ex10-1.htm


    
       

      Exhibit
10.1



     

    SECOND
AMENDMENT, dated as of February 28, 2008 (this “Second Amendment”),
among Chesapeake Funding LLC (the “Issuer”), PHH Vehicle
Management Services, LLC, as administrator (the “Administrator”), and
The Bank of New York, as successor to JPMorgan Chase Bank, N.A., as Indenture
Trustee (the “Indenture Trustee”),
to the Series 2006-1 Indenture Supplement, dated as of March 7, 2006, as amended
as of March 6, 2007 (the “Series 2006-1 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 “Base
Indenture”), between the Issuer and the Indenture Trustee pursuant to
which the Series 2006-1 Investor Notes were issued to the CP Conduit
Purchasers.

     

    W I T N E
S S E T H:

     

    WHEREAS,
the Issuer has requested, and, upon this Second Amendment becoming effective,
the Issuer, the Administrator and the Indenture Trustee have agreed and the
Series 2006-1 Investor Noteholders and the Administrative Agent have consented,
that certain provisions of the Series 2006-1 Indenture Supplement be amended in
the manner provided for in this Second Amendment.

     

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

     

    1. Defined
Terms.  All capitalized terms defined in Schedule 1 to the Base
Indenture or the Series 2006-1 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 2006-1 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:

     

    “‘Enhancement Matrix’
means either the Single A Enhancement Matrix or the Triple A Enhancement
Matrix.

    


    ‘Level 1 Required Enhancement
Percentage’ means on any date the sum of (a) the product of (i) the
percentage equivalent of a fraction, the numerator of which is equal to the
amount, if any, by which the Series 2006-1 Maximum Invested Amount on such date
exceeds $1,400,000,000 and the denominator of which is equal to the Series
2006-1 Maximum Invested Amount on such date and (ii) the percentage set forth in
the Triple A Enhancement Matrix on the line titled “Level 1 Required Enhancement
Percentage” for the Applicable Option and (b) the product of (i) the percentage
equivalent of a fraction, the numerator of which is equal to the lesser of (x)
$1,400,000,000 and (y) the Series 2006-1 Maximum Invested Amount on such date
and the denominator of which is equal to the Series 2006-1 Maximum Invested
Amount on such date and (ii) the percentage set forth in the Single A
Enhancement Matrix on the line titled “Level 1 Required Enhancement Percentage”
for the Applicable Option.

     

    

      [***]
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.

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
 

    ‘Level 2 Required Enhancement
Percentage’ means on any date the sum of (a) the product of (i) the
percentage equivalent of a fraction, the numerator of which is equal to the
amount, if any, by which the Series 2006-1 Maximum Invested Amount on such date
exceeds $1,400,000,000 and the denominator of which is equal to the Series
2006-1 Maximum Invested Amount on such date and (ii) the percentage set forth in
the Triple A Enhancement Matrix on the line titled “Level 2 Required Enhancement
Percentage” for the Applicable Option and (b) the product of (i) the percentage
equivalent of a fraction, the numerator of which is equal to the lesser of (x)
$1,400,000,000 and (y) the Series 2006-1 Maximum Invested Amount on such date
and the denominator of which is equal to the Series 2006-1 Maximum Invested
Amount on such date and (ii) the percentage set forth in the Single A
Enhancement Matrix on the line titled “Level 2 Required Enhancement Percentage”
for the Applicable Option.

    


    ‘Level 3 Required Enhancement
Percentage’ means on any date the sum of (a) the product of (i) the
percentage equivalent of a fraction, the numerator of which is equal to the
amount, if any, by which the Series 2006-1 Maximum Invested Amount on such date
exceeds $1,400,000,000 and the denominator of which is equal to the Series
2006-1 Maximum Invested Amount on such date and (ii) the percentage set forth in
the Triple A Enhancement Matrix on the line titled “Level 3 Required Enhancement
Percentage” for the Applicable Option and (b) the product of (i) the percentage
equivalent of a fraction, the numerator of which is equal to the lesser of (x)
$1,400,000,000 and (y) the Series 2006-1 Maximum Invested Amount on such date
and the denominator of which is equal to the Series 2006-1 Maximum Invested
Amount on such date and (ii) the percentage set forth in the Single A
Enhancement Matrix on the line titled “Level 3 Required Enhancement Percentage”
for the Applicable Option.

