Document:

exv10w11

EXHIBIT 10.11

MASTER TERMS AND CONDITIONS FOR WARRANTS

ISSUED BY PHH CORPORATION

          The purpose of this Master Terms and Conditions for Warrants (this “Master
Confirmation”), dated as of September 23, 2009, is to set forth certain terms and conditions
for warrant transactions that PHH Corporation (“Issuer”) shall enter into with Citibank,
N.A. (“Dealer”), as initial purchaser. Each such transaction (a “Transaction”)
entered into between Dealer and Issuer that is to be subject to this Master Confirmation shall be
evidenced by a written confirmation substantially in the form of Exhibit A hereto, with such
modifications thereto as to which Issuer and Dealer mutually agree (a “Confirmation”).
This Master Confirmation and each Confirmation together constitute a “Confirmation” as referred to
in the Agreement specified below.

          This Master Confirmation and a Confirmation evidence a complete binding agreement between you
and us as to the terms of the Transaction to which this Master Confirmation and such Confirmation
relates. This Master Confirmation and each Confirmation hereunder, shall supplement, form a part
of, and be subject to an agreement in the form of the 1992 ISDA Master Agreement
(Multicurrency-Cross Border) as if we had executed an agreement in such form on the Trade Date of
the first such Transaction (but without any Schedule except for the election of (i) the laws of the
State of New York as the governing law and (ii) United States dollars as the Termination Currency)
between you and us, and such agreement shall be considered the “Agreement” hereunder.

          The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Definitions”) as published by ISDA are incorporated into this Master Confirmation. For
the purposes of the Definitions, each reference herein or in any Confirmation hereunder to a
Warrant shall be deemed to be a reference to a Call Option or an Option, as context requires.

          THIS MASTER CONFIRMATION WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE. THE PARTIES HERETO IRREVOCABLY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND
WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO,
THESE COURTS.

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

          1. In the event of any inconsistency between this Master Confirmation, on the one hand, and
the Definitions or the Agreement, on the other hand, this Master Confirmation will control for the
purpose of the Transaction to which a Confirmation relates. In the event of any inconsistency
between the Definitions, the Agreement and this Master Confirmation, on the one hand, and a
Confirmation, on the other hand, the Confirmation will govern. With respect to a Transaction,
capitalized terms used herein that are not otherwise defined shall have the meaning assigned to
them in the Confirmation relating to such Transaction.

          2. Each party will make each payment specified in this Master Confirmation or a Confirmation
as being payable by such party, not later than the due date for value on that date in the place of
the account specified below or otherwise specified in writing, in freely transferable funds and in
a manner customary for payments in the required currency.

 

 

          3. Confirmations and General Terms:

          This Master Confirmation and the Agreement, together with the Confirmation relating to a
Transaction, shall constitute the written agreement between Issuer and Dealer with respect to such
Transaction. Each Transaction to which a Confirmation relates is a Warrant Transaction, which
shall be considered a Share Option Transaction for purposes of the Definitions, and shall have the
following terms:

	 	 	 
	Components:
	 	Each Transaction will be divided into individual Components, each with the terms
set forth in this Confirmation, and, in particular, with the Number of Warrants and
Expiration Date set forth in the Confirmation for such Transaction. The payments and
deliveries to be made upon settlement of each Transaction will be determined separately
for each Component or such Transaction as if each Component were a separate Transaction
under the Agreement.

	 	 	 

	Warrant Style:
	 	European

	 	 	 

	Warrant Type:
	 	Call

	 	 	 

	Seller:
	 	Issuer

	 	 	 

	Buyer:
	 	Dealer

	 	 	 

	Shares:
	 	The common stock, USD 0.01 par value per share, of Issuer (Ticker Symbol: “PHH”).

	 	 	 

	Trade Date:
	 	As set forth in the Confirmation for such Transaction

	 	 	 

	Effective Date:
	 	As set forth in the Confirmation for such Transaction

	 	 	 

	Number of Warrants:
	 	For each Component, as set forth in the Confirmation for such
Transaction.

	 	 	 

	Multiple Exercise:
	 	Not Applicable

	 	 	 

	Warrant Entitlement:
	 	One Share Per Warrant

	 	 	 

	Minimum Number of Warrants:
	 	0

	 	 	 

	Maximum Number of Warrants:
	 	For any Transaction, the Number of Warrants for such
Transaction.

	 	 	 

	Strike Price:
	 	As set forth in the Confirmation for such Transaction

	 	 	 

	Premium:
	 	As set forth in the Confirmation for such Transaction

	 	 	 

	Premium Payment Date:
	 	As set forth in the Confirmation for such Transaction

	 	 	 

	Exchange:
	 	New York Stock Exchange

	 	 	 

	Related Exchanges:
	 	All Exchanges

	 	 	 

	Calculation Agent:
	 	Buyer.

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          4. Procedure for Exercise and Valuation:

	 	 	 
	In respect of any Component:
	 	 

	 	 	 

	Expiration Time:
	 	The Valuation Time

	 	 	 

	Expiration Dates:
	 	As set forth in the Confirmation for such Transaction (or, if such date is
not a Scheduled Trading Day, the next following Scheduled Trading Day that is not
already an Expiration Date for another Component); provided that if that date
is a Disrupted Day, the Expiration Date for such Component shall be the first
succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not
deemed to be an Expiration Date in respect of any other Component of a Transaction
hereunder; and provided, further, that if the Expiration Date has not
occurred pursuant to the preceding proviso as of the Final Disruption Date, the Final
Disruption Date shall be the Expiration Date (irrespective of whether such date is an
Expiration Date in respect of any other Component for a Transaction).
Notwithstanding the foregoing and anything to the contrary in the Definitions, if a
Market Disruption Event occurs on any Expiration Date, the Calculation Agent may
determine that such Expiration Date is a Disrupted Day only in part, in which case the
Calculation Agent shall make adjustments to the number of Warrants for the relevant
Component for which such day shall be the Expiration Date and shall designate the
Scheduled Trading Day determined in the manner described in the immediately preceding
sentence as the Expiration Date for the remaining Warrants for such Component. Section
6.6 of the Definitions shall not apply to any Valuation Date occurring on an Expiration
Date.

	 	 	 

	Automatic Exercise:
	 	Applicable. The Warrants for any Component shall be deemed
automatically exercised at the Expiration Time on the Expiration Date for such
Component if at such time the Warrants are In-the-Money; provided that all
references in Section 3.4(b) of the Definitions to “Physical Settlement” shall be read
as references to “Net Share Settlement.” “In-the-Money” means, for any
Transaction, that the Reference Price is greater than the Strike Price for such
Transaction.

	 	 	 

	Reference Price:
	 	For any Valuation Date, the per Share volume-weighted average price on the
Exchange as displayed under the heading “Bloomberg VWAP” on Bloomberg page PHH.N
<equity> AQR (or any successor thereto) in respect of the period from the
scheduled opening time to the Scheduled Closing Time (New York City time) on such
Valuation Date (or if such volume-weighted average price is unavailable, the market
value of one Share on such Valuation Date, as determined by the Calculation Agent).
Notwithstanding anything to the contrary in the Definitions, if there is a Market
Disruption

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	 	 	Event on any Valuation Date, then the Calculation
Agent shall determine the Reference Price for such
Valuation Date on the basis of its good faith
estimate of the market value for the relevant Shares
on such Valuation Date.

	 	 	 

	Valuation Time:
	 	As defined in Section 6.1 of the Definitions

	 	 	 

	Valuation Date:
	 	Each Exercise Date

	 	 	 

	Final Disruption Date:
	 	For any Transaction, the eighth Scheduled Trading Day
immediately following the scheduled Expiration Date for the last Component of such
Transaction.

	 	 	 

	Market Disruption Event:
	 	The third and fourth lines of Section 6.3(a) of the Definitions are
hereby amended by deleting the words “during the one hour period that ends at the
relevant Valuation Time” and replacing them with “at any time prior to the relevant
Valuation Time”.

          5. Settlement Terms:

	 	 	 
	In respect of any Component:
	 	 

	 	 	 

	Net Share Settlement:
	 	On each Settlement Date, Issuer shall deliver to Buyer a
number of Shares equal to the Net Share Amount for such Settlement Date to the account
specified by Buyer and cash in lieu of any fractional shares valued at the Reference
Price for the Valuation Date corresponding to such Settlement Date. If Buyer
reasonably determines that, for any reason, the Shares deliverable upon Net Share
Settlement would not be immediately freely transferable by Buyer under Rule 144 under
the Securities Act of 1933, as amended (the “Securities Act”), then Buyer may
elect to either (x) accept delivery of such Shares notwithstanding any restriction on
transfer or (y) have the provisions set forth in Section 12(c) below apply.

	 	 	 

	Net Share Amount:
	 	For any Settlement Date, a number of Shares, as calculated by the
Calculation Agent, equal to the product of (i) the number of Warrants being exercised
or deemed exercised on the Exercise Date corresponding to such Settlement Date,
and (ii) the excess, if any, of the Reference Price for the Valuation Date
corresponding to such Settlement Date over the Strike Price for the relevant
Transaction (such product, the “Net Share Settlement Amount”), divided
by such Reference Price.

