    13  
Rules
    67  
Sale Date
    48  
Sale Price
    47  
Securities Act
    13  
Small Corps
    13  
Special Termination Event
    42  
Special Termination Notice
    42  
Special Termination Put
    53  
SRA
    1  
State Agency
    13  
Subsequent Capital Contributions
    19  
Subsidiary
    13  
Tax Matters Member
    62  
Termination Payment
    47  
Transaction Documents
    13  
Transfer
    14  
Treasury Regulations
    14  
Two Year PHH Sale
    50  
Two Year Put
    50  
Two Year Put Closing Date
    51  
Two Year Put Date
    50  
Two Year Put Price
    50  
Two Year Sale Date
    50  
Two Year Sale Price
    52  
Two-Year Termination Notice
    50  
Venture License Agreement
    14  

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This AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT, dated
as of January 31, 2005 (this “Agreement”), of PHH Home Loans, LLC (the
“Company”), a Delaware limited liability company, is by and between PHH Broker
Partner Corporation, a Maryland corporation (the “PHH Member”), and Cendant Real
Estate Services Venture Partner, Inc., a Delaware corporation (the “Cendant
Member”) and each Person (as hereinafter defined) subsequently admitted as a
member of the Company (individually, a “Member” and, collectively, the
“Members”).

W I T N E S S E T H:

WHEREAS, the PHH Member and the Cendant Member entered into a Limited Liability
Company Operating Agreement, effective as of November 3, 2004 (the “Initial
Operating Agreement”) and formed the Company pursuant to and in accordance with
the Limited Liability Company Act of the State of Delaware (the “Act”) by filing
the Certificate of Formation of the Company (the “Certificate of Formation”) in
accordance with the Act;

WHEREAS, the Members desire to amend and restate the Initial Operating
Agreement;

WHEREAS, the Members intend that hereafter the principal purpose of the Company
shall be to originate and sell mortgage loans sourced through Cendant’s owned
residential real estate brokerage and corporate relocations businesses and from
all U.S.-based employees of Cendant and its Subsidiaries, in accordance with the
terms and provisions of this Agreement;

WHEREAS, this Agreement sets forth, among other things, the agreement among the
Members as to the governance of the affairs of the Company and the conduct of
its business; and

WHEREAS, concurrently with the execution of this Agreement, Cendant Real Estate,
PHH, the Cendant Member, PMC, the PHH Member and the Company have entered into a
Strategic Relationship Agreement (as amended from time to time, the “SRA”) which
sets forth certain matters related to the business relationship among the
parties thereto during the term of this Agreement.

NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants, promises and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Members agree as follows:

ARTICLE I
Definitions

 

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Section 1.1      Definitions. As used in this Agreement, the following terms
shall each have the meaning set forth in this Article (unless the context
otherwise requires).

“Adjusted Capital Account” means, with respect to any Member, the balance, if
any, in such Member’s Capital Account as of the end of the relevant Fiscal
Period, after: (i) crediting to such Capital Account any amounts that such
Member is obligated to restore pursuant to Treasury
Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed to be obligated to restore
pursuant to the penultimate sentences of Treasury
Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5)) and (ii) debiting to such
Capital Account the items described in Treasury Regulation Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6).

“Affiliate” means, when used with reference to a specific Person, any Person
that, directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such specific Person. For the
avoidance of doubt, neither the Company nor any of the Brand Franchisees, as
defined in the SRA, shall be deemed to be an Affiliate of Cendant or any of
Cendant’s Affiliates for any purpose hereunder or under any of the other
Transaction Documents.

“Agreement” means this Agreement, including the Schedules and Exhibits hereto,
as originally executed and as subsequently amended from time to time in
accordance with the provisions hereof.

“Assignment” shall mean a document, sufficient under the laws of the
jurisdiction where the related Mortgaged Property is located, to reflect all
transfers of the applicable Mortgage Instrument and the Mortgage Note.

“Bankruptcy” means, with respect to any Person, the happening of any one or more
of the following events: (a) such Person (or, in the case of any Person which is
a partnership, any general partner thereof): (i) makes an assignment for the
benefit of creditors; (ii) files a voluntary petition in bankruptcy; (iii) is
adjudged bankrupt or insolvent, or there has been entered against such Person
(or general partner) an order for relief, in any bankruptcy or insolvency
proceeding; (iv) files a petition or answer seeking in respect of such Person
(or general partner) any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law or regulation;
(v) files an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against such Person (or such general
partner) in any proceeding of a nature described above; or (vi) seeks, consents
or acquiesces in the appointment of a trustee, receiver or liquidator of such
Person (or such general partner) or of all or any substantial part of such
Person’s (or such general partner’s) properties; or (b) 120 days after the
commencement of any proceeding against any such Person (or such general partner)
seeking reorganization, arrangement, composition, readjustment,

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liquidation, dissolution or similar relief under any statute, law or regulation,
if such proceeding has not been dismissed, or within 90 days after the
appointment without such Person’s (or such general partner’s) consent or
acquiescence of a trustee, receiver or liquidator of the Person (or such general
partner) or of all or any substantial part of such Person’s (or such general
partner’s) properties, if such appointment is not vacated or stayed, or within
90 days after the expiration of any such stay, if such appointment is not
vacated.

“Beneficial Owner” shall, with respect to any Person, be determined as set forth
in Rule 13d-3 of the General Rules and Regulations of the Securities Exchange
Act of 1934, as in effect on the date hereof.

“Business Day” means any day other than a Saturday, Sunday or a holiday on which
commercial banks in the State of New York are closed.

“Cendant” means Cendant Corporation, a Delaware corporation.

“Capital Contribution” means, with respect to any Member, the amount of cash and
the initial Gross Asset Value of any asset (other than cash) contributed to the
capital of the Company pursuant to Article IV hereof.

“Cendant Mobility Office” means any office comprising part of Cendant’s
corporate relocation business, including, without limitation, any office of
Cendant Mobility Services Corporation (“Cendant Mobility”) or any of its
Subsidiaries, whether owned as of the date hereof or acquired or opened
hereafter by Cendant Mobility or one of its Subsidiaries.

“Cendant Owned Real Estate Office” means any residential real estate brokerage
office owned as of the date hereof or acquired or opened hereafter by Cendant
Real Estate or one of its Subsidiaries, including NRT Incorporated.

“Cendant Real Estate” means Cendant Real Estate Services Group, LLC, a Delaware
limited liability company.

“Change of Control” means, with respect to any Person, the occurrence of any
event set forth in one of the following paragraphs:

  (a)  
any “person” or “group” (as such terms are used in Section 13(d)(3) of the
Exchange Act) is or becomes the Beneficial Owner, directly or indirectly, of
securities of such Person representing greater than one-third of the combined
voting power of such Person’s outstanding securities;

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  (b)  
during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors of such Person (together with any
new directors whose election or appointment by such Board or whose nomination
for election by the stockholders of such Person was approved by a vote of not
less than a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute at least
two-thirds of the Board of Directors of such Person;
    (c)  
there is consummated a merger, consolidation or similar transaction (including a
recapitalization) of such Person with any other Person, other than a merger or
consolidation immediately following which the stockholders of such Person
immediately prior thereto own in the aggregate not less than two-thirds of the
combined voting power of the entity surviving such merger, consolidation or
similar transaction or the Controlling Person thereof; or
    (d)  
there is consummated a sale or disposition by such Person of all or a
substantial portion of such Person’s assets to another Person, other than a sale
or disposition immediately following which the stockholders of such Person
immediately prior thereto own in the aggregate not less than two-thirds of the
combined voting power of such other Person or the Controlling Person thereof.

“Closing Date” means January 31, 2005.

“Code” means the Internal Revenue Code of 1986.

“Company Minimum Gain” means “partnership minimum gain” as set forth in Treasury
Regulation Sections 1.704-2(b)(2) and 1.704-2(d).

“Company Property or Properties” means all interests, properties, whether real
or personal, and rights of any type owned or held by the Company, whether owned
or held by the Company at the date of its formation or thereafter acquired.

“Company Regulatory Event” means a situation in which (i) the Company becomes
subject to any Regulatory Order, or any Governmental Entity initiates a
Proceeding with respect to the Company, and (ii) such Regulatory Order or
Proceeding prevents or materially impairs the Company’s ability to originate
loans for any period of time in a manner that adversely affects the value of one
or more of the quarterly distributions to be paid by the Company pursuant to
Section 5.6 of this Agreement; provided, however, that Company Regulatory Event
shall not include (1) any order,

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directive or interpretation or change in law, rule or regulation, in any such
case that is applicable generally to companies engaged in the mortgage lending
business such that the Company is unable to cure the resulting circumstances
described in (ii) above, or (2) any Regulatory Order or Proceeding that results
solely from acts or omissions on the part of the Cendant Entities or their
Affiliates.

“Contributed Property” means property or other consideration (other than cash)
contributed to the Company in exchange for Interests.

“Contribution Agreement” means the Contribution Agreement to be entered into by
and among the Cendant Member, the Company and the PHH Member pursuant to
Section 2.11 hereof.

“Control” shall mean, with regard to any Person, the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative with the foregoing.

“Controlling Person” means a Person who controls another Person.

“Customer” means any individual who contacts the Company, whether in person or
by mail, phone, via the Internet (including by electronic mail), or otherwise,
or who is so contacted by the Company, about the possibility of obtaining a
Mortgage Loan through the Company, or who otherwise obtains a Mortgage Loan from
or through the Company.

“Depreciation” means, for each Fiscal Period, an amount equal to the
depreciation, amortization or other cost recovery deduction allowable with
respect to an asset for such Fiscal Period; provided, however, that if the Gross
Asset Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such Fiscal Period, Depreciation shall be an amount
that bears the same ratio to such Gross Asset Value which the asset had when its
value was last adjusted, as the federal income tax depreciation, amortization or
other cost recovery deduction with respect to such asset for such Fiscal Period
bears to the adjusted tax basis which the asset had when its value was last
adjusted; and provided, further, that if the federal income tax depreciation,
amortization or other cost recovery deduction for such Fiscal Period is zero,
then, subject to Section 6.3(a)(xiv), Depreciation shall be determined with
reference to such beginning Gross Asset Value using any reasonable method
selected by the Managing Member.

“Distributable Net Income” shall mean, for each Fiscal Quarter, an amount equal
to the net income of the Company and its Subsidiaries, on a consolidated basis,
determined in accordance with GAAP, less any amounts retained by the Company as

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shall be necessary to meet the Minimum Capital Requirements (which requirements
shall be approved by the Board pursuant to Section 6.3).

“Fair Market Value” means the fair market value of an asset, as determined by
the Managing Member using any reasonable method of valuation, except as
otherwise provided herein; provided, however, that such fair market value shall
be approved by the Board as provided in Section 6.3(a)(xvii).

“FHA” means the Federal Housing Administration of HUD or any successor thereto.

“Fiscal Period” means the period (i) commencing (w) at the beginning of each
Fiscal Quarter, (x) the date of any acquisition of Interests by any new or
existing Member in exchange for a Capital Contribution, or (y) on each date
following the effective date of any distribution to a Member of any property as
consideration for an Interest in the Company, and (ii) ending on the date
immediately preceding the first day of the next Fiscal Period; provided, that
the last Fiscal Period shall end on the date on which all assets of the Company
are distributed to the Members pursuant to Section 9.4 hereof.

“Fiscal Quarter “ means (i) the period commencing on the date of this Agreement
and ending on March 31, 2005, or (ii) any subsequent three (3) month period
commencing on January 1, April 1, July 1 and October 1 and ending on March 31,
June 30, September 30 and December 31, respectively; provided, that the last
Fiscal Quarter shall end on the date on which all assets of the Company are
distributed to the Members pursuant to Section 9.4 hereof.

“GAAP” means generally accepted accounting principles in the United States.

“Governmental Entity” means any court, agency or commission or other
governmental or regulatory authority.

“Gross Asset Value” means, with respect to any asset, such asset’s adjusted
basis for federal income tax purposes, except as follows:

(i) the initial Gross Asset Value of any asset contributed by a Member to the
Company shall be the Fair Market Value of such asset;

(ii) the Gross Asset Value of all Company assets shall be adjusted to equal
their respective Fair Market Values, as of the following times: (a) the
acquisition of an additional interest in the Company by any new or existing
Member in exchange for more than a de minimis Capital

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Contribution, (b) the distribution by the Company to a Member of more than a de
minimis amount of Company assets as consideration for an interest in the Company
and (c) the liquidation of the Company, within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(ii)(g); provided, however, that, with approval
of the Board pursuant to Section 6.3(a)(xiv) hereof, adjustments pursuant to
clause (ii)(a) or (ii)(b) of this definition shall be made only if the Managing
Member reasonably determines that such adjustments are necessary or appropriate
to reflect the relative economic interests of the Members in the Company;

(iii) the Gross Asset Value of any Company asset distributed to any Member shall
be adjusted to equal the Fair Market Value of such asset on the date of such
distribution, unreduced by any liability secured by such asset; and

(iv) the Gross Asset Value of Company assets will be increased or decreased to
reflect any adjustment to the adjusted basis of such assets under Sections
734(b) or 743(b) of the Code, but only to the extent that the adjustment is
taken into account in determining Capital Accounts under Treasury
Regulation Section 1.704-1(b)(2)(iv)(m) and paragraph (f) of the definition of
Net Income and Net Loss or Section 5.2(f), provided, however, that Gross Asset
Values shall not be adjusted pursuant to this paragraph (iv) to the extent the
Managing Member determines that an adjustment pursuant to paragraph (ii) above
is necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this paragraph (iv) and the Board
authorizes such paragraph (ii) adjustment pursuant to Section 6.3(a)(xiv)
hereof.

If the Gross Asset Value of an asset has been determined or adjusted pursuant to
paragraph (i), paragraph (ii) or paragraph (iv) above, such Gross Asset Value
shall thereafter be adjusted by the Depreciation taken into account with respect
to such asset for purposes of computing Net Income and Net Loss.

“HUD” means the United States Department of Housing and Urban Development or any
successor thereto.

“Interest” means (i) a Member’s share of Net Income (and items of income and
gain) and Net Loss (and items of loss and deduction) of the Company and a
Member’s right to receive distributions from the Company in accordance with the
provisions of this Agreement and the Act and (ii) such Member’s other rights and
privileges as herein provided, including, without limitation, voting privileges.

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“Insolvency” means, when used with respect to any Person, such Person is unable
to pay its debts and obligations as they become due, or has incurred debts
beyond its ability to pay such debts as they mature.

“Investor Commitments” means any agreement, contract or arrangement pursuant to
which any Person purchases or agrees to purchase Mortgage Loans from the Company
or any Subsidiary of the Company.

“Lease” means the Bishop’s Gate Sublease, substantially in the form of Exhibit A
hereto, to be entered into between the Company and PMC on the Contribution Date,
pursuant to which the Company will lease space from PMC at 3000 Leadenhall Road,
Mt. Laurel, NJ 08054.

“License Agreement” means the Trademark License Agreement, dated as of the date
of this Agreement, between PMC and TM Acquisition Corp., Coldwell Banker Real
Estate Corporation and ERA Franchise Systems, Inc., pursuant to which PMC has
been granted a license to use the Cendant Real Estate Franchisee Brands (as
defined in the SRA) in connection with its business, on the terms set forth
therein.

“Loan Funding Facility” means a credit or loan agreement or other funding
arrangement, approved by the Board pursuant to Section 6.3 hereof, pursuant to
which the Company and/or its Subsidiaries borrows money for the purpose of
funding Mortgage Loan originations.

“Losses” means any and all losses, damages, disbursements, suits, claims,
liabilities, obligations, judgments, fines, penalties, charges, amounts paid in
settlement, costs and expenses (including, without limitation, reasonable
attorneys’ fees and expenses), and shall specifically include, but only for
purposes of Section 12.4 hereof, any indirect, special, incidental or
consequential damages (including lost profits and lost cash distributions).

“Management Services Agreement” means the Management Services Agreement,
substantially in the form attached hereto as Exhibit B, to be entered into by
the Company and PMC in accordance with Section 2.11 of this Agreement.

“Managing Member” means the PHH Member, or such other Member as may replace the
PHH Member as Managing Member pursuant to Section 8.2 or 8.4 hereof.

“Master Sublease Agreement” means the Master Shared Office Space Agreement,
substantially in the form attached hereto as Exhibit C, to be entered into
between the Company and NRT on the Contribution Date, pursuant to which the

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Company will sublease from NRT office space utilized by field personnel of the
Company who are co-located in a Cendant Owned Real Estate Office.

“Member” means, at any time, a Person admitted as a member of the Company
pursuant to Section 3.2 hereof and listed on Schedule I hereto. If a Member
Transfers its Interest or any portion thereof to a Person who is not a Member,
reference in this Agreement to a “Member” or such Member’s Capital Account in
connection with such Transferred Interest or portion thereof shall be deemed to
be a reference to the record holder of such Transferred Interest or portion
thereof for the purpose of calculating the economic interest and Capital Account
balances and adjustments represented by such Transferred Interest or portion
thereof until such record holder of such Transferred Interest or portion thereof
is admitted as a Member.

“Member Nonrecourse Debt” means “partner nonrecourse debt” as set forth in
Treasury Regulation Section 1.704-2(b)(4).

“Member Nonrecourse Debt Minimum Gain” means an amount with respect to each
Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if
such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined
in accordance with Treasury Regulation Section 1.704-2(i)(3).

“Member Nonrecourse Deductions” means “partner nonrecourse deductions” as set
forth in Treasury Regulation Section 1.704-2(i)(2), and the amount of Member
Nonrecourse Deductions with respect to a Member Nonrecourse Debt for a Fiscal
Period shall be determined in accordance with the rules of Treasury
Regulation Section 1.704-2(i)(2).

