EX-10.75






Exhibit 10.75




          THIRD AMENDMENT, dated as of December 17, 2008 (this “Third Amendment”), among
Chesapeake Funding LLC (the “Issuer”), PHH Vehicle Management Services, LLC, as
administrator (the “Administrator”), and The Bank of New York Mellon (formerly known as The
Bank of New York), as Indenture Trustee (the “Indenture Trustee”), to the Amended and
Restated Series 2006-2 Indenture Supplement, dated as of December 1, 2006, as amended as of March
6, 2007 and as of November 30, 2007 (the “Series 2006-2 Indenture Supplement”), among the
Issuer, the Administrator, the several commercial paper conduits listed on Schedule I thereto (the
“CP Conduit Purchasers”), the banks party thereto with respect to each CP Conduit Purchaser
(the “APA Banks”), the agent banks party thereto with respect to each CP Conduit Purchaser
(the “Funding Agents”), JPMorgan Chase Bank, N.A., in its capacity as administrative agent
(the “Administrative Agent”) for the CP Conduit Purchasers, the APA Banks and the Funding
Agents, and the Indenture Trustee, to the Base Indenture, dated as of March 7, 2006 (the
“Existing Base Indenture”), between the Issuer and the Indenture Trustee pursuant to which
the Series 2006-2 Investor Notes were issued to the CP Conduit Purchasers.




WITNESSETH:




          WHEREAS, the Issuer has requested the Series 2006-2 Investor Noteholders to agree to consent
to an amendment to the Series 1999-1 SUBI Servicing Supplement in the form of Exhibit A to this
Third Amendment (the “Second Amendment to the SUBI Servicing Supplement”), an amendment to
the Loan Agreement in the form of Exhibit B to this Third Amendment (the “First Amendment to
the Loan Agreement”), an amendment and restatement of the Fleet Receivable SUBI Supplement in
the form of Exhibit C to this Third Amendment (the “Second Amended and Restated Fleet
Receivable SUBI Supplement”) and to the amendment and restatement of the Existing Base
Indenture in the form of Exhibit D to this Third Amendment (the “Amended and Restated Base
Indenture”) and to amend the Series 2006-2 Indenture Supplement to extend the Scheduled Expiry
Date (as such term is defined in the Series 2006-2 Indenture Supplement) and make certain other
changes to the Series 2006-2 Indenture Supplement as set forth in this Third Amendment; and




          WHEREAS, each of the Series 2006-2 Investor Noteholders is willing to consent to the Second
Amendment to the SUBI Servicing Supplement, the First Amendment to the Loan Agreement, the
amendment and restatement of the Fleet Receivable SUBI Supplement in the form of the Second Amended
and Restated Fleet Receivable SUBI Supplement and the amendment and restatement of the Existing
Base Indenture in the form of the Amended and Restated Base Indenture and to agree to the
amendments to the Series 2006-2 Indenture Supplement requested by the Issuer and set forth in this
Third Amendment;




          NOW, THEREFORE, the parties hereto hereby agree as follows:




          1. Defined Terms. All capitalized terms defined in Schedule 1 to the Existing Base
Indenture or the Series 2006-2 Indenture Supplement and used herein shall have the meanings given
to them therein.




          2. Amendments to Article 1(b). Article 1(b) of the Series 2006-2 Indenture Supplement
is hereby amended by (a) deleting the definitions of the following defined terms in their
respective entireties and substituting in lieu thereof the following new definitions:












 




 2



     “‘LIBO Rate’ means, with respect to each day during each Eurodollar Period
pertaining to a Eurodollar Tranche, the rate per annum shown on the display designated as
“LIBOR01” on the Reuters Money 3000 Service for a period equal to such Eurodollar Period at
11:00 a.m. (London time) on the second Business Day prior to the commencement of such
Eurodollar Period; provided that in the event no such rate is shown, the LIBO Rate
shall be determined by reference to such other comparable available service for displaying
eurodollar rates as may be reasonably selected by the Administrative Agent; provided
further that in the event no such service is available, the LIBO Rate shall be a
rate per annum at which dollar deposits are offered by the principal office of JPMorgan
Chase in London, England to prime banks in the London interbank market at 11:00 a.m. (London
time) on the second Business Day prior to the commencement of such Eurodollar Period for
delivery on the first day of such Eurodollar Period and for a period equal to such
Eurodollar Period.




     ‘Program Support Provider’ means, with respect to any CP Conduit Purchaser, (i)
the APA Bank with respect to such CP Conduit Purchaser, (ii) any other or additional Person
now or hereafter providing liquidity or extending credit, or having a commitment to extend
liquidity or credit to or for the account of, or to make purchases from, such CP Conduit
Purchaser or issuing a letter of credit, surety bond or other instrument to support any
obligations arising under or in connection with such CP Conduit Purchaser’s securitization
program, (iii) any agent, administrator or manager of such CP Conduit Purchaser or (iv) any
bank holding company in respect of any of the foregoing.




     ‘Scheduled Expiry Date’ means, with respect to any Purchaser Group, the later
of (a) February 26, 2009 and (b) the last day of any extension of the Commitment of the APA
Banks included in such Purchaser Group made in accordance with Section 2.6(b).




     ‘Series 2006-2 Eligible Counterparty’ means a financial institution which has,
or has all of its obligations under its interest rate cap maintained pursuant to Section
5A.12 guaranteed by a Person that has (i) a short-term senior unsecured debt, deposit,
claims paying or credit rating of at least “A-1” by Standard & Poor’s, or if such financial
institution does not have a short-term senior unsecured debt rating by Standard &Poor’s, a
long-term senior, unsecured debt or credit rating of at least “A+” by Standard & Poor’s and
(ii) a short-term senior unsecured debt, deposit, claims paying or credit rating of “P-1” by
Moody’s, , or if such financial institution does not have a short-term senior unsecured debt
rating by Moody’s, a long-term senior unsecured debt or credit rating of at least “Aa3” by
Moody’s.




     ‘Series 2006-2 Minimum Yield Rate’ means, for any Settlement Date, a rate per
annum equal to the sum of (i) the Series 2006-2 Note Rate for the Series 2006-2 Interest
Period ending on the day before such Settlement Date, (ii) [***]% and (iii) [***]%.




     ‘Series 2006-2 Prepayment Amount’ means, the sum of the following amounts with
respect to each Purchaser Group:




     (a) the Purchaser Group Invested Amount with respect to such Purchaser Group,
plus




 




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HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.













 




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     (b) the sum of (i)(A) if the CP Conduit Purchaser in such Purchaser Group is a
Match Funding CP Conduit Purchaser, the sum of (x) all accrued and unpaid Discount
on all outstanding Commercial Paper issued by, or for the benefit of, such Match
Funding CP Conduit Purchaser to fund the CP Funded Amount with respect to such Match
Funding CP Conduit Purchaser from the issuance date(s) thereof to but excluding the
Prepayment Date and (y) the aggregate Discount to accrue on all outstanding
Commercial Paper issued by, or for the benefit of, such Match Funding CP Conduit
Purchaser to fund the CP Funded Amount with respect to such Match Funding CP Conduit
Purchaser from and including the Prepayment Date to and excluding the maturity date
of each CP Tranche with respect to such Match Funding CP Conduit Purchaser or (B) if
the CP Conduit Purchaser in such Purchaser Group is a Pooled Funding CP Conduit
Purchaser, the sum of (x) the aggregate amount of Discount on or in respect of the
Commercial Paper issued by, or for the benefit of, such Pooled Funding CP Conduit
Purchaser allocated, in whole or in part, by the Funding Agent with respect to such
Pooled Funding CP Conduit Purchaser, to fund the purchase or maintenance of the CP
Funded Amount with respect to such Pooled Funding CP Conduit Purchaser as of the
Prepayment Date and (y) the aggregate amount of Discount to accrue on or in respect
of the Commercial Paper issued by, or for the benefit of, such Pooled Funding CP
Conduit Purchaser allocated, in whole or in part, by the Funding Agent with respect
to such Pooled Funding CP Conduit Purchaser, to fund the purchase or maintenance of
the CP Funded Amount with respect to such Pooled Funding CP Conduit Purchaser from
and including the Prepayment Date to and excluding the maturity dates of such
Commercial Paper and (ii) the sum of the product for each day during the period from
and including the immediately preceding Payment Date to and excluding the Prepayment
Date of (A) the CP Funded Amount with respect to such Purchaser Group on such day
times (B) the Program Fee Rate on such day, divided by (C) 360; plus