	 
	Settlement Currency:
	 	USD

	 	 	 

	Failure to Deliver:
	 	Applicable

	 	 	 

	Representation and Agreement:
	 	To the extent Seller is obligated to deliver Shares hereunder,
the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 and 9.12 of the Definitions will be
applicable as if Physical Settlement were applicable to the Transaction;
provided that the Representation

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	 	 	and Agreement contained in Section 9.11 of the
Definitions shall be modified by excluding any
representations therein relating to restrictions,
obligations, limitations or requirements under
applicable securities laws arising as a result of the
fact that Seller is the Issuer of the Shares.

	 	 	 

	Maximum Delivery Amount:
	 	As set forth in the Confirmation for such Transaction

	 	 	 

	Transaction Multiplier:
	 	As set forth in the Confirmation for such Transaction

          6. Dividends:

	 	 	 
	In respect of any Component:
	 	 

	 	 	 

	Dividend Adjustments:
	 	Issuer agrees to notify Buyer promptly of the announcement of an
ex-dividend date of any cash dividend by the Issuer. If an ex-dividend date with
respect to a cash dividend occurs at any time from but excluding the Trade Date for the
Transaction that includes such Component to and including the Expiration Date for such
Component, then in addition to any adjustments as provided under “Share Adjustments”
below, the Calculation Agent shall make such adjustments to the Strike Price, Number of
Warrants and/or Number of Warrants per Component for such Transaction as it deems
appropriate to preserve for the parties the intended economic benefits of such
Transaction.

	 	 	 

	 	 	The Calculation Agent shall provide prompt notice of
any such adjustments, including a schedule or other
reasonably detailed explanation of the basis for and
determination of each adjustment.

          7. Share Adjustments:

	 	 	 
	Method of Adjustment:
	 	Calculation Agent Adjustment.

	 	 	 

	New Shares:
	 	In the definition of New Shares in Section 12.1(i) of the Definitions,
the text in clause (i) thereof shall be deleted in its entirety and replaced with
“issued by an entity or person organized under the laws of the United States, any State
thereof or the District of Columbia and publicly quoted, traded or listed on any of the
New York Stock Exchange, the American Stock Exchange, The NASDAQ Global Select Market
or the NASDAQ Global Market (or their respective successors)”.

          8. Extraordinary Events:

	 	 	 
	Consequences of Merger Events:
	 	 

	 	 	 

	    (a) Share-for-Share:
	 	Modified Calculation Agent Adjustment

	 	 	 

	    (b) Share-for Other:
	 	Cancellation and Payment (Calculation Agent Determination)

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	    (c) Share-for-Combined:
	 	Cancellation and Payment (Calculation Agent
Determination); provided that Dealer may elect, in its commercially
reasonable judgment, Component Adjustment (Calculation Agent Determination)

	 	 	 

	Tender Offer:
	 	Applicable

	 	 	 

	Consequences of Tender Offers:
	 	 

	 	 	 

	    (a) Share-for-Share:
	 	Modified Calculation Agent Adjustment

	 	 	 

	    (b) Share-for-Other:
	 	Modified Calculation Agent Adjustment

	 	 	 

	    (c) Share-for-Combined:
	 	Modified Calculation Agent Adjustment; provided,
however, that if an event occurs that constitutes both a Tender Offer under
Section 12.1(d) of the Definitions and an Additional Termination Event under Section
12(f) of this Master Confirmation, Dealer may elect, in its commercially reasonable
judgment, whether the provisions of Section 12.3 of the Definitions or Section 12(f)
of this Master Confirmation will apply

	 	 	 

	Composition of Combined Consideration:
	 	Not Applicable

	 	 	 

	Nationalization, Insolvency or Delisting:
	 	Cancellation and Payment (Calculation Agent
Determination).

	 
	 	 	In addition to the provisions of Section 12.6(a)(iii)
of the Definitions, it will also constitute a
Delisting if the Exchange is located in the United
States and the Shares are not immediately re-listed
or re-traded on any of the New York Stock Exchange,
the American Stock Exchange, The NASDAQ Global Select
Market or The NASDAQ Global Market (or their
respective successors); if the Shares are immediately
re-listed or re-traded on any such exchange, such
exchange shall thereafter be deemed to be the
Exchange and the Calculation Agent shall make any
adjustments it deems necessary to the terms of the
Transaction, as if Modified Calculation Agent
Adjustment were applicable to such event.

	 	 	 

	Determining Party:
	 	Buyer

	 

          9. Additional Disruption Events:

	 	 	 
	Change in Law:
	 	Applicable; provided that Section 12.9(a)(ii) of the Definitions is
hereby amended by (i) replacing the phrase “the interpretation” in the third line
thereof with the phrase “or public announcement of the formal or informal
interpretation” and (ii) immediately following the word “Transaction” in clause (X)
thereof, adding the phrase “in the manner contemplated by the Hedging Party on the
Trade Date”.

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	Failure to Deliver:
	 	Applicable

	 	 	 

	Insolvency Filing:
	 	Applicable, except if Issuer is a debtor (or similar participant) with
respect to such Insolvency Filing.

	 	 	 

	Hedging Disruption:
	 	Applicable; provided that Section 12.9(a)(v) of the Definitions
is hereby modified by inserting the following two phrases at the end of such Section;

	 
	 	 	“For the avoidance of doubt, the term “equity price
risk” shall be deemed to include, but shall not be
limited to, stock price and volatility risk. And,
for the further avoidance of doubt, any such
transactions or assets referred to in phrases (A) or
(B) above must be available on commercially
reasonable pricing terms (considered in the aggregate
across all such transactions).”

	 	 	 

	Increased Cost of Hedging:
	 	Applicable

	 	 	 

	Loss of Stock Borrow:
	 	Applicable

	 	 	 

	Maximum Stock Loan Rate:
	 	2.00%

	 	 	 

	Increased Cost of Stock Borrow:
	 	 Applicable

	 	 	 

	Initial Stock Loan Rate:
	 	0.25%

	 	 	 

	Hedging Party:
	 	For all applicable Additional Disruption Events, Buyer

	 	 	 

	Determining Party:
	 	For all applicable Additional Disruption Events, Buyer

          10. Acknowledgements:

	 	 	 
	Non-Reliance:
	 	Applicable

	 	 	 

	Agreements and Acknowledgments

Regarding Hedging Activities:
	 	Applicable

	 	 	 

	Additional Acknowledgments:
	 	Applicable

          11. Representations, Warranties and Agreements:

          (a) In connection with this Master Confirmation, each Confirmation, each Transaction to which
a Confirmation relates and any other documentation relating to the Agreement, each party to this
Master Confirmation represents and warrants to, and agrees with, the other party that:

          (i) it is an “accredited investor” as defined in Section 2(a)(15)(ii) of the Securities
Act; and

          (ii) it is an “eligible contract participant” as defined in Section 1a(12) of the
Commodity Exchange Act, as amended (the “CEA”), and this Master Confirmation and
each Transaction hereunder are

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subject to individual negotiation by the parties and have not been executed or traded
on a “trading facility” as defined in Section 1a(33) of the CEA.

          (b) Issuer hereby repeats the representations and warranties of Issuer set forth in Section 1
of the Purchase Agreement (the “Purchase Agreement”) dated as of September 23, 2009
between, among others, Issuer and J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and
Wells Fargo Securities, LLC, as representatives of the Initial Purchasers (as defined in the
Purchase Agreement), on the Trade Date and the Effective Date for each Transaction, and, in
addition, represents and warrants to, and agrees with, Buyer on the Trade Date and the Effective
Date of each Transaction that:

     (i) IT UNDERSTANDS THAT SUCH TRANSACTION IS SUBJECT TO COMPLEX RISKS THAT MAY ARISE
WITHOUT WARNING AND MAY AT TIMES BE VOLATILE AND THAT LOSSES MAY OCCUR QUICKLY AND IN
UNANTICIPATED MAGNITUDE AND IS WILLING TO ACCEPT SUCH TERMS AND CONDITIONS AND ASSUME
(FINANCIALLY AND OTHERWISE) SUCH RISKS;

     (ii) it is not on the date hereof in possession of material, non-public information
with respect to Issuer or the Shares;

     (iii) it is not entering into any Transaction to create, and will not engage in any
other securities or derivatives transactions to create, actual or apparent trading activity
in the Shares (or any security convertible into or exchangeable for Shares) or to raise or
depress or to manipulate the price of the Shares (or any security convertible into or
exchangeable for Shares);

     (iv) for any Transaction hereunder, it shall maintain a number of authorized but
unissued Shares that are free from preemptive rights that at all times exceeds the sum of
(x) the Maximum Delivery Amount for each Transaction, plus (y) the aggregate number
of Shares expressly reserved for any other use (including, without limitation, Shares
reserved for issuance upon the exercise of options or convertible debt), whether expressed
as caps or as numbers of Shares reserved or otherwise;

     (v) the Shares issuable upon exercise of all Warrants (the “Warrant Shares”)
have been duly authorized and, when delivered pursuant to the terms of such Transaction,
shall be validly issued, fully-paid and non-assessable, and such issuance of the Warrant
Shares shall not be subject to any preemptive or similar rights;

     (vi) Issuer is not, and after giving effect to the transactions contemplated hereby
will not be, an “investment company” as such term is defined in the Investment Company Act
of 1940, as amended;

     (vii) without limiting the generality of Section 13.1 of the Definitions, Issuer
acknowledges that Dealer is not making any representations or warranties with respect to the
treatment of the Transaction under FASB Statements 128, 133, as amended, 149 or 150, EITF
Issue No. 00-19, Issue No. 01-6 or Issue No. 03-6 (or any successor issue statements) or
under FASB’s Liabilities & Equity Project; and

     (viii) it is not on the date hereof engaged in a distribution, as such term is used in
Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), of any securities of Issuer, other than a distribution meeting the requirements
of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Issuer shall
not, until the sixth Scheduled Trading Day immediately following the Trade Date, engage in
any such distribution.