“Mobility Interim MSA” means the Marketing Agreement, by and between Cendant
Mobility and PMC, dated as of January 31, 2005.

“Mortgage Instrument” means any deed of trust, security deed, mortgage, or other
instrument which constitutes a first lien or second lien on the Mortgaged
Property securing payment by a mortgagor of a Mortgage Note.

“Mortgage Loan” means a mortgage loan (including a home equity line of credit)
evidenced by one or more promissory notes and secured by a mortgage or deed of
trust on one or more residential real estate properties.

“Mortgage Loan Disclosure” shall mean any disclosure, notice or other document
or statement that, pursuant to applicable law, must be provided to a Customer by
or on behalf of the Company in connection with the origination, closing and
funding of a Mortgage Loan or an application for a Mortgage Loan.

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“Mortgage Loan Documents” means the Mortgage Instruments, Mortgage Notes and
Assignments.

“Mortgage Loan Sale Agreement” means a Mortgage Loan Sale Agreement to be
entered into by and between the Company and PMC in accordance with Section 2.11
hereof.

“Mortgage Note” means the mortgage note, deed of trust note, security deed note
or other form of promissory note executed by a mortgagor and secured by a
Mortgage Instrument evidencing the indebtedness of the mortgagor under a
Mortgage Loan.

“Mortgaged Property” means the interest in real property pledged to secure a
Mortgage Note, as evidenced by one or more Mortgage Instruments.

“MSA” means the Marketing Services Agreement, dated as of the date of this
Agreement, by and between PMC and certain Subsidiaries of Cendant Real Estate.

“Net Income” and “Net Loss” shall mean, for each Fiscal Period, an amount equal
to the Company’s items of taxable income or loss for such Fiscal Period,
determined in accordance with Section 703 of the Code (for this purpose all
items of income, gain, loss and deduction required to be separately stated
pursuant to Section 703(a)(1) of the Code shall be included in taxable income or
loss), with the following adjustments (without duplication):

(a) any income that is exempt from federal income tax and not otherwise taken
into account in computing Net Income or Net Loss shall be added to taxable
income or loss;

(b) any expenditures of the Company described in Section 705(a)(2)(B) or that
are treated as Section 705(a)(2)(B) expenditures pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing
Net Income or Net Loss, shall be subtracted from such taxable income or loss;

(c) in the event that the Gross Asset Value of any Company asset is adjusted
pursuant to the definition of Gross Asset Value, the amount of such adjustment
shall be taken into account as an item of gain (if the adjustment increases the
Gross Asset Value of the asset) or an item of loss (if the adjustment decreases
the Gross Asset Value of the asset) from the disposition of such asset and shall
be taken into account for purposes of computing Net Income or Net Loss;

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(d) gain or loss resulting from the disposition of property with respect to
which gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property differs from its
Gross Asset Value;

(e) in lieu of the depreciation, amortization, and other costs recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation with respect to each asset of the
Company for such Fiscal Period computed in accordance with the definition of
Depreciation;

(f) to the extent an adjustment to the adjusted basis of any Company asset
pursuant to Section 734(b) or 743(b) of the Code is required pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in
determining Capital Accounts as a result of a distribution other than in
complete liquidation of a Member’s Interest, the amount of such adjustment shall
be treated as an item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account in computing Net Income
or Net Loss; and

(g) notwithstanding any other provision of this definition, any items specially
allocated pursuant to Section 5.2 shall not be considered in determining Net
Income or Net Loss.

“New Member” means any Person not listed on Schedule I as of the date hereof who
has been admitted as a Member to the Company pursuant to Section 3.2 hereof.

“Nonrecourse Deductions” has the meaning set forth in Treasury
Regulation Section 1.704-2(b)(1), and the amount of the Nonrecourse Deductions
for a Fiscal Period shall be determined in accordance with Treasury
Regulation Section 1.704-2(c).

“Nonrecourse Liability” means a liability (or that portion of a liability) with
respect to which no Member bears the economic risk of loss as determined under
Treasury Regulation Section 1.704-2(b)(3).

“NRT Interim MSA” means the Marketing Agreement, by and between NRT Incorporated
and PMC, dated as of January 31, 2005.

“Origination Channels” has the meaning assigned to such term in the SRA.

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“Person” means any individual, general partnership, limited partnership,
corporation, limited liability company, joint venture, trust, business trust,
governmental agency, cooperative, association, or other entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of such
person, as the context may require.

“PHH” means PHH Corporation, a Maryland corporation.

“PHH Regulatory Event” means a situation in which (i) PMC or any of its
Affiliates (other than the Company) becomes subject to any Regulatory Order, or
any Governmental Entity initiates a Proceeding with respect to PMC or any of its
Affiliates (other than the Company), and (ii) such Regulatory Order or
Proceeding prevents or materially impairs the Company’s ability to originate
loans for any period of time in a manner that adversely affects the value of one
or more quarterly distributions to be paid by the Company pursuant to
Section 5.6 of this Agreement; provided, however, that PHH Regulatory Event
shall not include (1) any order, directive or interpretation or change in law,
rule or regulation, in any such case that is applicable generally to companies
engaged in the mortgage lending business such that PMC or such Affiliate or the
Company is unable to cure the resulting circumstances described in (ii) above,
or (2) any Regulatory Order or Proceeding that results solely from acts or
omissions on the part of Cendant or its Affiliates.

“PMC” means PHH Mortgage Corporation, a New Jersey corporation.

“PHH Change of Control” means a Change of Control of PHH, or the Managing Member
or any other Affiliate of PHH that beneficially owns, directly or indirectly,
any Interest of the Company.

“Proceeding” means any legal, administrative, arbitral or other proceeding,
claim, action or governmental or regulatory investigation of any nature.

“Regulatory Order” means any injunction, order, judgment, decree, memorandum of
understanding, consent decree, directive or regulatory restriction, or any
change in or interpretation of any law, rule or regulation, imposed by a
Governmental Entity.

“RESPA” means the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et
seq., and the Department of Housing and Urban Development’s implementing
regulation, Regulation X, 24 C.F.R. § 3500 et seq.

“Securities Act” means the Securities Act of 1933.

“Small Corps” means, collectively, the companies listed in Exhibit D.

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“State Agency” means any agency or other Governmental Entity of any of the fifty
states of the United States or of the District of Columbia, in each case having
authority to regulate the mortgage-related activities of the Company or any of
its Subsidiaries or to determine the investment requirements with regard to
mortgage loan originations performed by the Company or any of its Subsidiaries.

“Subsidiary” means, when used with respect to any party, any corporation,
partnership, limited liability company or other organization, whether
incorporated or unincorporated, which is consolidated with such party for
financial reporting purposes under GAAP, and, when used with respect to the
Company, shall include, without limitation, those Small Corps that will become
Subsidiaries of the Company following the completion of the Subsequent Capital
Contributions in accordance with Section 2.11 hereof.

“Transaction Documents” means, collectively, this Agreement, the SRA, the MSA,
the NRT Interim MSA, the Mobility Interim MSA, the License Agreement, the
Venture License Agreement, the Management Services Agreement, the Lease
Agreement, the Master Sublease Agreement, the Contribution Agreement and the
Mortgage Loan Sale Agreement.

“Transfer” means any change in the record or beneficial ownership of an
Interest, whether made voluntarily or involuntarily by operation of law.

“Treasury Regulations” means the regulations promulgated by the U.S. Treasury
Department pursuant to the Code.

“Venture License Agreement” means the Trademark License Agreement, by and among
TM Acquisition Corp., Coldwell Banker Real Estate Corporation, ERA Franchise
Systems, Inc. and the Company, dated as of January 31, 2005.

Section 1.2      Interpretation. Each definition in this Agreement includes the
singular and the plural, and reference to the neuter gender includes the
masculine and feminine where appropriate. References to any statute or Treasury
Regulations means such statute or regulations as amended at the time and include
any successor legislation or regulations. The headings to the Articles and
Sections are for convenience of reference and shall not affect the meaning or
interpretation of this Agreement. Except as otherwise stated, reference to
Articles, Exhibits, Sections and Schedules mean the Articles, Exhibits, Sections
and Schedules of this Agreement. The Exhibits and Schedules are hereby
incorporated by reference into and shall be deemed a part of this Agreement.

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ARTICLE II
General Provisions

Section 2.1      Form. The Members hereby agree to operate the Company as a
limited liability company pursuant to the provisions of the Act and upon the
terms and conditions set forth in this Agreement. Except as expressly provided
herein to the contrary, the rights and obligations of the Members and the
administration and termination of the Company shall be governed by the Act.

Section 2.2      Company Name. The name of the Company is “PHH Home Loans, LLC”
or such other name or names as may be selected by a unanimous vote of the
Members from time to time, and its business shall be carried on in such name and
in the other names listed on Schedule 2.2 hereto, with such variations and
changes thereto as the Members shall deem necessary to comply with requirements
of the jurisdictions in which the Company’s operations are conducted.

Section 2.3      Registered Office; Registered Agent. The Company shall maintain
a registered office in the State of Delaware at 2711 Centerville Road,
Suite 400, in the City of Wilmington, County of New Castle, and the name of the
Company’s registered agent in the State of Delaware is, Corporation Service
Company.

Section 2.4      Place of Business. The business address of the Company is 3000
Leadenhall Road, Mt. Laurel, New Jersey 08054, or such other place as the
Members shall designate by unanimous vote.

Section 2.5      Purpose; Nature of Business Permitted; Powers.

(a)     The Company is formed for the purposes of (1) originating Mortgage Loans
that are sourced through any Cendant Owned Real Estate Office and fulfilled
through any of the Origination Channels, (2) originating Mortgage Loans that are
sourced through any Cendant Mobility Office and fulfilled through any of the
Origination Channels, (3) originating Mortgage Loans for U.S.-based employees of
Cendant and its Subsidiaries and fulfilled through any of the Origination
Channels, (4) originating Mortgage Loans sourced by any loan officer of the
Company, either through any Cendant Owned Real Estate Office or through any
Cendant Mobility Office, (5) selling all Mortgage Loans originated by the
Company on a servicing-released basis on terms consistent with the provisions of
Section 6.1(b) below, and (6) any other purpose agreed to unanimously by the
Members in writing. For the avoidance of doubt, the purposes for which the
Company is formed shall not include, and without the prior unanimous written
consent of all Members the Company shall not engage in, (i) originating,
purchasing or otherwise acquiring and holding Mortgage Loans for investment
purposes, or (ii) servicing Mortgage Loans or retaining servicing rights with
respect to any Mortgage Loans originated and sold by the Company.

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(b)      Subject to the other provisions of this Agreement, the Company shall
possess and may exercise all of the powers and privileges granted by the Act or
by any other law or by this Agreement, together with any powers incidental
thereto, but only in so far as such powers and privileges are necessary to the
conduct, promotion or attainment of the business purposes of the Company
specified in Section 2.5(a) hereof, including, without limitation, the power:

(i)      to acquire, hold, manage, own, sell, transfer, convey, assign,
exchange, license, pledge or otherwise dispose of the Company’s interest in
assets or any property held by the Company, including, without limitation,
interests in technology, intellectual property rights and other proprietary
processes, products or services;

(ii)      to establish, have, maintain or close one or more offices within or
without the State of Delaware and in connection therewith to rent or acquire
office space and to engage personnel;

(iii)      to open, maintain and close bank and brokerage accounts, including
the power to draw checks or other orders for the payment of moneys, and to
invest such funds as are temporarily not otherwise required for Company
purposes;

(iv)      to bring and defend actions and proceedings at law or in equity or
before any Governmental Entity, including any State Agency;

(v)      to hire consultants, custodians, attorneys, accountants and such other
agents, officers and employees of the Company as it may deem necessary or
advisable, and to authorize each such agent and employee to act for and on
behalf of the Company;

(vi)      to enter into, perform and carry out contracts and agreements of every
kind necessary or incidental to the accomplishment of the Company’s business
purposes, and to take or omit to take such other action in connection with the
business of the Company as may be necessary or desirable to further the business
purposes of the Company;

(vii)      to obtain and hold any and all permits, licenses, consents,
authorizations and approvals as the Managing Member may from time to time deem
necessary or appropriate for the conduct of the business of the Company and its
Subsidiaries, including, without limitation, any such licenses and
authorizations as may be required pursuant to the rules and regulations of any
State Agency; and

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(viii)      to carry on any other activities necessary or incidental to any of
the foregoing.

Section 2.6      Business Transactions of a Member with the Company. In
accordance with Section 18-107 of the Act and subject to the requirements of
Section 6.1(e) and Section 6.3 hereof, a Member may lend money to, borrow money
from, act as surety, guarantor or endorser for, guarantee or assume one or more
specific obligations of, provide collateral for, and transact other business
with, the Company and, subject to applicable law, shall have the same rights and
obligations with respect to any such matter as a Person who is not a Member.

Section 2.7      No State-Law Partnership. No provisions of this Agreement shall
be deemed or construed to constitute the Company a partnership (including,
without limitation, a limited partnership), or any Member a partner of a
partnership or a partner with any other Member, for any purpose other than, in
each case, federal and state income tax purposes.

Section 2.8      Authorized Representatives. The “Authorized Representatives” of
each Member shall be those Persons appointed from time to time as Advisors by
such Member in accordance with Section 6.2 hereof. The written statements and
representations of an Authorized Representative on behalf of a Member shall be
the only authorized statements and representations of such Member with respect
to the matters specifically covered by this Agreement. The term “approved by” or
“consented to by” or “consent of” or “satisfactory to” with respect to a Member
means a decision or action which has been consented to in writing by an
Authorized Representative of such Member.

Section 2.9      Term. The existence of the Company commenced on the date of the
filing of the Certificate of Formation in the Office of the Secretary of State
of the State of Delaware, and shall continue until January 31, 2055, unless
earlier dissolved pursuant to the provisions of Article IX hereof. Upon the
occurrence of an Event of Dissolution, all FHA-insured loans held by the Company
shall be transferred to an approved mortgagee or lender prior to dissolution of
the Company.

Section 2.10      D/B/As, Fictitious Names, Licenses and Regulatory Approvals.

(a)      The Company and its Subsidiaries shall make all d/b/a, fictitious name
and similar filings as are listed on Schedule 2.10(a) hereto and shall obtain
all licenses and regulatory approvals in each of the fifty (50) states and in
the District of Columbia as shall be necessary to conduct its loan origination,
loan sales and related operations as contemplated by this Agreement and the
other Transaction Documents in all such jurisdictions. The Cendant Member shall
be responsible for

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making all such d/b/a, fictitious name and similar filings, and the PHH Member
shall be responsible for obtaining all such licenses and regulatory approvals.
On the fifteenth (15th) of February, 2005 and on the first (1st) and fifteenth
(15th) of each month thereafter, the PHH Member shall provide to the Cendant
Member a detailed report on the status of all licenses and regulatory approvals
necessary to operate the Company and its Subsidiaries.

(b)      Not more than forty-five (45) days after the PHH Member receives all of
the requisite d/b/a, fictitious name and other similar approvals for filings
made by the Cendant Member in accordance with Section 2.10(a) above in any
state, the PHH Member shall cause the Company to file with the appropriate
regulatory authorities in such state all applications for the requisite licenses
and regulatory approvals with respect to the business to be conducted by the
Company and any of its Subsidiaries in such state; provided, however, that for
purposes of counting the forty-five day period herein, no such approvals shall
be deemed received by the PHH Member prior to February 15, 2005. The PHH Member
shall pay to the Cendant Member a cash payment of $50,000 per month with respect
to each state for which the Company shall not have met such forty-five (45) day
deadline, with such payment being due and payable on the day of such deadline
and again every thirty (30) days thereafter until such filing has been made.

(c)      The PHH Member shall cause the Company to diligently pursue and use its
reasonable best efforts to obtain all such licenses and regulatory approvals
described above not later than July 31, 2005. Without limiting the foregoing,
the PHH Member shall comply in a timely manner with all requests for information
received from any State Agency (provided that the PHH Member shall not be
responsible for any failure or refusal by Cendant to provide any information so
requested) and shall cause representatives of the Company to meet in person with
the requisite regulatory authorities in any state where such authorities have so
requested or where receipt of approval from such authorities has been delayed
and the Cendant Member so reasonably requests.

Section 2.11      Subsequent Capital Contributions.

(a)      At any time after the Company shall have obtained all requisite
licenses and approvals and made all other filings necessary to enable it to
operate its business both (1) in not less than 25 states and (2) in each of
those states listed on Schedule 2.11(a) hereto or any subset thereof approved by
the Cendant Member in writing, the Cendant Member shall have the right to
deliver to the PHH Member a written notice (the “Contribution Notice”)
containing the Cendant Member’s election to cause the Subsequent Capital
Contributions (as defined below) to occur. The Parties shall consummate the
transactions constituting the Subsequent Capital Contributions on the date
specified by the Cendant Member in the Contribution Notice, which date (the

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“Contribution Date”) shall be no earlier than the seventh (7th) day following
the date of delivery of such notice to the PHH Member. On the Contribution Date,
the Parties shall take the following actions:

(i)      the PHH Member shall contribute, or cause to be contributed, to the
Company, (A) substantially all of the assets constituting the businesses of each
of the companies constituting the Small Corps (with the form of the transaction
in which such transfer shall occur being determined pursuant to subparagraph
(b) below), and (B) those separately identifiable assets that comprise part of
PMC’s “phone-in, move-in” origination channel and that will be utilized by the
Company and its employees in the operation of its loan origination business (as
identified and scheduled by the Parties in accordance with subparagraph
(b) below) (the “PIMI Contributed Assets”);

(ii)      the Cendant Member shall contribute, or cause to be contributed, to
the Company (A) the right to use those tradenames and marks specified in the
Venture License Agreement, on a royalty-free basis and otherwise on the terms
set forth in such agreement, and (B) an amount of cash determined in accordance
with subparagraph (b) below;

(iii)      the parties shall execute the Contribution Agreement, the Management
Services Agreement, the Mortgage Loan Sale Agreement, the Lease and the Master
Sublease Agreement;

(iv)      the PHH Member shall cause the Company to offer employment to (A) such
employees of PMC as shall be reasonably necessary to enable the Company to
perform its obligations pursuant to the terms of the SRA, and (B) all of the
employees of the Small Corps (other than those Small Corps that will become
Subsidiaries of the Company upon being contributed to the Company); and

(v)     the PHH Member shall cause the Company to sponsor and maintain its own
employee benefit plans (including, but not limited to welfare benefit plans and
tax-qualified pension and retirement plans) for the benefit of the employees of
the Company and its Subsidiaries.

