Document:

exv10w5

EXHIBIT 10.5

CONFIRMATION

	 	 	 
	Date:

	 	September 23, 2009
	 
	 	 
	To:

	 	PHH Corporation (“Issuer”)
	 
	 	 
	Facsimile:

	 	(856) 917-4278
	 
	 	 
	Attention:

	 	Treasurer
	 
	 	 
	From:

	 	JPMorgan Chase Bank, National Association, London Branch (“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 JPMorgan Chase Bank, National
Association, London Branch 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:

	 	September 23, 2009

	 
	 	 
	Effective Date:

	 	September 29, 2009

	 
	 	 
	Strike Price:

	 	USD 34.74

	 
	 	 
	Premium:

	 	USD 13,491,984.00

	 
	 	 
	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:

	 	1.35

JPMorgan Chase Bank, National Association

Organised under the laws of the United States as a National Banking Association

Main Office 1111 Polaris Parkway, Columbus, Ohio 43271

Registered as a branch in England & Wales branch No. BR000746

Registered Branch Office 125 London Wall, London EC2Y 5AJ

Authorised and regulated by the Financial Services Authority

 

 

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.

	 	31,260.0
	 	December 1, 2014
	2.
	 	31,260.0
	 	December 2, 2014
	3.
	 	31,260.0
	 	December 3, 2014
	4.
	 	31,260.0
	 	December 4, 2014
	5.
	 	31,260.0
	 	December 5, 2014
	6.
	 	31,260.0
	 	December 8, 2014
	7.
	 	31,260.0
	 	December 9, 2014
	8.
	 	31,260.0
	 	December 10, 2014
	9.
	 	31,260.0
	 	December 11, 2014
	10.
	 	31,260.0
	 	December 12, 2014
	11.
	 	31,260.0
	 	December 15, 2014
	12.
	 	31,260.0
	 	December 16, 2014
	13.
	 	31,260.0
	 	December 17, 2014
	14.
	 	31,260.0
	 	December 18, 2014
	15.
	 	31,260.0
	 	December 19, 2014
	16.
	 	31,260.0
	 	December 22, 2014
	17.
	 	31,260.0
	 	December 23, 2014
	18.
	 	31,260.0
	 	December 24, 2014
	19.
	 	31,260.0
	 	December 26, 2014
	20.
	 	31,260.0
	 	December 29, 2014
	21.
	 	31,260.0
	 	December 30, 2014
	22.
	 	31,260.0
	 	December 31, 2014
	23.
	 	31,260.0
	 	January 2, 2015
	24.
	 	31,260.0
	 	January 5, 2015
	25.
	 	31,260.0
	 	January 6, 2015
	26.
	 	31,260.0
	 	January 7, 2015
	27.
	 	31,260.0
	 	January 8, 2015
	28.
	 	31,260.0
	 	January 9, 2015
	29.
	 	31,260.0
	 	January 12, 2015
	30.
	 	31,260.0
	 	January 13, 2015
	31.
	 	31,260.0
	 	January 14, 2015
	32.
	 	31,260.0
	 	January 15, 2015
	33.
	 	31,260.0
	 	January 16, 2015
	34.
	 	31,260.0
	 	January 20, 2015
	35.
	 	31,260.0
	 	January 21, 2015
	36.
	 	31,260.0
	 	January 22, 2015
	37.
	 	31,260.0
	 	January 23, 2015
	38.
	 	31,260.0
	 	January 26, 2015
	39.
	 	31,260.0
	 	January 27, 2015
	40.
	 	31,260.0
	 	January 28, 2015
	41.
	 	31,260.0
	 	January 29, 2015

2

 

	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date
	42.
	 	31,260.0
	 	January 30, 2015
	43.
	 	31,260.0
	 	February 2, 2015
	44.
	 	31,260.0
	 	February 3, 2015
	45.
	 	31,260.0
	 	February 4, 2015
	46.
	 	31,260.0
	 	February 5, 2015
	47.
	 	31,260.0
	 	February 6, 2015
	48.
	 	31,260.0
	 	February 9, 2015
	49.
	 	31,260.0
	 	February 10, 2015
	50.
	 	31,260.0
	 	February 11, 2015
	51.
	 	31,260.0
	 	February 12, 2015
	52.
	 	31,260.0
	 	February 13, 2015
	53.
	 	31,260.0
	 	February 17, 2015
	54.
	 	31,260.0
	 	February 18, 2015
	55.
	 	31,260.0
	 	February 19, 2015
	56.
	 	31,260.0
	 	February 20, 2015
	57.
	 	31,260.0
	 	February 23, 2015
	58.
	 	31,260.0
	 	February 24, 2015
	59.
	 	31,260.0
	 	February 25, 2015
	60.
	 	31,260.0
	 	February 26, 2015
	61.
	 	31,260.0
	 	February 27, 2015
	62.
	 	31,260.0
	 	March 2, 2015
	63.
	 	31,260.0
	 	March 3, 2015
	64.
	 	31,260.0
	 	March 4, 2015
	65.
	 	31,260.0
	 	March 5, 2015
	66.
	 	31,260.0
	 	March 6, 2015
	67.
	 	31,260.0
	 	March 9, 2015
	68.
	 	31,260.0
	 	March 10, 2015
	69.
	 	31,260.0
	 	March 11, 2015
	70.
	 	31,260.0
	 	March 12, 2015
	71.
	 	31,260.0
	 	March 13, 2015
	72.
	 	31,260.0
	 	March 16, 2015
	73.
	 	31,260.0
	 	March 17, 2015
	74.
	 	31,260.0
	 	March 18, 2015
	75.
	 	31,260.0
	 	March 19, 2015
	76.
	 	31,260.0
	 	March 20, 2015
	77.
	 	31,260.0
	 	March 23, 2015
	78.
	 	31,260.0
	 	March 24, 2015
	79.
	 	31,260.0
	 	March 25, 2015
	80.
	 	31,260.0
	 	March 26, 2015
	81.
	 	31,260.0
	 	March 27, 2015
	82.
	 	31,260.0
	 	March 30, 2015
	83.
	 	31,260.0
	 	March 31, 2015
	84.
	 	31,260.0
	 	April 1, 2015
	85.
	 	31,260.0
	 	April 2, 2015

3

 