          (c) Issuer shall deliver to Dealer an opinion of counsel, dated as of the Effective Date for
each Transaction hereunder and reasonably acceptable to Dealer in form and substance, with respect
to the matters set forth in Section 3(a) of the Agreement and Sections 11(b)(v) and (vi) hereof
with respect to such Transaction.

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          12. Miscellaneous:

          (a) Early Termination. The parties agree that Second Method and Loss will apply to
each Transaction under this Master Confirmation as such terms are defined under the Agreement.

          (b) Alternative Calculations and Issuer Payment on Early Termination and on Certain
Extraordinary Events. If, subject to Section 12(f) below, Issuer owes Buyer any amount in
connection with a Transaction hereunder pursuant to Section 12.7 or 12.9 of the Definitions (except
in the case of an Extraordinary Event in which the consideration or proceeds to be paid to holders
of Shares as a result of such event consists solely of cash) or pursuant to Section 6(d)(ii) of the
Agreement (except in the case of an Event of Default in which Issuer is the Defaulting Party or a
Termination Event in which Issuer is the Affected Party, other than an (x) Event of Default of the
type described in Section 5(a)(iii), (v), (vi) or (vii) of the Agreement or (y) a Termination Event
of the type described in Section 5(b) of the Agreement that in the case of either (x) or (y)
resulted from an event or events outside Issuer’s control) (an “Issuer Payment
Obligation”), Issuer shall have the right, in its sole discretion, to satisfy any such Issuer
Payment Obligation by delivery of Termination Delivery Units (as defined below) by giving
irrevocable telephonic notice to Buyer, confirmed in writing within one Scheduled Trading Day,
between the hours of 9:00 a.m. and 4:00 p.m. New York time on the Merger Date, the Announcement
Date (in the case of Nationalization, Insolvency or Delisting), Early Termination Date or date of
cancellation, as applicable (“Notice of Issuer Termination Delivery”); provided
that (i) if Issuer does not validly elect to satisfy its Issuer Payment Obligation in Termination
Delivery Units, Buyer shall have the right to require Issuer to satisfy its Issuer Payment
Obligation in Termination Delivery Units, notwithstanding Issuer’s election to the contrary and
(ii) Issuer shall not have the right, notwithstanding any notice to the contrary, to satisfy its
Issuer Payment Obligation by Termination Delivery Units unless on the date of any such notice,
Issuer represents to Buyer that, as of such date, it is not in possession of any material
non-public information with respect to itself or the Shares. Within a commercially reasonable
period of time following receipt of a Notice of Issuer Termination Delivery, Issuer shall deliver
to Buyer a number of Termination Delivery Units having a cash value equal to the amount of such
Issuer Payment Obligation (such number of Termination Delivery Units to be delivered to be
determined by the Calculation Agent as the number of whole Termination Delivery Units that could be
sold over a commercially reasonable period of time to generate proceeds equal to the cash
equivalent of such payment obligation, and the date of such delivery, the “Termination Payment
Date”). In addition, if, in the reasonable opinion of counsel to Issuer or Buyer, for any
reason, the Termination Delivery Units deliverable pursuant to this paragraph (b) would not be
immediately freely transferable by Buyer under Rule 144 under the Securities Act, then Buyer may
elect either to (x) accept delivery of such Termination Delivery Units notwithstanding any
restriction on transfer or (y) have the provisions set forth in paragraph (c) below apply. If the
provisions set forth in this paragraph are applicable, the provisions of Sections 9.8, 9.9, 9.10,
9.11 (modified as described above) and 9.12 of the Definitions shall be applicable, except that all
references to “Shares” shall be read as references to “Termination Delivery Units.”

“Termination Delivery Unit” means (i) in the case of a Termination Event, an Event
of Default or an Extraordinary Event (other than an Insolvency, Nationalization, Merger
Event or Tender Offer), one Share or (ii) in the case of an Insolvency, Nationalization,
Merger Event or Tender Offer, a unit consisting of the number or amount of each type of
property received by a holder of one Share (without consideration of any requirement to pay
cash or other consideration in lieu of fractional amounts of any securities) in such
Insolvency, Nationalization, Merger Event or Tender Offer. If a Termination Delivery Unit
consists of property other than cash or New Shares and Issuer provides irrevocable written
notice to the Calculation Agent on or prior to the Closing Date or the date of such
Termination Event, Event of Default or an Additional Disruption Event, as the case may be,
that it elects to deliver cash, New Shares or a combination thereof (in such proportion as
Issuer designates) in lieu of such other property, the Calculation Agent will replace such
property with cash, New Shares or a combination thereof as components of a Termination
Delivery Unit in such amounts, as determined by the Calculation Agent in its discretion by
commercially reasonable means, as shall have a value equal to the value of the property so
replaced. If such Insolvency, Nationalization, Merger Event or Tender Offer involves a
choice of consideration to be received by holders, such holder shall be deemed to have
elected to receive the maximum possible amount of cash.

9

 

          (c) Registration/Private Placement Procedures. (i) With respect to each Transaction,
the following provisions shall apply to the extent provided for above opposite the caption “Net
Share Settlement” in Section 5, if Buyer reasonably determines that, for any reason, the Shares
deliverable upon Net Share Settlement would not be immediately freely transferable by Buyer under
Rule 144 under the Securities Act, or in paragraph (b) of this Section 12. If so applicable, then,
at the election of Issuer by notice to Buyer within one Exchange Business Day after the relevant
delivery obligation arises, but in any event at least one Exchange Business Day prior to the date
on which such delivery obligation is due (if Issuer does not make an election by such date, Issuer
shall be deemed to have made the election described in clause (B) below), either (A) all Shares or
Termination Delivery Units, as the case may be, delivered by Issuer to Buyer shall be, at the time
of such delivery, covered by an effective registration statement of Issuer for immediate resale by
Buyer (such registration statement and the corresponding prospectus (the “Prospectus”)
(including, without limitation, any sections describing the plan of distribution) in form and
content commercially reasonably satisfactory to Buyer) or (B) Issuer shall deliver additional
Shares or Termination Delivery Units, as the case may be, so that the value of such Shares or
Termination Delivery Units, as determined by the Calculation Agent to reflect an appropriate
liquidity discount, equals the value of the number of Shares or Termination Delivery Units that
would otherwise be deliverable if such Shares or Termination Delivery Units were freely tradeable
(without prospectus delivery) upon receipt by Buyer (such value, the “Freely Tradeable
Value”); provided that Issuer may not make the election described in this clause (B)
if, on the date of its election, it has taken, or caused to be taken, any action that would make
unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by
Issuer to Buyer (or any affiliate designated by Buyer) of the Shares or the exemption pursuant to
Section 4(1) or Section 4(3) of the Securities Act for resales of the Shares by Buyer (or any such
affiliate of Buyer). (For the avoidance of doubt, as used in this paragraph (b) only, the term
“Issuer” shall mean the issuer of the relevant securities, as the context shall require.)

     (ii) If Issuer makes the election described in clause (c)(i)(A) above:

     (A) Buyer (or an Affiliate of Buyer designated by Buyer) shall be afforded a reasonable
opportunity to conduct a due diligence investigation with respect to Issuer that is
customary in scope for underwritten offerings of equity securities and that yields results
that are commercially reasonably satisfactory to Buyer or such Affiliate, as the case may
be, in its discretion; and

     (B) Buyer (or an Affiliate of Buyer designated by Buyer) and Issuer shall enter into an
agreement (a “Registration Agreement”) on commercially reasonable terms in
connection with the public resale of such Shares or Termination Delivery Units, as the case
may be, by Buyer or such Affiliate substantially similar to underwriting agreements
customary for underwritten offerings of equity securities, in form and substance
commercially reasonably satisfactory to Buyer or such Affiliate and Issuer, which
Registration Agreement shall include, without limitation, provisions substantially similar
to those contained in such underwriting agreements relating to the indemnification of, and
contribution in connection with the liability of, Buyer and its Affiliates and Issuer, shall
provide for the payment by Issuer of all expenses in connection with such resale, including
all registration costs and all fees and expenses of counsel for Buyer, and shall provide for
the delivery of accountants’ “comfort letters” to Buyer or such Affiliate with respect to
the financial statements and certain financial information contained in or incorporated by
reference into the Prospectus.