     (c) all accrued and unpaid interest on the APA Bank Funded Amount with respect
to such Purchaser Group, calculated at the Alternate Base Rate or the applicable
Adjusted LIBO Rate plus the then Applicable Margin for the period from and including
the immediately preceding Payment Date to and excluding the Prepayment Date, plus




     (d) the Commitment Fee payable to such Purchaser Group calculated for the
period from and including the immediately preceding Payment Date to and excluding
the Prepayment Date, plus




     (e) all Article 7 Costs then due and payable to such Purchaser Group, plus




     (f) without duplication, any other Program Costs then due and payable to such
Purchaser Group, and any other amounts then due and payable to such Purchaser Group
pursuant to this Indenture Supplement.












 




 4


     ‘Series 2006-2 Required Enhancement Amount’ means, on any date of
determination, an amount equal to the sum of (a) (i) during the Series 2006-2 Revolving
Period, the Series 2006-2 Required Percentage of the sum of (x) the Series 2006-2 Maximum
Invested Amount on such date and (y) during any Paydown Period, the aggregate Purchaser
Group Invested Amount of any Non-Extending Purchaser Groups on such date or (ii) during the
Series 2006-2 Amortization Period, the Series 2006-2 Required Percentage of the sum of (x)
the Series 2006-2 Maximum Invested Amount on the last day of the Series 2006-2 Revolving
Period and (y) if the last day of the Series 2006-2 Revolving Period occurred during a
Paydown Period, the aggregate Purchaser Group Invested Amount of any Non-Extending Purchaser
Groups on the last day of the Series 2006-2 Revolving Period plus (b) the sum of:




     (i) if the Three-Month Average Residual Value Loss Ratio with respect to the most
recent Settlement Date exceeded [***]%, an amount equal to the product of (a) the Series
2006-2 Invested Percentage as of the last day of the Monthly Period immediately
preceding such Settlement Date and (b) [***]% of the amount by which the Aggregate
Residual Value Amount exceeded the Excess Residual Value Amount, in each case, as of
that date; plus




     (ii) the greater of




     (A) the sum of:




     (1) an amount equal to the product of (x) the Series 2006-2 Invested
Percentage as of the last day of the Monthly Period immediately preceding
the most recent Settlement Date and (y) the Excess Equipment Amount on such
Settlement Date;




     (2) an amount equal to the product of (x) the Series 2006-2 Invested
Percentage as of the last day of the Monthly Period immediately preceding
the most recent Settlement Date and (y) the Excess Forklift Amount on such
Settlement Date;




     (3) an amount equal to the product of (x) the Series 2006-2 Invested
Percentage as of the last day of the Monthly Period immediately preceding
the most recent Settlement Date and (y) the Excess Truck Amount on such
Settlement Date;




     (4) an amount equal to the product of (x) the Series 2006-2 Invested
Percentage as of the last day of the Monthly Period immediately preceding
the most recent Settlement Date and (y) the Excess Trailer Amount on such
Settlement Date; and




     (5) an amount equal to the product of (x) the Series 2006-2 Invested
Percentage as of the last day of the Monthly Period immediately preceding
the most recent Settlement Date and (y) the Excess Truck Body Amount on such
Settlement Date; or




 





[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.













 




 5


     (B) an amount equal to the product of (x) the Series 2006-2 Invested Percentage
as of the last day of the Monthly Period immediately preceding such Settlement Date
and (y) the Excess Alternative Vehicle Amount on such Settlement Date; plus




     (iii) the sum of:




     (A) an amount equal to the product of (x) the Series 2006-2 Invested Percentage
as of the last day of the Monthly Period immediately preceding the most recent
Settlement Date and (y) the Overconcentration Amount on such Settlement Date;




     (B) an amount equal to the product of (x) the Series 2006-2 Invested Percentage
as of the last day of the Monthly Period immediately preceding the most recent
Settlement Date and (y) the Excess Longer-Term Lease Amount on such Settlement Date;




     (C) an amount equal to the product of (x) the Series 2006-2 Invested Percentage
as of the last day of the Monthly Period immediately preceding the most recent
Settlement Date and (y) the Excess High Lease Balance Amount on such Settlement
Date; and




     (D) an amount equal to the product of (x) the Series 2006-2 Invested Percentage
as of the last day of the Monthly Period immediately preceding the most recent
Settlement Date and (y) the Excess State Obligor Risk Amount on such Settlement
Date;




; provided, however, that, after the declaration or occurrence of an Amortization Event, the
Series 2006-2 Required Enhancement Amount shall equal the Series 2006-2 Required Enhancement
Amount on the date of the declaration or occurrence of such Amortization Event.




     ‘Series 2006-2 Required Percentage’ means, on any date of determination, [***]%
unless for the most recent Settlement Date any one of the following was true:




     (i) the Three Month Average Charge-Off Ratio exceeded [***]%;




     (ii) the Three Month Average Residual Value Loss Ratio exceeded [***]%;




     (iii) the Three Month Average Paid-In Advance Loss Ratio exceeded [***]%;


or


     (iv) the Three Month Average Delinquency Ratio exceeded [***]%;




in which case, the Series 2006-2 Required Percentage on such date will equal [***]%;
provided, however, that, if the Indenture Supplement with respect to any Series of Investor
Notes issued after December 17, 2008 and rated AA- by Standard & Poor’s or Aa2 by Moody’s at
the time of issuance requires that the Credit Enhancement with




 





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HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.













 





6

respect to such Series be a higher percentage of the Invested Amount with respect to such
Series, the Series 2006-2 Required Percentage shall mean such higher percentage.




     ‘Series 2006-2 Required Reserve Account Amount’ means, on any date of
determination, an amount equal to the greater of (a) [***]% of the Series 2006-2 Invested
Amount on such date and (b) [***]% of the Series 2006-2 Maximum Invested Amount (i) during
the Series 2006-2 Revolving Period, on such date, or (ii) during the Series 2006-2
Amortization Period, on the last day of the Series 2006-2 Revolving Period.




     ‘Series 2006-2 Required Yield Supplement Amount’ means, as of any Settlement
Date, the excess, if any, of (a) the Series 2006-2 Yield Shortfall Amount for such
Settlement Date over (b) [***]% of the product of (x) the Series 2006-2 Invested Percentage
on such Settlement Date and (y) the excess of (1) the Class X 1999-1B Invested Amount for
the current Monthly Period (after giving effect to any increase thereof on such Settlement
Date) over (2) the sum, with respect to each Obligor of Eligible Receivables as of the close
of business on the first day of such Monthly Period, of the amount, if any, by which the
amount owing by such Obligor in respect of such Eligible Receivables as of such date exceeds
an amount equal to [***]% of the Class X 1999-1B Invested Amount; provided, however that
upon the occurrence of a Receivables Purchase Termination Event, the Series 2006-2 Required
Yield Supplement Amount will equal the Series 2006-2 Yield Shortfall Amount.




     ‘Series 2006-2 Note Termination Date’ means the date on which the Series 2006-2
Invested Amount shall have been reduced to zero, all accrued and unpaid interest on the
Series 2006-2 Notes shall have been paid in full and all other amounts due and payable to
the Purchaser Groups hereunder shall have been paid in full.