	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date
	86.
	 	31,260.0
	 	April 6, 2015
	87.
	 	31,260.0
	 	April 7, 2015
	88.
	 	31,260.0
	 	April 8, 2015
	89.
	 	31,260.0
	 	April 9, 2015
	90.
	 	31,260.0
	 	April 10, 2015
	91.
	 	31,260.0
	 	April 13, 2015
	92.
	 	31,260.0
	 	April 14, 2015
	93.
	 	31,260.0
	 	April 15, 2015
	94.
	 	31,260.0
	 	April 16, 2015
	95.
	 	31,260.0
	 	April 17, 2015
	96.
	 	31,260.0
	 	April 20, 2015
	97.
	 	31,260.0
	 	April 21, 2015
	98.
	 	31,260.0
	 	April 22, 2015
	99.
	 	31,260.0
	 	April 23, 2015
	100.
	 	31,260.0
	 	April 24, 2015
	101.
	 	31,260.0
	 	April 27, 2015
	102.
	 	31,260.0
	 	April 28, 2015
	103.
	 	31,260.0
	 	April 29, 2015
	104.
	 	31,260.0
	 	April 30, 2015
	105.
	 	31,260.0
	 	May 1, 2015
	106.
	 	31,260.0
	 	May 4, 2015
	107.
	 	31,260.0
	 	May 5, 2015
	108.
	 	31,260.0
	 	May 6, 2015
	109.
	 	31,260.0
	 	May 7, 2015
	110.
	 	31,260.0
	 	May 8, 2015
	111.
	 	31,260.0
	 	May 11, 2015
	112.
	 	31,260.0
	 	May 12, 2015
	113.
	 	31,260.0
	 	May 13, 2015
	114.
	 	31,260.0
	 	May 14, 2015
	115.
	 	31,260.0
	 	May 15, 2015
	116.
	 	31,260.0
	 	May 18, 2015
	117.
	 	31,260.0
	 	May 19, 2015
	118.
	 	31,260.0
	 	May 20, 2015
	119.
	 	31,260.0
	 	May 21, 2015
	120.
	 	31,273.0
	 	May 22, 2015

4

 

          3. Please confirm that the foregoing correctly sets forth the terms of our agreement by
executing this Confirmation and returning it to EDG Confirmation Group, J.P. Morgan Securities
Inc., 277 Park Avenue, 11th Floor, New York, NY 10172-3401, or by fax to (212) 622 8519.

	 	 	 	 	 
	 	Yours sincerely,

J.P. MORGAN SECURITIES INC., AS AGENT

FOR JPMORGAN CHASE BANK, NATIONAL 

ASSOCIATION

 	 
	 	By:  	/s/ Santosh Sreenivasan
 	 
	 	 	Authorized Signatory 	 
	 	 	Name: Santosh Sreenivasan 	 

Confirmed as of the

date first above written:

PHH CORPORATION

	 	 	 	 	 
	By:

	 	/s/ Sandra E. Bell
	 	 
	 

	 	 	 	 
	 

	 	Name: Sandra E. Bell	 	 
	 

	 	Title: EVP & CFO	 	 

JPMorgan Chase Bank, National Association

Organised under the laws of the United States as a National Banking Association

Main Office 1111 Polaris Parkway, Columbus, Ohio 43271

Registered as a branch in England & Wales branch No. BR000746

Registered Branch Office 125 London Wall, London EC2Y 5AJ

Authorised and regulated by the Financial Services Authorityexv10w6

EXHIBIT 10.6

MASTER TERMS AND CONDITIONS FOR CONVERTIBLE BOND HEDGING TRANSACTIONS

BETWEEN WACHOVIA BANK, NATIONAL ASSOCIATION AND PHH CORPORATION

          The purpose of this Master Terms and Conditions for Convertible Bond Hedging Transactions
(this “Master Confirmation”), dated as of September 23, 2009, is to set forth certain terms
and conditions for convertible bond hedging transactions to be entered into between Wachovia Bank,
National Association (“Dealer”), represented by Wells Fargo Securities, LLC
(“Agent”) as its agent, and PHH Corporation (“Counterparty”). Each such
transaction (a “Transaction”) entered into between Dealer and Counterparty 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 Counterparty 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
Dealer and Counterparty, 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 Unit
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 Counterparty or any
confirmation or other between Dealer and Counterparty pursuant to which an ISDA Master Agreement is
deemed to exist between Dealer and Counterparty, then notwithstanding anything to the contrary in
such ISDA Master Agreement, such confirmation or agreement or any other agreement to which Dealer
and Counterparty 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 Counterparty and Dealer with respect to
such Transaction.

          Each Transaction to which a Confirmation relates is a Convertible Bond Hedging Transaction,
which shall be considered a Share Option Transaction for purposes of the Definitions, and shall
have the following terms:

	 	 	 
	Trade Date:

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

	 	As set forth in the Confirmation for such Transaction
	 
	 	 
	Option Type:

	 	Call
	 
	 	 
	Option Style:

	 	Modified American (as described below)
	 
	 	 
	Seller:

	 	Dealer
	 
	 	 
	Buyer:

	 	Counterparty
	 
	 	 
	Shares:

	 	The Common Stock of Counterparty, par value USD 0.01 per share (Ticker Symbol:
	 

	 	“PHH”).
	 
	 	 
	Convertible Notes:

	 	As set forth in the Confirmation for such Transaction
	 
	 	 
	Indenture:

	 	As set forth in the Confirmation for such Transaction
	 
	 	 
	Number of Units:

	 	As set forth in the Confirmation for such Transaction.
	 
	 	 
	Unit Entitlement:

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

	 	As set forth in the Confirmation for such Transaction
	 
	 	 
	Applicable Percentage:

	 	 As set forth in the Confirmation for such Transaction
	 
	 	 
	Number of Shares:

	 	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 Exchange:

	 	All Exchanges
	 
	 	 
	Calculation Agent:

	 	Dealer.

          4. Procedure for Exercise:

	 	 	 
	Potential Exercise Dates:

	 	Each Conversion Date.
	 
	 	 
	Conversion Date:

	 	Each “Conversion Date”, as defined in the Indenture, of Convertible Notes,
subject to the provisions of Section 11(e)(ii) hereof; provided that in no
event shall a Conversion

2

 

	 	 	 
	 

	 	Date be deemed to occur hereunder (and no exercise of
any Units shall occur) with respect to Convertible
Notes as to which Counterparty makes the election to
designate a financial institution as described in
Section 5.17 of the Indenture, and such financial
institution accepts such Convertible Notes
(regardless of whether such financial institution
delivers any required amounts due upon exchange, or
whether such Convertible Notes are resubmitted to
Counterparty for conversion following a failure by
such financial institution to deliver amounts due
upon exchange or otherwise), unless on or prior to
the fifth Exchange Business Day following such
acceptance, such financial institution informs
Counterparty that it will not honor such exchange and
Counterparty shall be obligated, pursuant to the
Indenture, to deliver the amounts due upon
conversion, in which case such Conversion Date shall
be a Conversion Date hereunder upon the
Counterparty’s delivery of a Notice of Exercise as
described below (but with the Notice Deadline being,
for this purpose, such fifth Exchange Business Day)
and the Calculation Agent shall have the right to
adjust the Delivery Obligation as appropriate to
reflect the additional costs (including, but not
limited to, hedging mismatches and market losses) and
expenses incurred by Dealer in connection with its
hedging activities (including the unwind of any hedge
position).
	Required Exercise on
	 	 
	Conversion Dates:

	 	On each Conversion Date, a number of Units equal to the number of
Convertible Notes in denominations of USD1,000 principal amount satisfying all of the
requirements for conversion on such Conversion Date in accordance with the terms of the
Indenture shall be automatically exercised, subject to “Notice of Exercise” below.
	 
