Document:

EX-10.9

 

Exhibit 10.9

CONFIRMATION

	 	 	 
	Date:

	 	March 27, 2008
	 
	 	 
	To:

	 	PHH Corporation (“Issuer”)
	 
	 	 
	Facsimile:

	 	(856) 917-4278
	 
	 	 
	Attention:

	 	Treasurer
	 
	 	 
	From:

	 	Wachovia Bank, National Association (“Dealer”)
	 
	 	 
	Facsimile:

	 	212-214-5913
	 
	 	 
	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 Wachovia Bank, National
Association, acting through the agency of Wachovia Capital Markets, LLC (the “Agent”), and
PHH Corporation, dated as of March 27, 2008 (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:

	 	March 27, 2008
	 
	 	 
	Effective Date:

	 	April 2, 2008
	 
	 	 
	Strike Price:

	 	USD 27.20
	 
	 	 
	Premium:

	 	USD 8,354,400.14
	 
	 	 
	Premium Payment Date:

	 	The Effective Date.
	 
	 	 
	Maximum Delivery Amount:

	 	4,328,000 Shares (as adjusted for stock splits, stock dividends,
recapitalizations and similar events)

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

A-1

 

	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date
	1.
	 	35,772
	 	July 16, 2012
	2.
	 	35,772
	 	July 17, 2012
	3.
	 	35,772
	 	July 18, 2012
	4.
	 	35,772
	 	July 19, 2012
	5.
	 	35,772
	 	July 20, 2012
	6.
	 	35,772
	 	July 23, 2012
	7.
	 	35,772
	 	July 24, 2012
	8.
	 	35,772
	 	July 25, 2012
	9.
	 	35,772
	 	July 26, 2012
	10.
	 	35,772
	 	July 27, 2012
	11.
	 	35,772
	 	July 30, 2012
	12.
	 	35,772
	 	July 31, 2012
	13.
	 	35,772
	 	August 1, 2012
	14.
	 	35,772
	 	August 2, 2012
	15.
	 	35,772
	 	August 3, 2012
	16.
	 	35,772
	 	August 6, 2012
	17.
	 	35,772
	 	August 7, 2012
	18.
	 	35,772
	 	August 8, 2012
	19.
	 	35,772
	 	August 9, 2012
	20.
	 	35,772
	 	August 10, 2012
	21.
	 	35,772
	 	August 13, 2012
	22.
	 	35,772
	 	August 14, 2012
	23.
	 	35,772
	 	August 15, 2012
	24.
	 	35,772
	 	August 16, 2012
	25.
	 	35,772
	 	August 17, 2012
	26.
	 	35,772
	 	August 20, 2012
	27.
	 	35,772
	 	August 21, 2012
	28.
	 	35,772
	 	August 22, 2012
	29.
	 	35,772
	 	August 23, 2012
	30.
	 	35,772
	 	August 24, 2012
	31.
	 	35,772
	 	August 27, 2012
	32.
	 	35,772
	 	August 28, 2012
	33.
	 	35,772
	 	August 29, 2012
	34.
	 	35,772
	 	August 30, 2012
	35.
	 	35,772
	 	August 31, 2012
	36.
	 	35,772
	 	September 4, 2012
	37.
	 	35,772
	 	September 5, 2012
	38.
	 	35,772
	 	September 6, 2012
	39.
	 	35,772
	 	September 7, 2012
	40.
	 	35,772
	 	September 10, 2012
	41.
	 	35,772
	 	September 11, 2012
	42.
	 	35,772
	 	September 12, 2012
	43.
	 	35,772
	 	September 13, 2012
	44.
	 	35,772
	 	September 14, 2012
	45.
	 	35,772
	 	September 17, 2012
	46.
	 	35,772
	 	September 18, 2012
	47.
	 	35,772
	 	September 19, 2012
	48.
	 	35,772
	 	September 20, 2012
	49.
	 	35,772
	 	September 21, 2012
	50.
	 	35,772
	 	September 24, 2012

A-2

 