     (iii) If Issuer makes the election described in clause (c)(i)(B) above:

     (A) Buyer (or an Affiliate of Buyer designated by Buyer) and any potential
institutional purchaser of any such Shares or Termination Delivery Units, as the case may
be, from Buyer or such Affiliate identified by Buyer shall be afforded a commercially
reasonable opportunity to conduct a due diligence investigation in compliance with
applicable law with respect to Issuer customary in scope for private placements of equity
securities (including, without limitation, the right to have made available to them for
inspection all financial and other records, pertinent corporate documents and other
information reasonably requested by them), subject to execution by such recipients of
customary confidentiality agreements reasonably acceptable to Issuer;

     (B) Buyer (or an Affiliate of Buyer designated by Buyer) and Issuer shall enter into an
agreement (a “Private Placement Agreement”) on commercially reasonable terms in
connection with the

10

 

private placement of such Shares or Termination Delivery Units, as the case may be, by
Issuer to Buyer or such Affiliate and the private resale of such shares by Buyer or such
Affiliate, substantially similar to private placement purchase agreements customary for
private placements of equity securities, in form and substance commercially reasonably
satisfactory to Buyer and Issuer, which Private Placement Agreement shall include, without
limitation, provisions substantially similar to those contained in such private placement
purchase agreements relating to the indemnification of, and contribution in connection with
the liability of, Buyer and its Affiliates and Issuer, shall provide for the payment by
Issuer of all expenses in connection with such resale, including all fees and expenses of
counsel for Buyer, shall contain representations, warranties and agreements of Issuer
reasonably necessary or advisable to establish and maintain the availability of an exemption
from the registration requirements of the Securities Act for such resales, and shall use
best efforts to provide for the delivery of accountants’ “comfort letters” to Buyer or such
Affiliate with respect to the financial statements and certain financial information
contained in or incorporated by reference into the offering memorandum prepared for the
resale of such Shares; and

     (C) Issuer agrees that any Shares or Termination Delivery Units so delivered to Buyer,
(i) may be transferred by and among Buyer and its affiliates, and Issuer shall effect such
transfer without any further action by Buyer and (ii) after the minimum “holding period”
within the meaning of Rule 144(d) under the Securities Act has elapsed with respect to such
Shares or any securities issued by Issuer comprising such Termination Delivery Units, Issuer
shall promptly remove, or cause the transfer agent for such Shares or securities to remove,
any legends referring to any such restrictions or requirements from such Shares or
securities upon delivery by Buyer (or such affiliate of Buyer) to Issuer or such transfer
agent of seller’s and broker’s representation letters customarily delivered by Buyer in
connection with resales of restricted securities pursuant to Rule 144 under the Securities
Act, without any further requirement for the delivery of any certificate, consent,
agreement, opinion of counsel, notice or any other document, any transfer tax stamps or
payment of any other amount or any other action by Buyer (or such affiliate of Buyer).

          (d) Make-whole Shares. If (x) Issuer elects to deliver Termination Delivery Units
pursuant to “Alternative Calculations and Issuer Payment on Early Termination and on Certain
Extraordinary Events” above or (y) Issuer makes the election described in clause (i)(B) of
paragraph (c) of this Section 12, then in either case Buyer or its affiliate may sell (which sale
shall be made in a commercially reasonable manner) such Shares or Termination Delivery Units, as
the case may be, during a period (the “Resale Period”) commencing on the Exchange Business
Day following delivery of such Shares or Termination Delivery Units, as the case may be, and ending
on the Exchange Business Day on which Buyer completes the sale of all such Shares or Termination
Delivery Units, as the case may be, or a sufficient number of Shares or Termination Delivery Units,
as the case may be, so that the realized net proceeds of such sales exceed the amount of the Issuer
Payment Obligation (in the case of clause (x), or in the case that both clause (x) and clause (y)
apply) or the Freely Tradeable Value (in the case that only clause (y) applies) (such amount of the
Issuer Payment Obligation or Freely Tradeable Value, as the case may be, the “Required
Proceeds”). If any of such delivered Shares or Termination Delivery Units remain after such
realized net proceeds exceed the Required Proceeds, Buyer shall return such remaining Shares or
Termination Delivery Units to Issuer. If the Required Proceeds exceed the realized net proceeds
from such resale, Issuer shall transfer to Buyer by the open of the regular trading session on the
Exchange on the Exchange Business Day immediately following the last day of the Resale Period the
amount of such excess (the “Additional Amount”) in cash or in a number of additional Shares
or Termination Delivery Units (“Make-whole Shares”) in an amount that, based on the
Relevant Price on the last day of the Resale Period (as if such day was the “Valuation Date” for
purposes of computing such Relevant Price), has a dollar value equal to the Additional Amount. The
Resale Period shall continue to enable the sale of the Make-whole Shares in the manner contemplated
by this Section 12(d). This provision shall be applied successively until the Additional Amount is
equal to zero, subject to Section 12(e).

          (e) Limitations on Settlement by Issuer. (i) Notwithstanding anything herein or in
the Agreement to the contrary, in no event shall Issuer be required to deliver Shares in connection
with any Transaction in excess of the Maximum Delivery Amount for such Transaction. Issuer
represents and warrants (which shall be deemed to be repeated on each day that the Transaction is
outstanding) that the Maximum Delivery Amount for all

11

 

Transactions hereunder is equal to or less than the number of authorized but unissued Shares
of the Issuer that are not reserved for future issuance in connection with transactions in the
Shares (other than all Transactions hereunder).

          (ii) If at any shareholder meeting (a “Relevant Shareholder Meeting”) Issuer seeks a
shareholder vote authorizing any transaction involving the issuance by it of Shares or securities
convertible into or exercisable for Shares (other than pursuant to the Transactions), Issuer shall,
in good faith, use its commercially reasonable best efforts to obtain at such Relevant Shareholder
Meeting a shareholder vote authorizing the Transactions (including without limitation, clause (iv)
below) in accordance with the rules and regulations of the New York Stock Exchange (which efforts
shall include, without limitation, a recommendation by Issuer’s management to shareholders that the
Transactions be authorized). If a Relevant Shareholder Meeting occurs and Issuer complies in good
faith with the provisions of this clause (ii) and, notwithstanding such compliance, shareholder
authorization of the Transactions is not obtained, Issuer shall have no obligation to (A) obtain
shareholder authorization of the Transactions under clause (iii) below, or (B) deliver any Shares
(or any cash or other property in lieu thereof) in excess of the Maximum Delivery Amount in respect
of any Transaction.

          (iii) If the Reference Price for three or more Exchange Business Days (determined as if each
such Exchange Business Day were a Valuation Date) in any period of five consecutive Exchange
Business Days exceeds two times the Strike Price on each such Exchange Business Day (such third
Exchange Business Day, the “Trigger Date”) and, as of the Trigger Date, Issuer has not
obtained or attempted to obtain shareholder authorization of the Transactions pursuant to clause
(ii) above or otherwise, Issuer shall, in good faith, use its commercially reasonable best efforts
to obtain at the next regularly scheduled shareholder meeting a shareholder vote authorizing the
Transactions (including, without limitation, clause (iv) below) in accordance with the rules and
regulations of the New York Stock Exchange (which efforts shall include, without limitation, a
recommendation by Issuer’s management to shareholders that the Transactions be authorized). For
the avoidance of doubt, to the extent that Issuer complies in good faith with the provisions of
this clause (iii) and, notwithstanding such compliance, shareholder authorization of the
Transactions is not obtained, Issuer shall have no obligation to deliver any Shares (or any cash or
other property in lieu thereof) in excess of the Maximum Delivery Amount in respect of any
Transaction.

          (iv) Upon obtaining shareholder approval pursuant to clause (ii) or (iii) above and without
any further action by either party, the Transaction Multiplier for each Transaction shall be deemed
to be equal to 2.0.