	 	 
	Expiration Date:

	 	As set forth in the Confirmation for such Transaction
	 
	 	 
	Multiple Exercise:

	 	Applicable, as provided above under “Required Exercise on Conversion
Dates”.
	 
	 	 
	Minimum Number of Units:

	 	Zero
	 
	 	 
	Maximum Number of Units:

	 	Number of Units
	 
	 	 
	Integral Multiple:

	 	Not Applicable
	 
	 	 
	Automatic Exercise:

	 	As provided above under “Required Exercise on Conversion Dates”.
	 
	 	 
	Notice of Exercise:

	 	Notwithstanding anything to the contrary in the Definitions, in order to
exercise any Units, Counterparty must notify Seller in writing prior to 5:00 PM, New
York City time, on the Scheduled Trading Day prior to the first day of the “Observation
Period”, as defined in the Indenture, relating to the Convertible Notes converted on
the Conversion Date relating to the relevant Exercise Date (the “Notice
Deadline”) of (i) the number of Units being exercised on such Exercise Date, (ii)
the scheduled settlement date under the Indenture for the Convertible Notes converted
on the Conversion Date

3

 

	 	 	 
	 

	 	corresponding to such Exercise Date and (iii) the
“Cash Percentage” (as such term is defined in the
Indenture), if applicable, for the Convertible Notes
converted on the Conversion Date relating to the
relevant Exercise Date; provided that if the
Conversion Date for such Units occurs on or after the
65th Scheduled Trading Day (as defined in
the Indenture) immediately preceding the Expiration
Date, the Notice Deadline solely with respect to the
information described in clause (i) and clause (ii)
above shall be 5:00 PM, New York City time, on the
Scheduled Trading Day (as defined in the Indenture)
immediately preceding the Expiration Date (it being
understood and agreed that Counterparty shall,
subject to the immediately succeeding paragraph, be
required to notify Dealer in writing prior to 5:00
PM, New York City time, on the Scheduled Trading Day
prior to the first day of the relevant “Observation
Period” of the information described in clause (iii)
above, if applicable); provided,
further, that, notwithstanding the foregoing
(except in the case of an Observation Period that
commences on or after the 65th Scheduled
Trading Day immediately preceding the Expiration
Date), such notice shall be effective so long the
notice is given after the Notice Deadline but prior
to 5:00 PM (New York City time) on the fifth Exchange
Business Day of such “Observation Period”, in which
event the Calculation Agent shall have the right to
adjust the Delivery Obligation as appropriate to
reflect the additional costs (including, but not
limited to, hedging mismatches and market losses) and
expenses incurred by Dealer in connection with its
hedging activities (including the unwinding of any
hedge position) as a result of its not having
received such notice prior to the Notice Deadline.
	 
	 	 
	 

	 	Notwithstanding anything to the contrary in the
Indenture or the Notice of Exercise, for purposes of
the Transactions hereunder, Counterparty shall be
deemed to have designated a “Cash Percentage” (as
such term is defined in the Indenture) for the
Convertible Notes equal to 100% pursuant to clause
(iii) above, unless on the date of its election of a
“Cash Percentage” under the Indenture of less than
100%, Counterparty shall represent to Dealer that, as
of such date, it is not in possession of any material
non-public information with respect to itself or the
Shares.

          5. Settlement Terms:

	 	 	 
	Settlement Date:

	 	In respect of an Exercise Date occurring on a Conversion Date, the
settlement date for the Shares to be delivered under the Convertible Notes converted on
such Conversion Date under the terms of the Indenture; provided that the
Settlement Date will not be prior to the date one Settlement Cycle following the final
day of the “Observation Period”, as defined in the Indenture.

4

 

	 	 	 
	Delivery Obligation:

	 	In lieu of the obligations set forth in Sections 8.1 and 9.1 of
 the Definitions, and subject to “Notice of Exercise”
above, in respect of an Exercise Date occurring on a
Conversion Date, Seller will deliver to Counterparty,
on the related Settlement Date, the product of the
Applicable Percentage and a number of Shares and/or
amount of cash in USD equal to the aggregate number
of Shares and/or amount of cash in USD that
Counterparty is obligated to deliver to the holder(s)
of the Convertible Notes converted on such Conversion
Date pursuant to the Net Share Provision of the
Indenture (the “Convertible Obligation”);
provided that such obligation shall be
determined excluding any Shares (or cash) that
Counterparty is obligated to deliver to holder(s) of
the Convertible Notes as a result of any adjustments
to the Conversion Rate pursuant to the Excluded
Provisions of the Indenture and the Seller shall have
no delivery obligation hereunder with respect to the
“Daily Principal Return” (as defined in the
Indenture). For the avoidance of doubt, if the
aggregate “Daily Conversion Value” (as defined in the
Indenture) in respect of each USD1,000 principal
amount of Convertible Notes is less than or equal to
USD1,000, Seller will have no delivery obligation
hereunder.
	 
	 	 
	Net Share Provision:

	 	As set forth in the Confirmation for such Transaction.
	 
	 	 
	Excluded Provisions:

	 	As set forth in the Confirmation for such Transaction.
	 
	 	 
	Notice of Delivery Obligation:

	 	No later than the Scheduled Trading Day immediately following
the last day of the “Observation Period”, as defined in the Indenture, Counterparty
shall give Seller notice of the final number of Shares and/or amount of cash comprising
the Convertible Obligation; provided, that with respect to any Exercise Date
occurring on or after the 65th Scheduled Trading Day (as defined in the
Indenture) immediately preceding the Expiration Date, Counterparty may provide Dealer
with a single notice of the aggregate number of Shares and/or the amount of cash
comprising the Convertible Obligation for all Exercise Dates occurring on or after such
Scheduled Trading Day (it being understood, for the avoidance of doubt, that the
requirement of Counterparty to deliver such notice shall not limit Counterparty’s
obligations with respect to Notice of Exercise, as set forth above, in any way).
	 
	 	 
	Other Applicable Provisions:

	 	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 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 Buyer is the issuer of
the Shares. In addition, notwithstanding anything to the contrary in the Definitions,
Seller may, in whole or in part, deliver Shares in certificated form representing the
Delivery Obligation to Counterparty in lieu of delivery through the Clearance System.

5

 

          6. Adjustments:

	 	 	 
	Method of Adjustment:

	 	Notwithstanding Section 11.2 of the Definitions, upon the occurrence
of any event or condition set forth in the Dilution Provisions of the Indenture, the
Calculation Agent shall make the corresponding adjustment in respect of any one or
more of the Strike Price, Number of Units, the Unit Entitlement and any other variable
relevant to the exercise, settlement or payment of such Transaction, to the extent an
analogous adjustment is made under the Indenture. For the avoidance of doubt, in no
event shall there be any adjustment hereunder as a result of an adjustment to the
“Conversion Rate” (as defined in the Indenture) pursuant to the Excluded Provisions.