	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date
	51.
	 	35,772
	 	September 25, 2012
	52.
	 	35,772
	 	September 26, 2012
	53.
	 	35,772
	 	September 27, 2012
	54.
	 	35,772
	 	September 28, 2012
	55.
	 	35,772
	 	October 1, 2012
	56.
	 	35,772
	 	October 2, 2012
	57.
	 	35,772
	 	October 3, 2012
	58.
	 	35,772
	 	October 4, 2012
	59.
	 	35,772
	 	October 5, 2012
	60.
	 	35,772
	 	October 8, 2012
	61.
	 	35,772
	 	October 9, 2012
	62.
	 	35,772
	 	October 10, 2012
	63.
	 	35,772
	 	October 11, 2012
	64.
	 	35,772
	 	October 12, 2012
	65.
	 	35,772
	 	October 15, 2012
	66.
	 	35,772
	 	October 16, 2012
	67.
	 	35,772
	 	October 17, 2012
	68.
	 	35,772
	 	October 18, 2012
	69.
	 	35,772
	 	October 19, 2012
	70.
	 	35,772
	 	October 22, 2012
	71.
	 	35,772
	 	October 23, 2012
	72.
	 	35,772
	 	October 24, 2012
	73.
	 	35,772
	 	October 25, 2012
	74.
	 	35,772
	 	October 26, 2012
	75.
	 	35,772
	 	October 29, 2012
	76.
	 	35,772
	 	October 30, 2012
	77.
	 	35,772
	 	October 31, 2012
	78.
	 	35,772
	 	November 1, 2012
	79.
	 	35,772
	 	November 2, 2012
	80.
	 	35,772
	 	November 5, 2012
	81.
	 	35,772
	 	November 6, 2012
	82.
	 	35,772
	 	November 7, 2012
	83.
	 	35,772
	 	November 8, 2012
	84.
	 	35,772
	 	November 9, 2012
	85.
	 	35,772
	 	November 12, 2012
	86.
	 	35,772
	 	November 13, 2012
	87.
	 	35,772
	 	November 14, 2012
	88.
	 	35,772
	 	November 15, 2012
	89.
	 	35,772
	 	November 16, 2012
	90.
	 	35,772
	 	November 19, 2012
	91.
	 	35,772
	 	November 20, 2012
	92.
	 	35,772
	 	November 21, 2012
	93.
	 	35,772
	 	November 23, 2012
	94.
	 	35,772
	 	November 26, 2012
	95.
	 	35,772
	 	November 27, 2012
	96.
	 	35,772
	 	November 28, 2012
	97.
	 	35,772
	 	November 29, 2012
	98.
	 	35,772
	 	November 30, 2012
	99.
	 	35,772
	 	December 3, 2012
	100.
	 	35,772
	 	December 4, 2012
	101.
	 	35,772
	 	December 5, 2012
	102.
	 	35,772
	 	December 6, 2012
	103.
	 	35,772
	 	December 7, 2012

A-3

 

	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date
	104.
	 	35,772
	 	December 10, 2012
	105.
	 	35,772
	 	December 11, 2012
	106.
	 	35,772
	 	December 12, 2012
	107.
	 	35,772
	 	December 13, 2012
	108.
	 	35,772
	 	December 14, 2012
	109.
	 	35,772
	 	December 17, 2012
	110.
	 	35,772
	 	December 18, 2012
	111.
	 	35,772
	 	December 19, 2012
	112.
	 	35,772
	 	December 20, 2012
	113.
	 	35,772
	 	December 21, 2012
	114.
	 	35,772
	 	December 24, 2012
	115.
	 	35,772
	 	December 26, 2012
	116.
	 	35,772
	 	December 27, 2012
	117.
	 	35,772
	 	December 28, 2012
	118.
	 	35,772
	 	December 31, 2012
	119.
	 	35,772
	 	January 2, 2013
	120.
	 	35,816
	 	January 3, 2013

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 or in the Master Confirmation and immediately returning an
executed copy by facsimile at 212-214-5913 (Attention: Equity Division Documentation Unit, by
telephone contact 212-214-6100).