          (f) Certain Corporate Transactions. Upon the consummation of any of the following
events, each a “Fundamental Change”, Buyer shall have the right to designate each such
event an Additional Termination Event and designate an Early Termination Date pursuant to Section
6(b) of the Agreement with respect to which the Transaction is the sole Affected Transaction and
Issuer is the sole Affected Party:

          (1) any Person (as defined below) acquires beneficial ownership, directly or indirectly,
through a purchase, merger or other acquisition transaction or series of transactions, of shares of
Issuer’s Capital Stock (as defined below) entitling the Person to exercise 50% or more of the total
voting power of all shares of Issuer’s Capital Stock entitled to vote generally in elections of
directors, other than an acquisition by Issuer or any of Issuer’s Subsidiaries (as defined below)
provided that a Fundamental Change shall not occur as a result of this clause (1) if, in such
purchase, merger, acquisition or other transaction, all or substantially all of the Common Stock
(as defined below) is exchanged for or converted into cash, securities or other property, in which
case clause (2) below shall apply (in addition to, if applicable, clauses (3), (4) or (5) below);
or

          (2) Issuer (i) merges or consolidates with or into any other Person, another Person merges
with or into Issuer, or Issuer conveys, sells, transfers or leases all or substantially all of
Issuer’s assets to another Person (excluding a pledge of securities issued by any of Issuer’s
Subsidiaries, but not excluding any transfer or other disposition resulting from the foreclosure or
other exercise of creditors’ remedies pursuant to such pledge) or (ii) engages in any
recapitalization, reclassification or other acquisition transaction or series of transactions in
which all or substantially all of the Common Stock is exchanged for or converted into cash,
securities or other property, in each case other than a merger or consolidation:

12

 

          (a) pursuant to which the holders of the Common Stock immediately prior to the transaction
have the entitlement to exercise, directly or indirectly, 50% or more of the voting power of all
shares of Capital Stock entitled to vote generally in the election of directors of either (x) the
continuing or surviving corporation immediately after the transaction or (y) the corporation that
directly or indirectly owns 100% of the Capital Stock of such continuing or surviving corporation;
or

          (b) that does not result in a reclassification, conversion, exchange or cancellation of the
outstanding shares of Common Stock; or

          (c) which is effected solely to change Issuer’s jurisdiction of incorporation and results in a
reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares
of common stock of the surviving entity; or

          (3) at any time Issuer’s Continuing Directors (as defined below) do not constitute a majority
of the Board of Directors (as defined below) of Issuer (or, if applicable, a successor Person to
Issuer); or

          (4) Issuer is liquidated or dissolved or holders of the Common Stock approve any plan or
proposal for Issuer’s liquidation or dissolution; or

          (5) if shares of Common Stock, or shares of any other Capital Stock which constitute Reference
Property (as defined below), are not listed for trading on any United States national securities
exchange.

          “Board of Directors” means, with respect to any Person, either the board of directors
of such Person or any duly authorized committee of that board.

          “Capital Stock” means any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock and limited liability company interests and,
with respect to partnerships, partnership interests (whether general or limited) and any other
interest or participation that confers on a Person the right to receive a share of the profits and
losses of, or distributions of assets of, such partnership.

          “Common Stock” means the Shares as they exist on the date of the Indenture (as defined
below) or any other shares of Capital Stock of Issuer into which the Common Stock shall be
reclassified or changed.

          “Continuing Directors” means (i) individuals who on the date of original issuance of
the Notes (as defined below) were members of the Board of Directors of Issuer and (ii) any new
directors whose election to the Board of Directors of Issuer or whose nomination for election by
Issuer’s stockholders was approved by at least a majority of Issuer’s directors then still in
office (or a duly constituted committee thereof), either who were directors on the date of original
issuance of the Notes or whose election or nomination for election was previously so approved.

          “Conversion Rate” means, initially 38.7522 Shares per $1,000 principal amount of
Notes, subject to adjustment as set forth in the Indenture.

          “Corporation” means a corporation, association, company, limited partnership,
joint-stock company or business trust.

          “Indenture” means the Indenture to be dated September 29, 2009 between the Issuer and
The Bank of New York Mellon as Trustee.

          “Merger Event” means (i) any reclassification or change of the outstanding Shares
(other than a change in par value, or from par value to no par value, or from no par value to par
value, or as a result of a split, subdivision or combination), (ii) a consolidation, binding share
exchange, recapitalization, reclassification, merger, combination or other similar event, or (iii)
any sale or conveyance to another Person of all or substantially all of the

13

 

property and assets of Issuer (excluding a pledge of securities issued by any of the Issuer’s
Subsidiaries but, for the avoidance of doubt, not excluding any foreclosure thereon), in any case
as a result of which holders of Shares shall be entitled to receive cash, securities or other
property or assets with respect to or in exchange for such Shares.

          “Notes” means the convertible notes issued by the Issuer pursuant to the terms of the
Indenture.

          “Person” means any individual, corporation, partnership, limited liability company,
joint venture, trust, unincorporated organization or government or any agency or political
subdivision thereof.

          “Reference Property” means, at the effective time of a Merger Event, pursuant to the
terms of the Indenture, the kind and amount of cash, securities or other property or assets that a
holder of a number of Shares equal to the Conversion Rate immediately prior to such transaction
would have owned or been entitled to receive.

          “Subsidiary” means a Corporation more than 50% of the outstanding voting stock or
other voting interests of which is owned, directly or indirectly, by Issuer or by one or more other
Subsidiaries, or by Issuer and one or more other Subsidiaries. For the purposes of this
definition, “voting stock or other voting interests” means stock or other voting interests which
ordinarily have voting power for the election of directors or comparable governing body, whether at
all times or only so long as no senior class of stock or other interests has such voting power by
reason of any contingency.

          (g) Set-Off and Netting. Neither party shall set-off or net amounts due to either
party with respect to any Transaction hereunder against amounts due to either party from the other
party whether arising under the Agreement, this Master Confirmation or any other agreement between
the parties hereto, by operation of law or otherwise.

          (h) Status of Claims in Bankruptcy. Buyer acknowledges and agrees that this Master
Confirmation, together with any Confirmation, is not intended to convey to Buyer rights with
respect to any Transaction that are senior to the claims of common stockholders in any U.S.
bankruptcy proceedings of Issuer; provided that nothing herein shall limit or shall be
deemed to limit Buyer’s right to pursue remedies in the event of a breach by Issuer of its
obligations and agreements with respect to any Transaction; and provided, further,
that nothing herein shall limit or shall be deemed to limit Buyer’s rights in respect of any
transactions other than the Transactions.

          (i) No Collateral. Notwithstanding any provision of this Master Confirmation, any
Confirmation or the Agreement, or any other agreement between the parties, to the contrary, the
obligations of Issuer under the Transactions are not secured by any collateral. Without limiting
the generality of the foregoing, if this Master Confirmation, the Agreement or any other agreement
between the parties includes an ISDA Credit Support Annex or other agreement pursuant to which
Issuer collateralizes obligations to Buyer, then the obligations of Issuer hereunder shall not be
considered to be obligations under such Credit Support Annex or other agreement pursuant to which
Issuer collateralizes obligations to Buyer, and any Transactions hereunder shall be disregarded for
purposes of calculating any Exposure, Market Value or similar term thereunder.

          (j) Assignment of Share Delivery to Affiliates. Notwithstanding any other provision
in this Master Confirmation to the contrary requiring or allowing Buyer to purchase, sell, receive
or deliver any shares or other securities to or from Issuer, Buyer may designate any of its
affiliates to purchase, sell, receive or deliver such shares or other securities and otherwise to
perform Buyer’s obligations in respect of this Transaction and any such designee may assume such
obligations. Buyer shall be discharged of its obligations to Issuer to the extent of any such
performance.

          (k) Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Buyer
may not exercise any Warrant hereunder, have the “right to acquire” (within the meaning of NYSE
Rule 312.04(g)) Shares upon exercise of any Warrant hereunder, Automatic Exercise shall not apply
with respect thereto, and any delivery pursuant to Section 12(b) shall not be made, to the extent
(but only to the extent) that the receipt of any

14

 

Shares upon such exercise or delivery would result in (i) Buyer Group directly or indirectly
beneficially owning (within the meaning of Section 13 of the Exchange Act and rules promulgated
thereunder) at any time in excess of the lesser of (A) 4.9% of the outstanding Shares or (B)
2,681,358 Shares (such lesser number, the “Threshold Number of Shares”), (ii) if at any
time any of Sections 3-701 to 3-709 of the Maryland Control Share Acquisition Act are, or would be,
applicable to Seller in the reasonable judgment of Buyer, Buyer owning “control shares” (as such
term is used in Section 3-701(d) of the Maryland Control Share Acquisition Act) in excess of 8.0%
of the outstanding Shares or (iii) the Share Amount (as defined below) exceeding the Applicable
Share Limit (as defined below). Any purported delivery hereunder shall be void and have no effect
to the extent (but only to the extent) that such delivery would result in (i) Buyer Group directly
or indirectly so beneficially owning in excess of the Threshold Number of Shares, (ii) if at any
time any of Sections 3-701 to 3-709 of the Maryland Control Share Acquisition Act are, or would be,
applicable to Seller in the reasonable judgment of Buyer, Buyer so owning “control shares” (as such
term is used in Section 3-701(d) of the Maryland Control Share Acquisition Act) in excess of 8.0%
of the outstanding Shares, or (iii) the Share Amount exceeding the Applicable Share Limit. If any
delivery owed to Buyer hereunder is not made, in whole or in part, as a result of this provision,
Issuer’s obligation to make such delivery shall not be extinguished and Issuer shall make such
delivery as promptly as practicable after, but in no event later than one Business Day after, Buyer
gives notice to Issuer that such delivery would not result in (i) Buyer Group directly or
indirectly so beneficially owning in excess of the Threshold Number of Shares, (ii) Buyer so owning
“control shares” (as such term is used in Section 3-701(d) of the Maryland Control Share
Acquisition Act) in excess of 8.0% of the outstanding Shares, or (iii) the Share Amount exceeding
the Applicable Share Limit. 