The actions contemplated by subparagraphs (i) through (v) above are referred to
herein as the “Subsequent Capital Contributions.”

(b)     As soon as practicable after the date of this Agreement, in preparation
for the Subsequent Capital Contributions, the Parties shall cooperate in good
faith to do each of the following as promptly as practicable following the date
hereof and

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in any event within such time as shall be necessary to enable the Subsequent
Capital Contributions to occur by mid-year 2005:

(i)      Determine the form of the transaction (merger, asset transfer, transfer
of equity interests or other) pursuant to which the businesses of the Small
Corps will be contributed to the Company (including, among other things,
determining the consents and approvals and d/b/a and other filings,
qualifications and notices required to be obtained or made in connection with
such transaction and the expected timing thereof), it being understood that the
final determination regarding the form of such transaction shall be made by the
Cendant Member in its sole discretion, and that the Parties will work together
with a view toward structuring the contributions so that the loans originated by
the Small Corps whose businesses will be combined directly with the Company’s
(rather than becoming Subsidiaries of the Company) will constitute not less than
15% of all loans originated directly by the Company;

(ii)      Obtain all such consents and approvals and make all such d/b/a and
other filings, qualifications and notices as shall be necessary to complete the
contribution of the businesses of the Small Corps to the Company pursuant to the
form of transaction determined in accordance with subparagraph (b)(i) above;

(iii)      Prepare detailed and complete schedules identifying all of the PIMI
Contributed Assets, all of the employees of PMC and its Subsidiaries who will be
offered employment with the Company on the Contribution Date, and, if the form
of transaction determined pursuant to subparagraph (i) above contemplates one or
more asset transfer transactions, all of the assets, contracts and other rights
constituting the businesses of the applicable Small Corps to be contributed to
the Company pursuant to such transactions;

(iv)      Obtain valuations (which in the case of subclauses (A) and (C) below
shall be performed by an unaffiliated third party selected by the Cendant
Member) for (A) the businesses of the Small Corps to be contributed to the
Company pursuant to Section 2.11(a)(i)(A) above, (B) the PIMI Contributed Assets
to be contributed to the Company pursuant to Section 2.11(a)(i)(B) above, and
(C) the Venture Trademark License to be contributed to the Company pursuant to
Section 2.11(a)(ii)(A) (it being understood that the amount of cash to be
contributed to the Company by the Cendant Member pursuant to
Section 2.11(a)(ii)(B) shall equal the difference between the total of the
amounts determined pursuant to subclauses (A) and (B) above and the amount
determined pursuant to subclause (C) above), and finalize Schedule II to this
Agreement to reflect the updated Gross Asset Values for such assets based upon
such valuations;

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(v)      Prepare all agreements, instruments and other documents necessary or
appropriate to effect the transactions constituting the Subsequent Capital
Contributions (including without limitation a Contribution Agreement), which
agreements shall include provisions for, among other things, (A) customary
representations from the PHH Member with respect to the assets to be contributed
by it to the Company, the consents and approvals necessary to effect such
contributions, compliance with law and other regulatory matters with respect to
the businesses of the Small Corps and employee matters with respect to the
period prior to the Contribution Date, and (B) indemnification of the Company by
the PHH Member with respect to Losses arising out of or resulting from any
matter, circumstance or event occurring prior to the Contribution Date with
respect to or affecting the business, assets or employees of the Small Corps
contributed by or on behalf of the PHH Member; and

(vi)      Prepare a Mortgage Loan Sale Agreement having terms consistent with
Section 6.1(b) of this Agreement.

(c)      Prior to making the Subsequent Capital Contributions contemplated by
subparagraph (a) above, if the form of transaction involves any of the companies
comprising the Small Corps being merged into the Company or being contributed to
the Company and becoming a Subsidiary of the Company as a result thereof, the
PHH Member shall (i) settle and eliminate all intercompany accounts receivable,
accounts payable or other arrangements and obligations between PHH or any of its
Subsidiaries, on the one hand, and each such company, on the other, (ii) cause
all of the ownership interests in Landover Mortgage LLC held by any such company
to be distributed by such company to PMC, and (iii) in the case of any such
company that will become a Subsidiary of the Company following the contribution,
convert such company to a limited liability company pursuant to a transaction
acceptable in form and substance to tax counsel for the Cendant Member prior to
the Contribution Date.

(d)     The PHH Member and its Affiliates (other than the Company and any of the
Small Corps (or any successor thereto) that is merged into the Company or
contributed as a Subsidiary of the Company) shall bear and pay all costs and
expenses (including Taxes) associated with the contribution of the businesses of
the Small Corps contemplated by Section 2.11(a) hereof, all of the transactions
contemplated by Section 2.11(c) hereof, and obtaining the consents and approvals
required in connection with the contribution of the Small Corps contemplated by
Section 2.11(b)(ii) above. Each Member shall bear and pay its own costs in
connection with the other transactions contemplated by this Section 2.11.

ARTICLE III
Members

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Section 3.1      Members. The Company shall consist of the Members executing
this Agreement and any New Members admitted to the Company by the Members in
accordance with terms hereof. The Members of the Company, together with the
Common Interest Percentages and addresses of such Members, are listed on
Schedule I of this Agreement. As of the date hereof, there are no other Members
of the Company and no other Person has any right to take part in the ownership
or share in the profits of the Company. The Managing Member shall have the
authority, without the consent of the Members, but subject to the limitations
contained in Article VI hereof and otherwise in accordance with the terms of
this Agreement, to amend Schedule I in connection with any Transfer or other
change in ownership of Interests permitted hereunder and to reflect (a) the
admission of any New Member, (b) the removal, expulsion, retirement or death of
any Member, in each case, in accordance with the terms of this Agreement and
(c) any change in the Interests of any Member effected in accordance with the
terms of this Agreement (including Section 4.3 or 10.1 hereof). No Person shall
be deemed to be a Member unless such Person has executed and delivered to the
Company a copy of this Agreement. Each New Member shall be deemed to have a
fully executed copy of this Agreement if such Member is delivered a copy of this
Agreement which (a) has been executed by such Member and (b) is countersigned on
the same page by an authorized officer of the Company.

Section 3.2      Admission of New Members. New Members of the Company may only
be added if the addition of any such proposed New Member is approved, prior to
such admission, by the unanimous consent of all Members and if such proposed New
Member executes this Agreement and makes the representations and warranties set
forth in Section 3.3 hereof. Notwithstanding the foregoing, a Person that (a) is
an Affiliate of a Member and to whom such Member has Transferred all or any
portion of its Interest in accordance with Section 10.1 hereof or (b) is a
transferee of all or a portion of the Cendant Member’s Interest as permitted by
Section 10.1 hereof shall be admitted as a New Member without the consent of the
other Members, provided that such New Member executes this Agreement and makes
the representations and warranties set forth in Section 3.3 hereof.

Section 3.3      Representations. Each Member hereby represents and warrants to
the Company as follows:

(a)      Such Member is a corporation, limited liability company, partnership or
business trust duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization. Such Member has full
right, power and authority to execute and deliver this Agreement and to perform
each of its obligations hereunder.

(b)      All necessary action, corporate or otherwise, on the part of such
Member necessary to authorize the execution and delivery by such Member

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of this Agreement and the performance by such Member of its obligations
hereunder has been taken, and no further action on the part of such Member is
necessary for such authorization. This Agreement has been duly authorized,
executed and delivered by such Member and (assuming due authorization, execution
and delivery by the other Members), constitutes a legal, valid and binding
obligation of such Member enforceable against such Member in accordance with its
terms.

(c)     Except as otherwise set forth in or contemplated by this Agreement with
respect to the Company, no consent, approval or authorization of, or filing or
registration with, any governmental or regulatory authority or any other Person
(other than such as have been obtained or made by such Member) is required to be
made or obtained by such Member in connection with the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement.

(d)      Neither the execution and delivery of this Agreement by such Member nor
the consummation by such Member of the transactions contemplated hereby, nor
compliance by such Member with any of the terms or provisions hereof, will
(i) conflict with or result in a breach of any provision of the certificate of
incorporation, by-laws or similar governing documents of such Member or (ii)
assuming the consents, permits, authorizations, approvals, filings and
registrations previously disclosed in writing by such Member to the other
Members are obtained or made (x) violate any statute, code, ordinance, rule,
regulation, judgment, order, write, decree or injunction applicable to such
Member or any of its properties or assets or (y) violate, conflict with, result
in a breach of any provisions of, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, result in
the termination of, accelerate the performance required by, or result in a right
of termination or acceleration or the creation of any encumbrance upon any of
the properties or assets of such Member under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which such Member is a
party, or by which its properties or assets may be bound or affected, except, in
the case of clause (ii), for such violations, conflicts, breaches or defaults
which, either individually or in the aggregate, would not prevent or materially
hinder or delay such Member’s ability to consummate the transactions
contemplated hereby or perform its obligations hereunder.

Section 3.4      No Liability of Members. All debts, obligations and liabilities
of the Company, whether arising in contract, tort or otherwise, shall be solely
the debts, obligations and liabilities of the Company, and no Member shall be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a Member.

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Section 3.5      Company Property. No real or other property of the Company
shall be deemed to be owned by any Member individually but shall be owned by and
title shall be vested solely in the Company. The Interests of the Members in the
Company shall constitute personal property.

Section 3.6      Confidentiality.

(a)      Each Member agrees not to disclose, communicate, use to the detriment
of the Company or for the benefit of any other Person, or misuse in any way, any
confidential information or trade secrets of the Company or any Subsidiary or
any other Member or its Affiliates, including personnel information, secret
processes, know-how, customer lists, formulas or other technical data
(“Confidential Information”), except as may be required by law; provided,
however, that (i) this prohibition shall not apply to (x) any information which,
through no improper action of such Member, is publicly available or generally
known in the industry or (y) any information which is disclosed upon the
approval of all of the Members and (ii) such information may be disclosed to the
extent required by law, legal process or applicable stock exchange rule. Each
Member acknowledges and agrees that any information or data such Member has
acquired on any of these matters or items were received in confidence and as
fiduciary of the Company.

(b)     It is agreed between the parties that the Company would be irreparably
damaged by reason of any violation of the provisions of this Section 3.6 and
that any remedy at law for a breach of such provisions would be inadequate.
Therefore, the Company shall be entitled to seek and obtain injunctive or other
equitable relief (including, but not limited to, a temporary restraining order,
a temporary injunction or a permanent injunction) against any Member, such
Member’s agents, assigns or successors for a breach or threatened breach of such
provisions and without the necessity of proving actual monetary loss. It is
expressly understood among the parties that this injunctive or other equitable
relief shall not be the Company’s exclusive remedy for any breach of this
Section 3.6 and that the Company shall be entitled to seek any other relief or
remedy that it may have by contract, statute, law or otherwise for any breach
hereof, and it is agreed that the Company shall also be entitled to recover its
attorneys’ fees and expenses in any successful action or suit against any Member
relating to any such breach. It is also expressly agreed that any Member shall
have the right to enforce this Section 3.6 on behalf of the Company against the
other Members.

(c)      Notwithstanding the foregoing, the participation or involvement of any
Member in the Company shall not confer upon the Company or otherwise entitle the
Company or any other Member thereof to use or otherwise disclose in connection
with the Company and its business and affairs the name of such Member without
such Member’s prior consent.

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(d)     Except as otherwise agreed by the Members, in the event of a PHH Change
of Control or anticipated PHH Change of Control, the PHH Member shall implement
reasonable internal access controls and other restrictions on the use and
disclosure of Confidential Information to prevent any directors, officers,
employees, agents, consultants or contractors of a third party from having
access to such Confidential Information.

ARTICLE IV
Capital Contributions

Section 4.1      Capital Structure. The capital structure of the Company shall
consist of one class of Interests (“Common Interests”). Except as otherwise set
forth herein, each of the Common Interests shall be identical.

Section 4.2      Capital Contributions.

(a)     Each Member has contributed, as an initial capital contribution
(“Initial Capital Contribution”) to the Company, the amount set forth opposite
such Member’s name on Schedule I hereto, and hereby agrees to contribute, in
accordance with the provisions of Section 2.11 of this Agreement, all of its
right, title and interest (whether now held or hereafter acquired) in and to the
assets described in Section 2.11(a) hereto having the estimated Gross Asset
Values as are reflected on Schedule II hereto (with the final Gross Asset Values
for such assets to be determined for purposes of this Agreement in accordance
with Section 2.11).

(b)      In exchange for the Initial Capital Contributions, each Member has
received an Interest in the Company in proportion to the Interest percentage
(“Common Interest Percentage”) set forth opposite the name of such Member on
Schedule I hereto.

Section 4.3      Additional Provisions Concerning Capital Contributions.

(a)     Capital Contributions. Other than as set forth in Section 4.2, no Member
shall be permitted to make additional Capital Contributions to the Company
except upon the prior written approval of all the other Members; provided,
however, that notwithstanding anything to the contrary contained herein, in the
event of an Additional Capital Determination (as defined below), then additional
Capital Contributions shall be made by each Member in an amount equal to the
product of (x) the Additional Capital Amount with respect to such Additional
Capital Determination and (y) such Member’s Common Interest Percentage. An
“Additional Capital Determination” shall mean a determination made by the
Managing Member (which determination, if

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made, shall be immediately notified in writing to the Board), and approved by
the Board pursuant to Section 6.3, that the Company requires additional Capital
Contributions from the Members to satisfy the Minimum Capital Requirements, as
defined in Section 6.3(a)(xviii) herein. The “Additional Capital Amount” with
respect to any Additional Capital Determination shall mean the aggregate
additional Capital Contributions required from all Members in connection
therewith, as approved by the Board pursuant to Section 6.3.

(b)     Interest. Interest, if any, earned on funds contributed or held by the
Company shall inure to the benefit of the Company; the Members shall not be
entitled to receive interest or any other payments from the Company with respect
to their Capital Contributions or Capital Accounts.

Section 4.4      Capital Accounts.

(a)     In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv), a
capital account (a “Capital Account”) shall be established and maintained for
each Member throughout the full term of the Company. A Member’s Capital Account
(i) shall be increased by (A) the amount of cash and the Fair Market Value of
property (other than cash) contributed by such Member and (B) such Member’s
allocable share of the Company’s Net Income (and items of income and gain) for
each Fiscal Period; and (ii) shall be decreased by (A) the amount of cash and
the Fair Market Value of property (other than cash) distributed to such Member
and (B) such Member’s allocable share of the Company’s Net Loss (and items of
deduction and loss) for each Fiscal Period.

(b)     In addition to the adjustments specified by Section 4.4(a), each
Member’s Capital Account shall also be adjusted for any other increases or
decreases that are made to Capital Accounts pursuant to Section 704(b) of the
Code and Treasury Regulation Section 1.704-1(b)(2)(iv).

(c)      In the event any Interest or portion thereof is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account or ratable portion thereof of the transferor to the extent such
Capital Account relates to the Interest or portion thereof so transferred,
except to the extent provided in Treasury
Regulation Section 1.704-1(b)(2)(iv)(m).

(d)     It is the intention of the Members that Capital Accounts shall be
maintained in accordance with Section 704(b) of the Code and with the Treasury
Regulations promulgated thereunder so that the allocations of items of income,
gain, loss, deduction and credit provided herein have substantial economic
effect thereunder.

(e)      Except as may be required by the provisions of the Act or to the extent
of any withdrawal of capital in contravention of this Agreement or any

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distribution in contravention of this Agreement, at no time during the term of
the Company or upon dissolution and liquidation thereof shall a Member with a
negative balance in his Capital Account have any obligation to the Company or
the other Members to restore such negative balance, and such negative balance
shall not be treated as an asset of the Company. Notwithstanding whether a
Member has a positive or a negative balance in its Capital Account, a Member
shall be obligated to restore to the Company the amount of any withdrawal of
capital in contravention of this Agreement or any distribution in contravention
of this Agreement.

Section 4.5      Return of Capital Contributions. Except as otherwise provided
herein or in the Act, no Member shall have the right to withdraw, or receive any
return of, all or any portion of such Member’s Capital Contribution.

Section 4.6      Loans From Members. Loans by a Member to the Company shall not
be considered Capital Contributions. If any Member shall advance funds to the
Company in excess of the amounts contributed by such Member to the capital of
the Company, the making of such advances shall not result in any increase in the
amount of the Capital Account of such Member. The amounts of any such advances
shall be a debt of the Company to such Member and shall be payable or
collectible only out of the Company assets in accordance with the terms and
conditions upon which such advances are made. The repayment of loans from a
Member to the Company upon liquidation shall be subject to the order of priority
set forth in Section 9.4 hereof. Notwithstanding anything to the contrary in
this Agreement, any Loan by a Member to the Company shall be subject to the
provisions of Section 6.1(e) and shall be on arm’s-length market terms.