    


    ‘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.

    


    ‘Required Reserve Account
Amount Percentage’ means on any date the sum of (a) the product of (i)
the percentage equivalent of a fraction, the numerator of which is equal to the
amount, if any, by which the Series 2006-1 Maximum Invested Amount on such date
exceeds $1,400,000,000 and the denominator of which is equal to the Series
2006-1 Maximum Invested Amount on such date and (ii) the percentage set forth in
the Triple A Enhancement Matrix on the line titled “Required Reserve Account
Amount Percentage” for the Applicable Option and (b) the product of (i) the
percentage equivalent of a fraction, the numerator of which is equal to the
lesser of (x) $1,400,000,000 and (y) the Series 2006-1 Maximum Invested Amount
on such date and the denominator of which is equal to the Series 2006-1 Maximum
Invested Amount on such date and (ii) the percentage set forth in the Single A
Enhancement Matrix on the line titled “Required Reserve Account Amount
Percentage” for the Applicable Option.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
 

    ‘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 2006-1 Minimum Yield
Rate’ means, for any Settlement Date, a rate per annum equal to the sum
of (i) the Series 2006-1 Note Rate for the Series 2006-1 Interest Period ending
on the day before such Settlement Date, (ii) [***]% and (iii)
[***]%.”;

     

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

    


    “‘Change in Control’
means (i) the acquisition by any Person or group (within the meaning of the
Exchange Act and the rules of the Securities and Exchange Commission thereunder
as in effect on January 1, 2006), directly or indirectly, beneficially or of
record, of ownership or control of in excess of 50% of the voting common stock
of PHH on a fully diluted basis at any time or (ii) if at any time, individuals
who on January 1, 2006 constituted the Board of Directors of PHH (together with
any new directors whose election by such Board of Directors or whose nomination
for election by the shareholders of PHH, as the case may be, was approved by a
vote of the majority of the directors then still in office who were either
directors on January 1, 2006 or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of PHH then in office.

    


    ‘Net Cash Proceeds’
means, with respect to any issuance and sale of a Series of Investor Notes, the
cash proceeds of such issuance and sale net of attorneys’ fees, accountants’
fees, underwriters’ or placement agents’ fees, discounts or commissions and
brokerage, consultant and other fees actually incurred in connection with such
issuance and sale.

    


    ‘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 February 28, 2008 not approved by the Series 2006-1
Required Investor Noteholders.

     

    

      [***]
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.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
 

    ‘Single A Enhancement
Matrix’ means the following matrix:

    


    
      	 
      	
              Option 1

            	
              Option 2

            	
              Option 3

            
	
              Level
      1 Required Enhancement Percentage

            	
              [***]%

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            
	
              Level
      2 Required Enhancement Percentage

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            
	
              Level
      3 Required Enhancement Percentage

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            
	
              Required
      Reserve Account Amount Percentage

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            	
                    
                [***]%

              

               

            


    

    ; provided,
however, that, if the
Indenture Supplement with respect to any Series of Investor Notes issued after
February 28, 2008 and rated A-, A or A+ by S&P or A1, A2 or A3 by Moody’s at
the time of issuance requires that the Credit Enhancement with respect to such
Series be a higher percentage of the Initial Invested Amount with respect to
such Series during any period when a particular Overconcentration Option is in
effect in accordance with Section 13.18 of the
Base Indenture than the percentage for such Overconcentration Option in the
matrix set forth above, the Single A Enhancement Matrix shall mean the matrix
set forth above revised to include each such higher percentage.

    


    ‘Triple A Enhancement
Matrix’ means the following matrix:

    


    
      	 
      	
              Option 1

            	
              Option 2

            	
              Option 3

            
	
              Level
      1 Required Enhancement Percentage

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            
	
              Level
      2 Required Enhancement Percentage

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            
	
              Level
      3 Required Enhancement Percentage

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            
	
              Required
      Reserve Account Amount Percentage

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            	
                    
                [***]%

              

            


    

     

    ; provided,
however, that, if the
Indenture Supplement with respect to any Series of Investor Notes issued after
February 28, 2008 and rated AAA by S&P or Aaa by Moody’s at the time of
issuance requires that the Credit Enhancement with respect to such Series be a
higher percentage of the Initial Invested Amount with respect to such Series
during any period when a particular Overconcentration Option is in effect in
accordance with Section 13.18 of the
Base Indenture than the percentage for such Overconcentration Option in the
matrix set forth above, the Triple A Enhancement Matrix shall mean the matrix
set forth above revised to include each such higher percentage.” ;

    


    and (c)
deleting therefrom the definition of “Telerate Page 3750” in its
entirety.