     ‘Series 2006-2 Yield Shortfall Amount’ means, for any Settlement Date, the sum
of the product with respect to each Series 2006-2 Yield Shortfall Lease of (a) the Series
2006-2 Invested Percentage on such Settlement Date, (b) the Lease Balance of such Series
2006-2 Yield Shortfall Lease as of the last day of the immediately preceding Monthly Period,
(c) the Series 2006-2 Yield Shortfall with respect to such Series 2006-2 Yield Shortfall
Lease for such Settlement Date and (d) the quotient of (i) [***]% of the Remaining Lease
Term with respect to such Series 2006-2 Yield Shortfall Lease on such Settlement Date
divided by (ii) 12.




     ‘Series 2006-2 Yield Shortfall Lease’ means, as of any Settlement Date, each
Unit Lease that is a Floating Rate Lease with an actual or implicit finance charge rate,
including therein the rate at which any management and/or administrative fee accrues in
respect of such Unit Lease, that is less than the Series 2006-2 Minimum Yield Rate for such
Settlement Date.




     ‘Series 2006-2 Yield Supplement Deficiency’ means, on any date of
determination, the amount, if any, by which the Series 2006-2 Required Yield Supplement
Amount exceeds the Series 2006-2 Yield Supplement Account Amount.”;



 





[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.













 





7


(b) inserting the following new defined terms in alphabetical order:





     “‘Accounting Based Consolidation Event’ means the consolidation, for financial
and/or regulatory accounting purposes, of all or any portion of the assets and liabilities
of any CP Conduit Purchaser that are subject to this Indenture Supplement or any other
Transaction Document with all or any portion of the assets and liabilities of an Affected
Party. An Accounting Based Consolidation Event shall be deemed to occur on the date any
Affected Party shall acknowledge in writing that any such consolidation of the assets and
liabilities of a CP Conduit Purchaser shall occur.




     ‘Charge-Off Ratio’ means, for any specified Settlement Date, twelve times the
quotient, expressed as a percentage, of (a) Aggregate Net Lease Losses for the preceding
Monthly Period, divided by (b) the Aggregate Lease Balance as of the last day of the second
preceding Monthly Period.




     ‘Contingent Monthly Funding Costs’ means, with respect to any Purchaser Group,
the sum of:




     (a) with respect to any Series 2006-2 Interest Period, the excess, if any, of
(i) the amount calculated for such Series 2006-2 Interest Period pursuant to clause
(a) of the definition of Monthly Funding Costs with respect to such Purchaser Group
over (ii) an amount equal to the sum of the product for each day during such Series
2006-2 Interest Period of (A) the CP Conduit Funded Amount with respect to such
Purchaser Group on such day and (B) a rate per annum equal to the sum of (x) the
rate on one-month nonfinancial commercial paper for such day set forth in
Statistical Release H.15(519), “Selected Interest Rates” published by the Board Of
Governors of the Federal Reserve System and (y) [***]% divided by (C) 360; and




     (b) with respect to any Series 2006-2 Interest Period, the excess, if any, of
(i) the amount calculated for such Series 2006-2 Interest Period pursuant to clause
(b) of the definition of Monthly Funding Costs with respect to such Purchaser Group
over (ii) an amount equal to the sum of the product for each day during such Series
2006-2 Interest Period of (A) the APA Bank Funded Amount with respect to such
Purchaser Group on such day and (b) a rate per annum equal to the sum of (x) the
LIBO Rate for such Series 2006-2 Interest Period (assuming for this purpose only
that such Series 2006-2 Interest Period is a Eurodollar Period) and (y) the
Applicable Margin on such day (assuming for this purpose only that no Amortization
Event or Potential Amortization Event shall have occurred and be continuing) divided
by (C) 360.




     ‘Contingent Monthly Funding Costs Shortfall’ is defined in Section
5A.3(b).




     ‘Contingent Monthly Interest Payment’ is defined in Section
5A.4(c)(xii).



 





[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.













 




 8


     ‘Delinquency Ratio’ means, for any specified Settlement Date, the quotient,
expressed as a percentage, of (a) the aggregate billings with respect to all Leases and all
Fleet Receivables which were unpaid for 60 days or more from the original due date thereof
as of the last day of the immediately preceding Monthly Period divided by (b) the sum of (i)
the aggregate billings with respect to all Leases and all Fleet Receivables which were
unpaid as of the last day of the second preceding Monthly Period and (ii) the aggregate
amount billed with respect to all Leases and all Fleet Receivables during the immediately
preceding Monthly Period.




     ‘Excess High Lease Balance Amount’ means, on any Settlement Date, an amount
equal to the excess, if any, of (a) the aggregate Lease Balance of all Eligible Leases
having a Lease Balance in excess of $[***] allocated to the Lease SUBI as of the last day of
the Monthly Period immediately preceding such Settlement Date over (b) an amount equal to
[***]% of the Aggregate Lease Balance as of such Settlement Date.




     ‘Excess Longer-Term Lease Amount’ means, on any Settlement Date, an amount
equal to the greater of (a) the excess, if any, of (i) the aggregate Lease Balance of all
Eligible Leases having remaining terms of longer than five years allocated to the Lease SUBI
as of the last day of the Monthly Period immediately preceding such Settlement Date over
(ii) an amount equal to [***]% of the Aggregate Lease Balance as of such Settlement Date and
(b) the excess, if any, of (i) the aggregate Lease Balance of all Eligible Leases having
remaining terms of longer than seven years allocated to the Lease SUBI as of the last day of
the Monthly Period immediately preceding such Settlement Date over (ii) an amount equal to
[***]% of the Aggregate Lease Balance as of such Settlement Date.




     ‘Excess State Obligor Risk Amount’ means, on any Settlement Date, an amount
equal to the excess, if any, of (a) the aggregate Lease Balance of all Eligible Leases the
Obligor of which is a state or local government or any subdivision thereof, or any agency,
department or instrumentality thereof allocated to the Lease SUBI as of the last day of the
Monthly Period immediately preceding such Settlement Date over (b) an amount equal to [***]%
of the Aggregate Lease Balance as of such Settlement Date.




     ‘JPMorgan Chase’ means JPMorgan Chase Bank, N.A., and its successors and
assigns.




     ‘Monthly Funding Costs Shortfall’ means a Senior Monthly Funding Costs
Shortfall or a Contingent Monthly Funding Costs Shortfall.




     ‘Overconcentration Amount’ means, on any Settlement Date, an amount equal to
the greatest of (a) the excess, if any, of (i) the aggregate Lease Balance of the Eligible
Leases to which the Obligor having the largest aggregate Lease Balance of Eligible Leases
allocated to the Lease SUBI is a party as of the last day of the Monthly Period immediately
preceding such Settlement Date over (ii) an amount equal to [***]% of the Aggregate Lease
Balance as of such Settlement Date; provided, however that if the long-term debt obligations
of such Obligor are not rated at least “Baa3” by Moody’s and at



 





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HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.













 




 9


least “BBB-” by Standard & Poor’s as of such Settlement Date, the amount in this clause
(ii) shall equal [***]% of the Aggregate Lease Balance as of such Settlement Date, (b) the
excess, if any, of (i) the aggregate Lease Balance of the Eligible Leases to which the
Obligors having the two largest aggregate Lease Balances of Eligible Leases allocated to the
Lease SUBI are a party as of the last day of the Monthly Period immediately preceding such
Settlement Date over (ii) an amount equal to [***]% of the Aggregate Lease Balance as of
such Settlement Date; provided, however that if the long-term debt obligations of the
Obligor having the largest aggregate Lease Balance of Eligible Leases allocated to the Lease
SUBI are not rated at least “Baa3” by Moody’s and at least “BBB-” by Standard & Poor’s as of
such Settlement Date, the amount in this clause (ii) shall equal [***]% of the Aggregate
Lease Balance as of such Settlement Date, (c) the excess, if any, of (i) the aggregate Lease
Balance of the Eligible Leases to which the Obligors having the five largest aggregate Lease
Balances of Eligible Leases allocated to the Lease SUBI are a party as of the last day of
the Monthly Period immediately preceding such Settlement Date over (ii) an amount equal to
[***]% of the Aggregate Lease Balance as of such Settlement Date and (d) the excess, if any,
of (i) the aggregate Lease Balance of the Eligible Leases to which the Obligors having the
ten largest aggregate Lease Balances of Eligible Leases allocated to the Lease SUBI are a
party as of the last day of the Monthly Period immediately preceding such Settlement Date
over (ii) an amount equal to [***]% of the Aggregate Lease Balance as of such Settlement
Date.