ARTICLE V
Allocations and Distributions

Section 5.1      Allocations of Net Income and Net Loss. This Section 5.1 sets
forth the rules for both the book allocations of Net Income (and items of income
and gain) and Net Loss (and items of loss and deduction), to reflect the
economic arrangements of the Members and, subject to Section 5.5, for the tax
allocations for United States federal income tax purposes, pursuant to
Section 704 of the Code and the Treasury Regulations promulgated thereunder.

(a)     Except as otherwise provided in this Article V, Net Loss shall be
allocated among the Members with respect to each Fiscal Period as of the end of
such Fiscal Period pro rata based upon their respective Common Interest
Percentages.

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(b)      Except as otherwise provided in this Article V, Net Income shall be
allocated among the Members with respect to each Fiscal Period as of the end of
such Fiscal Period pro rata based upon their respective Common Interest
Percentages.

Section 5.2      Adjustments and Special Allocations.

The following special allocations shall be made in the following order and prior
to any other allocations under this Agreement:

(a)     Minimum Gain Chargeback. Notwithstanding any other provision of this
Article V and except as otherwise provided in Treasury
Regulation Section 1.704-2(f), if there is a net decrease in Company Minimum
Gain during any Fiscal Period of the Company, each Member shall be specially
allocated items of Company income and gain for such Fiscal Period (and, if
necessary, subsequent Fiscal Periods) in an amount equal to such Member’s share
of the net decrease in Company Minimum Gain, as determined under Treasury
Regulation Section 1.704-2(g). Allocations pursuant to the previous sentence
shall be made in proportion to the respective amounts required to be allocated
to each Member pursuant thereto. The items to be so allocated shall be
determined in accordance with Treasury Regulation Sections 1.704-2(f)(6) and
(j)(2). This Section 5.2(a) is intended to comply with the minimum gain
chargeback requirement in such Treasury Regulation Section 1.704-2(f) and shall
be interpreted consistently therewith.

(b)     Member Minimum Gain Chargeback. Notwithstanding any other provision of
this Article V, if there is a net decrease in Member Nonrecourse Debt Minimum
Gain attributable to a Member Nonrecourse Debt, then, each Member who has a
share of the Member Nonrecourse Debt Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Treasury
Regulation Section 1.704-2(i), shall be specially allocated items of Company
income and gain for such Fiscal Period (and, if necessary, subsequent Fiscal
Periods) in an amount equal to such Member’s share of the net decrease in Member
Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt,
determined in accordance with Treasury Regulation Section 1.704-2(i)(4).
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Member pursuant thereto. The
items to be allocated shall be determined in accordance with Treasury
Regulation Sections 1.704-2(i)(4) and (j)(2). This Section 5.2(b) is intended to
comply with the minimum gain chargeback requirement in Treasury Regulation
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

(c)     Qualified Income Offset. Pursuant to Treasury Regulation Section
1.704-1(b)(2)(ii)(d), in the event any Member unexpectedly receives any
adjustments, allocations, or distributions described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income
and gain shall be specially

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allocated to such Member in an amount and manner sufficient to eliminate, to the
extent required by the Treasury Regulations, any Adjusted Capital Account
Deficit as quickly as possible, provided that an allocation pursuant to this
Section 5.2(c) shall be made only if and to the extent that such Member would
have an Adjusted Capital Account Deficit after all other allocations provided
for in this Section have been tentatively made as if this Section 5.2(c) were
not in the Agreement. This Section 5.2(c) is intended to satisfy the provisions
of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistent therewith.

(d)     Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Period
shall be allocated among the Members in accordance with their respective Common
Interest Percentage.

(e)     Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any
Fiscal Period of the Company or portion thereof shall be allocated to the Member
who bears the economic risk of loss with respect to the Member Nonrecourse Debt
to which such Member Nonrecourse Deductions are attributable, in accordance with
Treasury Regulation Section 1.704-2(i)(1).

(f)     Section 754 Adjustments. To the extent an adjustment to the adjusted tax
basis of any Company asset is required pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m) (2) or (4) to be taken into account in
determining Capital Accounts, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be allocated to the Members in a manner consistent with the
manner in which their Capital Accounts are required to be adjusted pursuant to
such sections of the Treasury Regulations.

Section 5.3      Net Loss Limitation.

Notwithstanding the provisions of Section 5.1(a), the Net Losses (or items of
deduction or loss) allocated pursuant to Section 5.1(a) hereof shall not exceed
the maximum amount of Net Losses (or items of deduction or loss) that can be so
allocated without causing any Member to have an Adjusted Capital Account Deficit
at the end of any Fiscal Period. In the event that some but not all Members
would have Adjusted Capital Account Deficits as a consequence of the allocation
of Net Losses (or items of deduction or loss) pursuant to Section 5.1 hereof,
the limitation set forth in this Section 5.3 shall be applied on a Member by
Member basis and Net Losses (or items of deduction or loss) not allocable to any
Member as a result of such limitation shall be allocated to the other Members in
accordance with the respective positive balances in such Members’ Capital
Accounts so as to allocate the maximum permissible Net Losses (or items of
deduction or loss) to each Member under Treasury
Regulation Section 1.704-1(b)(2)(ii)(d).

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Section 5.4      Other Allocation Rules.

(a)      For purposes of determining the Net Income, Net Loss or other items
allocable to any Fiscal Period, subject to approval by the Board pursuant to
Section 6.3(a)(xiv) hereof, Net Income, Net Losses and such other items shall be
determined on a daily, monthly or other basis as determined by the Managing
Member using any permissible method under Section 706 of the Code and the
Treasury Regulations thereunder. Without limiting the generality of the
foregoing, the Managing Member shall, subject to approval by the Board pursuant
to Section 6.3(a)(xiv), allocate items of Net Income (and items of income or
gain) and Net Loss (and items of deduction or loss) between a Member and any
Person who has acquired an Interest in the Company from such Member (including
as a result of the provisions of Article VIII) using any permissible method
under Section 706 of the Code and the Treasury Regulations thereunder.

(b)     “Excess nonrecourse liabilities” of the Company, within the meaning of
Treasury Regulation Section 1.752-3(a)(3), shall, subject to Section 6.3(a)(xiv)
hereof, be allocated to the Members in any permissible method as determined by
the Managing Member.

Section 5.5      Tax Allocations; Code Section 704(c).

(a)      Except as otherwise provided for in this Agreement, each item of
income, gain, loss, deduction and credit shall be allocated among the Members in
the same manner for U.S. federal income tax purposes as the correlative item of
book income, gain, loss, deduction and credit is allocated pursuant to
Sections 5.1, 5.2, 5.3 and 5.4. In addition, in accordance with Code Section
704(c) and the Treasury Regulations thereunder, items of income, gain, loss,
deduction and credit with respect to any property contributed to the capital of
the Company shall, solely for U.S. federal income tax purposes, be allocated
among the Members so as to take account of any variation between the adjusted
tax basis of such property at the time of contribution to the Company for U.S.
federal income tax purposes and its initial Gross Asset Value at the time of
contribution using the “traditional method” as set forth in Treasury
Regulation Section 1.704-3(b).

(b)      In the event the Gross Asset Value of any Company asset is adjusted in
accordance with the definition of Gross Asset Value hereof, subsequent
allocations of items of income, gain, loss and deduction with respect to such
asset shall take account of any variation between the adjusted tax basis of such
asset for U.S. federal income tax purposes and its adjusted Gross Asset Value in
a manner consistent with the principles of Code Section 704(c) and the Treasury
Regulations promulgated thereunder.

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(c)      Any elections or other decisions relating to such allocations shall,
subject to Section 6.3(a)(xiv) hereof, be made by the Managing Member in any
manner that reasonably reflects the purpose and intention of this Agreement.
Allocations pursuant to this Section are solely for purposes of U.S. federal,
state, and local income taxes and shall not affect, or in any way be taken into
account in computing, any Members’ Capital Account or share of Net Income (or
items of income or gain) or Net Loss (or items of loss or deduction), other
items, or distributions pursuant to any provision of this Agreement.

Section 5.6      Distributions.

Within thirty (30) days following the completion of each Fiscal Quarter, the
Managing Member shall cause the Company to distribute to all Members an amount
equal to the Distributable Net Income for such Fiscal Quarter pro rata based
upon their respective Common Interest Percentages.

ARTICLE VI
Management

Section 6.1      Managing Member.

(a)     General. The PHH Member shall be the Managing Member of the Company, and
shall manage the Company in accordance with this Agreement. The actions of the
Managing Member taken in such capacity and in accordance with this Agreement
shall bind the Company.

(b)      Powers and Duties. Except for circumstances in which the approval of
the Board is required by this Agreement pursuant to Section 6.3, the Managing
Member shall have full, exclusive and complete discretion to manage the business
and affairs of the Company in the ordinary course. Notwithstanding the
foregoing, the Managing Member covenants and agrees to manage the business and
affairs of the Company in accordance with the following terms and provisions:

(i)     The Managing Member shall manage the business and affairs of the Company
only in a manner consistent with and in furtherance of the purposes set forth in
Section 2.5(a) of this Agreement. The Managing Member shall not cause or permit
the Company or any of its Subsidiaries to engage in any business or activity
other than that permitted to be conducted by the Company or any of its
Subsidiaries pursuant to Section 2.5(a) of this Agreement, or take or fail to
take any action that would prevent or preclude the Company from carrying on its
business as contemplated in this Agreement.

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(ii)     The Managing Member shall cause the Company and its Subsidiaries to
sell any and all Mortgage Loans it originates as promptly as practicable, but in
no event earlier than three (3) Business Days following the closing and funding
of such Mortgage Loan, and at no time shall the Managing Member cause or permit
the Company or any of its Subsidiaries to hold any Mortgage Loans for investment
purposes (it being the Members’ intent that at least 15% of the total number of
all loans originated by the Company be sold to unaffiliated Persons pursuant to
Investor Commitments or other sale arrangements entered into on terms consistent
with the provisions of Section 6.1(b)(iii) below).

(iii)     In connection with any sales of Mortgage Loans by the Company or any
Subsidiary of the Company, whether to the Managing Member or any of its
Affiliates or to Persons that are not Affiliates of any Member, the Managing
Member shall cause the Company or such Subsidiary to sell such Mortgage Loans
only on arm’s-length terms pursuant to industry-standard loan sale documentation
and on industry-standard terms for best efforts execution inclusive for
servicing released sales.

Such duties may be delegated by the Managing Member to such officers, agents or
employees of the Company as the Managing Member may deem appropriate from time
to time.

(c)      Fiduciary Duties of Managing Member. The Managing Member, in the
performance of its duties as such, shall owe to the Members duties of loyalty
and due care of the type owed by the general partner of a limited partnership to
its limited partners under the laws of the State of Delaware.

(d)     Compliance with Transaction Documents. Without limiting the provisions
of Section 6.1(b), the Managing Member shall cause the Company to operate its
business at all times in a manner consistent with the SRA, this Agreement and
all the other Transaction Documents.

(e)     Transactions With Affiliates. Any transactions between the Company, on
the one hand, and the Managing Member or any Affiliate thereof, on the other
hand (any such transaction, a “Related Transaction”), including without
limitation any arrangements for sale of Mortgage Loans (including the Mortgage
Loan Sale Agreement), shall be approved by the Board in accordance with
Section 6.3 prior to the time that the Company engages or agrees or commits to
engage in any such Related Transaction. Notwithstanding the fact that the terms
of a Related Transaction have been previously approved by the Board, the
Managing Member shall not permit the Company to enter into a Related Transaction
unless the transaction is entered into on an arm’s length basis on terms no less
favorable to the Company than the terms that the Company could obtain from an
independent third party.

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(f)     Status of Managing Member. The Managing Member shall be the sole
“manager” (as that term is used in the Act) of the Company. Neither the Advisors
nor the officers of the Company, in such capacity, shall be “managers.” No
Person who is not also a Member may be appointed or serve as the Managing
Member.

(g)      Reliance by Third Parties. Third parties dealing with the Company may
rely conclusively upon any certificate of the Managing Member to the effect that
it (or its designee) is acting on behalf of the Company. Subject to the
provisions of this Agreement, the signature of an authorized officer of the
Managing Member shall be sufficient to bind the Company in every manner to any
agreement or on any document.

(h)      HUD Manager. Notwithstanding any other provisions of this Agreement,
however, for the purposes of complying with the regulations of the HUD only, a
separate person shall be designated by the Managing Member (upon prior written
consent of the Cendant Member) as the HUD-Manager, who will have as his/her
principal activity the management of the Company as it relates to the
origination of FHA-insured mortgages and shall have exclusive authority to deal
with HUD/FHA on behalf of the Company (the “HUD-Manager”). If the HUD-Manager
withdraws or is removed, a new HUD-Manager shall be designated by the Managing
Member, and HUD shall be notified of the change. Upon admission of any new
Member, such new Member shall be deemed to agree that the HUD-Manager shall have
exclusive authority to deal with HUD/FHA on behalf of the Company.

Section 6.2      Board of Advisors.

(a)     Establishment. There is hereby established a committee (the “Board”)
comprised of natural persons (the “Advisors”), whose primary purpose shall be to
provide a means for the Cendant Member to exercise its approval rights over
certain actions of the Company, as set forth in Section 6.3 below.

(b)     Number of Advisors. The authorized number of Advisors shall be five
(5) and the Board shall be designated as set forth in paragraphs (c) and
(d) below. No Member may appoint any Advisor except as expressly set forth in
paragraphs (c) and (d) below.

(c)      Appointment by the PHH Member. The PHH Member shall have the right to
designate (and to remove and/or designate successive replacements for) three
(3) Advisors (“PHH Advisors”). Each PHH Advisor shall have one (1) vote with
respect to any matter to be voted on by the Board. The initial PHH Advisors
shall be Donna Van Osten, Marshall Gayden and Robert Groody.

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(d)     Appointment by Cendant. The Cendant Member shall have the right to
designate (and to remove and/or designate successive replacements for) two
(2) Advisors (“Cendant Advisors”). Each Cendant Advisor shall have one (1) vote
with respect to any matter to be voted on by the Board. The initial Cendant
Advisors shall be Dave Weaving and Judy Reeves.

(e)     Term of Office. Once designated, an Advisor shall continue in office
until such Advisor’s removal in accordance with this Agreement or such Advisor’s
earlier death or resignation. Any Advisor may resign at any time by giving
written notice to that effect to the Board and the Managing Member. Any such
resignation shall take effect at the time of the receipt of that notice or any
later effective time specified in that notice, and, unless otherwise specified
in that notice, the acceptance of the resignation shall not be necessary to make
it effective.

(f)     Meetings of the Board. The Board shall meet regularly at least once each
Fiscal Quarter, at such time and at such place as the Board may designate.
Special meetings of the Board shall be held on the call of any Advisor upon at
least five (5) Business Days (if the meeting is to be held in person) or two
(2) Business Days (if the meeting is held by telephone communications) notice to
each of the other Advisors, or upon such shorter notice as may be approved by
the Advisors (including at least one PHH Advisor and at least one Cendant
Advisor), and such notice may be delivered personally or by telephone,
electronic mail, facsimile transmission, United States mail or courier to each
Advisor at his or her business or residence address, provided that notice shall
be deemed given when actually delivered to the Advisor. Any Advisor may waive
such notice as to himself or herself.

(g)     Conduct of Meeting. Any meeting of the Advisors may be held in person or
telephonically.

(h)     Quorum. A majority of the Advisors which have been designated and who
are then in office shall constitute a quorum of the Board for purposes of
conducting business, provided that such quorum shall include at least one
Cendant Advisor, and provided further that proper notice of such meeting was
delivered pursuant to paragraph (f) above.

(i)     Voting. The effectiveness of any vote, consent or other action of the
Board in respect of any matter set forth in Section 6.3 shall require a majority
vote of the entire Board (at least three Advisors voting in favor of such
consent or other action), provided that such majority must include the
affirmative vote of at least one Cendant Advisor. No Advisor shall be
disqualified from voting on, or shall be required to recuse himself or herself
from the consideration of or voting on, any matter by reason of such Advisor’s
or any related Person’s interest in such matter (it being understood that in
approving or disapproving any matter an Advisor may act to protect

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the interests of such Advisor or related Person, as the Managing Member, a
Member, or in any other capacity), so long as such Advisor discloses such
interest to, or such interest is reasonably apparent to, the other Advisors.
Only the Advisors in attendance at (or participating by telephone in) any
meeting of the Board may vote on any matter as to which a vote is taken during
such meeting, and no Advisor may vote by proxy, absentee ballot or any other
means.

(j)     Action Without Meeting. Any action required or permitted to be taken at
any meeting of the Board may be taken without a meeting if all of the Advisors
consent thereto in writing, and such writing is filed with the minutes of
proceedings of the Board.

Section 6.3     Actions Requiring Board Approval.