          (l) [Reserved]

          (m) Transfer. Buyer may transfer or assign its rights and obligations hereunder and
under the Agreement, in whole or in part, with the consent of Seller (which consent shall not be
unreasonably withheld). If at any time at which (1) Buyer Group’s “beneficial ownership” (within
the meaning of Section 13 of the Exchange Act and rules promulgated thereunder) exceeds 8.0% of
Seller’s outstanding Shares, (2) the Units Equity Percentage (as defined below) is at or exceeds
14.5%, (3) if at any time any of Sections 3-701 to 3-709 of the Maryland Control Share Acquisition
Act are, or would be, applicable to Issuer in the reasonable judgment of Buyer, the quotient of (x)
the number of “control shares” (as such term is used in Section 3-701(d) of the Maryland Control
Share Acquisition Act) owned by Buyer divided by (y) the number of Seller’s outstanding
Shares (the “Control Share Percentage”) exceeds 8.0%, or (4) the Share Amount exceeds the
Applicable Share Limit, Buyer, in its discretion, is unable to effect a transfer or assignment to a
third party after using commercially reasonable efforts on pricing terms reasonably acceptable to
Buyer and within a time period reasonably acceptable to Buyer such that (1) Buyer Group’s
“beneficial ownership” (within the meaning of Section 13 of the Exchange Act and rules promulgated
thereunder) is reduced to 8.0% of Seller’s outstanding Shares or less, (2) the Units Equity
Percentage is reduced to 14.5% or less, (3) the Control Share Percentage is reduced to 8.0% or
less, or (4) the Share Amount is reduced to the Applicable Share Limit or less, Buyer may designate
any Scheduled Trading Day as an Early Termination Date with respect to a portion (the
“Terminated Portion”) of the Transaction, such that (1) Buyer Group’s “beneficial
ownership” following such partial termination will be equal to or less than 8.0%, (2) the Units
Equity Percentage following such partial termination will be less than 14.5%, (3) the Control Share
Percentage following such partial termination will be equal to or less than 8.0% or (4) the Share
Amount following such partial termination will be equal to or less than the Applicable Share Limit.
In the event that Buyer so designates an Early Termination Date with respect to a portion of the
Transaction, a payment or delivery shall be made pursuant to Section 6 of the Agreement and Section
11(b) of this Master Confirmation as if (i) an Early Termination Date had been designated in
respect of a Transaction having terms identical to the Terminated Portion of the Transaction, (ii)
Seller shall be the sole Affected Party with respect to such partial termination and (iii) such
portion of the Transaction shall be the only Terminated Transaction. The “Buyer Group”
means Buyer and each person subject to aggregation of Shares with Buyer under Section 13 or Section
16 of the Exchange Act and rules promulgated thereunder. The “Units Equity Percentage” as
of any day is the fraction (i) the numerator of which is the aggregate Number of Shares for all
Transactions hereunder plus the aggregate “Number of Shares” for all “Transactions” (as
such terms are defined in the Master Terms and Conditions for Warrants dated March 27, 2008 between
Issuer and Buyer) and (ii) the denominator of which is the number of Shares outstanding on such
day. The “Share Amount” as of any day is the number of Shares that Buyer and any person
whose ownership position would be aggregated with that of Buyer (Buyer or any such

15

 

person, a “Buyer Person”) under any insurance or other law, rule, regulation or
regulatory order applicable to ownership of Shares (“Applicable Laws”), owns, beneficially
owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant
definition of ownership of under the Applicable Laws, as determined by Buyer in its reasonable
discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum
number of Shares that would give rise to reporting or registration obligations or other
requirements (including obtaining prior approval from any person or entity) of a Buyer Person, or
would result in an adverse effect on a Buyer Person, under the Applicable Laws, as determined by
Buyer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding.

          (n) Severability; Illegality. If compliance by either party with any provision of a
Transaction would be unenforceable or illegal, (i) the parties shall negotiate in good faith to
resolve such unenforceability or illegality in a manner that preserves the economic benefits of the
transactions contemplated hereby and (ii) the other provisions of the Transaction shall not be
invalidated, but shall remain in full force and effect.

          (o) Waiver of Trial by Jury. EACH OF ISSUER AND BUYER HEREBY IRREVOCABLY WAIVES (ON
ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY TRANSACTION HEREUNDER OR THE ACTIONS OF BUYER OR
ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

          (p) Confidentiality. Notwithstanding any provision in this Master Confirmation, any
Confirmation or the Agreement, in connection with Section 1.6011-4 of the Treasury Regulations, the
parties hereby agree that each party (and each employee, representative, or other agent of such
party) may disclose to any and all persons, without limitation of any kind, the U.S. tax treatment
and U.S. tax structure of the Transaction and all materials of any kind (including opinions or
other tax analyses) that are provided to such party relating to such U.S. tax treatment and U.S.
tax structure, other than any information for which nondisclosure is reasonably necessary in order
to comply with applicable securities laws.

          (q) Securities Contract; Swap Agreement. The parties hereto intend for: (i) each
Transaction hereunder to be a “securities contract” as defined in Section 741(7) of the Bankruptcy
Code (Title 11 of the United States Code, as amended) (the “Bankruptcy Code”) and a “swap
agreement” as defined in Section 101(53B) of the Bankruptcy Code, and the parties hereto to be
entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(27),
362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code; (ii) the
Agreement to be a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code;
(iii) a party’s right to liquidate, terminate or accelerate any Transaction, offset, net or net out
termination values, payment amounts or other transfer obligations, and to exercise any other
remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with
respect to the other party or any Extraordinary Event that results in the termination or
cancellation of any Transaction to constitute a “contractual right” within the meaning of Sections
555, 560 and 561 of the Bankruptcy Code; (iv) any cash, securities or other property provided as
performance assurance, credit support or collateral with respect to each Transaction to constitute
“margin payments” and “transfers” “under” or “in connection with” each Transaction and the
Agreement, in each case within the meaning of the Bankruptcy Code; and (v) all payments or
deliveries for, under or in connection with each Transaction, all payments for the Shares and the
transfer of such Shares to constitute “settlement payments” and “transfers” “under” or “in
connection with” each Transaction and the Agreement, in each case within the meaning of the
Bankruptcy Code.

          (r) Additional Termination Events. (i) If at any time Buyer reasonably determines in
good faith that it is advisable to terminate a portion of the Transaction so that Buyer’s related
hedging activities will comply with applicable securities laws, rules, regulations, self-regulatory
requirements or related policies or procedures (whether or not such requirements, policies or
procedures are imposed by law or have been voluntarily adopted by Buyer so that its hedging
activities will comply with such laws, rules or regulations), an Additional

16

 

Termination Event shall occur in respect of which (1) Issuer shall be the sole Affected Party
and (2) the Transaction shall be the sole Affected Transaction.

          (ii) If Issuer defaults on the Notes, and such default results in an acceleration of the Notes
pursuant to the terms of the Indenture, an Additional Termination Event shall occur in respect of
which (1) Issuer shall be the sole Affected Party and (2) the Transaction shall be the sole
Affected Transaction.

          (s) Effectiveness. If, prior to the Effective Date for any Transaction, Buyer
reasonably determines that it is advisable to cancel such Transaction because of concerns that
Buyer’s related hedging activities could be viewed as not complying with applicable securities
laws, rules or regulations, such Transaction shall be cancelled and shall not become effective, and
neither party shall have any obligation to the other party in respect of such Transaction.

          (t) Share Deliveries. Issuer acknowledges and agrees that, to the extent the holder of
this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being
understood that Buyer will not be considered an affiliate under this paragraph solely by reason of
its receipt of Shares pursuant to this Transaction), and otherwise satisfies all holding period and
other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or
Termination Delivery Units hereunder at any time after 6 months from the Trade Date (or 1 year from
the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with
respect to the Issuer) shall be eligible for resale under Rule 144 of the Securities Act and Issuer
agrees to promptly remove, or cause the transfer agent for such Shares or Termination Delivery
Units, to remove, any legends referring to any restrictions on resale under the Securities Act from
the Shares or Termination Delivery Units. Issuer further agrees that any delivery of Shares or
Termination Delivery Units prior to the date that is 6 months from the Trade Date (or 1 year from
the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with
respect to the Issuer), may be transferred by and among Buyer and its affiliates and Issuer shall
effect such transfer without any further action by Buyer. Notwithstanding anything to the contrary
herein, Issuer agrees that any delivery of Shares or Termination Delivery Units shall be effected
by book-entry transfer through the facilities of the Depositary Trust Corporation (“DTC”),
or any successor depositary, if at the time of delivery, such class of Shares or class of
Termination Delivery Units is in book-entry form at DTC or such successor depositary.
Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the
Securities Act or any successor rule are amended, or the applicable interpretation thereof by the
Securities and Exchange Commission or any court change after the Trade Date, the agreements of
Issuer herein shall be deemed modified to the extent necessary, in the opinion of outside counsel
of Issuer, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of
the relevant Shares or Termination Delivery Units.