          7. Extraordinary Events:

	 	 	 
	Merger Events:

	 	Notwithstanding Section 12.1(b) of the Definitions, a “Merger Event” means
the occurrence of any event or condition set forth in the Merger Provision of the
Indenture.
	 
	 	 
	 

	 	Immediately upon the occurrence of any Merger Event,
Counterparty shall notify the Calculation Agent of
such Merger Event; and once the adjustments to be
made to the terms of the Indenture and the
Convertible Notes in respect of such Merger Event
have been determined, Counterparty shall immediately
notify the Calculation Agent in writing of the
details of such adjustments.
	 
	 	 
	Notice of Merger Consideration:

	 	Upon the occurrence of a Merger Event that causes the Shares
to be converted into the right to receive more than a single type of consideration
(determined based in part upon any form of stockholder election), Counterparty shall
promptly (but in any event prior to the Merger Date) notify the Calculation Agent of
the weighted average of the types and amounts of consideration received by the holders
of Shares entitled to receive cash, securities or other property or assets with respect
to or in exchange for such Shares in any Merger Event who affirmatively make such an
election or if no holders of Shares affirmatively make such an election, the types and
amount of consideration actually received by such holders.
	 
	 	 
	Tender Offer:

	 	Applicable. Notwithstanding Section 12.1(d) of the Definitions, a “Tender
Offer” means the occurrence of any event or condition set forth in the Tender Offer
Provision of the Indenture.
	 
	 	 
	Consequences of Merger Events and
Tender Offers:

	 	Notwithstanding Sections 12.2 and 12.3 of the Definitions, upon the
occurrence of a Merger Event or Tender Offer, the Calculation Agent shall make a
corresponding adjustment in respect of any adjustment under the Indenture to any one or
more of the nature of the Shares, the Strike Price, the Number of Units, the Unit
Entitlement and any other variable relevant

6

 

	 	 	 
	 

	 	to the exercise, settlement or payment of the
Transaction, to the extent an analogous adjustment is
made under the Indenture; provided that (i)
such adjustment shall be made without regard to any
adjustment to the Conversion Rate for the issuance of
additional shares as set forth in the Excluded
Provisions of the Indenture; and (ii) if such
adjustment would (but for this clause (ii)) result in
the Shares including (or, at the option of a holder
of Shares, may include) shares of an entity or person
not organized under the laws of the United States,
any State thereof or the District of Columbia, no
such adjustment shall be made and instead such Merger
Event or Tender Offer shall be an Additional
Termination Event with respect to which (1) the
Transaction is the sole Affected Transaction and (2)
Counterparty shall be the sole Affected Party.
	 
	 	 
	Dilution Provisions:

	 	As set forth in the Confirmation for such Transaction.
	 
	 	 
	Merger Provision:

	 	As set forth in the Confirmation for such Transaction.
	 
	 	 
	Tender Offer Provision:

	 	As set forth in the Confirmation for such Transaction.
	 
	 	 
	Make-Whole Provisions:

	 	As set forth in the Confirmation for such Transaction.
	 
	 	 
	Fundamental Change Provisions:

	 	As set forth in the Confirmation for such Transaction.
	 
	 	 
	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.

           8. 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”.
	 
	 	 
	Failure to Deliver:

	 	Applicable
	 
	 	 
	Insolvency Filing:

	 	Applicable
	 
	 	 
	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:

7

 

	 	 	 
	 

	 	“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:

	 	Not Applicable
	 
	 	 
	Hedging Party:

	 	Dealer for all applicable Additional Disruption Events
	 
	 	 
	Determining Party

	 	For all applicable Additional Disruption Events, Dealer.

          9. Acknowledgements:

	 	 	 
	Non-Reliance:

	 	Applicable
	 
	 	 
	Agreements and Acknowledgments
Regarding Hedging Activities:

	 	Applicable
	 
	 	 
	Additional Acknowledgments:

	 	Applicable

          10. 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 of 1933, as amended (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 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) Counterparty hereby repeats the representations and warranties of Counterparty set forth
in Section 1 of the Purchase Agreement (the “Purchase Agreement”) dated as of September 23,
2009 between, among others, Counterparty 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, Dealer on the Trade Date and the Effective
Date of each Transaction that:

     (i) its financial condition is such that it has no need for liquidity with respect to
its investment in such Transaction and no need to dispose of any portion thereof to satisfy
any existing or contemplated undertaking or indebtedness;

     (ii) its investments in and liabilities in respect of such Transaction, which it
understands are not readily marketable, are not disproportionate to its net worth, and it is
able to bear any loss in connection with such Transaction, including the loss of its entire
investment in such Transaction;

8

 

     (iii) it understands that Dealer has no obligation or intention to register such
Transaction under the Securities Act or any state securities law or other applicable federal
securities law;

     (iv) it understands that no obligations of Dealer to it hereunder will be entitled to
the benefit of deposit insurance and that such obligations will not be guaranteed by any
Affiliate of Dealer or any governmental agency;

     (v) 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;

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

     (vii) 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);

     (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 Counterparty, other than a distribution meeting the
requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M.
Counterparty shall not, until the sixth Scheduled Trading Day immediately following the
Trade Date, engage in any such distribution;

     (ix) on the Trade Date (A) its assets at their fair valuation exceed its liabilities,
including contingent liabilities, (B) its capital is adequate to conduct its business and
(C) it has the ability to pay its debts and obligations as such debts mature and does not
intend to, or does not believe that it will, incur debt beyond its ability to pay as such
debts mature;

     (x) such Transaction, any repurchase of the Shares by Counterparty in connection with
such Transaction and the issuance of Convertible Notes with respect to such Transaction were
approved by its board of directors and publicly announced, solely for the purposes stated in
such board resolution and public disclosure;

     (xi) there is no internal policy, whether written or oral, of Counterparty that would
prohibit it from entering into any aspect of such Transaction, including, but not limited
to, the purchases of Shares to be made pursuant thereto;

     (xii) it 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;

     (xiii) without limiting the generality of Section 13.1 of the Definitions, Counterparty
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, Issue No. 03-6 (or any successor issue statements) or Issue
No. 07-5 or under FASB’s Liabilities & Equity Project; and

     (xiv) without limiting the generality of Section 3(a)(iii) of the Agreement, the
Transaction will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

9

 

          (c) Counterparty 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 with respect to such Transaction.

          11. 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 1992 ISDA
Master Agreement (Multicurrency–Cross Border).