     

    
      [***]
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.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
 

    3. Amendment to Article
2.  Article 2 of the Series 2006-1 Indenture Supplement is
hereby amended by inserting the following new paragraph (d) to the end of
Section 2.6 thereof:

     

    “(d)  If,
subsequent to February 28, 2008, the Issuer issues a new Series of Investor
Notes on a date on which the Series 2006-1 Invested Amount is greater than
$1,400,000,000, the Administrator shall direct the Indenture Trustee to allocate
the Net Cash Proceeds thereof (or such lesser amount thereof sufficient to
reduce the Series 2006-1 Invested Amount to $1,400,000,000) to the Series 2006-1
General Collection Subaccount pursuant to Section 5A.2(b)(ii)
and then to the Series 2006-1 Principal Collection Subaccount pursuant to Section 5A.2(e) in
order to effect a Decrease with such funds in accordance with Section 5A.2(g) and
Section 2.5(a)
on the earliest possible date.  In connection with any such Decrease,
the Issuer shall reduce the Series 2006-1 Maximum Invested Amount in an amount
at least equal to the amount of such Decrease pursuant to Section
2.6(c).”

    


    4. Amendments to Article
3.  Article 3 of the Series 2006-1 Indenture Supplement is
hereby amended by (a) inserting the word “General” after the words “Series
2006-1” and before the words “Collection Subaccount” in Section 5A.2(e) thereof,
(b) deleting paragraph (x) of Section 5A.4(c) thereof in its entirety and
inserting the following new clause (x) in lieu thereof:

     

    “(x)  (A)
on any Payment Date during the Series 2006-1 Revolving Period, to the Series
2006-1 Principal Collection Subaccount, an amount equal to the greater of (I)
the Series 2006-1 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 2006-1 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 2006-1 Amortization Period to and
including the Series 2006-1 Note Termination Date, to the Series 2006-1
Principal Collection Subaccount, an amount equal to the lesser of the Series
2006-1 Principal Payment Amount for such Payment Date and the Series 2006-1
Invested Amount on such Payment Date;” ;

    


    (c)
inserting the words “Class X” before  the words “1999-1B Invested
Amount” in clause (xii) of Section 5A.4(c) thereof; (d) deleting [***]% from
Section 5A.12(b) thereof and inserting the words “the sum of [***]% and the then
current Program Fee Rate” in lieu thereof; and (e) deleting [***]% from Section
5A.12(c) thereof and inserting the words “the sum of [***]%
and the then current Program Fee Rate” in lieu thereof.

    


    5. Amendments to Article
4.  Article 4 of the Series 2006-1 Indenture Supplement is
hereby amended by (a) deleting “or” at the end of clause (u) thereof; (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 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 2006-1 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 2006-1 Investor
Noteholder, written notice specifying such default and requiring it to be
remedied;” ;

     

    
      [***]
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

        
          

        

      

      
        
        

      

    

    
 

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

    


    “(w) a
Change in Control shall occur;

    


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

    


    6. Amendments to Article
8.  Article 8 of the Series 2006-1 Indenture Supplement is
hereby amended by (a) deleting the proviso to Section 8.3(c) thereof; and (b)
deleting the proviso to Section 8.3(d) thereof.

     

    7. Amendment to Article
12.  Article 12 of the Series 2006-1 Indenture Supplement is
hereby amended by deleting Section 12.20 thereof in its entirety and inserting
the following new Section 12.20 in lieu thereof:

     

    “SECTION
12.20.                                           JPMorgan Chase Conflict
Waiver.  JPMorgan Chase acts as the Funding Agent with respect
to one or more of the CP Conduit Purchasers  (collectively, “Conduit”)
and as administrative agent for Conduit, as issuing and paying agent for
Conduit’s Commercial Paper, as provider of other backup facilities for Conduit,
and may provide other services or facilities from time to time (the “JPMorgan Chase
Roles”).  Each of the parties hereto hereby acknowledges and
consents to any and all JPMorgan Chase Roles, waives any objections it may have
to any actual or potential conflict of interest caused by JPMorgan Chase’s
acting as the Funding Agent with respect to Conduit or as the APA Bank with
respect to Conduit and acting as or maintaining any of the JPMorgan Chase Roles,
and agrees that in connection with any JPMorgan Chase Role, JPMorgan Chase may
take, or refrain from taking, any action which it in its discretion deems
appropriate.”