     ‘Paid-In Advance Loss Ratio’ means, for any specified Settlement Date, the
quotient, expressed as a percentage, of (a) the excess, if any, of (i) the aggregate Cost of
all Unit Paid-In Advance Vehicles that became Rejected Paid-In Advance Vehicles during the
immediately preceding Monthly Period over (ii) all Paid-In Advance Proceeds received by the
Servicer during the preceding Monthly Period for all Unit Paid-In Advance Vehicles that
became Rejected Paid-In Advance Vehicles during such Monthly Period and all prior Monthly
Periods divided by (b) the aggregate Cost of all Unit Paid-In Advance Vehicles that became
Rejected Paid-In Advance Vehicles during the immediately preceding Monthly Period.




     ‘PHH Credit Agreement’ means the Amended and Restated Competitive Advance and
Revolving Credit Agreement, dated as of January 6, 2006, among PHH, PHH Vehicle Management
Services Inc., the lenders referred to therein, Citicorp USA, Inc. as syndication agent, The
Bank of Nova Scotia and Wachovia Bank, National Association, as co-documentation agents, and
JPMorgan Chase, as administrative agent for the lenders, as amended, modified, supplemented
or waived from time to time in accordance with its terms; provided, however, that, for the
purposes of clause (y) of Article 4, PHH Credit Agreement shall mean such credit agreement
without giving effect to any amendments, modifications or supplements thereto or waivers
thereof after December 17, 2008 not approved by the Series 2006-2 Required Investor
Noteholders.




     ‘Remaining Lease Term’ means, with respect to any Series 2006-2 Yield Shortfall
Lease on any Settlement Date, the remaining number of months over which the Capitalized Cost
of the related Leased Vehicle is being depreciated thereunder as of the last day of the
immediately preceding Monthly Period.



 





[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.













 





10

     ‘Residual Value Loss Ratio’ means, for any specified Settlement Date, the
quotient, expressed as a percentage, of (a) the sum of the Residual Value Losses for all
Unit Vehicles that became Residual Value Vehicles during the preceding Monthly Period minus
all Termination Proceeds included in clauses (i) and (ii) of the definition thereof for the
preceding Monthly Period for all Unit Vehicles that became Residual Value Vehicles during
prior Monthly Periods divided by (b) the sum of the Stated Residual Values for all Unit
Vehicles that became Residual Value Vehicles during the preceding Monthly Period.




     ‘Senior Monthly Funding Costs’ means, with respect to each Series 2006-2
Interest Period and any Purchaser Group, the excess of (a) the Monthly Funding Costs over
(b) the Contingent Monthly Funding Costs, in each case, with respect to such Series 2006-2
Interest Period and such Purchaser Group.




     ‘Senior Monthly Funding Costs Shortfall’ is defined in Section 5A.3(b).




     ‘Senior Monthly Interest Payment’ is defined in Section 5A.4(c)(v).




     ‘Series 2006-2 Yield Shortfall’ means, with respect to any Series 2006-2 Yield
Shortfall Lease for any Settlement Date, the excess of (a) the Series 2006-2 Minimum Yield
Rate for such Settlement Date over (b) the actual or implicit finance charge rate applicable
to such Series 2006-2 Yield Shortfall Lease, including therein the rate at which any
management and/or administrative fee accrues in respect of such Series 2006-2 Yield
Shortfall Lease.




     ‘Three Month Average Charge-Off Ratio’ means, with respect to any Settlement
Date, the average of the Charge-Off Ratios for such Settlement Date and the two immediately
preceding Settlement Dates.




     ‘Three Month Average Delinquency Ratio’ means, with respect to any Settlement
Date, the average of the Delinquency Ratios for such Settlement Date and the two immediately
preceding Settlement Dates.




     ‘Three Month Average Paid-In Advance Loss Ratio’ means, with respect to any
Settlement Date, the average of the Paid-In Advance Loss Ratios for such Settlement Date and
the two immediately preceding Settlement Dates.




     ‘Three Month Average Residual Value Loss Ratio’ means, with respect to any
Settlement Date, the average of the Residual Value Loss Ratios for such Settlement Date and
the two immediately preceding Settlement Dates.”;


(c) deleting therefrom the definitions of “Additional Costs Cap,” “Applicable Option,” “Assumed
Lease Term,” “Dollar,” “Enhancement Matrix,” “Interest Shortfall,” “Level 1 Required Enhancement
Percentage,” “Level 2 Required Enhancement Percentage,” “Level 3 Required Enhancement Percentage,”
“Monthly Interest Payment,” “Required Reserve Account













 





11


Amount Percentage,” “Series 2006-2 Excess Fleet Receivable Amount,” “Series 2006-2 Hypothetical
Yield Shortfall Amount,” “Series 2006-2 Weighted Average Yield Shortfall,” “Series 2006-2 Weighted
Average Yield Shortfall Life” and “Telerate Page 3750” in their entirety; and



(d) deleting the reference to Sections 5A.4(c)(ix) and (xv) from the definition of “Increased Costs
Carry Forward Amount” and inserting a reference to Section 5A.4(c)(xv) in lieu thereof.




          3. Amendments to Article 2. Article 2 of the Series 2006-2 Indenture Supplement is
hereby amended by adding the following sentence to the end of Section 2.6(b) thereof:





     “The Administrator shall provide written notice to the Rating Agencies of any extension
of the Scheduled Expiry Date with respect to the Purchaser Groups.”



          4. Amendments to Article 3. Article 3 of the Series 2006-2 Indenture Supplement is
hereby amended by:





     (a) inserting the word “General” after the words “Series 2006-2” and before the words
“Collection Subaccount” in Section 5A.2(e) thereof;




     (b) deleting Section 5A.3(b) thereof in its entirety and inserting the following new
Section 5A.3(b) in lieu thereof:




     “(b) On each Determination Date, the Administrator shall determine
(i) the sum of the Senior Monthly Funding Costs and the sum of the Contingent
Monthly Funding Costs for each Purchaser Group for the Series 2006-2 Interest
Period ending on the next succeeding Payment Date, (ii) the excess, if any (the
“Senior Monthly Funding Costs Shortfall”), of (A) the sum of (x) the
Senior Monthly Funding Costs for each Purchaser Group for such Series 2006-2
Interest Period and (y) the amount of any unpaid Senior Monthly Funding Costs
Shortfall, as of the preceding Payment Date (together with any Additional
Interest on such Senior Monthly Funding Costs Shortfall) over (B) the amount
which will be available to be distributed to the Series 2006-2 Investor
Noteholders on such Payment Date in respect thereof pursuant to Section
5A.4(c)(v) and (iii) the excess, if any (the “Contingent Monthly
Funding Costs Shortfall”), of (A) the sum of (x) the Contingent Monthly
Funding Costs for each Purchaser Group for such Series 2006-2 Interest Period
and (y) the amount of any unpaid Contingent Monthly Funding Costs Shortfall, as
of the preceding Payment Date (together with any Additional Interest on such
Contingent Monthly Funding Costs Shortfall) over (B) the amount which will be
available to be distributed to the Series 2006-2 Investor Noteholders on such
Payment Date in respect thereof pursuant to Section 5A.4(c)(xii). If
the Senior Monthly Funding Costs Shortfall or the Contingent Monthly Funding
Costs Shortfall with respect to any Payment Date is greater than zero, an
additional amount (“Additional Interest”) equal to the product of (A)
the number of days until such Monthly Funding Costs Shortfall shall be repaid
divided by 365 (or 366, as the case may be), (B) the Alternate Base












 




 12


Rate plus [***]% and (C) such Monthly Funding Costs Shortfall (or the portion
thereof which has not been paid to the Series 2006-2 Investor Noteholders) shall be
payable as provided herein on each Payment Date following such Payment Date, to but
excluding the Payment Date on which such Monthly Funding Costs Shortfall is paid to
the Series 2006-2 Investor Noteholders.”