          (b) Alternative Calculations and Dealer Payment on Early Termination and on Certain
Extraordinary Events. If, Dealer owes Counterparty 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 Counterparty is the Defaulting Party or a
Termination Event in which Counterparty 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 Counterparty’s control) (a “Dealer Payment
Obligation”), Counterparty shall have the right, in its sole discretion, to require Dealer to
satisfy any such Dealer Payment Obligation by delivery of Termination Delivery Units (as defined
below) by giving irrevocable telephonic notice to Dealer, 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 Dealer Termination Delivery”);
provided that (i) if Counterparty does not validly request Dealer to satisfy its Dealer
Payment Obligation by Termination Delivery Units, Dealer shall have the right, in its sole
discretion, to satisfy its Dealer Payment Obligation by Termination Delivery Units, notwithstanding
Counterparty’s election to the contrary and (ii) Counterparty shall not have the right,
notwithstanding any notice to the contrary, to request Dealer to satisfy its Dealer Payment
Obligation by Termination Delivery Units unless on the date of any such notice, Counterparty
represents to Dealer 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 Dealer Termination Delivery, Dealer shall deliver to Counterparty
a number of Termination Delivery Units having a cash value equal to the amount of such Dealer
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 purchased
over a commercially reasonable period of time with the cash equivalent of such payment obligation).

“Termination Delivery Unit” means (i) in the case of a Termination Event, an Event
of Default or an Extraordinary Event (other than an Insolvency or Nationalization), one
Share or (ii) in the case of an Insolvency or Nationalization, 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 or Nationalization. If a Termination Delivery
Unit consists of property other than cash and Counterparty 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 have Dealer deliver cash in lieu of such other property, the Calculation
Agent will replace such property with cash as a component of a Termination Delivery Unit in
such amount, 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 or Nationalization 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.

          (c) Set-Off and Netting. Neither party under any circumstances shall have the right
to set off or net any obligation that it may have to the other party under this Transaction against
any obligation such other

10

 

party may have to it, whether arising under the Agreement, this Master Confirmation or any
other agreement between the parties hereto, by operation of law or otherwise.

          (d) Transfer or Assignment. (i) Counterparty shall have the right to transfer or
assign its rights and obligations hereunder to persons who are broker-dealers, banks, investment
advisors, investment banks or other persons in the derivatives industry with respect to all, but
not less than all, of the Options hereunder (such Options, the “Transfer Options”);
provided that such transfer or assignment shall be subject to reasonable conditions that
Dealer may impose, including but not limited, to the following conditions:

          (A) With respect to any Transfer Options, Counterparty shall not be released from its notice
and indemnification obligations to Dealer pursuant to Section 11(o) or any obligations under
Section 11(q) of this Master Confirmation;

          (B) Any Transfer Options shall only be transferred or assigned to a third party that is a U.S.
person (as defined in the Internal Revenue Code of 1986, as amended);

          (C) Such transfer or assignment shall be effected on terms, including any reasonable
undertakings by such third party (including, but not limited to, an undertaking with respect to
compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer,
will not expose Dealer to material risks under applicable securities laws) and execution of any
documentation and delivery of legal opinions with respect to securities laws and other matters by
such third party and Counterparty, as are requested and reasonably satisfactory to Dealer;

          (D) Dealer will not, as a result of such transfer and assignment, be required to pay the
transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an
amount that Dealer would have been required to pay to Counterparty in the absence of such transfer
and assignment;

          (E) An Event of Default, Potential Event of Default or Termination Event will not occur as a
result of such transfer and assignment;

          (F) Without limiting the generality of clause (B), Counterparty shall cause the transferee to
make such Payee Tax Representations and to provide such tax documentation as may be reasonably
requested by Dealer to permit Dealer to determine that results described in clauses (D) and (E)
will not occur upon or after such transfer and assignment; and

          (G) Counterparty shall be responsible for all reasonable costs and expenses, including
reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment.

          (ii) Dealer may transfer or assign its rights and obligations hereunder and under the
Agreement, in whole or in part, to any of its affiliates with the consent of Counterparty (which
consent shall not be unreasonably withheld); provided that Counterparty shall have recourse
to Dealer in the event of the failure by the transferee to perform any of such obligations
hereunder. If at any time at which (1) Dealer Group’s “beneficial ownership” (within the meaning
of Section 13 of the Exchange Act and rules promulgated thereunder) exceeds 8.0% of Counterparty’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 Counterparty in the reasonable judgment of Dealer, and 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 Dealer divided by (y) the number of Counterparty’s outstanding
Shares (the “Control Share Percentage”) exceeds 8.0%, or (4) the Share Amount exceeds the
Applicable Share Limit, Dealer, 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
Dealer and within a time period reasonably acceptable to Dealer such that (1) Dealer Group’s
“beneficial ownership” (within the meaning of Section 13 of the Exchange Act and rules promulgated
thereunder) is reduced to 8.0% of Counterparty’s outstanding Shares or less, (2) the Units Equity
Percentage is reduced to 14.5% or less, (3) the Control Share

11

 

Percentage is reduced to 8.0% or less, or (4) the Share Amount is reduced to the Applicable
Share Limit or less, Dealer 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)
Dealer 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 will be equal to or less than the Applicable Share Limit. In
the event that Dealer 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)
Counterparty 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 “Dealer
Group” means Dealer and each person subject to aggregation of Shares with Dealer under Section
13 or Section 16 of the Exchange Act and rules promulgated thereunder. The “Share Amount”
as of any day is the number of Shares that Dealer and any person whose ownership position would be
aggregated with that of Dealer (Dealer or any such person, a “Dealer 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 Dealer 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 Dealer Person, or would result in an adverse effect on a Dealer Person, under the
Applicable Laws, as determined by Dealer in its reasonable discretion, minus (B) 1% of the
number of Shares outstanding.

          (e) Additional Termination Events. (i) For any Transaction, the occurrence of (A) an
event of default with respect to Counterparty under the terms of the Convertible Notes for such
Transaction that results in an acceleration of such Convertible Notes pursuant to the terms of the
Indenture or (B) an Amendment Event shall be an Additional Termination Event with respect to which
such Transaction is the sole Affected Transaction and Counterparty shall be the sole Affected
Party. In the case of clause (A), either party shall be entitled to designate an Early Termination
Date pursuant to Section 6(b) of the Agreement; provided that (1) Counterparty shall not be
entitled to designate an Early Termination Date unless it is has represented to Seller that, on the
date of its election, it is not in possession of any material non-public information with respect
to itself or the Shares and (2) no Early Termination Date designated by Counterparty shall be
effective unless it is at least 10 Exchange Business Days following notice from Counterparty or the
Trustee (as defined in the Indenture) of the occurrence of such event of default. In the case of
clause (B), Seller shall be the party entitled to designate an Early Termination Date pursuant to
Section 6(b) of the Agreement; provided that Seller may designate an Early Termination Date
following such Amendment Event only if (1) Seller provides prior written notice to Counterparty
proposing that for purposes of the Transactions hereunder “Indenture” shall mean the Indenture as
in effect immediately prior to the effectiveness of any such Amendment Event and (2) Counterparty
does not agree to such proposal (or does not provide a written response) within three Exchange
Business Days following such notice. If a Conversion Date occurs prior to such third Exchange
Business Day or prior to the Early Termination Date designated by Seller as a result of such
Amendment Event, the “Indenture” shall be deemed to be the Indenture as in effect immediately prior
to the effectiveness of any such Amendment Event.