          (u) Right to Extend. Buyer may postpone, in whole or in part, any Expiration Date or
any other date of valuation or delivery with respect to some or all of the relevant Warrants (in
which event the Calculation Agent shall make appropriate adjustments to the number of Warrants per
Component with respect to one or more Expiration Dates) if Buyer determines, in its commercially
reasonable judgment, that such extension is reasonably necessary or appropriate to preserve Buyer’s
hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable
Buyer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement
activity hereunder in a manner that would, if Buyer were Issuer or an affiliated purchaser of
Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Buyer.

          (v) Amendments to the Definitions:

          (A) Section 11.2(a) of the Definitions is hereby amended by deleting the words “a diluting or
concentrative” and replacing them with the words “a material”; and adding the phrase “or Warrants”
at the end of the sentence.

          (B) Section 11.2(c) of the Definitions is hereby amended by (x) replacing the words “a
diluting or concentrative” with “an”, (y) adding the phrase “or Warrants” after the words “the
relevant Shares” in the

17

 

same sentence and (z) deleting the phrase “(provided that no adjustments will be made to
account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Shares)” and replacing it with the phrase “(and, for the avoidance of doubt,
adjustments may be made to account solely for changes in volatility, expected dividends, stock loan
rate or liquidity relative to the relevant Shares).”

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

          (D) Section 12.6(a)(ii) of the Definitions is hereby amended by (1) deleting from the fourth
line thereof the word “or” after the word “official” and inserting a comma therefor, and (2)
deleting the semi-colon at the end of subsection (B) thereof and inserting the following words
therefor “or (C) at Buyer’s option, the occurrence of any of the events specified in Section
5(a)(vii) (1) through (9) of the ISDA Master Agreement with respect to that Issuer.”

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

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

          (y) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends
Shares in the amount of the Hedging Shares or” in the penultimate sentence.

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

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

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

          13. Addresses for Notice:

	 	 	 	 	 
	 

	 	If to Dealer:
	 	Citibank, N.A.
	 

	 	 	 	390 Greenwich Street
	 

	 	 	 	New York, NY 10013
	 

	 	 	 	Attention:   Equity Derivatives
	 

	 	 	 	Facsimile:     (212) 723-8328
	 

	 	 	 	Telephone:     (212) 723-7357
	 
	 	 	 	 
	 

	 	 	 	With a copy to:
	 
	 	 	 	 
	 

	 	 	 	Citibank, N.A.
	 

	 	 	 	250 West Street, 10th Floor

New York, NY 10013
	 

	 	 	 	Attention:  GCIB Legal Group—Derivatives
	 

	 	 	 	Facsimile:  (212) 816-7772
	 

	 	 	 	Telephone:   (212) 816-2211
	 
	 	 	 	 
	 

	 	If to Issuer:
	 	PHH Corporation
	 

	 	 	 	3000 Leadenhall Road,

	 

	 	 	 	Mt. Laurel New Jersey 08054
	 

	 	 	 	Fax: (856) 917-4278

	 

	 	 	 	Attention: Treasurer

18

 

      14. Accounts for Payment:

	 	 	 	 	 
	 

	 	To Dealer:
	 	Citibank, N.A.
	 

	 	 	 	ABA #021000089
	 

	 	 	 	DDA 00167679
	 

	 	 	 	Ref: Equity Derivatives
	 
	 

	 	To Issuer:
	 	JP Morgan Chase
	 

	 	 	 	ABA 021 000 021
	 

	 	 	 	PHH Corporation
	 

	 	 	 	Account number 323018688

      15. Delivery Instructions:

      Unless otherwise directed in writing, any Share to be delivered hereunder shall be
delivered as follows:

	 	 	 
	      To Dealer:
	 	To be provided by Dealer.

19

 

	 	 	 	 	 
	 	Yours sincerely,

CITIBANK, N.A.

 	 
	 	By:  	/s/ Herman Hirsch
 	 
	 	 	Authorized Signatory 	 
	 	 	Name:  Herman Hirsch 	 
	 

Confirmed
as of the

date first above written:

PHH CORPORATION

	 	 	 	 	 
	By:

	 	/s/ Sandra E. Bell
 

Name: Sandra E. Bell

Title: EVP & CFO
	 	 

  

 

EXHIBIT A

CONFIRMATION

	 	 	 
	Date:

	 	[___________], 20[____]
	 
	 	 
	To:

	 	PHH Corporation (“Issuer”)
	 
	 	 
	Facsimile:

	 	(856) 917-4278
	 
	 	 
	Attention:

	 	Treasurer
	 
	 	 
	From:

	 	Citibank, N.A. (“Dealer”)
	 
	 	 
	Facsimile:

	 	(212) 622-8534

Transaction Reference Number:

          The purpose of this communication (this “Confirmation”) is to set forth the terms and
conditions of the above-referenced Transaction entered into on the Trade Date specified below
between you and us. This Confirmation supplements, forms a part of, and is subject to the Master
Terms and Conditions for Warrants Issued by PHH Corporation, between Citibank, N.A. and PHH
Corporation, dated as of September 23, 2009 (as amended from time to time, the “Master
Confirmation”).

          1. The definitions and provisions contained in the Definitions (as such term is defined in the
Master Confirmation) and in the Master Confirmation are incorporated into this Confirmation. In
the event of any inconsistency between those definitions and provisions and this Confirmation, this
Confirmation will govern.

          2. The particular Transaction to which this Confirmation relates shall have the following
terms:

	 	 	 
	Trade Date:

	 	[_________], 20[___]
	 
	 	 
	Effective Date:

	 	[_________], 20[___]
	 
	 	 
	Strike Price:

	 	USD [_____]
	 
	 	 
	Premium:

	 	USD [_____]
	 
	 	 
	Premium Payment Date:

	 	The Effective Date.
	 
	 	 
	Maximum Delivery Amount:

	 	At any time, a number of Shares equal to the product of the Transaction
Multiplier and the Number of Shares at such time.
	 
	 	 
	Transaction Multiplier:

	 	[____]

A-1

 

For each Component of the Transaction, the Number of Warrants and Expiration Date are as set forth
below.

	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date
	1.
	 	[_________]
	 	[_________]
	2.
	 	[_________]
	 	[_________]
	3.
	 	[_________]
	 	[_________]
	4.
	 	[_________]
	 	[_________]
	5.
	 	[_________]
	 	[_________]
	6.
	 	[_________]
	 	[_________]
	7.
	 	[_________]
	 	[_________]
	8.
	 	[_________]
	 	[_________]
	9.
	 	[_________]
	 	[_________]
	10.
	 	[_________]
	 	[_________]
	11.
	 	[_________]
	 	[_________]
	12.
	 	[_________]
	 	[_________]
	13.
	 	[_________]
	 	[_________]
	14.
	 	[_________]
	 	[_________]
	15.
	 	[_________]
	 	[_________]
	16.
	 	[_________]
	 	[_________]
	17.
	 	[_________]
	 	[_________]
	18.
	 	[_________]
	 	[_________]
	19.
	 	[_________]
	 	[_________]
	20.
	 	[_________]
	 	[_________]
	21.
	 	[_________]
	 	[_________]
	22.
	 	[_________]
	 	[_________]
	23.
	 	[_________]
	 	[_________]
	24.
	 	[_________]
	 	[_________]
	25.
	 	[_________]
	 	[_________]
	26.
	 	[_________]
	 	[_________]
	27.
	 	[_________]
	 	[_________]
	28.
	 	[_________]
	 	[_________]
	29.
	 	[_________]
	 	[_________]
	30.
	 	[_________]
	 	[_________]
	31.
	 	[_________]
	 	[_________]
	32.
	 	[_________]
	 	[_________]
	33.
	 	[_________]
	 	[_________]
	34.
	 	[_________]
	 	[_________]
	35.
	 	[_________]
	 	[_________]
	36.
	 	[_________]
	 	[_________]
	37.
	 	[_________]
	 	[_________]
	38.
	 	[_________]
	 	[_________]
	39.
	 	[_________]
	 	[_________]
	40.
	 	[_________]
	 	[_________]
	41.
	 	[_________]
	 	[_________]
	42.
	 	[_________]
	 	[_________]

A-2

 

	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date
	43.
	 	[_________]
	 	[_________]
	44.
	 	[_________]
	 	[_________]
	45.
	 	[_________]
	 	[_________]
	46.
	 	[_________]
	 	[_________]
	47.
	 	[_________]
	 	[_________]
	48.
	 	[_________]
	 	[_________]
	49.
	 	[_________]
	 	[_________]
	50.
	 	[_________]
	 	[_________]
	51.
	 	[_________]
	 	[_________]
	52.
	 	[_________]
	 	[_________]
	53.
	 	[_________]
	 	[_________]
	54.
	 	[_________]
	 	[_________]
	55.
	 	[_________]
	 	[_________]
	56.
	 	[_________]
	 	[_________]
	57.
	 	[_________]
	 	[_________]
	58.
	 	[_________]
	 	[_________]
	59.
	 	[_________]
	 	[_________]
	60.
	 	[_________]
	 	[_________]
	61.
	 	[_________]
	 	[_________]
	62.
	 	[_________]
	 	[_________]
	63.
	 	[_________]
	 	[_________]
	64.
	 	[_________]
	 	[_________]
	65.
	 	[_________]
	 	[_________]
	66.
	 	[_________]
	 	[_________]
	67.
	 	[_________]
	 	[_________]
	68.
	 	[_________]
	 	[_________]
	69.
	 	[_________]
	 	[_________]
	70.
	 	[_________]
	 	[_________]
	71.
	 	[_________]
	 	[_________]
	72.
	 	[_________]
	 	[_________]
	73.
	 	[_________]
	 	[_________]
	74.
	 	[_________]
	 	[_________]
	75.
	 	[_________]
	 	[_________]
	76.
	 	[_________]
	 	[_________]
	77.
	 	[_________]
	 	[_________]
	78.
	 	[_________]
	 	[_________]
	79.
	 	[_________]
	 	[_________]
	80.
	 	[_________]
	 	[_________]
	81.
	 	[_________]
	 	[_________]
	82.
	 	[_________]
	 	[_________]
	83.
	 	[_________]
	 	[_________]
	84.
	 	[_________]
	 	[_________]
	85.
	 	[_________]
	 	[_________]
	86.
	 	[_________]
	 	[_________]