     (c) deleting the reference to paragraphs (i) through (x) of Section 5A.4(c) from
Section 5A.4(b) thereof and inserting in lieu thereof a reference to paragraphs (i) through
(ix) of Section 5A.4(c);




     (d) inserting the following new sentence to the end of Section 5A.4(b) thereof:




“Notwithstanding the foregoing, if the Administrator determines that the aggregate
amount distributable from the Series 2006-2 Settlement Collection Subaccount
pursuant to paragraphs (i) through (xv) of Section 5A.4(c)
on the Payment Date on which the Series 2006-2 Invested Amount will be reduced to
zero exceeds the sum of the Total Cash Available for such Payment Date and the
amount to be deposited in the Series 2006-2 Settlement Collection Subaccount
pursuant to Section 5A.2(e)(i) on such Payment Date, the Administrator shall
notify the Indenture Trustee thereof in writing at or before 10:00 A.M., New York
City time, on the Business Day immediately preceding such Payment Date, and the
Indenture Trustee shall, by 11:00 A.M., New York City time, on such Payment Date,
withdraw from the Series 2006-2 Reserve Account and deposit in the Series 2006-2
Settlement Collection Subaccount an amount equal to the lesser of (x) such
deficiency and (y) the Series 2006-2 Reserve Account Amount and, to the extent that
such amount is less than such deficiency, withdraw from the Series 2006-2 Yield
Supplement Account and deposit in the Series 2006-2 Settlement Collection Subaccount
an amount equal to the lesser of the amount of such insufficiency and the Series
2006-2 Yield Supplement Account Amount.”;




     (e) deleting the words in clause (i) of Section 5A.4(c) thereof and inserting in lieu
thereof the words “[reserved]”;




     (f) deleting clause (v) of Section 5A.4(c) thereof in its entirety and inserting the
following new clause (v) in lieu thereof:




     “(v) to the Series 2006-2 Distribution Account, an amount equal to the sum of
the Senior Monthly Funding Costs for each Purchaser Group for the Series 2006-2
Interest Period ending on such Payment Date plus the amount of any unpaid Senior
Monthly Funding Costs Shortfall, as of the preceding Payment Date, together with any
Additional Interest on such Senior Monthly Funding Costs Shortfall (such amount, the
“Senior Monthly Interest Payment”);”




     (g) deleting clause (ix) of Section 5A.4(c) and redesignating existing clauses (x),
(xi) and (xii) of Section 5A.4(c) as clauses (ix), (x) and (xi) of Section 5A.4(c);




 





[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.













 





13

     (h) deleting newly designated clause (ix) of Section 5A.4(c) thereof in its entirety
and inserting the following new clause (ix) in lieu thereof:




     “(ix) (A) on any Payment Date during the Series 2006-2 Revolving Period, to
the Series 2006-2 Principal Collection Subaccount, an amount equal to the greater of
(I) the Series 2006-2 Allocated Asset Amount Deficiency, if any, on such Payment
Date and (II) if such Payment Date is during a Paydown Period, the lesser of the
Series 2006-2 Principal Payment Amount for such Payment Date and the aggregate
Purchaser Group Invested Amounts with respect to the Non-Extending Purchaser Groups
on such Payment Date and (B) on any Payment Date during the period from and
including the first day of the Series 2006-2 Amortization Period to and including
the Series 2006-2 Note Termination Date, to the Series 2006-2 Principal Collection
Subaccount, an amount equal to the lesser of the Series 2006-2 Principal Payment
Amount for such Payment Date and the Series 2006-2 Invested Amount on such Payment
Date;”;




     (i) inserting the words “Class X” before the words “1999-1B Invested Amount” in newly
designated clause (xi) of Section 5A.4(c) thereof;




     (j) inserting the following new clause (xii) to Section 5A.4(c) thereof following newly
designated clause (xi) thereof:




     “(xii) to the Series 2006-2 Distribution Account, an amount equal to the sum of
the Contingent Monthly Funding Costs for each Purchaser Group for the Series 2006-2
Interest Period ending on such Payment Date plus the amount of any unpaid Contingent
Monthly Funding Costs Shortfall, as of the preceding Payment Date, together with any
Additional Interest on such Contingent Monthly Funding Costs Shortfall (such amount,
the “Contingent Monthly Interest Payment”);”




     (k) deleting clause (xv) of Section 5A.4(c) thereof in its entirety and inserting the
following new clause (xv) in lieu thereof:




     “(xv) to the Series 2006-2 Distribution Account, an amount equal to the
Increased Costs for such Payment Date;”




     (l) deleting Section 5A.5(a) thereof in its entirety and inserting the following new
Section 5A.5(a) in lieu thereof:




     “(a) On each Payment Date, based solely on the information contained in the
Monthly Settlement Statement with respect to the Series 2006-2 Investor Notes, the
Indenture Trustee shall, in accordance with Section 6.1 of the Base
Indenture, pay to the Administrative Agent, for the account of the Series 2006-2
Investor Noteholders, from the Series 2006-2 Distribution Account the Senior Monthly
Interest Payment to the extent of the amount deposited in the Series 2006-2
Distribution Account for the payment of such amount pursuant to Section
5A.4(c)(v) and the Contingent Monthly Interest Payment to the extent of the












 




 14


amount deposited in the Series 2006-2 Distribution Account for the payment of such
amount pursuant to Section 5A.4(c)(xii). Upon the receipt of funds from the
Indenture Trustee on each Payment Date on account of the Senior Monthly Interest
Payment and the Contingent Monthly Interest Payment, the Administrative Agent shall
pay to each Funding Agent with respect to a Purchaser Group an amount equal to the
Monthly Funding Costs with respect to such Purchaser Group with respect to the
immediately succeeding Series 2006-2 Interest Period plus the amount of any unpaid
Monthly Funding Costs Shortfall payable to such Purchaser Group as of the preceding
Payment Date, together with any Additional Interest thereon. If the amount
deposited in the Series 2006-2 Distribution Account on any Payment Date pursuant to
Section 5A.4(c)(v) is less than the Senior Monthly Interest Payment on such
Payment Date, the Administrative Agent shall pay the amount available to pay such
Senior Monthly Interest Payment to the Funding Agents, on behalf of the Purchaser
Groups, on a pro rata basis, based on the Senior Monthly Funding Costs with respect
to each Purchaser Group with respect to the immediately preceding Series 2006-2
Interest Period. If the amount deposited in the Series 2006-2 Distribution Account
on any Payment Date pursuant to Section 5A.4(c)(xii) is less than the
Contingent Monthly Interest Payment on such Payment Date, the Administrative Agent
shall pay the amount available to pay such Contingent Monthly Interest Payment to
the Funding Agents, on behalf of the Purchaser Groups, on a pro rata basis, based on
the Contingent Monthly Funding Costs with respect to each Purchaser Group with
respect to the immediately preceding Series 2006-2 Interest Period.”




     (m) deleting the references to Sections 5A.4(c)(ix) and (xv) from Sections 5A.5(c) and
5A.5(d) thereof and inserting references to Section 5A.4(c)(xv) in lieu thereof;




     (n) deleting Section 5A.12(a) thereof in its entirety and inserting the following new
Section 5A.12(a) in lieu thereof:




     “(a) On each Payment Date, the Issuer shall have obtained and shall
thereafter maintain one or more interest rate caps, substantially in the form of
Exhibit I hereto, each from a Series 2006-2 Eligible Counterparty, having, in the
aggregate, a notional amount on such Payment Date at least equal to the aggregate
Lease Balance of all Fixed Rate Leases allocated to the Lease SUBI Portfolio as of
the last day of the Monthly Period immediately preceding such Payment Date, plus, in
the case of all such Fixed Rate Leases that are Closed-End Leases, the aggregate
Stated Residual Values of the related Leased Vehicles, and on each Payment Date
thereafter at least equal to the aggregate scheduled Lease Balance of all such Fixed
Rate Leases as of the last day of the Monthly Period immediately preceding such
Payment Date, plus, in the case of all such Fixed Rate Leases that are Closed-End
Leases, the aggregate Stated Residual Values of the related Leased Vehicles, and an
effective strike rate based on the eurodollar rate set forth therein in effect on
the dates set forth therein at the most equal to the weighted average fixed rate of
interest on such Fixed Rate Leases minus the sum of [***]% and the then current
Program Fee Rate.”;



 





[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.