     “Amendment Event” means, for any Transaction, that Counterparty amends,
modifies, supplements or waives any term of the Indenture for such Transaction or the
Convertible Notes for such Transaction governing the principal amount, coupon, maturity,
repurchase obligation of Counterparty, redemption right of Counterparty, any term relating
to conversion of the Convertible Notes for such Transaction (including changes to the
Conversion Rate, conversion price, conversion settlement dates or conversion conditions), or
any term that would require consent of the holders of not less than 100% of the principal
amount of the Convertible Notes for such Transaction to amend, in each case without the
prior consent of Seller, such consent not to be unreasonably withheld.

12

 

          (ii) Notwithstanding anything to the contrary in this Master Confirmation, for any
Transaction, in respect of the Convertible Notes that are converted in compliance with the
Make-Whole Provisions of the Indenture, the delivery of a “Conversion Notice” (as defined in the
Indenture) to Counterparty relating to such Convertible Notes shall constitute an Additional
Termination Event hereunder with respect to the number of Units relating to such number of
Convertible Notes in USD 1,000 principal amount set forth in such “Conversion Notice.” Upon
receipt of such “Conversion Notice”, Counterparty shall promptly (but in any event no later than
the Notice Deadline of such “Conversion Notice”) forward such “Conversion Notice” (along with
information with respect to such conversion described above opposite the caption “Notice of
Exercise” above) to Dealer and upon receipt thereof, Dealer shall promptly designate an Exchange
Business Day as an Early Termination Date (such date to occur on or as closely as practicable, in
the Calculation Agent’s commercially reasonable judgment, to the final day of the “Observation
Period” for the conversion of the relevant Convertible Notes) with respect to all or a portion of
such Transaction, as the case may be, corresponding to such number of Units. As a result of the
occurrence of an Additional Termination Event as described in this clause (ii), any payment
hereunder shall be calculated by the Calculation Agent pursuant to Section 6 of the Agreement;
provided that, for the purposes of such calculation, (A) Counterparty shall be the sole
Affected Party with respect to such Additional Termination Event, (B) Dealer shall be the party
entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement; and (C)
for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the
Agreement, the Calculation Agent shall take into account (i) the time value of this Transaction
assuming an Expiration Date occurring on the “Stated Maturity Date” (as defined in the Indenture
for such Transaction), without regard to any requirement for the occurrence of a Conversion Date or
delivery of a Notice of Exercise as conditions to the exercise of the Units and (ii) shall not take
into account any adjustments to the Unit Entitlement that result from corresponding adjustments to
the Conversion Rate pursuant to the Make-Whole Provisions of the Indenture. Notwithstanding the
foregoing, (x) in case of a partial termination, an Early Termination Date shall be designated in
respect of a Transaction having terms identical to this Transaction and a number of Units equal to
the terminated portion, and such Transaction shall be the only Terminated Transaction, and (y) if
any amount is payable by Dealer to Counterparty in connection with such Additional Termination
Event, payment of such amount shall be satisfied by delivery by Dealer to Counterparty of an amount
of cash and/or a number of Shares or Termination Delivery Units, in such percentages as notified to
Dealer in writing at the time the relevant “Conversion Notice” is forwarded by Counterparty to
Dealer, such that the aggregate value of such cash, Shares and/or Termination Delivery Units,
determined by the Calculation Agent in good faith and in a commercially reasonable manner, is equal
to the amount payable by Dealer to Counterparty in connection with such Additional Termination
Event.

          (iii) Notwithstanding anything to the contrary in this Master Confirmation, if any Convertible
Notes are repurchased and cancelled in accordance with their terms pursuant to the Fundamental
Change Provisions, then an Additional Termination Event shall be deemed to occur upon delivery of a
notice of such repurchase and cancellation by Counterparty to Dealer no later than 10 Exchange
Business Days following such repurchase and cancellation. Upon receipt of any such notice, Dealer
shall designate an Exchange Business Day as an Early Termination Date with respect to a portion of
the Transaction corresponding to a number of Units (the “Cancelled Units”) equal to the
number of such Convertible Notes repurchased and cancelled and, as of such date, the Number of
Units shall be reduced by the number of Cancelled Units. In the event that such an Early
Termination is designated with respect to a portion of a Transaction, a payment shall be made
pursuant to Section 6 of the Agreement as if (A) an Early Termination Date had been designated in
respect of a Transaction having terms identical to this Transaction and a Number of Units equal to
the number of Cancelled Units, (B) Counterparty shall be the sole Affected Party with respect to
such partial termination and (C) such terminated portion of such Transaction shall be the only
Terminated Transaction.

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

13

 

          (g) 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 Counterparty 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 Counterparty collateralizes obligations to Dealer, then the obligations of Counterparty
hereunder will not be considered to be obligations under such Credit Support Annex or other
agreement pursuant to which Counterparty collateralizes obligations to Dealer, and any Transactions
hereunder shall be disregarded for purposes of calculating any Exposure, Market Value or similar
term thereunder.

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

          (i) 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.

          (j) Waiver of Trial by Jury. EACH OF COUNTERPARTY AND DEALER 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 DEALER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

          (k) 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.

          (l) 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.

14

 

          (m) Extension of Settlement. Dealer may postpone any Potential Exercise Date or any
other date of valuation or delivery by Dealer, with respect to some or all of the relevant Units
(in which event the Calculation Agent shall make appropriate adjustments to the Delivery
Obligation), if Dealer determines, in its reasonable discretion and taking into account any Dealer
hedging and settlement activity in connection with the 2008 Bond Hedge (as defined below), that
such extension is reasonably necessary or advisable to preserve Dealer hedging activity hereunder
in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in
connection with its hedging or settlement activity hereunder in a manner that would, if Dealer were
Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal and
regulatory requirements or with related internal policies or procedures of Dealer.

          (n) Staggered Settlement. If upon advice of counsel with respect to applicable legal
and regulatory requirements, including any requirements relating to Dealer’s hedging activities
hereunder, Dealer reasonably determines that it would not be practicable or advisable to deliver,
or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on the
Settlement Date for the Transaction, Dealer may, by notice to the Counterparty prior to any
Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more
dates (each, a “Staggered Settlement Date”) or at two or more times on the Nominal
Settlement Date as follows:

     (i) in such notice, Dealer will specify to Counterparty the related Staggered
Settlement Dates (each of which will be on or prior to such Nominal Settlement Date, but not
prior to the beginning of such “Observation Period,” as defined in the Indenture) or
delivery times and how it will allocate the Shares it is required to deliver under “Delivery
Obligation” (above) among the Staggered Settlement Dates or delivery times; and

     (ii) the aggregate number of Shares that Dealer will deliver to Counterparty hereunder
on all such Staggered Settlement Dates and delivery times will equal the number of Shares
that Dealer would otherwise be required to deliver on such Nominal Settlement Date.