(a)     It is hereby understood and agreed by the Members that (x) the Company
shall not take, nor shall the Managing Member and/or any officer of the Company
cause the Company to take, nor shall the Company authorize or permit any of its
Subsidiaries to take, any of the following actions (in each case, the taking of
which shall be hereinafter referred to as a “Major Action”) without first
obtaining approval thereof by the Board in accordance with Section 6.2, in each
case:

(i)     Accounting. (a) Except as otherwise may be mandated by GAAP, change any
of the accounting principles or practices used by the Company or (b) change the
independent auditors of the Company;

(ii)     Acquisitions and Dispositions. Other than as specifically contemplated
by this Agreement or any other Transaction Document or the then-current Annual
Business Plan approved in accordance with Section 6.9 of this Agreement, (a)(1)
purchase or acquire any assets or property (including real property or capital
stock of a business) or (2) make any capital expenditures in excess of $100,000,
or (b) sell, option, convey, exchange, lease (as lessor), license or otherwise
dispose of or transfer any portion of or any interest in any property of the
Company, other than sales of Mortgage Loans made in accordance with
Section 6.1(b)(iii);

(iii)     Advisors. Employ accountants, legal counsel, investment bankers or
other experts, other than those currently used by PHH or Cendant, to perform
services for the Company;

(iv)     Bankruptcy. Make, execute or deliver on behalf of the Company an
assignment for the benefit of creditors; or cause the Company, or any part
thereof or interest therein to be subject to the authority of any trustee,
custodian or receiver or to be subject to any proceeding for bankruptcy,

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insolvency, reorganization, arrangement, readjustment of debt, relief of
debtors, dissolution or liquidation, or similar proceedings with respect to the
Company;

(v)     Distributions or Capital Returns. Declare, set aside, or pay any
dividend or make any distribution of assets (whether in cash, securities,
property, or any combination thereof), or return to a Member any amount of its
Capital Contribution, except, in each case, as expressly provided herein;

(vi)     Indebtedness. Obligate the Company, any Subsidiary of the Company or
any Member as a surety, guarantor, or accommodation party to any obligation;
incur any indebtedness for borrowed money (other than pursuant to the Loan
Funding Facility and trade payables incurred in the ordinary course of
business); or impose upon any Member any personal liability in respect of any
indebtedness of the Company, except as and to the extent agreed in writing by
such Member;

(vii)     Issuances or Repurchases of Interests. (a) sell or issue, or enter
into any agreement to sell or issue, to any Person any Interest in the Company
or option or other right to acquire any Interest or any other equity interest or
quasi equity interest in the Company; (b) repurchase any Interest or any other
equity interest in the Company, in each case other than as specifically
contemplated by this Agreement; or (c) admit any Person as a Member;

(viii)     Joint Ventures. Enter into any joint venture, joint operating or
similar arrangement;

(ix)     Judgments. (1) Confess a judgment against the Company, or settle or
adjust any claims against the Company, resulting in either (A) the payment or
transfer of consideration of more than $150,000 for a single judgment or claim
or more than $500,000 in the aggregate during any 12-month period, (B) any
material or significant restriction on the ability of the Company to conduct its
business as contemplated by this Agreement and the other Transaction Documents,
or (C) that otherwise causes a significant change in the business operations of
the Company; or (2) commence any legal action or proceeding involving the
Company where the amount exceeds $300,000;

(x)     Liens or Encumbrances. Grant any lien or encumbrance on any property of
the Company (other than the interest of any lessor in property leased by the
Company as lessee under a capitalized lease or operating lease entered into in
accordance with this Agreement), other than as specifically contemplated by this
Agreement or the Loan Funding Facility;

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(xi)     Material Contracts. Enter into any new contract, or modify any existing
contract, if such contract is a Transaction Document or is otherwise material to
the business, results of operations or financial condition of the Company and
its Subsidiaries taken as a whole;

(xii)     Related Transactions. Enter into, modify or amend the terms of in any
material manner, make any material waiver on behalf of the Company under, or
terminate any Related Transaction, including any Transaction Document to which
the Company, on the one hand, and PHH or any of its Subsidiaries (other than the
Company), on the other, are parties;

(xiii)     Mergers. Directly or indirectly, by operation of law or otherwise,
merge with, consolidate with, acquire all or substantially all of the assets or
capital stock of, or otherwise combine with, any Person, other than as
specifically contemplated by this Agreement;

(xiv)     Tax Matters. Take any action to the extent that this Agreement
provides that such action is subject to the provisions of this
Section 6.3(a)(xiv), make any election under the Code and other relevant tax
laws as to the status of the Company, the treatment of items of income, gain,
loss, deduction and expense, and as to all other relevant matters, including,
without limitation, elections referred to in Section 754 of the Code, determine
which items of cash outlay are to be capitalized or treated as current expenses,
or select the method of accounting and bookkeeping procedures to be used by the
Company;

(xv)     Annual Business Plan. Approve each Annual Business Plan and any
material changes thereto or deviations therefrom;

(xvi)     Chief Executive Officer. Appointment of the president and/or chief
executive officer of the Company;

(xvii)     Fair Market Value. Make any determination of Fair Market Value
required to be made under this Agreement;

(xviii)     Minimum Capital Requirements. Make any final Additional Capital
Determination or any determination regarding the respective Additional Capital
Amounts required to be made by Members in connection therewith; or approve the
amount of cash or cash equivalents that should be retained by the Company in
order to meet minimum regulatory capital and reserve requirements imposed by any
Governmental Entity, whether in connection with retaining the licenses and
registrations necessary for the Company to originate Mortgage Loans or
otherwise, or by any creditor of the

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Company or any of its Subsidiaries, including any lender under the Loan Funding
Facility (the “Minimum Capital Requirements”);

(xix)     Liquidating Trustee. The appointment of a Liquidating Trustee that is
a Person other than the Managing Member; or

(xx)     Agree to do any of the foregoing.

The Managing Member shall cause the governing documents of each of the Company’s
Subsidiaries to provide that such Subsidiary must obtain the approval of the
Company, as outlined pursuant to this Section 6.3, prior to taking any action
set forth in this Section 6.3.

Section 6.4     Company Resources. Except as specifically provided in this
Agreement or any other Transaction Document, or with the prior approval of the
Board, the Company shall not pay to or use for the benefit of any Member, funds,
assets, credit or other resources of any kind or description of the Company.
Funds of the Company shall be deposited only in the accounts of the Company in
the Company’s name, shall not be commingled with funds of any Member, and shall
be withdrawn only upon such signature or signatures as may be designated in
writing from time to time by the Managing Member.

Section 6.5     Advisors Have No Managerial Authority.

(a)     Neither the Board nor the Advisors (individually or together with one or
more other Advisors) shall have power to direct or participate in the management
of the Company; provided, however, that nothing contained in this Section 6.5(a)
shall adversely affect or impair the authority and obligations of the Board and
the Advisors pursuant to Sections 6.2 and 6.3 hereof.

(b)     The Advisors (acting in their individual capacity as such) shall owe no
fiduciary or other duties to the Company or any Member.

(c)     Unless expressly and duly authorized in writing to do so by the Managing
Member and the Board, no other Member and no Advisor shall have any power or
authority to bind or act on behalf of the Company in any way, to pledge its
credit, or to render it liable for any purpose.

Section 6.6     Devotion of Time. The Advisors (in their capacity as Advisors)
shall not be obligated to devote all of their time or business efforts to the
affairs of the Company, and shall devote such time, effort, and skill as they
deem appropriate for the execution of their duties and responsibilities under
this Agreement.

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Section 6.7     Officers. The initial executive officers of the Company shall be
the individuals set forth in Schedule 6.7 hereto (the “Initial Officers”).
Successors to the Initial Officers, and such other executive officers as may be
necessary to conduct the business of the Company, shall be chosen by the
Managing Member, subject to the approval of the Board if required pursuant to
Section 6.3 hereof.

Section 6.8     Remuneration; Reimbursement. Neither the Managing Member nor any
Advisor or officer shall be entitled to remuneration in its capacity as such.

Section 6.9     Approval of Annual Business Plan. Not less than seventy-five
(75) days prior to the end of each fiscal year, the Managing Member shall submit
to the Board the business plan of operations for the Company for the upcoming
fiscal year, which shall contain detailed budget, planning, projection and
profitability information (the “Annual Business Plan”). Each Annual Business
Plan shall be subject to approval of the Board in accordance with Section 6.3.

Section 6.10     Reports.

(a)     No later than the sixth (6th) Business Day following the end of each
calendar month, the PHH Member shall, in its capacity as Managing Member on an
outsourced basis, deliver to the Cendant Member:

(i)     those surveys and reports listed and described in Schedule 6.10(a)(i)
hereto to verify compliance with the covenant contained in Section 6.1(d); and

(ii)     a copy of (a) the balance sheet of the Company as of the end of the
month, (b) an income statement of the Company for such month, and (c) reports
reflecting other financial and statistical information with respect to the
Company, prepared substantially in the form of the report set forth in
Schedule 6.10(a)(ii).

(b)     No later than the tenth (10th) Business Day following the end of each
calendar month, the PHH Member shall, in its capacity as Managing Member on an
outsourced basis, deliver to the Cendant Member such forward-looking financial
information about the Company and the Company’s operations as the Cendant Member
may reasonably request (i.e., that is capable of being obtained, produced, or
generated without undue effort by the Company and the Managing Member) from time
to time (the “Monthly Forecasts”). The Managing Member shall (i) provide the
Monthly Forecasts to the Cendant Member in the format requested by the Cendant
Member and on a timely basis and (ii) make members of its management and the
Company’s management reasonably available for discussion relating to such
Monthly Forecasts. The Managing

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Member acknowledges that the Cendant Member and any Affiliate thereof may use
the Monthly Forecasts for the purpose of developing projections of the Company’s
future financial performance and may include such projections in reports and
other documents filed with Governmental Entities, and as such, the Managing
Member represents and warrants to Cendant that the Managing Member shall prepare
the Monthly Forecasts in good faith and shall use its reasonable best efforts to
ensure that the Monthly Forecasts provide the most accurate estimate of the
Company’s future results.

(c)     No later than the tenth (10th) Business Day following the completion of
each Fiscal Quarter, the PHH Member shall, in its capacity as Managing Member on
an outsourced basis, deliver to the Cendant Member all statements, reports and
other documents reasonably requested by the Cendant Member that may be necessary
or appropriate for the Cendant Member or any Controlling Person thereof
(including, without limitation, Cendant) to satisfy all its reporting
requirements pursuant to the Securities Exchange Act of 1934.

(d)     The Managing Member shall cause the Company to deliver to the Cendant
Member the financial reports and other information described in Sections 11.5
and 11.6 hereof.

ARTICLE VII
Changes in Law; Financial Reporting

Section 7.1     Compliance with Law; Changes in Law.

(a)     The Members shall use commercially reasonable efforts to ensure that the
Company’s business and operations comply at all times with all applicable laws,
including RESPA.

(b)     In the event that, as a result of any change in law, rule or regulation
or interpretation thereof after the date hereof, as set forth in a written
document by a Governmental Entity of competent jurisdiction, (i) any term or
provision of this Agreement or any of the other Transaction Documents, in the
written opinion of nationally-recognized counsel of either party, is not
compliant in any material respect with any applicable law, including RESPA, or
(ii) the financial terms of this Agreement and the other Transaction Documents,
taken as a whole, become materially inconsistent with the then-current market,
the Members shall use commercially reasonable efforts to restructure the
business and operations of the Company and amend the relevant provisions of this
Agreement and the other Transaction Documents to the extent necessary to achieve
as closely as possible the intention of the parties with respect to the
economics of the relationships provided for in this Agreement and the other
Transaction Documents in a manner that complies with such law, and, in the case
of a change in law, rule or regulation described in (ii) above, the Cendant
Member shall have the right, by

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providing written notice to the PHH Member, to cause PMC and the PHH Member to
enter into good faith discussions to renegotiate the economic terms provided for
in this Agreement and the other Transaction Documents. In the event the Members
fail to reach agreement regarding any such restructuring and renegotiation on
terms that are reasonably satisfactory to the Cendant Member within thirty
(30) days following the date on which written notice is provided by the Cendant
Member, the existing financial terms shall remain in full force and effect;
provided, however, that in such case the Cendant Member may elect to solicit
from the PHH Member and from other Persons a request for proposals for the
provision of mortgage services substantially similar to those provided for in
this Agreement and the other Transaction Documents. In the event that any
proposal received by the Cendant Member contains financial and other terms that,
taken as a whole, are reasonably determined by the Cendant Member to be superior
to those set forth in the PHH Member’s proposal, and the Cendant Member notifies
the PHH Member of its intent to accept such proposal, the PHH Member shall have
thirty (30) days from the date of such notification to review and determine
whether to accept all of the terms of such proposal, so long as such proposal
complies with all applicable laws and regulations (it being understood that the
Cendant Member shall have no obligation to accept any proposal at all). In the
event that the PHH Member agrees to the terms of such proposal within such
thirty (30) day period, such terms shall be incorporated into this Agreement and
the other Transaction Documents effective as of a date not later than ten
(10) days following such agreement. In the event the PHH Member fails to accept
the terms of such proposal, then the Cendant Member, at its option, shall have
the right to terminate its relationship as set forth in this Agreement by
providing written notice (the “Special Termination Notice”) to the PHH Member
and through completion of the transaction contemplated by Section 8.4(b) (a
“Special Termination Event”). In the event that the proposal submitted by the
PHH Member is selected by the Cendant Member, the terms of such proposal shall
be incorporated into this Agreement and the other Transaction Documents
effective as of a date not later than 20 days following the Cendant Member’s
selection of such proposal.

(c)     If any change in law, rule or regulation described in (b) above involves
a change in RESPA that would permit Cendant or an Affiliate of Cendant to be
paid directly for loan referrals to the Company, then in lieu of the provisions
described in (b) above, the Members shall revise the structure and terms of this
Agreement and the other Transaction Documents so that, in lieu of the
distributions provided for in this Agreement, the Company shall pay a fee to the
Cendant Member in respect of each Mortgage Loan referred to the Company by
Cendant or an Affiliate of Cendant in an amount not less than, at Cendant’s
option, (i) 10 basis points over the average return to the Cendant Member with
respect to its interest in the Company, computed as basis points per loan, over
the immediately preceding six Quarterly Periods and (ii) the price the Cendant
Member could obtain in the then-current market on substantially similar terms,
based upon a survey of the market by Cendant and PMC with the highest and lowest
bids being discounted.

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Section 7.2     Consolidation.

(a)     The PHH Member hereby represents and warrants to the Cendant Member that
the Company will be consolidated on the books of PHH for financial reporting
purposes, and that PHH has undertaken and completed prior to date hereof all
analyses and investigations as shall be necessary and appropriate to support
such position.

(b)     The Members shall use commercially reasonable efforts to take all such
actions as shall be necessary to ensure that the Company is consolidated on the
books of PHH for financial reporting purposes. Without limiting the foregoing,
in the event that, as a result of a change or interpretation in United States
generally accepted accounting principles after the date hereof, the Company is
required to be consolidated on the balance sheet of Cendant, the Members shall
use commercially reasonable efforts to make such changes to the business
relationship between the parties and to the provisions of this Agreement as are
requested by the Cendant Member to mitigate the effects to Cendant of such
change.

Section 7.3     Certain Actions.

The Managing Member shall (i) promptly notify the Cendant Member in writing of
any claim or action, or any inquiry or investigation that could result in a
claim or action, initiated by any Person (including any Governmental Entity)
that, if adversely resolved, would result in a material or significant
restriction on the ability of the Company to conduct its business as
contemplated by this Agreement and the other Transaction Documents, or that
would otherwise cause a significant change in the business operations of the
Company, and (ii) keep the Cendant Member actively involved in the settlement or
other resolution of any such claim, action, inquiry or investigation; provided,
however, that such claim, action, inquiry or investigation shall not be settled
or adjusted, and the Company shall not confess a judgment against it in
connection therewith, without the approval of the Board pursuant to Section 6.3
hereof.

ARTICLE VIII
Termination of Relationship

Section 8.1     Cendant Termination Events. For purposes of this Agreement,
“Cendant Termination Event” means the occurrence of any of the following events:

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(a)     A PHH Regulatory Event occurs and is continuing for a period of six
consecutive months or more; provided, however, that the PHH Member may elect to
defer a termination pursuant to this Section 8.1(a) for up to six (6) additional
one-month periods following the time that such termination event shall have
first occurred if, no later than the second Business Day prior to the
commencement of each such additional one-month period the PHH Member pays the
Cendant Member in cash, by wire transfer of immediately available funds to an
account designated in writing by the Cendant Member, one million dollars
($1,000,000) (the “Regulatory Event Fee”);

(b)     A Company Regulatory Event occurs and is continuing for a period of six
consecutive months or more; provided, however, that the PHH Member may elect to
defer a termination pursuant to this Section 8.1(b) for up to six (6) additional
one-month periods following the time that such termination event shall have
first occurred if, no later than the second Business Day prior to the
commencement of each such additional one-month period the PHH Member pays the
Cendant Member in cash, by wire transfer of immediately available funds to an
account designated in writing by the Cendant Member, an amount equal to the
Regulatory Event Fee;

(c)     There is a material violation or breach by the PHH Member (acting in any
capacity whatsoever, including as Managing Member) of any representation,
warranty, covenant or other agreement contained in this Agreement or any other
Transaction Document (a “PHH Material Breach”), which violation or breach is not
cured by the PHH Member or the other relevant PHH party, in a manner reasonably
satisfactory to the Cendant Member, within thirty (30) days after written notice
relating to such PHH Material Breach has been delivered by the Cendant Member to
the PHH Member;

(d)     The Company fails to make a distribution for any Fiscal Quarter in
accordance with the provisions of Section 5.6 hereof within ten (10) Business
Days after the date on which the Cendant Member first provides notice to the
Company of such failure; provided, however, that any payment of a distribution
to the Cendant Member after the due date provided for under Section 5.6 shall
include interest from the due date through the payment date at the prime rate;

(e)     (i) The occurrence of a PHH Change of Control involving any entity on
the Cendant List attached hereto as Schedule 8.1(e) or any other entity that
directly or indirectly conducts or engages in any business covered by the
non-competition provisions set forth in Article X of the SRA. The Cendant List
shall contain up to ten companies and may be refreshed by the Cendant Member no
more frequently than once every two years beginning from the date of this
Agreement; provided, however, that if any Person on the Cendant List enters into
a merger, consolidation or similar business combination transaction with another
Person on the Cendant List, then Cendant may add another Person to the Cendant
List to replace such Person within sixty (60) days after the

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announcement of such transaction, and such addition shall not constitute a
refreshing of the Cendant List as discussed above;

(f)     The occurrence of any event or circumstance constituting Insolvency or
Bankruptcy with respect to PHH or PMC (a “Bankruptcy Event”); or

(g)     The occurrence of any act or omission by PHH or any of its Subsidiaries
that causes or would reasonably be expected to cause material harm to the
reputation of Cendant or any of its Subsidiaries.