 





15

     (o) inserting the words “substantially in the form of Exhibit I hereto,” after the
words “an interest rate cap” in Section 5A.12(b) thereof;




     (p) deleting 0.465% from Section 5A.12(b) thereof and inserting the words “the sum of
[***]% and the then current Program Fee Rate” in lieu thereof;




     (q) inserting the words “substantially in the form of Exhibit I hereto,” after the
words “an interest rate cap” in Section 5A.12(c) thereof;




     (r) deleting 0.465% from Section 5A.12(c) thereof and inserting the words “the sum of
[***]% and the then current Program Fee Rate” in lieu thereof; and




     (s) deleting Section 5A.12(d) thereof in its entirety and inserting the following new
Section 5A.12(d) in lieu thereof:




     “(d) If, at any time, any provider of an interest rate cap required to be
obtained and maintained by the Issuer pursuant to this Section 5A.12 is not
a Series 2006-2 Eligible Counterparty, the Issuer shall cause such provider to take
the actions required of it under the terms of the interest rate cap to which it is a
party within the time frames set forth therein following such occurrence. If any
such provider of an interest rate cap fails to take the actions required of it under
the terms of its interest rate cap, the Issuer shall, at such provider’s expense,
obtain a replacement interest rate cap on the same terms from a Series 2006-2
Eligible Counterparty and, simultaneously with such replacement, the Issuer shall
terminate the interest rate cap being replaced. The Issuer will not permit any
interest rate cap required to be obtained and maintained by the Issuer pursuant to
this Section 5A.12 to be terminated or transferred in whole or in part
unless a replacement interest rate cap therefor has been provided as described in
the immediately preceding sentence and, after giving effect thereto, the Issuer has
the interest rate caps required to be obtained and maintained by the Issuer pursuant
to this Section 5A.12.”



          5. Amendments to Article 4. Article 4 of the Series 2006-2 Indenture Supplement is
hereby amended by:





     (a) deleting clause (o) thereof in its entirety and inserting the following new clause
(o) in lieu thereof:




     “(o) the failure on the part of the Issuer to pay any Commitment Fee or any
Series 2006-2 Monthly Interest due and payable on any Payment Date which failure
continues unremedied for two Business Days;”




     (b) deleting clause (v) thereof in its entirety and inserting the following new clause
(v) in lieu thereof:




     “(v) the failure on the part of the Administrator to (i) deliver to the
Indenture Trustee, the Administrative Agent and each Funding Agent a letter of




 





[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.













 





16

independent certified public accountants of recognized national standing concerning
the results of agreed upon procedures pursuant to Section 8.3(e) that is in
form and substance reasonably satisfactory to the Series 2006-2 Required Investor
Noteholders or (ii) duly to observe or perform in any material respect any other
covenants or agreements of the Administrator set forth in the Base Indenture or this
Indenture Supplement, which failure continues unremedied for a period of 30 days
after there shall have been given to the Administrator by the Indenture Trustee or
the Administrator and the Indenture Trustee by any Series 2006-2 Investor
Noteholder, written notice specifying such default and requiring it to be
remedied;”;




     (c) inserting after clause (w) thereof, the following new clauses (x) and (y):




     “(x) default shall occur in the due observance or performance of any covenant,
condition or agreement contained in Section 6.6 or Section 6.7 of the PHH Credit
Agreement; or




     (y) an event described in paragraph (e) or (f) of Section 7 of the PHH Credit
Agreement shall occur”;



     and




     (d) replacing “then, in the case of any event described in clause (p) through (w)
above” with “then, in the case of any event described in clause (p) through (y) above”
therein.



          6. Amendments to Article 7. Article 7 of the Series 2006-2 Indenture Supplement is
hereby amended by (a) inserting the following new paragraph (c) of Section 7.2 thereof:





     “(c) If an Accounting Based Consolidation Event shall at any time occur then, upon
demand, the Issuer shall pay to the relevant Affected Party, such amounts as such Affected
Party reasonably determines will compensate or reimburse such Affected Party for any
resulting (i) fee, expense or increased cost charged to, incurred or otherwise suffered by
such Affected Party, (ii) reduction in the rate of return on such Affected Party’s capital
or reduction in the amount of any sum received or receivable by such Affected Party or (iii)
internal capital charge or other imputed cost determined by such Affected Party to be
allocable to the Issuer or the transactions contemplated in this Indenture Supplement in
connection therewith. Amounts under this Section 7.2(c) may be demanded at any
time without regard to the timing of issuance of any financial statement by the CP Conduit
Purchaser or by any Affected Party.”


(b) designating existing paragraphs (c) and (d) of Section 7.2 thereof as paragraphs (d) and (e)
and (c) deleting the words “subsections (a) and (b)” in the first sentence of new paragraph (d) of
Section 7.2 thereof and inserting the words “subsections (a), (b) and (c)” in lieu thereof.




          7. Amendments to Article 12. Article 12 of the Series 2006-2 Indenture Supplement is
hereby amended by (a) deleting paragraph (a) of Section 12.10 thereof in its













 





17


entirety and inserting the following new paragraph (a) of Section 12.10 in lieu thereof:





     “(a) This Indenture Supplement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, except that the
Issuer may not assign or transfer any of its rights under this Indenture Supplement
without the prior written consent of all of the Series 2006-2 Investor Noteholders,
no CP Conduit Purchaser may assign or transfer any of its rights under this
Indenture Supplement other than in accordance with the Asset Purchase Agreement with
respect to such CP Conduit Purchaser or otherwise to the APA Bank with respect to
such CP Conduit Purchaser or a Program Support Provider with respect to such CP
Conduit Purchaser or pursuant to paragraph (b) or (e) below of this Section
12.10 and no APA Bank may assign or transfer any of its rights or
obligations under this Indenture Supplement except to a Program Support Provider or
pursuant to paragraph (c), (d), (e) or (g) below of this Section 12.10.”;


and (b) inserting the following new paragraph (g) to the end of Section 12.10 thereof:





     “(g) Notwithstanding any other provision of this Indenture Supplement to the
contrary, any APA Bank or any Program Support Provider may at any time pledge or
grant a security interest in all or any portion of its rights under this Indenture
Supplement to secure obligations of such APA Bank or such Program Support Provider
to a Federal Reserve Bank, without notice to or consent of the Administrative Agent,
the Issuer or the Administrator; provided that no such pledge or grant of a
security interest shall release an APA Bank from any of its obligations hereunder or
substitute any such pledgee or grantee for such APA Bank as a party hereto.”



          8. Amendment to Schedule I. Schedule I to the Series 2006-2 Indenture Supplement is
hereby amended and restated to read in its entirety as set forth on Exhibit G to this Third
Amendment.




          9. New Exhibit I. The Indenture Supplement is hereby amended by adding Exhibit I
thereto in the form of Exhibit H to this Third Amendment.