          (o) Repurchase Notices. Counterparty shall, on any day on which Counterparty effects
any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a
“Repurchase Notice”) on such day if, following such repurchase, the Units Equity Percentage
as determined on such day is (i) equal to or greater than 13.0% and (ii) greater by 0.5% than the
Units Equity Percentage included in the immediately preceding Repurchase Notice (or, in the case of
the first such Repurchase Notice, greater by 0.5% than the Units Equity Percentage as of the date
hereof). 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 Convertible Bond Hedging Transactions dated March 27, 2008 between Dealer and
Counterparty (the “2008 Bond Hedge”)) and (ii) the denominator of which is the number of
Shares outstanding on such day. Counterparty agrees to indemnify and hold harmless Dealer and its
Affiliates and their respective officers, directors and controlling persons (each, a “Section
16 Indemnified Person”) from and against any and all losses (including losses relating to
Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, subject to
the reporting and profit disgorgement provisions of Section 16 of the Exchange Act, including
without limitation, any forbearance from hedging activities or cessation of hedging activities and
any losses in connection therewith with respect to any Transaction), claims, damages, judgments,
liabilities and expenses (including reasonable attorney’s fees), joint or several, to which a
Section 16 Indemnified Person may become subject, as a result of Counterparty’s failure to provide
Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph (o), and
to reimburse, upon written request, each such Section 16 Indemnified Person for any reasonable
legal or other expenses incurred in connection with investigating, preparing for, providing
testimony or other evidence in connection with or defending any of the foregoing. If any suit,
action, proceeding (including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against any Section 16 Indemnified Person, such Section 16 Indemnified
Person shall promptly notify Counterparty in writing, and Counterparty, upon request of such
Section 16 Indemnified Person, shall retain counsel reasonably satisfactory to such Section 16
Indemnified Person to represent such Section 16 Indemnified Person and any others Counterparty may
designate in such proceeding and shall pay the fees and expenses of such counsel related to such
proceeding. Counterparty shall be relieved from liability to the extent that

15

 

such Section 16 Indemnified Person fails to promptly notify Counterparty of any action
commenced against it in respect of which indemnity may be sought hereunder; provided, that
failure to notify Counterparty (i) shall not relieve Counterparty from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and (ii) shall not, in any event,
relieve Counterparty from any liability that it may have otherwise than on account of this
paragraph (o). Counterparty shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a final judgment for
the plaintiff, Counterparty agrees to indemnify any Section 16 Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. Counterparty shall not, without
the prior written consent of each Section 16 Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Section 16 Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by any such Section 16 Indemnified
Person, unless such settlement includes an unconditional release of each such Section 16
Indemnified Person from all liability on claims that are the subject matter of such proceeding on
terms reasonably satisfactory to each such Section 16 Indemnified Person. If the indemnification
provided for in this paragraph (o) is unavailable to a Section 16 Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred to therein, then
Counterparty, in lieu of indemnifying such Section 16 Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Section 16 Indemnified Person as a result of such
losses, claims, damages or liabilities. The remedies provided for in this paragraph (o) are not
exclusive and shall not limit any rights or remedies that may otherwise be available to any Section
16 Indemnified Person at law or in equity. The indemnity and contribution agreements contained in
this paragraph (o) shall remain operative and in full force and effect regardless of the
termination of any Transaction.

          (p) Early Unwind. In the event the sale of Convertible Notes for any Transaction
hereunder is not consummated with the initial purchasers thereof for any reason by the close of
business in New York City on the Early Unwind Date set forth in the Confirmation for such
Transaction, such Transaction shall automatically terminate on such Early Unwind Date and (i) such
Transaction and all of the respective rights and obligations of Dealer and Counterparty under such
Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged
by the other party from and agrees not to make any claim against the other party with respect to
any obligations or liabilities of the other party arising out of and to be performed in connection
with such Transaction either prior to or after such Early Unwind Date.

          (q) Registration. Counterparty hereby agrees that if the Shares (the “Hedge
Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the
Transaction, in Dealer’s good faith and reasonable judgment, cannot be sold in the U.S. public
market by Dealer without registration under the Securities Act, Counterparty shall, at its
election: (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make
available to Dealer an effective registration statement under the Securities Act to cover the
resale of such Hedge Shares and (A) enter into an agreement, in form and substance satisfactory to
Dealer and Counterparty, substantially in the form of an underwriting agreement for a registered
secondary offering, (B) provide accountant’s “comfort” letters in customary form for registered
offerings of equity securities, (C) provide disclosure opinions of nationally recognized outside
counsel to Counterparty reasonably acceptable to Dealer, (D) provide other customary opinions,
certificates and closing documents customary in form for registered offerings of equity securities
and (E) afford Dealer a reasonable opportunity to conduct a “due diligence” investigation with
respect to Counterparty customary in scope for underwritten offerings of equity securities;
provided that if Dealer, in its sole reasonable discretion, is not satisfied with access to
due diligence materials, the results of its due diligence investigation, or the procedures and
documentation for the registered offering referred to above, then clause (ii) of this section shall
apply at the election of Counterparty; (ii) in order to allow Dealer to sell the Hedge Shares in a
private placement, enter into a private placement agreement substantially similar to private
placement agreements customary for private placements of equity securities, in form and substance
satisfactory to Dealer and Counterparty, including customary representations, covenants, blue sky
and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights
(for Dealer or any designated buyer of the Hedge Shares from Dealer), opinions and certificates and
such other documentation as is customary for private placements agreements, all reasonably
acceptable to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms
of the Transaction that are necessary, in its reasonable judgment, to compensate Dealer for any
discount from the public market price of the Shares incurred on the sale of Hedge Shares in a
private placement); or (iii) purchase the Hedge Shares from Dealer at the price

16

 

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 of the Exchange to
the Scheduled Closing Time of the Exchange on such Valid Day (or if such volume-weighted average
price is unavailable, the market value of one Share on such Valid Day, as determined by the
Calculation Agent using a volume-weighted method) on such Exchange Business Days, and in the
amounts, requested by Dealer; provided, that, for the avoidance of doubt, Counterparty
shall not be required to purchase the Hedge Shares pursuant to this clause (iii) unless it makes
the election to do so hereunder.

          (r) Conversion Rate Adjustments. Counterparty shall provide to Dealer written notice
(such notice, a “Conversion Rate Adjustment Notice”), concurrently with a public
announcement of any transaction or event (a “Conversion Rate Adjustment Event”) (and at
least five Scheduled Trading Days (as such term is defined in the Indenture) prior to the date the
related adjustment to the Conversion Rate (as such term is defined in the Indenture) would be
effective under the Indenture) that is reasonably expected to lead to an increase in the Conversion
Rate (as such term is defined in the Indenture), which Conversion Rate Adjustment Notice shall set
forth the new, adjusted Conversion Rate after giving effect to such Conversion Rate Adjustment
Event (the “New Conversion Rate”). In connection with the delivery of any Conversion Rate
Adjustment Notice to Dealer, if prior to public announcement, (x) Counterparty shall, concurrently
with or prior to such delivery, publicly announce and disclose the Conversion Rate Adjustment Event
or (y) Counterparty shall, concurrently with such delivery, represent and warrant that the
information set forth in such Conversion Rate Adjustment Notice does not constitute material
non-public information with respect to Counterparty or the Shares.