Section 8.2     Effects of a Cendant Termination Event. Upon the occurrence of a
Cendant Termination Event during the term of the Company, the Cendant Member
shall have the right to either (i) cause PMC or the PHH Member to purchase (the
“Cendant Put”) all of the Interests then held by the Cendant Member or any of
its Affiliates or (ii) cause the PHH Member to sell (the “PHH Sale”) all of the
Interests then held by the PHH Member or any of its Affiliates to a Person not
affiliated with Cendant (any such Person, for purposes of this Section 8.2, the
“Cendant Designated Buyer”).

(a)     Cendant Put.

(i)     The exercise price of the Cendant Put (the “Put Price”) shall be an
amount equal to the sum of (A) the then-current Capital Account balance of the
Cendant Member plus the then-current Capital Account balance of any other
Affiliate of Cendant holding an Interest, in each case, as of the Put Date plus
(B) the aggregate amount of all past due quarterly distributions to the Cendant
Member and to any other Affiliate of Cendant and any unpaid distribution in
respect of the most recently completed Fiscal Quarter pursuant to Section 5.6
hereof, in each case as of the Put Date, plus (C) liquidated damages in an
amount equal to the Termination Payment (as defined below), calculated as of the
Put Date, plus (D) an amount equal to 49.9% of the Net Income, if any, realized
by the Company at any time after the end of the Fiscal Quarter most recently
completed as of the Put Date attributable to Mortgage Loans in process at any
time prior to the Put Date. In the event that the Cendant Member elects to
exercise the Cendant Put, the Cendant Member shall provide written notice (the
“Cendant Put Notice”) to the PHH Member. The Cendant Put Notice shall set forth
the Cendant Member’s calculation of the Put Price and the basis for such
calculation. Any disagreement regarding the Put Price or any other matter
related to the exercise of the Cendant Put shall be resolved in accordance with
the provisions of Section 13.6 hereof. In the event that the Cendant Member
elects to exercise the Cendant Put, the PHH Member and the Cendant Member shall,
and shall cause their respective Affiliates to, cooperate as fully as reasonably
practicable with one another to consummate the Cendant Put transaction as soon
as reasonably practicable following the receipt of the Cendant Put Notice by the

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PHH Member. Concurrently with the consummation of the Cendant Put transaction,
the PHH Member shall pay or cause to be paid the Put Price to the Cendant Member
in cash by wire transfer of immediately available funds to an account or
accounts designated in writing by the Cendant Member. The “Put Date” shall be
the date on which the Cendant Put is consummated.

(ii)     Upon the consummation of a Cendant Put, (A) all of the other
Transaction Documents shall automatically terminate (except as otherwise
provided in any such Transaction Document), (B) neither the Cendant Member nor
any Affiliate thereof shall be subject to any restriction under this Agreement
or any other Transaction Document to pursue a partnership, joint venture or
other arrangement with any third party mortgage operation, and (C) the PHH
Member shall, and shall cause the Company to, cause all loan officers employed
by PMC or any of its Subsidiaries (including the Company) that are located in
any of Cendant’s Owned Real Estate Offices to vacate those offices promptly
following the Cendant Member’s request.

(iii)     “Termination Payment” means an amount equal to (A) the product of (x)
two (2) and (y) the actual Net Income of the Company for the trailing twelve
months (“LTM Net Income”), plus (B) all costs reasonably incurred by Cendant in
unwinding its relationship with PHH pursuant to this Agreement and the other
Transaction Documents and transitioning to a new mortgage venture partner;
provided, however, that in the case of a Cendant Termination Event pursuant to a
PHH Change in Control, in calculating the Termination Payment, the LTM Net
Income shall instead be multiplied by the number of years (including fractions
thereof) remaining until the tenth (10th) anniversary of the Closing Date;
provided further, however, that if such PHH Change in Control termination occurs
on or after the eighth (8th) anniversary of the Closing Date, the LTM Net Income
shall be multiplied by two (2).

(b)     PHH Sale.

(i)     If the Cendant Member elects to cause the PHH Sale, it shall deliver
written notice (the “PHH Sale Notice”) to the PHH Member. The Cendant Member
shall provide written notice to the PHH Member of the identity of the Cendant
Designated Buyer as promptly as reasonably practicable after delivery of the PHH
Sale Notice.

(ii)     The sale price (the “Sale Price”) of the Interests then held by the PHH
Member and any of its Affiliates (the “PHH Interests”) to the Cendant Designated
Buyer shall be an amount equal to the sum of (A) the fair value of the Interests
of the PHH Member and any Affiliate thereof as of the date that the PHH Sale
Notice is delivered, which value shall be determined by

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multiplying the PHH Member’s then-current proportionate membership interest by
the Company’s EBITDA for the trailing twelve months, multiplied by a
then-current average market EBITDA multiple for mortgage banking companies, plus
(B) the aggregate amount of all past due quarterly distributions to the PHH
Member and any Affiliate thereof and any unpaid distribution in respect of the
most recently completed Fiscal Quarter pursuant to Section 5.6 hereof, plus
(C) an amount equal to 50.1% of the Net Income realized by the Company at any
time after the end of the Fiscal Quarter most recently completed as of the Sale
Date attributable to Mortgage Loans in process prior to the Sale Date. The PHH
Sale Notice shall set forth the Cendant Member’s calculation of the Sale Price
and the basis for such calculation. Any disagreement regarding the Sale Price or
any other matter related to the PHH Sale shall be resolved in accordance with
the provisions of Section 13.6 hereof.

(iii)     If the Cendant Member delivers a PHH Sale Notice, then promptly
thereafter the Cendant Member and the PHH Member shall work together to effect
the sale by the PHH Member and its Affiliates of the PHH Interests to the
Cendant Designated Buyer, and the PHH Member shall use its reasonable best
efforts to complete such sale as promptly as practicable thereafter. The PHH
Member shall cooperate with and assist the Cendant Member and the Cendant
Designated Buyer in obtaining all consents and approvals of, making all filings
and registrations with and providing all notices to, such Governmental Entities
or third parties as shall be necessary or advisable to consummate such sale. At
the time agreed upon for the closing of the PHH Sale (the “Sale Date”), (i) the
Cendant Designated Buyer shall pay to the PHH Member (and/or, as directed by the
PHH Member, to any of its Affiliates) the Sale Price, by wire transfer of
immediately available funds, in consideration for the PHH Interests, and
(ii) the PHH Member shall pay to the Cendant Member liquidated damages in an
amount equal to the Termination Payment as of the Sale Date.

(iv)     Upon consummation of the PHH Sale, (A) the other Transaction Documents
(except as otherwise provided in any such Transaction Document) shall
automatically terminate, (B) neither Cendant nor any Affiliate thereof shall be
subject to any restriction under this Agreement or any other Transaction
Document to pursue a partnership, joint venture or another arrangement with any
third party mortgage operation, (C) the PHH Member shall cause all loan officers
employed by PMC or any of its Subsidiaries that are located in any of Cendant’s
Owned Real Estate Offices to vacate those offices promptly following the Cendant
Member’s request, and (D) the Cendant Designated Buyer or an Affiliate thereof
shall become a Member and the sole Managing Member of the Company. The PHH
Member shall, and shall cause its Affiliates to, execute any agreement or
document necessary to effectuate the provisions of this paragraph (iv).

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Section 8.3     PHH Termination Event.

For purposes of this Agreement, a “PHH Termination Event” means the occurrence
of any of the following events: (i) a material violation or breach by Cendant or
any Subsidiary thereof of any material covenant, agreement or obligation set
forth in this Agreement or any other Transaction Document, which violation or
breach is not cured and is continuing within sixty (60) days following written
notice to the Cendant Member; provided, however, that the PHH Member shall have
no right pursuant to this Section 8.3 or otherwise to terminate this Agreement
as a result of a breach by any Affiliate of Cendant of the covenant set forth in
Section 3.13(b) of the SRA; or (ii) the Bankruptcy of Cendant.

(a)     In the event that a PHH Termination Event shall have occurred, the PHH
Member shall have the right to purchase (the “Purchase Right”) all of the
Interests then held by the Cendant Member and any of its Affiliates. The
exercise price of the Purchase Right (the “Purchase Price”) shall be an amount
equal to the sum of (i) the fair value of the Interests then held by the Cendant
Member and by any of its Affiliates as of the date that the Purchase Right is
exercised, which value shall be determined by multiplying the Cendant Member’s
then-current proportionate membership interest by the Company’s EBITDA for the
trailing twelve months, multiplied by a then-current average market EBITDA
multiple for mortgage banking companies, plus (ii) the aggregate amount of all
past due quarterly distributions to the Cendant Member and any Affiliate thereof
and any unpaid distribution in respect of the most recently completed Fiscal
Quarter pursuant to Section 5.6 hereof, plus (iii) an amount equal to 49.9% of
the Net Income realized by the Company at any time after the end of the Fiscal
Quarter most recently completed as of the date of purchase attributable to
Mortgage Loans in process at any time prior to completion of the Purchase Right
transaction. The Purchase Right shall remain exercisable for a period of two
(2) months following the occurrence of a PHH Termination Event. In the event
that the PHH Member elects to exercise the Purchase Right, the PHH Member shall
provide written notice (the “Purchase Notice”) to the Cendant Member prior to
the expiration of such two-month period. The Purchase Notice shall set forth the
PHH Member’s calculation of the Purchase Price and the basis for such
calculation. Any disagreement regarding the Purchase Price or any other matter
related to the exercise of the Purchase Right shall be resolved in accordance
with the provisions of Section 13.6 hereof. In the event that the PHH Member
elects to exercise the Purchase Right, the PHH Member and the Cendant Member
shall, and shall cause their respective Affiliates to, cooperate as fully as
reasonably practicable with one another to consummate the Purchase Right
transaction; provided, however, that the Purchase Right transaction shall not be
consummated earlier than the one-year anniversary of delivery of the Purchase
Notice. Concurrently with the consummation of the Purchase Right transaction,
the PHH Member shall pay or cause to be paid the Purchase Price to the Cendant
Member in cash by wire transfer of immediately available funds to an account or
accounts designated in writing by the Cendant Member.

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(b)     Upon consummation of the Purchase Right transaction, (i) all other
Transaction Documents shall automatically terminate (except as otherwise
provided in any such Transaction Document), (ii) neither the Cendant Member nor
any Affiliate thereof shall be subject to any restriction under this Agreement
or any other Transaction Document to pursue a partnership, joint venture or
another arrangement with any third party mortgage operation and (iii) the PHH
Member shall, and shall cause the Company to, cause all loan officers employed
by PMC or any of its Subsidiaries (including the Company) that are located in
any of Cendant’s Owned Real Estate Offices to vacate those offices promptly
following the Cendant Member’s request.

(c)     The PHH Member’s sole remedy hereunder or under any other Transaction
Document with respect to a breach of the covenant set forth in Section 3.13(b)
of the SRA shall be the right to receive from the Cendant Entities liquidated
damages in an amount equal to the aggregate amount of all documented
out-of-pocket costs actually incurred and paid by the PHH Member or any of its
Affiliates to one or more third parties as a direct result of such breach.

Section 8.4     Two Year Termination, Special Termination Event and 25-Year
Termination.

(a)     Two-Year Termination. At any time after the eighth (8th) anniversary of
the Closing Date, the Cendant Member may deliver to the PHH Member a written
notice (the “Two-Year Termination Notice”) requesting that the PHH Member either
(i) purchase or cause to be purchased (the “Two Year Put”) all of the Interests
held by the Cendant Member or any of its Affiliates on a date no earlier than
two years after such Two-Year Termination Notice is delivered to the PHH Member
(“Two Year Put Date”) or (ii) sell (the “Two Year PHH Sale”) all of the
Interests then held by the PHH Member and/or any of its Affiliates to a Person
that is not affiliated with Cendant (any such Person, for purposes of this
Section 8.4, the “Cendant Designated Buyer”) on a date no earlier than two years
after such Two-Year Termination Notice is delivered to the PHH Member (“Two Year
Sale Date”).

(i)     Two Year Put.

(1)     The exercise price of the Two Year Put (the “Two Year Put Price”) shall
be an amount equal to the sum of (A) the fair value of the Interests of the
Cendant Member and any Affiliate thereof as of the Two Year Put Closing Date,
which value shall be determined by multiplying the Cendant Member’s then-current
proportionate membership interest by the Company’s EBITDA for the trailing
twelve months, multiplied by a then-current average market EBITDA multiple for
mortgage banking companies, plus (B) the aggregate amount of all past due
quarterly distributions to the Cendant

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Member and any Affiliate thereof and any unpaid distribution in respect of the
most recently completed Fiscal Quarter pursuant to Section 5.6 hereof as of the
Two Year Put Closing Date, plus (C) an amount equal to 49.9% of the Net Income
realized by the Company at any time after the end of the Fiscal Quarter most
recently completed as of the Two Year Put Closing Date attributable to Mortgage
Loans in process at any time prior to the Two Year Put Closing Date. No later
than sixty (60) days prior to the Two Year Put Date, the Cendant Member shall
deliver to the PHH Member a written notice setting forth the Cendant Member’s
calculation of the Two Year Put Price and the basis for such calculation. Any
disagreement regarding the Two Year Put Price or any other matter related to the
exercise of the Two Year Put shall be resolved in accordance with the provisions
of Section 13.6 hereof. In the event that the Cendant Member elects to exercise
the Two Year Put, the PHH Member and the Cendant Member shall, and shall cause
their respective Affiliates to, cooperate as fully as reasonably practicable
with one another to consummate the Two Year Put transaction on the Two Year Put
Date. Concurrently with the consummation of the Two Year Put transaction, the
PHH Member shall pay or cause to be paid the Two Year Put Price to the Cendant
Member in cash by wire transfer of immediately available funds to an account or
accounts designated in writing by the Cendant Member. The “Two Year Put Closing
Date” shall be the date on which the Two Year Cendant Put is consummated.

(2)     On the Two Year Put Closing Date, (A) all other Transaction Documents
shall automatically terminate (except as otherwise provided in any such
Transaction Document), (B) neither Cendant nor any Affiliate thereof shall be
subject to any restriction under this Agreement or any other Transaction
Document to pursue a partnership, joint venture or another arrangement with any
third party mortgage operation, and (C) the PHH Member shall, and shall cause
the Company to, cause all loan officers employed by PMC or any of its
Subsidiaries (including the Company) that are located in any of Cendant’s Owned
Real Estate Offices to vacate those offices promptly following the Cendant
Member’s request.

(ii)     Two Year PHH Sale.

(1)     If the Cendant Member elects to cause the Two Year PHH Sale, it shall
provide written notice to the PHH Member of the identity of the Cendant
Designated Buyer no later than 180 days before the Two Year Sale Date.

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(2)     The sale price (the “Two Year Sale Price”) of the PHH Member’s Interest
to the Cendant Designated Buyer shall be an amount equal to the sum of (A) the
fair value of the PHH Member’s Interest, which value shall be determined by
multiplying the PHH Member’s then-current proportionate membership interest by
the Company’s EBITDA for the trailing twelve months, multiplied by a
then-current average market EBITDA multiple for mortgage banking companies, plus
(B) the aggregate amount of all past due quarterly distributions to the PHH
Member and any Affiliate thereof and any unpaid distribution in respect of the
most recently completed Fiscal Quarter pursuant to Section 5.6 hereof as of such
date, plus (C) an amount equal to 50.1% of the Net Income realized by the
Company at any time after the end of the Fiscal Quarter most recently completed
on or after the Two Year Sale Date attributable to Mortgage Loans in process at
any time prior to the Two Year Sale Date. No later than sixty (60) days prior to
the Two Year Sale Date, the Cendant Member shall deliver to PMC or the PHH
Member a notice that sets forth the Cendant Member’s calculation of the Two Year
Sale Price and the basis for such calculation. Any disagreement regarding the
Two Year Sale Price or any other matter related to the Two Year PHH Sale shall
be resolved in accordance with the provisions of Section 13.6 hereof.

(3)     The Cendant Member, PMC and the PHH Member shall work together to effect
the sale by the PHH Member or its Affiliates of the PHH Interests to the Cendant
Designated Buyer, and the PHH Member shall use its reasonable best efforts to
complete such sale on the Two Year Sale Date. PMC and the PHH Member shall
cooperate with and assist the Cendant Member and the Cendant Designated Buyer in
obtaining all consents and approvals of, making all filings and registrations
with and providing all notices to, such Governmental Entities or third parties
as shall be necessary or advisable to consummate such sale. At the time agreed
upon for the closing of the Two Year PHH Sale, the Cendant Designated Buyer
shall pay to the PHH Member (or, as directed by the PHH Member, any of its
Affiliates) the Two Year Sale Price, by wire transfer of immediately available
funds, in consideration for the PHH Interests.

(4)     Upon consummation of the Two Year PHH Sale, (A) the other Transaction
Documents shall automatically terminate (other than as set forth in any such
Transaction Document), (B) neither Cendant nor any Affiliate thereof shall be
subject to any restriction under this Agreement or any other Transaction
Document to pursue a partnership, joint venture or another arrangement with any
third party

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mortgage operation, (C) the PHH Member shall, and shall cause the Company to,
cause all loan officers employed by PMC or any of its Subsidiaries (including
the Company) that are located in any of Cendant’s Owned Real Estate Offices to
vacate those offices promptly following the Cendant Member’s request, and
(D) the Cendant Designated Buyer or an Affiliate thereof shall become a Member
and the sole Managing Member of the Company. The PHH Member shall, and shall
cause its Affiliates, to execute any agreement or document necessary to
effectuate the provisions of this paragraph (iv).