          10. Conditions to Effectiveness. This Third Amendment shall become effective on
December 17, 2008 (the “Third Amendment Effective Date”), if each of the following
conditions precedent shall have been satisfied on or prior to such day:





          (a) The Administrative Agent shall have received, with a copy for each Funding Agent,
this Third Amendment duly executed and delivered by duly authorized officers of the Issuer,
the Administrator and the Indenture Trustee;




          (b) The Administrative Agent shall have received, with a copy for each Funding Agent,
each of the Second Amendment to the SUBI Servicing Supplement, the First Amendment to the
Loan Agreement, the Second Amended and Restated Fleet Receivable SUBI Supplement and the
Amended and Restated Base Indenture, duly executed and delivered by duly authorized officers
of the parties thereto;












 





18

          (c) The representations and warranties of the Issuer and VMS contained in the
Transaction Documents to which each is a party shall be true and correct in all material
respects as of the Third Amendment Effective Date as if made as of the Third Amendment
Effective Date;




          (d) The Indenture Trustee and the Administrative Agent shall have received the Consent
of Purchaser Groups in the form of Exhibit E to this Third Amendment, duly executed by the
CP Conduit Purchasers, the APA Banks and the Administrative Agent;




          (e) The Indenture Trustee and the Administrative Agent shall have received the amended
and restated Fee Letter relating to the Series 2006-2 Indenture Supplement in the form of
Exhibit F to this Third Amendment, duly executed by the Issuer, the Administrator, the
Administrative Agent and each Funding Agent;




          (f) The Administrative Agent shall have received, with a counterpart addressed to each
CP Conduit Purchaser and the Funding Agent, the Program Support Provider and the APA Banks
with respect to such CP Conduit Purchaser and the Indenture Trustee, opinions of counsel to
the Issuer, Holdings, SPV, the Origination Trust, the Intermediary and the Administrator,
dated the Third Amendment Effective Date, as to due organization of the Origination Trust,
Holdings, SPV, the Administrator, the Intermediary and the Issuer, bankruptcy (“true sale”
and “non-substantive consolidation”), perfection and priority of security interests in the
Series 2006-2 Collateral, creation and perfection of the security interests in the Loan
Collateral, including the SUBI Certificates and the Sold Units and the Fleet Receivables,
the characterization of the Series 2006-2 Investor Notes as debt for U.S. federal income tax
purposes, the characterization of the Issuer not as an association or a publicly traded
partnership taxable as a corporation for U.S. federal income tax purposes and other matters,
in each case, in form and substance acceptable to the addressees thereof and their
respective counsel; and




          (g) The Administrative Agent shall have received letters signed by Moody’s and Standard
& Poor’s, confirming that the Series 2006-2 Investor Notes have been publicly rated “AA-”
and “Aa2”, respectively.



          11. Miscellaneous.




          (a) Payment of Expenses. The Issuer agrees to pay or reimburse the Indenture Trustee,
the Administrative Agent, the CP Conduit Purchasers, the APA Banks and the Funding Agents for all
of their respective out-of-pocket costs and reasonable expenses incurred in connection with this
Third Amendment, including, without limitation, the reasonable fees and disbursements of their
respective counsel and the fees and expenses charged by Moody’s and Standard & Poor’s in connection
with their ratings of the Series 2006-2 Investor Notes.




          (b) No Other Amendments; Confirmation. Except as expressly amended, modified and
supplemented hereby, the provisions of the Series 2006-2 Indenture Supplement are and shall remain
in full force and effect.













 





19



          (c) Governing Law. THIS THIRD AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.




          (d) Counterparts. This Third Amendment may be executed in two or more counterparts
(and by different parties on separate counterparts), each of which shall be an original, but all of
which together shall constitute one and the same instrument. A set of the copies of this Third
Amendment signed by all the parties shall be lodged with the Indenture Trustee. This Third
Amendment may be delivered by facsimile transmission of the relevant signature pages hereof.













 






20


          IN WITNESS WHEREOF, the Issuer, the Administrator and the Indenture Trustee have caused this
Third Amendment to be duly executed by their respective officers as of the day and year first above
written.




	 	 	 	 	 
	 	CHESAPEAKE FUNDING LLC

 	 
	 	By:  	/s/ Mark E. Johnson
 	 
	 	 	Name:  	Mark E. Johnson 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	PHH VEHICLE MANAGEMENT SERVICES, LLC

 	 
	 	By:  	/s/ Mark E. Johnson
 	 
	 	 	Name:  	Mark E. Johnson 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	THE BANK OF NEW YORK MELLON, as Indenture Trustee

 	 
	 	By:  	/s/ Jared Fischer
 	 
	 	 	Name:  	Jared Fischer 	 
	 	 	Title:  	Assistant Treasurer 	 
	 















 



21


EXHIBIT A

TO THIRD AMENDMENT

TO SERIES 2006-2

INDENTURE SUPPLEMENT




Form of Second Amendment to the SUBI Servicing Supplement










 



22




EXHIBIT B

TO THIRD AMENDMENT

TO SERIES 2006-2

INDENTURE SUPPLEMENT




Form of First Amendment to the Loan Agreement










 



23




EXHIBIT C

TO THIRD AMENDMENT

TO SERIES 2006-2

INDENTURE SUPPLEMENT




Form of Second Amended and Restated Fleet Receivable SUBI Supplement










 



24




EXHIBIT D

TO THIRD AMENDMENT

TO SERIES 2006-2

INDENTURE SUPPLEMENT




Form of Amended and Restated Base Indenture










 



25




EXHIBIT E

TO THIRD AMENDMENT

TO SERIES 2006-2

INDENTURE SUPPLEMENT




Consent of Purchaser Groups




          Reference is made to (i) that certain Amended and Restated Series 2006-2 Indenture
Supplement, dated as of December 1, 2006, as amended by the First Amendment thereto, dated
as of March 6, 2007, and the Second Amendment thereto, dated as of November 30, 2007 (as
further amended or supplemented, the “Series 2006-2 Indenture Supplement”), among
Chesapeake Funding LLC (the “Issuer”), PHH Vehicle Management Services, LLC
(“VMS”), as administrator (the “Administrator”), the several commercial
paper conduits listed on Schedule I thereto (the “CP Conduit Purchasers”), the
banks party thereto with respect to each CP Conduit Purchaser (the “APA Banks”),
the agent banks party thereto with respect to each CP Conduit Purchaser (the “Funding
Agents”), JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the
“Administrative Agent”) for the CP Conduit Purchasers, the APA Banks and the
Funding Agents, and The Bank of New York Mellon (formerly known as The Bank of New York),
as Indenture Trustee (the “Indenture Trustee”), to the Base Indenture, dated as of
March 7, 2006 between the Issuer and the Indenture Trustee, (ii) that certain Amendment No.
2 dated as of December 17, 2008 to Amended and Restated Sold SUBI Supplement 1999-1 to the
Servicing Agreement, dated as of March 7, 2006 (the “Second Amendment to the SUBI
Servicing Supplement”), among D.L. Peterson Trust (“DLPT”), Wilmington Trust
Company, as SUBI Trustee, Chesapeake Finance Holdings LLC (“Holdings”) and VMS, as
Servicer, (iii) that certain Amendment No. 1 to Loan Agreement, dated as of December 17,
2008 to the Loan Agreement, dated as of March 7, 2007 (the “First Amendment to the Loan
Agreement”), among Holdings, the Issuer and DLPT, (iv) that certain Second Amended and
Restated Fleet Receivable SUBI Supplement dated as of December 17, 2008 (the “Second
Amended and Restated Fleet Receivable SUBI Supplement”) among Holdings, as settlor and
initial beneficiary, VMS, as UTI Trustee and Servicer, and Wilmington Trust Company, as
Delaware Trustee and SUBI Trustee, (v) that certain Amended and Restated Base Indenture
(the “Amended and Restated Base Indenture”), dated as of December 17, 2008 between
the Issuer and the Indenture Trustee and (vi) that certain Third Amendment to the Series
2006-2 Indenture Supplement, dated as of December 17, 2008 (the “Third Amendment”),
among the Issuer, the Administrator and the Indenture Trustee. All capitalized terms
defined in the Series 2006-2 Indenture Supplement and used herein shall have the meanings
given to them therein.