     

    8. Amendment to Schedule
I.  Schedule I to the Series 2006-1 Indenture Supplement is
hereby amended and restated to read in its entirety as set forth on Schedule A to this
Second Amendment.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    9. Conditions to
Effectiveness.  This Second Amendment shall become effective on
February 28, 2008 (the “Second 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 Second Amendment duly executed and delivered by the Issuer, the
Administrator and the Indenture Trustee;

     

    (b) 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 Second Amendment Effective Date as if made as of the
Second Amendment Effective Date;

     

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

     

    (d) The
Indenture Trustee and the Administrative Agent shall have received the second
amended and restated Fee Letter relating to the Series 2006-1 Indenture
Supplement in the form of Exhibit B to this Second Amendment, duly executed by
the Issuer, the Administrator, the Administrative Agent and each Funding Agent;
and

     

    (e) The
Issuer shall have paid to the Administrative Agent on behalf of each Purchaser
Group the non-refundable renewal fee contemplated by the amended and restated
Fee Letter referred to in Section 9(d) hereof and all other fees due and payable
to the Administrative Agent in connection with this Second
Amendment.

     

    10. 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 Second Amendment,
including, without limitation, the reasonable fees and disbursements of their
respective counsel.

     

    (b) No Other Amendments;
Confirmation.  Except as expressly amended, modified and
supplemented hereby, the provisions of the Series 2006-1 Indenture Supplement
are and shall remain in full force and effect.

     

    (c) Governing
Law.   THIS SECOND 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
Second 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 Second Amendment signed by all the parties shall be lodged
with the Indenture Trustee.  This Second Amendment may be delivered by
facsimile transmission of the relevant signature pages hereof.

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the Issuer, the Administrator and the Indenture Trustee have
caused this Second 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, as successor Indenture Trustee

     

    By: /s/ Jared
Fischer                                                                           

       Name:
Jared Fischer

       Title:   Assistant
Treasurer

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

    TO SECOND
AMENDMENT

    TO SERIES
2006-1

     

    INDENTURE
SUPPLEMENT

     

    Consent of Purchaser
Groups

     

    Reference
is made to (i) that certain Series 2006-1 Indenture Supplement, dated as of
March 7, 2006, as amended by the First Amendment thereto, dated as of March 6,
2007 (as further amended or supplemented, the “Series 2006-1 Indenture
Supplement”), among Chesapeake Funding LLC (the “Issuer”), PHH Vehicle
Management Services, LLC, 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, as successor to JPMorgan Chase Bank, N.A., as
Indenture Trustee (the “Indenture Trustee”),
to the Base Indenture, dated as of March 7, 2006 between the Issuer and the
Indenture Trustee pursuant to which the Series 2006-1 Investor Notes were issued
to the CP Conduit Purchasers and (ii) that certain Second Amendment to the
Series 2006-1 Indenture Supplement, dated as of February 28, 2008 (the “Second Amendment”),
among the Issuer, the Administrator and the Indenture Trustee.  All
capitalized terms defined in the Series 2006-1 Indenture Supplement and used
herein shall have the meanings given to them therein.

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    The
undersigned hereby consent to the execution, delivery and performance of the
Second Amendment by the parties thereto.

     

    Dated:  February
28, 2008

     

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

                   

                
	 
      	
                  By:  /s/ Jill T.
  Lane

                
	 
      	
                  Name:
      Jill T. Lane

                
	 
      	
                  Title:
      Executive Director

                


        

      

      
 

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      PARK
AVENUE RECEIVABLES COMPANY, LLC, as a CP Conduit Purchaser

       

      
        
          	 
      	
                  By:  JPMorgan
      Chase Bank, N.A., its attorney-in-fact

                
	 
      	 
      
	 
      	
                  By:  /s/ Jill T. Lane

                
	 
      	
                  Name:  Jill
      T. Lane

                
	 
      	
                  Title:   Executive
      Director

                
	 	 