(b)     Special Termination Event. Upon the occurrence of a Special Termination
Event, the Members shall as promptly as practicable take all such actions
necessary to consummate a transaction identical in all material respects to a
Two Year Put (a “Special Termination Put”), except that (1) the purchase price
shall be calculated as of the date the Special Termination Put is completed, and
(2) such transaction shall be completed not later than ninety (90) days
following the delivery by the Cendant Member of the Special Termination Notice
pursuant to Section 7.1(b). On the date of completion of the Special Termination
Put, (A) all other Transaction Documents shall automatically terminate (except
as otherwise provided in any such Transaction Document), (B) neither Cendant nor
any Affiliate thereof shall be subject to any restriction under this Agreement
or any other Transaction Document to pursue a partnership, joint venture or
another arrangement with any third party mortgage operation, and (C) the PHH
Member shall, and shall cause the Company to, cause all loan officers employed
by PMC or any of its Subsidiaries (including the Company) that are located in
any of Cendant’s Owned Real Estate Offices to vacate those offices promptly
following the Cendant Member’s request.

(c)     PHH 25-Year Termination. The PHH Member may terminate the relationship
between the Parties to this Agreement, effective as of January 31, 2030, by
delivering written notice thereof to the Cendant Member (a “Non-Renewal
Notice”), which notice shall be delivered no earlier than January 31, 2027 and
not later than January 31, 2028. Upon delivery of a Non-Renewal Notice, PMC and
the PHH Member shall work together with the Cendant Member to consummate a
transaction identical in all material respects to, at the election of the PHH
Member, either the Two Year Put (a “Non-Renewal Put”) or Two Year PHH Sale (a
“Non-Renewal PHH Sale”), except that (1) the purchase price for such transaction
shall be calculated as of the date of completion of such transaction, and
(2) such transaction shall be completed no earlier than January 31, 2030. Upon
consummation of the Non-Renewal Put or the Non-Renewal PHH Sale, (A) the other
Transaction Documents shall automatically terminate (other than as set forth in
any such Transaction Document), (B) neither Cendant nor any Affiliate thereof
shall be subject to any restriction under this Agreement or any other
Transaction Document to pursue a partnership, joint venture or another
arrangement with any third party mortgage operation, (C) the PHH Member shall,
and shall cause the

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Company to, cause all loan officers employed by PMC or any of its Subsidiaries
(including the Company) that are located in any of Cendant’s Owned Real Estate
Offices to vacate those offices promptly following the Cendant Member’s request,
and (D) in the case of a Non-Renewal PHH Sale, the Cendant Designated Buyer or
an Affiliate thereof shall become a Member and the sole Managing Member of the
Company. The PHH Member shall, and shall cause its Affiliates, to execute any
agreement or document necessary to effectuate the provisions of this paragraph
(c).

Section 8.5     Effect of Termination Events.

(a)     Notwithstanding anything to the contrary set forth in this Agreement,
upon the consummation of a Cendant Put, a Two Year Put, a Purchase Right, a
Special Termination Event Put or a Non-Renewal Put, the Cendant Member and each
of its Affiliates that is a Member shall cease to be a Member and to have any
obligations pursuant to this Agreement.

(b)     Notwithstanding anything to the contrary set forth in this Agreement,
upon the consummation of a PHH Sale, a Two Year PHH Sale or a Non-Renewal PHH
Sale, the PHH Member and each of its Affiliates that is a Member shall cease to
be a Member and to have any obligations pursuant to this Agreement.

ARTICLE IX
Dissolution and Winding Up

Section 9.1     Events Causing Dissolution.

(a)     The Company shall be dissolved upon the first of the following events to
occur (an “Event of Dissolution”):

(i)     The written consent all Members at any time to dissolve and wind up the
affairs of the Company; or

(ii)     The entry of a decree of judicial dissolution under Section 18-802 of
the Act.

No other event, including the retirement, insolvency, liquidation, dissolution,
expulsion, bankruptcy, death, incapacity or adjudication of incompetence of a
Member, shall cause the existence of the Company to terminate.

(b)     Except as otherwise set forth in this Section 9.1, dissolution shall be
effective on the effective date of the Event of Dissolution, but the Company
shall not terminate until the assets thereof have been distributed in accordance
with the

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provisions of Section 9.4 hereof and all other provisions of the Act with
respect to the dissolution of a limited liability company have been complied
with. Notwithstanding the dissolution of the Company, prior to the termination
of the Company, the business, assets and affairs of the Company shall continue
to be governed by this Agreement.

Section 9.2     Winding Up. If the Company is dissolved pursuant to Section 9.1,
the Company’s affairs shall be wound up as soon as reasonably practicable in the
manner set forth below.

(a)     Upon the occurrence of an Event of Dissolution, sole and plenary
authority to effectuate the liquidation of the Company shall be vested in the
Managing Member or a Person designated by the Managing Member (subject to the
approval of the Board pursuant to Section 6.3 hereof) to effectuate the
liquidation of the Company or if the Managing Member elects not to effectuate
such liquidation and fails to designate a liquidator, such Person as is selected
by the Members (the Managing Member or any such liquidating trustee who assumes
such responsibility being referred to herein as the “Liquidating Trustee”). The
Liquidating Trustee shall proceed diligently to wind up the affairs of the
Company, liquidate the assets of the Company in an orderly and businesslike
manner consistent with obtaining the fair value thereof and distribute the
assets of the Company in accordance with the provisions of Section 9.4 hereof. A
reasonable amount of time shall be allowed for the orderly liquidation of the
assets of the Company and the discharge of liabilities to creditors so as to
enable the Liquidating Trustee to minimize the losses attendant upon such
liquidation. All FHA-insured loans held by the Company shall be transferred to
an approved mortgagee or lender prior to dissolution of the Company. Prior to
such distribution of the Company’s assets, the Liquidating Trustee shall
continue to exploit the rights, activities and properties of the Company
consistent with the sale or liquidation thereof, exercising in connection
therewith all of the power and authority of the Managing Member as herein set
forth.

(b)     In winding up the affairs of the Company, the Liquidator shall have full
right and unlimited discretion, in the name of and for and on behalf of the
Company to:

(i)     Prosecute and defend civil, criminal or administrative suits;

(ii)     Collect Company assets, including obligations owed to the Company;

(iii)     Settle and close the Company’s business;

(iv)     Dispose of and convey all Company Property for cash, and in connection
therewith to determine the time, manner and terms of any

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sale or sales of Company Property, having due regard for the activity and
condition of the relevant market and general financial and economic conditions;

(v)     Pay all reasonable selling costs and other expenses incurred in
connection with the winding up out of the proceeds of the disposition of Company
Property;

(vi)     Discharge the Company’s known liabilities and, if necessary, to set up,
for a period not to exceed five (5) years after the date of dissolution, such
cash reserves as the Liquidator may deem reasonably necessary for any contingent
or unforeseen liabilities or obligations of the Company;

(vii)     Distribute any remaining proceeds from the sale of Company Property to
the Members;

(viii)     Prepare, execute, acknowledge and file articles of dissolution under
the Act and any other certificates, tax returns or instruments necessary or
advisable under any applicable law to effect the winding up and termination of
the Company;

(ix)     Upon the distribution of the assets of the Company in accordance with
the provisions of Section 9.4 hereof, the Liquidating Trustee shall cause the
Company’s accountants to make a full and proper accounting of the assets,
liabilities and operations of the Company, as of and through the date on which
such distribution occurs; and

(x)     Exercise, without further authorization or consent of any of the parties
hereto or their legal representatives or successors in interest, all of the
powers conferred upon the Members under the terms of this Agreement to the
extent necessary or desirable in the good faith judgment of the Liquidating
Trustee to perform its duties and functions. The Liquidating Trustee (unless
such Liquidating Trustee is the Managing Member or an Affiliate thereof) shall,
while acting in such capacity on behalf of the Company, be entitled to the
indemnification rights set forth in Section 12.1 hereof.

Section 9.3     Compensation of Liquidating Trustee. The Liquidating Trustee
appointed as provided herein shall be entitled to receive such reasonable
compensation for its services as shall be agreed upon by the Liquidating Trustee
and the Managing Member.

Section 9.4     Distribution of Company Property and Proceeds of Sale Thereof.

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(a)     Upon completion of all desired sales of Company Property, and after
payment of all selling costs and expenses, the Liquidating Trustee shall
distribute the proceeds of such sales, and any Company Property that is to be
distributed in kind, to the following groups in the following order of priority:

(i)     to satisfy Company liabilities to creditors, including Members who are
creditors, to the extent otherwise permitted by law (other than for past due
Company distributions), whether by payment or establishment of reserves;

(ii)     to satisfy Company obligations to Members and former Members to pay
past due Company distributions;

(iii)     pro rata among the Members who have made Capital Contributions to the
extent of their Capital Contributions; and

(iv)     to the Members pro rata in accordance with their positive Capital
Account balances, taking into account all Capital Account adjustments for the
Fiscal Period in which the liquidation occurs and any distributions to such
Member pursuant to Section 9.4(a)(iii).

All distributions required under this Section 9.4 shall be made to the Members
by the end of the taxable year in which the liquidation occurs or, if later,
within 90 days after the date of such liquidation.

(b)     The claims of each priority group specified above shall be satisfied in
full before satisfying any claims of a lower priority group. If the assets
available for disposition are insufficient to dispose of all of the claims of a
priority group, the available assets shall be distributed in proportion to the
amounts owed to each creditor or the respective Capital Account balances or
Interests of each Member in such group.

Section 9.5     Company Termination. Upon compliance with the foregoing
distribution plan, the Company shall cease to be such, and the Liquidating
Trustee shall execute, acknowledge and cause to be filed with the Secretary of
State of the State of Delaware articles of dissolution of the Company.

Section 9.6     Final Audit. Within a reasonable time following the completion
of the liquidation, the Liquidating Trustee shall supply to each of the Members
a statement that shall set forth the assets and the liabilities of the Company
as of the date of complete liquidation and each Member’s pro rata portion of
distributions pursuant to Section 9.4.

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ARTICLE X
Transfers and Assignment of Interests

Section 10.1     Consent Required for Transfer.

(a)     No Member shall be entitled to directly or indirectly sell, assign,
Transfer or otherwise dispose of all or any portion of his Interest,
involuntarily or voluntarily, without the written consent of all the other
Members, which consent may be given or withheld in each such other Member’s sole
and absolute discretion; provided, however, that notwithstanding the foregoing
any Member may sell, assign, Transfer or otherwise dispose of all or any portion
of such Member’s Interest to an Affiliate of such Member without the written
consent of the other Members; provided further, however, that the Cendant Member
may at its election Transfer a portion of its Interest to any Person that
acquires or otherwise succeeds to a portion of the business of Cendant Real
Estate, and shall transfer (i) its entire Interest to any Person that acquires
or otherwise succeeds to substantially all of the business of Cendant Real
Estate, or (ii) an appropriate portion of its Interest to any Person that
acquires or otherwise succeeds to substantially all of the business of NRT, in
each case, whether by merger, asset sale, stock sale, or otherwise (it being
understood that in the case of any transfer of a portion of the Cendant Member’s
Interest contemplated by this second proviso, the percentage represented by the
portion of the Interest so transferred shall be determined based upon the
percentage of the Company’s revenue for the then-current trailing twelve months
represented by the portion of the business of Cendant Real Estate so transferred
in the transaction).

(b)     It shall be a condition to any Transfer of all or a portion of the
Cendant Member’s Interest permitted by Section 10.1(a) that any Person acquiring
such Interest or portion thereof shall agree in writing to be bound by this
Agreement and all of the other Transaction Documents with respect to the portion
of the business of Cendant Real Estate acquired by such Person, to the same
extent that Cendant Real Estate and the Cendant Member were so bound prior to
such transfer (other than as set forth in any such other Transaction Document).
In the event of consummation of any such Transfer in accordance with
Section 10.1(a), the Managing Member shall amend Schedule I to reflect such
Transfer.

(c)     It shall be a condition to any Transfer by a Member which may be
permitted under Section 10.1(a) that the transferee assume by written agreement
all of the obligations of the transferor under this Agreement with respect to
such transferred Interests and make the representations in Section 3.3 hereof.
Any attempted or purported Transfer in violation of this Article X shall be null
and void ab initio.

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Section 10.2     Withdrawal. No Member may withdraw from the Company without the
prior written consent of all Members, which consent may be given or withheld for
any reason.

ARTICLE XI
Fiscal Matters; Books and Records

Section 11.1     Bank Accounts; Investments. Capital Contributions, revenues and
any other Company funds shall be deposited by the Company in a bank account
established in the name of the Company, or shall be invested by the Company, at
the direction of the Managing Member, in time deposits, short-term governmental
obligations, commercial paper or other short-term money market instruments in
furtherance of the purposes of the Company. No other funds shall be deposited
into Company bank accounts or commingled with Company investments. Funds
deposited in the Company’s bank accounts may be withdrawn only to be invested in
time deposits, short-term governmental obligations, commercial paper or other
short-term money market instruments in furtherance of the Company’s purposes, to
pay Company debts or obligations or to be distributed to the Members pursuant to
this Agreement.

Section 11.2     Records Required by Act; Right of Inspection.

(a)     During the term of the Company’s existence and for a period of four
(4) years thereafter, there shall be maintained in the Company’s principal
office specified pursuant to Section 2.4 all records required to be kept
pursuant to Section 18-305(a) of the Act, including, without limitation, a
current list of the names, addresses and Common Interest Percentage held by each
of the Members (including the dates on which each of the Members became a
Member), copies of federal, state and local information or income tax returns
for each of the Company’s tax years, copies of this Agreement and the
Certificate of Formation, including all amendments or restatements, and correct
and complete books and records of account of the Company for all periods of
operations.

(b)     Each of the Company and the Managing Member shall, at their sole cost
and expense, make available, or cause to be made available, to the Cendant
Member or any person designated by the Cendant Member, in a timely manner, all
documents or materials in the possession of, or available to, the Company or the
Managing Member that the Cendant Member may reasonably request for any business
purpose (including, without limitation, any such documents and materials the
Cendant Member may request to verify the accuracy of the calculation of
Distributable Net Income for any Fiscal Quarter). In furtherance of the
foregoing, each of the Company and the Managing Member shall, at its sole cost
and expense, make available, or cause to be made available, during normal
business hours and with reasonable advance notice, to

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the Cendant Member or any Person designated by the Cendant Member, resources,
including, but not limited to, access to employees, sufficient to respond
adequately to any issue or concern raised by the Cendant Member.

Section 11.3     Books and Records of Account. The Company shall maintain books
and records in such a manner as to enable the preparation of the Company’s U.S.
federal information tax return in compliance with Section 6031 of the Code, and
such other records as may be required in connection with the preparation and
filing of the Company’s required U.S. federal, state and local income tax
returns or other tax returns or reports of foreign jurisdictions, including,
without limitation, the records reflecting the Capital Accounts and adjustments
thereto specified in Article V hereof. Subject to Section 3.6, all such books
and records shall at all times be made available at the principal office of the
Company and shall be open to the reasonable inspection and examination by the
Members or their duly authorized representatives during normal business hours.
Notwithstanding the definition of “Members” herein, only Members admitted as
such to the Company shall have the inspection rights provided in the preceding
sentence.

Section 11.4     Expenses. The Company will be responsible for all expenses
(“Company Expenses”), including, without limitation, (i) all reasonable
accounting and legal expenses incurred in connection with Company operations,
(ii) all reasonable costs incurred in connection with the preparation of or
relating to reports made to the Members, (iii) all reasonable costs related to
litigation involving the Company, directly or indirectly, including, without
limitation, attorneys’ fees incurred in connection therewith and (iv) all
reasonable costs related to the Company’s obligations set forth in
Sections 11.10 and 12.1; provided, however, that any Company Expenses must be
attributable solely to the operations of the Company, and that any expenses
relating to, resulting from or in connection with any other Person, including
without limitation any other Person who is an Affiliate of the Managing Member,
shall not be Company Expenses.

Section 11.5     Tax Returns and Information. The Members intend for the Company
to be treated as a partnership for tax purposes. The Company shall prepare or
cause to be prepared all federal, state and local income and other tax returns
that the Company is required to file. After the end of each fiscal year of the
Company, the Company shall prepare and transmit to each Member a report (i.e.,
Schedule K-1) that shall include all necessary tax reporting information
required by Members for preparation of their federal, state and local income or
franchise tax returns, including the amount of income, gain, loss, deduction and
credit allocated to each Member for such fiscal year.

Section 11.6     Delivery of Audited Financial Statements to Members. As to each
fiscal year of the Company, the Company shall send to each Member a copy of
(a) the balance sheet of the Company as of the end of the fiscal year, (b) an
income

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statement of the Company for such year, and (c) a statement showing the Net
Income distributed by the Company to Members in respect of such year. Such
financial statements shall be delivered sixty (60) days following the end of
such fiscal year. The Company shall send to each Member all other reports or
statements prepared by the Company’s accountants promptly after receipt thereof.

Section 11.7     Audits. The fiscal year-end financial statements to be
delivered pursuant to Section 11.6 shall be audited and prepared in accordance
with GAAP. The audit shall be performed by an accounting firm selected pursuant
to Section 6.3(a)(iii).

Section 11.8     Fiscal Year. The Company’s fiscal year shall end on December 31
of each calendar year.

Section 11.9     Tax Elections. The Company shall, subject to approval of the
Board pursuant to Section 6.3(a)(xiv) hereof, make the following elections on
the appropriate tax returns:

(a)     to adopt the calendar year as the Company’s fiscal year, if permitted by
the Code;

(b)     to elect to amortize the organizational expenses of the Company ratably
over a period of sixty (60) months as permitted by Section 709(b) of the Code;
and

(c)     any other election the Managing Member determines is in the best
interests of the Members, including an election pursuant to Section 754 of the
Code to adjust Company Properties upon a distribution of Company Property as
described in Section 734 of the Code or a transfer of any Interests as described
in Section 743 of the Code.