          (s) Amendments to Definitions. (i) 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 Dealer’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.”

          (ii) Section 12.9(b)(i) of the Definitions is hereby amended by (1) replacing “either party
may elect” with “Dealer may elect” and (2) replacing “notice to the other party” with “notice to
Counterparty” in the first sentence of such section.

          (t) Role of Agent. (i) The Agent is registered as a broker-dealer with the U.S.
Securities and Exchange Commission and the Financial Industry Regulatory Authority, is acting
hereunder for and on behalf of Dealer solely in its capacity as agent for Dealer pursuant to
instructions from Dealer, and is not and will not be acting as Counterparty’s agent, broker,
advisor or fiduciary in any respect under or in connection with any Transaction.

          (ii) In addition to acting as Dealer’s agent in executing the Transactions, the Agent is
authorized from time to time to give written payment and/or delivery instructions to Counterparty
directing it to make its payments and/or deliveries under any Transaction to an account of the
Agent for remittance to Dealer (or its designee), and for that purpose any such payment or delivery
by Counterparty to the Agent shall be treated as a payment or delivery to Dealer.

          (iii) Except as otherwise provided herein, any and all notices, demands, or communications of
any kind transmitted in writing by either Dealer or Counterparty under or in connection with any
Transaction will be transmitted exclusively by such party to the other party through the Agent at
the following address:

Wells Fargo Securities, LLC

201 South College Street, 6th Floor

Charlotte, NC 28288-0601

Facsimile No.: (704) 383-8425

Telephone No.: (704) 715-8086
Attention: Equity Derivatives

17

 

          (iv) The Agent shall have no responsibility or liability to Dealer or Counterparty for or
arising from (A) any failure by either Dealer or Counterparty to perform any of their respective
obligations under or in connection with any Transaction, (B) the collection or enforcement of any
such obligations, or (C) the exercise of any of the rights and remedies of either Dealer or
Counterparty under or in connection with any Transaction. Each of Dealer and Counterparty agrees
to proceed solely against the other to collect or enforce any such obligations, and the Agent shall
have no liability in respect of any Transaction except for its gross negligence or willful
misconduct in performing its duties as the agent of Dealer.

          (v) Upon written request, the Agent will furnish to Dealer and Counterparty the date and time
of the execution of the Transactions and a statement as to the source and amount of any
remuneration received or to be received by the Agent in connection with the Transactions.

	 	 	 	 	 
	 	 	12. Addresses for Notice:
	 
	 

	 	If to Dealer:
	 	Wachovia Bank, National Association
	 

	 	 	 	c/o Mark Kohn or Head Trader
	 

	 	 	 	375 Park Avenue, NY4073
	 

	 	 	 	New York, NY 10152
	 

	 	 	 	Telephone No.: (212) 214-6089
	 

	 	 	 	Facsimile No.: (212) 214-8917
	 
	 

	 	If to Counterparty:
	 	PHH Corporation
	 

	 	 	 	3000 Leadenhall Road,
	 

	 	 	 	Mt. Laurel New Jersey 08054
	 

	 	 	 	Fax: (856) 917-4278
	 

	 	 	 	Attention: Treasurer
	 
	 	 	13. Accounts for Payment:
	 
	 

	 	To Dealer:
	 	Wachovia Bank, National Association
	 

	 	 	 	Charlotte, NC
	 

	 	 	 	ABA: 053-000-219
	 

	 	 	 	Account No.: 04659360009768
	 

	 	 	 	Attn: Equity Derivatives
	 
	 

	 	To Counterparty:
	 	JP Morgan Chase
	 

	 	 	 	ABA 021 000 021
	 

	 	 	 	PHH Corporation
	 

	 	 	 	Account number 323018688
	 
	 	 	14. Delivery Instructions:
	 
	 	 	Unless otherwise directed in writing, any Share to be delivered hereunder shall be
delivered as follows:
	 
	 

	 	To Counterparty:
	 	Counterparty to advise.

18

 

     

     

	 	 	 	 	 
	 	Yours sincerely,	 
	 	 	 
	 	WELLS FARGO SECURITIES, LLC, acting solely in
its capacity as Agent of Wachovia Bank,
National Association	 
	 	 	 
	 	By:  	                    /s/ Mary Louise Guttmann
 	 
	 	 	Authorized Signatory 	 
	 	 	Name:	Mary Louise Guttmann

Senior Vice President

Assistant General Counsel 
	 

	 	 	 	 	 
	 	WACHOVIA BANK NATIONAL ASSOCIATION,
 by Wells
Fargo Securities, LLC, acting solely in its
capacity as Agent	 
	 	 	 
	 	By:  	                                             /s/ Mary Louise Guttmann
 	 
	 	 	Authorized Signatory 	 
	 	 	Name: 	 Mary Louise Guttmann

Senior Vice President

Assistant General Counsel 	 
	 

	 	 	 	 
	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 (“Counterparty”)
	 
	 	 
	Facsimile:

	 	(856) 917-4278
	 
	 	 
	Attention:

	 	Treasurer
	 
	 	 
	From:

	 	Wachovia Bank, National Association (“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 Wachovia Bank, National
Association, represented by Wells Fargo Securities, LLC as its agent, 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:

	 	[_________], 20[___]
	 
	 	 	 	 
	Effective Date:

	 	The closing date for the initial issuance of the Convertible Notes

	 
	 	 	 	 
	Premium:

	 	USD [___]

	 
	 	 	 	 
	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.

A-1

 

	 	 	 	 	 
	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:
	 	22%	 	 
	 	 	 	 	 
	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.

A-2

 

          3. Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon
receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm
that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the
agreement between Dealer and Counterparty with respect to the Transaction, by manually signing this
Confirmation or this page hereof as evidence of agreement to such terms and providing the other
information requested herein and immediately returning an executed copy by facsimile to
212-214-5913 (Attention: Equity Division Documentation Unit, by telephone contact 212-214-6100).

	 	 	 	 	 
	 	Yours sincerely,	 
	 	 	 
	 	WELLS FARGO SECURITIES, LLC, acting solely in
its capacity as Agent of Wachovia Bank,
National Association	 
	 	 	 
	 	By:  	
 	 
	 	 	Authorized Signatory

	 
	 	 	Name: 	 

	 	 	 	 	 
	 	WACHOVIA BANK NATIONAL ASSOCIATION,
 by Wells
Fargo Securities, LLC, acting solely in its
capacity as Agent	 
	 	 	 
	 	By:  	
 	 
	 	 	Authorized Signatory

	 
	Name: 	 	
 	 
	 

	 	 	 	 
	Confirmed as of the

date first above written:	 
	 	 	 
	PHH CORPORATION
 	 
	 	 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:

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