	 
      	
                  FALCON
      ASSET SECURITIZATION COMPANY LLC, as a CP Conduit
  Purchaser

                
	 	 
	 
      	
                  By:  JPMorgan
      Chase Bank, N.A., its attorney-in-fact

                
	 
      	 
      
	 
      	
                  By:  /s/ Jill T. Lane

                
	 
      	
                  Name:  Jill
      T. Lane

                
	 
      	
                  Title:   Executive
      Director

                
	 	 
	 
      	
                  JPMORGAN
      CHASE BANK, N.A., as an APA Bank

                
	 	 
	 
      	
                  By:  /s/ Jill T. Lane

                
	 
      	
                  Name:  Jill
      T. Lane

                
	 
      	
                  Title:   Executive
      Director

                


        

      

       

       

      
 

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      
        
          	 
      	
                  CRC
      FUNDING, LLC, as a CP Conduit Purchaser

                   

                
	 
      	
                  By:  CITICORP
      NORTH AMERICA, INC.,

                
	 
      	
                  As
      Attorney-in-Fact

                   

                
	 
      	
                  By:  /s/ James H.
      Matland

                
	 
      	
                  Name:  James
      H. Matland

                
	 
      	
                  Title:   Director

                
	 
      	
                   

                  CITIBANK,
      N.A., as an APA Bank

                   

                
	 
      	
                  By:    /s/ James H.
      Matland

                
	 
      	
                  Name:  James
      H. Matland

                
	 
      	
                  Title:   Director

                


        

      

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      
        
          
            	 
      	
                    VARIABLE
      FUNDING CAPITAL COMPANY LLC, as a CP Conduit Purchaser

                     

                  
	 
      	
                    By:  WACHOVIA
      CAPITAL MARKETS, LLC,

                  
	 
      	
                    As
      Attorney-in-Fact

                  
	 
      	 
      
	 
      	 
      
	 
      	
                    By:  /s/ Douglas R. Wilson,
      Sr.

                  
	 
      	
                    Name:  Douglas
      R. Wilson, Sr.

                  
	 
      	
                    Title:   Director

                  
	 
      	
                     

                    WACHOVIA
      BANK, NATIONAL ASSOCIATION, as an APA Bank

                     

                  
	 
      	
                    By:    /s/ Kevin
    McConnoll

                  
	 
      	
                    Name:  Kevin
      McConnoll

                  
	 
      	
                    Title:   Managing
      Director

                  


          

        

      

    

     

    
      


      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      
        
          
            	 
      	
                    YC
      SUSI TRUST, as a CP Conduit Purchaser

                     

                     

                    By:  Bank
      of America, National Association, as Administrative
  Trustee

                  
	 
      	 
      
	 
      	
                    By:    /s/ Leif E.
    Rauer

                  
	 
      	
                    Name:  Leif
      E. Rauer

                  
	 
      	
                    Title:   Vice
      President

                  
	 
      	
                     

                    BANK
      OF AMERICA, NATIONAL ASSOCIATION, as an APA Bank

                     

                  
	 
      	
                    By:    /s/ Leif E.
    Rauer

                  
	 
      	
                    Name:  Leif
      E. Rauer

                  
	 
      	
                    Title:   Vice
      President

                  


          

        

      

      
 

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      
        
          
            	 
      	
                    LIBERTY
      STREET FUNDING LLC, as a CP Conduit Purchaser

                     

                  
	 
      	
                    By:  /s/ Jill A.
    Gordon

                  
	 
      	
                    Name:  Jill
      A. Gordon

                  
	 
      	
                    Title:   Vice
      President

                  
	 
      	
                     

                    THE
      BANK OF NOVA SCOTIA, as an APA Bank

                     

                  
	 
      	
                    By:    /s/ Michael
  Eden

                  
	 
      	
                    Name:  Michael
      Eden

                  
	 
      	
                    Title:   Director

                  


          

        

      

      


       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      
        
          
            	 
      	
                    PARADIGM
      FUNDING, LLC, as a CP Conduit Purchaser

                  
	 
      	
                     

                    By:    /s/ Doris J.
    Hearn

                  
	 
      	
                    Name:  Doris
      J. Hearn

                  
	 
      	
                    Title:   Vice
      President

                  
	 
      	
                     

                    WESTLB
      AG, NEW YORK BRANCH, as an APA Bank

                  
	 