Neither the Company nor any Member may make an election for the Company to be
(i) excluded from the application of the provisions of subchapter K of chapter 1
of subtitle A of the Code or any similar provisions of applicable state law or
(ii) classified as a corporation for income tax purposes.

Section 11.10     Tax Matters Member. The PHH Member shall be designated as the
“tax matters partner” (the “Tax Matters Member”) of the Company pursuant to
Section 6231(a)(7) of the Code or corresponding provisions of state or local
law, to manage administrative tax proceedings conducted at the Company level by
the Internal Revenue Service or the state or local taxing authority with respect
to Company matters. The Tax Matters Member is, subject to Section 6.3(a)(xiv)
directed and authorized to take whatever steps it, in its reasonable judgment,
determines is necessary

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or desirable to perfect such designation, including, without limitation, filing
any forms or documents with the Internal Revenue Service or any state or local
taxing authority and taking such other action as may from time to time be
required under Treasury Regulations and corresponding provisions of state or
local law. Expenses of administrative proceedings relating to the determination
of Company items at the Company level undertaken by the Tax Matters Member shall
be expenses of the Company. The Tax Matters Member shall inform each Member of
the commencement of any audit of the Company by the Internal Revenue Service or
any other taxing authority.

ARTICLE XII
Indemnification and Insurance

Section 12.1     Indemnification and Advancement of Expenses.

(a)     In General. The Company shall, to the maximum extent permitted by
applicable law, indemnify and hold harmless all Advisors and officers of the
Company (“Indemnified Parties”), to the fullest extent permitted by law, from
and against any and all Losses, including, without limitation, Losses incurred
in investigating, preparing or defending any action, claim, suit, inquiry,
proceeding, investigation or appeal taken from any of the foregoing by or before
any court or governmental, administrative or other regulatory agency, body or
commission, whether pending or threatened, whether or not an Indemnified Party
is or may be a party thereto, which arises out of, relates to or is in
connection with this Agreement or the management or conduct of the business or
affairs of the Company, except for any such Losses that are found, pursuant to a
final and nonappealable judgment of a court of competent jurisdiction, to have
resulted from the gross negligence, bad faith, fraud or willful misconduct of,
or breach of this Agreement or knowing violation of law by, the Indemnified
Party seeking indemnification. The termination of any proceeding by settlement
shall not be deemed to create a presumption that the Indemnified Party involved
in such settlement acted in a manner which constituted gross negligence, bad
faith, fraud or willful misconduct or a knowing violation of law. All judgments
against an Indemnified Party wherein such Indemnified Party is entitled to
indemnification shall, to the extent available, be satisfied from Company
assets. The provisions of this Section 12.1 shall survive any termination or
expiration of this Agreement. Expenses incurred by an Indemnified Party in
defense or settlement of any claim that may be subject to a right of
indemnification hereunder may be advanced (and must be advanced to Advisors) by
the Company prior to the final disposition thereof upon receipt of an
undertaking by or on behalf of the Indemnified Party to repay such amount if it
shall ultimately be determined that the Indemnified Party is not entitled to be
indemnified by the Company. The right of any Indemnified Party to the
indemnification and advancement of expenses provided herein shall be cumulative
of and in addition to any and all rights to which such Indemnified Party may
otherwise be

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entitled by contract or as a matter of law or equity and shall extend to such
Indemnified Party’s successors, assigns and legal representatives.

(b)     Any indemnification under paragraph (a) of this Section 12.1 (unless
ordered by a court of competent jurisdiction) shall be made by the Company only
as authorized in the specific case upon a determination that indemnification of
the Indemnified Party is proper in the circumstances because he or she has met
the applicable standard of conduct set forth in paragraph (a) of this Section
12.1. Such determination shall be made (i) by a four-fifths vote of the Board,
or (ii) if a four-fifths vote of the Board so directs, by independent legal
counsel in a written opinion.

(c)     For purposes of this Section 12.1, any reference to the “Company” shall
include, in addition to the resulting or surviving entity, any constituent
entity (including any constituent of a constituent) absorbed in a consolidation
or merger which, if its separate existence had continued, would have had power
and authority to indemnify its directors or officers, so that any Person who is
or was a director or officer of such constituent entity, or is or was serving at
the request of such constituent entity as a director, officer or manager of
another corporation, limited liability company, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Section 12.1 with respect to the resulting or surviving entity as he or
she would have with respect to such constituent entity if its separate existence
had continued.

(d)     Notwithstanding anything in this Article XII to the contrary, the
Company will not have the obligation of indemnifying any Person with respect to
proceedings, claims or actions initiated or brought voluntarily by such Person
and not by way of defense.

(e)     Any indemnification or advancement of expenses provided by, or granted
pursuant to, this Section 12.1 shall be considered retroactive to the date upon
which the Certificate of Formation was filed with the State of Delaware.

Section 12.2     Insurance. The Company may purchase and maintain insurance or
another arrangement on behalf of any Person who is or was an Advisor or officer
identified in Section 12.1 against any liability asserted against such Person or
incurred by such Person in such a capacity or arising out of the status of such
a Person, whether or not the Company would have the power to indemnify such
Person against that liability under Section 12.1 or otherwise.

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Section 12.3     Limit on Liability of Members. The indemnification set forth in
this Article XII shall in no event cause the Members to incur any personal
liability beyond their total Capital Contributions, nor shall it result in any
liability of the Members to any third party.

Section 12.4     Indemnification by Managing Member.

(a)     The Managing Member shall indemnify and hold harmless the Company and
all other Members and their respective Affiliates (“Other Indemnified Parties”),
to the fullest extent permitted by law, from and against any and all Losses,
including, without limitation, Losses incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from any of the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or commission, whether pending
or threatened, whether or not an Other Indemnified Party is or may be a party
thereto, arising out of or resulting from (i) the negligence, willful misconduct
or violation of law or erroneous acts of or by the Managing Member or any of its
officers or employees in connection with the management of the business and
affairs of the Company, and (ii) any breach or violation by PMC or any of its
Affiliates of any representation, warranty, covenant or other agreement
contained in this Agreement or any other Transaction Document (including,
without limitation, any indemnification payment made to an Advisor or officer
under this Article XII hereof as a result of such breach or violation), it being
understood that the Company shall retain all risk with respect to, and the
Managing Member shall have no indemnification obligations hereunder with respect
to, loan level origination defects not otherwise resulting from any of the
circumstances described in clause (i) or (ii) of this Section 12.4(a). The
provisions of this Section 12.4 shall survive any termination or expiration of
this Agreement or any other Transaction Document. The right of any Other
Indemnified Party to the indemnification and advancement of expenses provided
herein shall be cumulative of and in addition to any and all rights to which
such Other Indemnified Party may otherwise be entitled by contract or as a
matter of law or equity and shall extend to such Other Indemnified Party’s
successors, assigns and legal representatives.

(b)     In the case of a PHH Regulatory Event, the PHH Member shall indemnify
and hold harmless the Company from and against all Losses incurred by it arising
out of or resulting from such PHH Regulatory Event, except, in any such case, to
the extent that the Regulatory Order or Proceeding or Losses leading to such PHH
Regulatory Event are caused solely by Cendant or any of its Affiliates or any of
their respective directors, officers, advisors or employees.

(c)     In the case of a Company Regulatory Event, the PHH Member shall
indemnify and hold harmless the Company from and against all Losses incurred or
sustained by it arising out of or resulting from such Company Regulatory

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Event, except, in any case, to the extent that the Regulatory Order or
Proceeding or Losses leading to such Company Regulatory Event are caused solely
by Cendant or any of its Affiliates or any of their respective directors,
officers, advisors or employees.

(d)     In the event there is a breach or violation by PMC or its Affiliates
(excluding the Company), on the one hand, or by Cendant or its Affiliates, on
the other hand, of any representation, warranty, covenant or other agreement
contained in this Agreement or any other Transaction Document, then the
breaching Party shall give prompt written notice thereof to the other Party and
each Advisor.

Section 12.5     No Additional Indemnification Rights.

Except as set forth herein, no Person (including, without limitation, any Member
and any officer, director or agent of any Member) shall have indemnification
rights against the Company.

ARTICLE XIII
Miscellaneous Provisions

Section 13.1     Counterparts. This Agreement may be executed in several
counterparts, each of which will be deemed an original but all of which will
constitute one and the same.

Section 13.2     Entire Agreement. This Agreement and the other Transaction
Documents constitute the entire agreement among the parties hereto and contains
all of the agreements among such parties with respect to the subject matter
hereof and thereof. This Agreement and the other Transaction Documents supersede
any and all other agreements, either oral or written, between such parties with
respect to the subject matter hereof and thereof.

Section 13.3     Partial Invalidity. Wherever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such provision shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability without invalidating
the remainder of such invalid, illegal or unenforceable provision or provisions
or any other provisions hereof, unless such a construction would be
unreasonable.

Section 13.4     Amendment. Except as expressly provided herein (including
Section 10.1 hereof), this Agreement may be amended only by a written agreement
executed by all the Members. Following such amendment, the Agreement, as

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amended, shall be binding upon all Members. The Company shall notify the
Secretary of HUD of any amendments to this Agreement which would affect the
Company’s action under any HUD/FHA administered mortgage insurance program.

Section 13.5     Binding Effect. Subject to the provisions of this Agreement
relating to transferability, this Agreement will be binding upon and shall inure
to the benefit of the parties, and their respective distributees, heirs,
successors and assigns.

Section 13.6     Negotiation and Mediation.

(a)     Negotiation. In the event of any dispute, controversy or claim arising
out of or relating to this Agreement or the breach, termination or validity
thereof, or the transactions contemplated hereby (a “Dispute”), upon the written
notice of any Member hereto, the Members shall attempt in good faith to
negotiate a resolution of the Dispute. If the Members are unable for any reason
to resolve a Dispute within 30 days after the receipt of such notice, the
Dispute shall be submitted to mediation in accordance with Section 13.6(b)
hereof.

(b)     Mediation. Any Dispute not resolved pursuant to Section 13.6(a) hereof
shall, at the request (the “Mediation Request”) of any Member (the “Disputing
Member”), be submitted to mediation in accordance with the then-prevailing
Commercial Mediation Rules of the American Arbitration Association, as modified
herein (the “Rules”). The mediation shall be held in New York, New York. The
Members shall have twenty (20) days from receipt by a party of a Mediation
Request to agree on a mediator. If no mediator has been agreed upon by the
Members within twenty (20) days of receipt by a Member (or Members) of a
Mediation Request, then any Member may request (on written notice to the other
Member or Members), that the American Arbitration Association appoint a mediator
in accordance with the Rules. All mediation pursuant to this Section 13.6(b)
shall be confidential and shall be treated as compromise and settlement
negotiations, and no oral or documentary representations made by the Members
during such mediation shall be admissible for any purpose in any subsequent
proceedings. No Member shall disclose or permit the disclosure of any
information about the evidence adduced or the documents produced by another
Member in the mediation proceedings or about the existence, contents or results
of the mediation award without the prior written consent of such other Member
except in the course of a judicial or regulatory proceeding or as may be
required by law, rule or regulation or requested by a governmental authority or
securities exchange. Before making any disclosure permitted by the preceding
sentence, the Member intending to make such disclosure shall give the other
Member a reasonable opportunity to protect its interests. If the Dispute has not
been resolved within sixty (60) days of the appointment of a Mediator, or within
ninety (90) days of delivery by a Disputing Member of notice in accordance with
Section 13.10 (whichever occurs sooner) or within such longer period as the

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Members may agree to in writing, then any Member may file an action on the
Dispute in any court having jurisdiction in accordance with Section 13.7 herein.

Section 13.7     Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE CHOICE OF LAWS
RULES THEREOF, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE MEMBERS HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Any legal suit, action or
proceeding against any of the Parties hereto arising out of or relating to this
Agreement shall only be instituted in any federal or state court in New York,
New York, pursuant to Section 5-1402 of the New York General Obligations Law,
and each of the Parties hereby irrevocably submits to the exclusive jurisdiction
of any such court in any such suit, action or proceeding. The Parties hereby
agree to venue in such courts and hereby waive, to the fullest extent permitted
by law, any claim that any such action or proceeding was brought in an
inconvenient forum. Each of the Parties hereby irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim arising out of or
relating to this Agreement.

Section 13.8     Offset. Whenever the Company is to pay any sum to any Member,
any amounts that Member owes the Company may be deducted from that sum before
payment.

Section 13.9     Effect of Waiver or Consent. No provision of this Agreement
shall be deemed to have been waived unless such waiver is contained in a written
notice given to the party claiming such waiver has occurred. A waiver or
consent, express or implied, to or of any breach or default by any Person in the
performance by that Person of its obligations with respect to the Company is not
a consent or waiver to or of any other breach or default in the performance by
that Person of the same or any other obligations of that Person with respect to
the Company. Failure on the part of a Person to complain of any act of any
Person or to declare any Person in default with respect to the Company,
irrespective of how long that failure continues, does not constitute a waiver by
that Person of its rights with respect to that default until the applicable
statute-of-limitations period has run.

Section 13.10     Notices. To be effective, unless otherwise specified in this
Agreement, all notices and demands, consents and other communications under this
Agreement must be in writing and must be given (a) by depositing the same in the
United States mail, postage prepaid, certified or registered, return receipt
requested, (b) by delivering the same in person and receiving a signed receipt
therefore, (c) by sending the same by a nationally recognized overnight delivery
service or (d) by telecopy (promptly confirmed by telephone and followed by
personal or nationally recognized overnight

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delivery). For purposes of notices, demands, consents and other communications
under this Agreement, the addresses of the Members (and their respective
counsel, if applicable) shall be as follows:

If to the PHH Member, addressed to:

PHH Broker Partner Corporation
3000 Leadenhall Road
Mt. Laurel, NJ 08054
Attn: William F. Brown

With a copy to:

PHH Mortgage Corporation
3000 Leadenhall Road
Mt. Laurel, NJ 08054
Attn: William F. Brown

If to the Cendant Member, addressed to:

Cendant Real Estate Services Venture Partner, Inc.
1 Campus Drive
Parsippany, NJ 07054
Attn: Eric Bock

With a copy to:

Cendant Corporation
9 West 57th Street, 37th Floor
New York, NY 10019
Attn: Eric Bock

Notices, demands, consents and other communications mailed in accordance with
the foregoing clause (a) shall be deemed to have been given, made and received
three (3) Business Days following the date so mailed. Notices, demands, consents
and other communications given in accordance with the foregoing clauses (b) and
(d) shall be deemed to have been given, made and received when sent on a
Business Day or, if not sent on a Business Day, then the next succeeding
Business Day. Notices, demands, consents and other communications given in
accordance with the foregoing clause (c) shall be deemed to have been given,
made and received when delivered or

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refused on a Business Day or, if not delivered or refused on a Business Day,
then the next succeeding Business Day. Any Member or its assignee may designate
a different address to which notices or demands shall thereafter be directed and
such designation shall be made by written notice given in the manner hereinabove
required, provided, that at all times each Member shall be required to maintain
a notice address in the continental United States.

Section 13.11     No Consequential Damages.

In no event shall the Cendant Member or any of its Affiliates have any liability
to the PHH Member or any of its Affiliates for any indirect, consequential,
incidental, collateral, exemplary, punitive, enhanced, special or other similar
damages of any kind or nature whatsoever, including, without limitation, lost
profits to the PHH Member or any of its Affiliates from past, present or future
business opportunities, loss of use or revenue, loss of savings or losses by
reason of cost of capital, arising out of or in any manner relating to this
Agreement or any other Transaction Document, the performance or breach thereof
or the subject matter thereof, whether or not the Cendant Member or any of its
Affiliates have been advised of, or otherwise might or should have anticipated,
the possibility or likelihood of such damages. The limitations of liability set
forth in this Section 13.11 shall apply regardless of the form of action in
which a claim is brought, whether in contract, tort (including negligence of any
kind, whether active or passive), warranty, strict liability or any other legal
or equitable grounds, and shall survive failure of an exclusive remedy.

Section 13.12     Most Favored Nation.

If during the term of this Agreement PMC or any of its Affiliates enters into
any agreement, arrangement or understanding with a third party whereby PMC or
such Affiliate (or any other entity formed in connection with such agreement,
arrangement or understanding) agrees to provide substantially the same Mortgage
Loan origination services to such third party, and such agreement, arrangement
or understanding contains pricing (other than the pricing of loans) or servicing
terms or conditions that, taken as a whole, are more favorable to such third
party than the comparable terms of this Agreement and the related Transaction
Documents, taken as a whole, are to Cendant, then the Company shall offer such
favorable terms and conditions to the Cendant Member with respect to Mortgage
Loans originated by the Company pursuant to this Agreement and amend this
Agreement and any other Transaction Documents, as applicable, to the extent
necessary so that such terms and conditions are incorporated in a manner
reasonably acceptable to the Cendant Member.

Section 13.13     Impossibility of Performance.

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If during the term of this Agreement, without any change in applicable law, rule
or regulation and through no fault or breach of any Party hereto, it shall have
become impossible for the Parties to fulfill the objectives of the Company and
to perform their obligations hereunder, then the Parties shall proceed with an
orderly liquidation and dissolution of the Company in accordance with Article IX
hereof.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized, as of the day
and year first above written.

                  CENDANT REAL ESTATE SERVICES         VENTURE PARTNER, INC.
 
           

  By:    /s/ Eric J. Bock              

      Name:   Eric J. Bock

      Title:   Executive Vice President and Secretary
 
                PHH BROKER PARTNER         CORPORATION
 
           

  By:    /s/ Terence W. Edwards              

      Name:   Terence W. Edwards

      Title:   President

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