 



26


          The undersigned hereby consent to the execution, delivery and performance of the
Second Amendment to the SUBI Servicing Supplement, the First Amendment to the Loan
Agreement, the Second Amended and Restated Fleet Receivable SUBI Supplement, the Amended
and Restated Base Indenture and the Third Amendment by the parties thereto and authorize
the Indenture Trustee to sign the Second Amendment to the SUBI Servicing Supplement and the
Second Amended and Restated Fleet Receivable SUBI Supplement.



Dated: December 17, 2008




	 	 	 	 	 
	 	PARK AVENUE RECEIVABLES COMPANY, LLC, 

as a CP Conduit
Purchaser

 	 
	 	By: JPMorgan Chase Bank, N.A., its attorney-in-fact 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	JPMORGAN CHASE BANK, N.A., as an APA Bank

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	VARIABLE FUNDING CAPITAL COMPANY LLC, 

as a CP Conduit
Purchaser

 	 
	 	By:  	WACHOVIA CAPITAL MARKETS, LLC,
As Attorney-in-Fact 	 
	 	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 









 



27

	 	 	 	 	 



	 	 	 	 	 
	 	WACHOVIA BANK, NATIONAL
ASSOCIATION, 

as an APA Bank


 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	YC SUSI TRUST, as a CP Conduit Purchaser

 	 
	 	By:  	Bank of America, National Association, as

Administrative Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	BANK OF AMERICA, NATIONAL ASSOCIATION, as an APA Bank
 	 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	LIBERTY STREET FUNDING LLC, as a CP
Conduit Purchaser
 	 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THE BANK OF NOVA SCOTIA, as an APA Bank

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 










 



28

	 	 	 	 	 



	 	 	 	 	 
	 	PARADIGM FUNDING, LLC, as a CP Conduit Purchaser

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WESTLB AG, NEW YORK BRANCH, as an APA Bank

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	 	 
	 	CHARTA, LLC, as a CP Conduit Purchaser

 	 
	 	By:  	CITICORP NORTH AMERICA, INC.,
as Attorney-in-Fact 	 
	 	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CITIBANK, N.A., as an APA Bank

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	SALISBURY RECEIVABLES COMPANY, LLC, 
as a CP Conduit
Purchaser

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 










 



29

	 	 	 	 	 



	 	 	 	 	 
	 	BARCLAYS BANK PLC, as an APA Bank

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ATLANTIC ASSET SECURITIZATION LLC, as a 
CP Conduit
Purchaser

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CALYON NEW YORK BRANCH, as an APA Bank

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WINDMILL FUNDING CORPORATION, as CP

Conduit Purchaser

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 










 



30

	 	 	 	 	 



	 	 	 	 	 
	 	THE ROYAL BANK OF SCOTLAND PLC, as an APA Bank

 	 
	 	By:  	Greenwich Capital Markets, Inc., as agent 	 
	 	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 










 



31

	 	 	 	 	 




EXHIBIT F

TO THIRD AMENDMENT

TO SERIES 2006-2

INDENTURE SUPPLEMENT




Chesapeake Funding LLC

940 Ridgebrook Road

Sparks, Maryland 21152




December 17, 2008




Amended and Restated Series 2006-2 Indenture Supplement Fee Letter




JPMorgan Chase Bank, N.A.

10 South Dearborn, IL1-0597

Chicago, Illinois 60670




Ladies and Gentlemen:





          Reference is hereby made to the Amended and Restated Series 2006-2 Indenture Supplement, dated
as of December 1, 2006, as amended by the First Amendment thereto, dated as of March 6, 2007, the
Second Amendment thereto, dated as of November 30, 2007 and the Third Amendment thereto, dated as
of the date hereof (as further amended or supplemented from time to time, the “Series 2006-2
Indenture Supplement”), among Chesapeake Funding LLC, as the issuer (the “Issuer”), PHH
Vehicle Management Services, LLC, as administrator, JPMorgan Chase Bank, N.A. (“JPMorgan
Chase”), as administrative agent (the “Administrative Agent”), the CP Conduit
Purchasers, APA Banks and Funding Agents named therein and The Bank of New York Mellon, as
successor to JPMorgan Chase, as indenture trustee (the “Indenture Trustee”), to the Amended
and Restated Base Indenture, dated as of December 17, 2008, between the Issuer and the Indenture
Trustee. Capitalized terms used but not defined herein are used with the meanings assigned to them
in the Series 2006-2 Indenture Supplement.



          This Fee Letter sets forth the definitions of Applicable Margin, Commitment Fee Rate and
Program Fee Rate used in the Series 2006-2 Indenture Supplement.



          The following terms shall have the following meanings:




     “Applicable Margin” means on any date of determination, [***]% per annum;
provided, however that, after the occurrence of an Amortization Event or a Potential
Amortization Event, the Applicable Margin shall equal [***]% per annum.




     “Commitment Fee Rate” means (a) during the period from and including the date
hereof to and including January 31, 2009, [***]% per annum and (b) thereafter, [***]% per
annum.



 





[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.









 



32




     “Program Fee Rate” means (a) during the period from and including the date
hereof to and including January 31, 2009, [***]% per annum and (b) thereafter, [***]% per
annum.



          Once paid, the fees or any part thereof payable hereunder shall not be refundable under any
circumstances. All fees payable hereunder shall be paid in immediately available funds and shall
be in addition to reimbursement of the reasonable out-of-pocket expenses of each Purchaser Group.



          It is understood and agreed that this Fee Letter shall not constitute or give rise to any
obligation to provide any financing; such an obligation will arise only to the extent provided in
the Series 2006-2 Indenture Supplement. This Fee Letter may not be amended or waived except by an
instrument in writing signed by the Issuer and each of the undersigned parties. This Fee Letter
shall be governed by, and construed and interpreted in accordance with, the laws of the State of
New York. This Fee Letter may be executed in any number of counterparts, each of which shall be an
original, and all of which, when taken together, shall constitute one agreement. Delivery of an
executed signature page of this Fee Letter by facsimile transmission shall be effective as delivery
of a manually executed counterpart hereof.



          Please confirm that the foregoing is our mutual understanding by signing and returning to us
an executed counterpart of this Fee Letter.



	 	 	 	 	 
	 	Very truly yours,




CHESAPEAKE FUNDING LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Accepted and agreed to as of
the date first written above by:

PHH VEHICLE MANAGEMENT SERVICES, LLC,

as Administrator




	 	 	 	 	 
	By:  	
 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	JPMORGAN CHASE BANK, N.A., as Administrative
Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 



 





[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.











 



33



	 	 	 	 	 
	JPMORGAN CHASE BANK, N.A., as 
Funding Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	CITICORP NORTH AMERICA, INC., as Funding Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	WACHOVIA BANK, NATIONAL

ASSOCIATION, as Funding Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	BANK OF AMERICA, NATIONAL ASSOCIATION, as

Funding Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	THE BANK OF NOVA SCOTIA, as 
Funding Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	WESTLB AG, NEW YORK BRANCH, as 
Funding Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 	 	 
	By:  	
 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 










 



34

	 	 	 	 	 



	 	 	 	 	 
	CALYON NEW YORK BRANCH, as 
Funding Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 	 	 
	By:  	
 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	BARCLAYS BANK PLC, as Funding 
Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	THE ROYAL BANK OF SCOTLAND 
PLC, as Funding
Agent

 	 	 
	By:  	Greenwich Capital Markets, Inc., as

agent 	 	 
	 	 	 
	By:  	
 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 










 



35

	 	 	 	 	 




EXHIBIT G

TO THIRD AMENDMENT

TO SERIES 2006-2

INDENTURE SUPPLEMENT




SCHEDULE I TO SERIES 2006-2

INDENTURE SUPPLEMENT




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Maximum	 	 
	CP Conduit	 	APA	 	APA Bank	 	Funding	 	Purchaser Group	 	Match
	Purchaser	 	Bank	 	Percentage	 	Agent	 	Invested Amount	 	Funding
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]	 	 






 





[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.










 



36




EXHIBIT H

TO THIRD AMENDMENT

TO SERIES 2006-2

INDENTURE SUPPLEMENT




Form of Interest Rate Cap