      	
                     

                    By:    /s/ Michael
      Gilhuley

                  
	 
      	
                    Name:  Michael
      Gilhuley

                  
	 
      	
                    Title:   Associate
      Director

                  
	 
      	
                     

                    By:    /s/ Liyin
  Liang

                  
	 
      	
                    Name:  Liyin
      Liang

                  
	 
      	
                    Title:   Director

                  


          

           

           

          
            
              
              

            

            
              16

              
                

              

            

            
              
              

            

          

           

           

          
            	 
      	
                    ATLANTIC
      ASSET SECURITIZATION LLC, as a CP Conduit Purchaser

                     

                  
	 
      	
                     

                    By:    /s/ Richard
    McBride

                  
	 
      	
                    Name:  Richard
      McBride

                  
	 
      	
                    Title:   Director

                  
	 
      	
                     

                    By:    /s/ Kostantina
      Kourmpetis

                  
	 
      	
                    Name:  Kostantina
      Kourmpetis

                  
	 
      	
                    Title:   Managing
      Director

                  
	 
      	
                     

                    CALYON
      NEW YORK BRANCH, as an APA Bank

                     

                  
	 
      	
                    By:    /s/ Richard
    McBride

                  
	 
      	
                    Name:  Richard
      McBride

                  
	 
      	
                    Title:   Director

                     

                  
	 
      	
                    By:    /s/ Kostantina
      Kourmpetis

                  
	 
      	
                    Name:   Kostantina
      Kourmpetis

                  
	 
      	
                    Title:   Managing
      Director

                  


          

        

      

      


       

      


      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      
        
          
            	 
      	
                    THAMES
      ASSET GLOBAL SECURITIZATION 

                        NO.1
      INC., as a CP Conduit Purchaser

                     

                  
	 
      	
                    By:  /s/ R. Douglas
      Donaldson

                  
	 
      	
                    Name:
      R. Douglas Donaldson

                  
	 
      	
                    Title:  Treasurer

                  
	 
      	
                     

                    THE
      ROYAL BANK OF SCOTLAND, NEW YORK 

                        BRANCH,
      as an APA Bank

                     

                  
	 
      	
                    By:    /s/ James P.
    Wilson

                  
	 
      	
                    Name:
      James P. Wilson

                  
	 
      	
                    Title:  Senior
      Vice President

                  


          

        

      

      


      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
B

      TO SECOND
AMENDMENT

      TO SERIES
2006-1

       

      INDENTURE
SUPPLEMENT

       

      Chesapeake Funding LLC

      940
Ridgebrook Road

      Sparks,
Maryland 21152

      


      February
28, 2008

       

      Second Amended and Restated
Series 2006-1 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 Series 2006-1 Indenture Supplement, dated as of March 7,
2006, as amended by the First Amendment thereto, dated as of March 6, 2007, and
the Second Amendment thereto, dated as of the date hereof (as further amended or
supplemented from time to time, the “Series 2006-1 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, as successor to JPMorgan Chase Bank, N. A., as
indenture trustee (the “Indenture Trustee”),
to the Base Indenture, dated as of March 7, 2006, 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 2006-1 Indenture
Supplement.

       

      This Fee
Letter sets forth (i) the definitions of Applicable Margin, Commitment Fee Rate
and Program Fee Rate used in the Series 2006-1 Indenture Supplement and (ii) the
fees to be paid by the Issuer to the Administrative Agent on behalf of each
Purchaser Group on the date hereof.

       

      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.

       

      
        [***]
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.

      

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      “Commitment Fee Rate”
means [***]% per annum; provided, however,
that the Commitment Fee Rate on any day during the Fourth Period on which the
Series 2006-1 Maximum Invested Amount is greater than $2,400,000,000 shall be
[***]% per annum.

       

      “First Period” means
the period from and including February 28, 2008 to and including May 31,
2008.

       

      “Fourth Period” means
the period from and including February 1, 2009 to and including February 26,
2009.