A-3

 

	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date
	87.
	 	[_________]
	 	[_________]
	88.
	 	[_________]
	 	[_________]
	89.
	 	[_________]
	 	[_________]
	90.
	 	[_________]
	 	[_________]
	91.
	 	[_________]
	 	[_________]
	92.
	 	[_________]
	 	[_________]
	93.
	 	[_________]
	 	[_________]
	94.
	 	[_________]
	 	[_________]
	95.
	 	[_________]
	 	[_________]
	96.
	 	[_________]
	 	[_________]
	97.
	 	[_________]
	 	[_________]
	98.
	 	[_________]
	 	[_________]
	99.
	 	[_________]
	 	[_________]
	100.
	 	[_________]
	 	[_________]
	101.
	 	[_________]
	 	[_________]
	102.
	 	[_________]
	 	[_________]
	103.
	 	[_________]
	 	[_________]
	104.
	 	[_________]
	 	[_________]
	105.
	 	[_________]
	 	[_________]
	106.
	 	[_________]
	 	[_________]
	107.
	 	[_________]
	 	[_________]
	108.
	 	[_________]
	 	[_________]
	109.
	 	[_________]
	 	[_________]
	110.
	 	[_________]
	 	[_________]
	111.
	 	[_________]
	 	[_________]
	112.
	 	[_________]
	 	[_________]
	113.
	 	[_________]
	 	[_________]
	114.
	 	[_________]
	 	[_________]
	115.
	 	[_________]
	 	[_________]
	116.
	 	[_________]
	 	[_________]
	117.
	 	[_________]
	 	[_________]
	118.
	 	[_________]
	 	[_________]
	119.
	 	[_________]
	 	[_________]
	120.
	 	[_________]
	 	[_________]

A-4

 

          3. Issuer hereby agrees (a) to check this Confirmation promptly upon receipt so that errors or
discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing
correctly sets forth the terms of the agreement between us with respect to the particular
Transaction to which this Confirmation relates, by manually signing this Confirmation and providing
any other information requested herein and immediately returning an executed copy to Confirmation
Unit via 212-615-8985. Hard copies should be returned to Citibank, N.A., 333 West 34th Street, 2nd
Floor, New York, New York 10001, Attention: Confirmation Unit.

	 	 	 	 	 
	 	Yours sincerely,

CITIBANK, N.A.

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	Name: 	 
	 

Confirmed as of the

date first above written:

PHH CORPORATION

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 

Name:
	 	 
	 

	Title:exv10w12

EXHIBIT 10.12

CONFIRMATION

	 	 	 
	Date:

	 	September 23, 2009
	 
	 	 
	To:

	 	PHH Corporation (“Counterparty”)
	 
	 	 
	Facsimile:

	 	(856) 917-4278
	 
	 	 
	Attention:

	 	Treasurer
	 
	 	 
	From:

	 	Citibank, N.A. (“Dealer”)
	 
	 	 
	Facsimile:

	 	(212) 622-8534
	 
	 	 
	Transaction Reference Number:

          The purpose of this communication (this “Confirmation”) is to set forth the terms and
conditions of the above-referenced Transaction entered into on the Trade Date specified below
between you and us. This Confirmation supplements, forms a part of, and is subject to the Master
Terms and Conditions for Convertible Bond Hedging Transactions between Citibank, N.A. and PHH
Corporation dated as of September 23, 2009 (as amended from time to time, the “Master
Confirmation”).

          1. The definitions and provisions contained in the Definitions (as such term is defined in the
Master Confirmation) and in the Master Confirmation are incorporated into this Confirmation. In
the event of any inconsistency between those definitions and provisions and this Confirmation, this
Confirmation will govern.

          2. The particular Transaction to which this Confirmation relates is entered into as part of an
integrated hedging transaction of the Convertible Notes pursuant to the provisions of Treasury
Regulation Section 1.1275-6.

          3. The particular Transaction to which this Confirmation relates shall have the following
terms:

	 	 	 
	Trade Date:

	 	September 23, 2009
	 
	 	 
	Effective Date:

	 	The closing date for the initial issuance of the Convertible Notes
	 
	 	 
	Premium:

	 	USD 19,786,096.00
	 
	 	 
	Premium Payment Date:

	 	The Effective Date
	 
	 	 
	Convertible Notes:

	 	4.00% Convertible Senior Notes due 2014, offered pursuant to a Preliminary Offering Memorandum
dated as of September 23, 2009 and issued pursuant to the Indenture.
	 
	 	 
	Number of Units:

	 	The number of Convertible Notes in denominations of USD1,000 principal amount issued by
Counterparty on the closing date for the initial issuance of the Convertible Notes.

 

 

	 	 	 	 	 
	Strike Price:

	 	As of any date, an amount in USD, rounded to the nearest cent (with 0.5 cents being rounded
upwards), equal to USD1,000 divided by the Unit Entitlement.

	 
	 	 	 	 
	Applicable Percentage:

	 	34%	 
	 
	 	 	 	 
	Number of Shares:

	 	The product of the Number of Units, the Unit Entitlement and the Applicable Percentage.

	 
	 	 	 	 
	Expiration Date:

	 	September 1, 2014

	 
	 	 	 	 
	Unit Entitlement:

	 	As of any date, a number of Shares per Unit equal to the Conversion Rate (as defined in the
Indenture, but without regard to any adjustments to the Conversion Rate pursuant to the Excluded
Provisions of the Indenture).

	 
	 	 	 	 
	Indenture:

	 	Indenture to be dated as of September 29, 2009 by and between Counterparty and The Bank of New
York Mellon, as trustee, pursuant to which the Convertible Notes are to be issued. For the
avoidance of doubt, references herein to sections of the Indenture are based on the draft of the
Indenture most recently reviewed by the parties at the time of execution of this Confirmation.
If any relevant sections of the Indenture are changed, added or renumbered following execution
of this Confirmation but prior to the execution of the Indenture, the parties will amend this
Confirmation in good faith to preserve the economic intent of the parties.

	 
	 	 	 	 
	Net Share Provision:

	 	Section 5.04(a)(ii) and Section 5.04(b) (without duplication) of the Indenture.

	 
	 	 	 	 
	Excluded Provisions:

	 	Sections 5.02, 5.06(g) and 5.17 of the Indenture.

	 
	 	 	 	 
	Dilution Provisions:

	 	Sections 5.06(a), (b), (c), (d), (e) and (l) of the Indenture

	 
	 	 	 	 
	Merger Provision:

	 	Section 5.12 of the Indenture

	 
	 	 	 	 
	Tender Offer Provision:

	 	Section 5.06(e) of the Indenture.

	 
	 	 	 	 
	Make-Whole Provisions:

	 	Section 5.02 of the Indenture.

	 
	 	 	 	 
	Fundamental Change Provisions:

	 	Section 4.01 of the Indenture.

	 
	 	 	 	 
	Early Unwind Date:

	 	September 29, 2009, or such later date as agreed by the parties hereto.

2

 

          3. Counterparty hereby agrees (a) to check this Confirmation promptly upon receipt so that
errors or discrepancies can be promptly identified and rectified and (b) to confirm that the
foregoing correctly sets forth the terms of the agreement between us with respect to the particular
Transaction to which this Confirmation relates, by manually signing this Confirmation and providing
any other information requested herein and immediately returning an executed copy to Confirmation
Unit via 212-615-8985. Hard copies should be returned to Citibank, N.A., 333 West 34th Street, 2nd
Floor, New York, New York 10001, Attention: Confirmation Unit.

	 	 	 	 	 
	 	Yours sincerely,	 
	 
	 	CITIBANK, N.A.
 	 
	 
	 	By:  	/s/ Herman Hirsch
 	 
	 	 	Authorized Signatory 	 
	 	 	Name:  Herman Hirsch 	 

	 	 	 	 
	Confirmed as of the

date first above written:

PHH CORPORATION

 	 
	By:  	/s/ Sandra E. Bell
 	 
	 	Name:  	Sandra E. Bell 	 
	 	Title:  	EVP & CFO

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