       

      “Program Fee Rate”
means [***]% per annum; provided, however,
that (a) the Program Fee Rate on any day during (i) the Second Period on which
the Series 2006-1 Maximum Invested Amount is greater than $2,400,000,000, (ii)
the Third Period on which the Series 2006-1 Maximum Invested Amount is greater
than $1,900,000,000 but not greater than $2,400,000,000 or (iii) the Fourth
Period on which the Series 2006-1 Maximum Invested Amount is greater than
$1,400,000,000 but not greater than $1,900,000,000 shall be [***]% per annum,
(b) the Program Fee Rate on any day during (i) the Third Period on which the
Series 2006-1 Maximum Invested Amount is greater than $2,400,000,000 or (ii) the
Fourth Period on which the Series 2006-1 Maximum Invested Amount is greater than
$1,900,000,000 but not greater than $2,400,000,000 shall be [***]% per annum and
(c) the Program Fee Rate on any day during the Fourth Period on which the Series
2006-1 Maximum Invested Amount is greater than $2,400,000,000 shall be [***]%
per annum.

       

      “Second Period” means
the period from and including June 1, 2008 to and including September 30,
2008.

      


      “Third Period” means
the period from and including October 1, 2008 to and including January 31,
2009.

      


       

      On the
date hereof, the Issuer shall pay to the Administrative Agent on behalf of each
Purchaser Group an amount equal to [***]% of the Maximum Purchaser Group
Invested Amount with respect to such Purchaser Group.

       

      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 2006-1 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.

       

      
        [***]
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.

      

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      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:
      /s/ Mark E.
Johnson

                
	 
      	
                     Name:
      Mark E. Johnson

                
	 
      	
                     Title:   Vice
      President and Treasurer

                


        

      

       

      Accepted
and agreed to as of

      the date
first written above by:

       

      


       

      PHH
VEHICLE MANAGEMENT SERVICES, LLC,

        as
Administrator

       

      


      By: /s/ Mark E.
Johnson                                                      

      Name:
Mark E. Johnson

      Title:   Vice
President and Treasurer

      


      


      JPMORGAN
CHASE BANK, N.A., as 

        
Administrative Agent

       

      By:   /s/ Jill T.
Lane                                           

      Name:  Jill
T. Lane

      Title:    Executive
Director

       

      


      JPMORGAN
CHASE BANK, N.A., as 

        
Funding Agent

       

      By:   /s/ Jill T.
Lane                                           

      Name:  Jill
T. Lane

      Title:    Executive
Director

      


      


      CITICORP
NORTH AMERICA, INC., as 

        
Funding Agent

       

      By:   /s/ James H.
Matland                                                                

      Name:
James H. Matland

      Title:   Director

       

      
 

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      


      WACHOVIA
BANK, NATIONAL

        ASSOCIATION,
as Funding Agent

       

      By: /s/ Kevin
McConnoll                                                      

      Name:
Kevin McConnoll

      Title:   Managing
Director

      


      


      BANK OF
AMERICA, NATIONAL 

        
ASSOCIATION, as Funding Agent

       

      By: / s/ Leif E.
Rauer                                                      

      Name:
Leif E. Rauer

      Title:   Vice
President

      


      THE BANK
OF NOVA SCOTIA, as 

        
Funding Agent

       

      By: / s/ Michael
Eden                                                      

      Name:
Michael Eden

      Title:   Director

      


      


      WESTLB
AG, NEW YORK BRANCH, as 

        
Funding Agent

       

      By: / s/ Michael
Gilhuley                                                      

      Name:
Michael Gilhuley

      Title:   Associate
Director

      


      By: / s/ Liyin
Liang                                           

      Name:
Liyin Liang

      Title:   Director

      


      


      THE ROYAL
BANK OF SCOTLAND PLC, as 

        
Funding Agent

       

      By: / s/ David
Viney                                                      

      Name:
David Viney

      Title:   Senior
Director

       

       

      
 

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      


      CALYON
NEW YORK BRANCH, as 

        
Funding Agent

       

      By: / s/ Richard
McBride                                                      

      Name:
Richard McBride

      Title:   Director

      


      By: / s/ Kostantina
Kourrmpetis                                                                           

      Name:
Kostantina Kourmpetis

      Title:   Managing
Director

      


      



    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    


    Schedule
A

    
      	
              SCHEDULE I TO SERIES
      2006-1 INDENTURE SUPPLEMENT

            


    

    
      	
              CP Conduit Purchaser

            	
              APA Bank

            	
               

               

              APA Bank Percentage

            	
              Funding Agent

            	
              Maximum

              Purchaser Group Invested
    Amount

            	
              Match 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.