Yours sincerely,

	 	 	 	 	 	 	 	 	 	 	 
	WACHOVIA CAPITAL MARKETS, LLC,	 	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION	 	 
	acting solely in its capacity as Agent of Wachovia Bank, National Association	 	 	 	By:  	Wachovia Capital Markets, LLC, acting solely in its capacity as its Agent	 
	 	 	 	 	 	 	 
	By:  

	/s/ Mary Lou Guttmann
	 	 
	 	By:  
	/s/ Mary Lou Guttmann	 	 
	 	Name: 	 Mary Lou Guttman
	 	 	 	 	Name: 	Mary Lou Guttman
	 	 
	 

	Title: 	Senior Vice President
	 	 	 	 	Title: 	Senior Vice President	 	 

Confirmed as of the
date first above written:

PHH CORPORATION

	 	 	 	 	 
	By:  	/s/ Mark E. Johnson
 	 	 
	 	Name:	Mark E. Johnson 	 	 
	 	Title:	Vice President & TreasurerEX-10.10

 

Exhibit 10.10

MASTER TERMS AND CONDITIONS FOR CONVERTIBLE BOND HEDGING TRANSACTIONS

BETWEEN CITIBANK, N.A. AND PHH CORPORATION

          The purpose of this Master Terms and Conditions for Convertible Bond Hedging Transactions
(this “Master Confirmation”), dated as of March 27, 2008, is to set forth certain terms and
conditions for convertible bond hedging transactions to be entered into between Citibank, N.A.
(“Citi”) and PHH Corporation (“Counterparty”). Each such transaction (a
“Transaction”) entered into between Citi 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 Citi 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 Citi
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 Citi and Counterparty or any
confirmation or other between Citi and Counterparty pursuant to which an ISDA Master Agreement is
deemed to exist between Citi and Counterparty, then notwithstanding anything to the contrary in
such ISDA Master Agreement, such confirmation or agreement or any other agreement to which Citi 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 Citi 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:

	 	Citi
	 
	 	 
	Buyer:

	 	Counterparty
	 
	 	 
	Shares:

	 	The Common Stock of Counterparty, par value USD 0.0001 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:

	 	Citi.

          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 Date be deemed to occur hereunder (and no exercise of any
Units shall occur) with respect to Convertible Notes as to

2

 

	 	 	 
	 

	 	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 Citi 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 corresponding to such Exercise Date and (iii) the “Cash

3

 

	 	 	 
	 

	 	Percentage” (as such term is defined in the
Indenture) 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 Citi 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);
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 Citi 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 pursuant to clause (iii) above
equal to 100%, unless on the date of its election of
something other than “Cash Percentage” under the
Indenture equal to 100%, Counterparty shall represent
to Citi that, as of such date, (i) it is not in
possession of any material non-public information
with respect to itself or the Shares and (ii) it has
obtained the requisite shareholder vote for the
issuance of any Shares in settlement of such
Convertible Notes pursuant to the Indenture.

          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

4

 

	 	 	 
	 

	 	in the Indenture.
	 
	 	 
	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 Citi
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 Equity

5

 

	 	 	 
	 

	 	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.

          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

6

 

	 	 	 
	 

	 	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 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.
	 
	 	 
	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

7

 

	 	 	 
	Hedging Disruption:

	 	Not Applicable
	 
	 	 
	Increased Cost of Hedging:

	 	Not Applicable
	 
	 	 
	Determining Party

	 	For all applicable Additional Disruption Events, Citi.

          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 March 27,
2008 between, among others, Counterparty and Citi as a representative of the Initial Purchasers (as
defined in the Purchase Agreement), and, in addition, represents and warrants to, and agrees with,
Citi on the Trade 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;

     (iii) it understands that Citi 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 Citi to it hereunder will be entitled to the
benefit of deposit insurance and that such obligations will not be guaranteed by any
Affiliate of Citi 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

8

 

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 Citi 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.

          (c) Counterparty shall deliver to Citi an opinion of counsel, dated as of the Effective Date
for each Transaction hereunder and reasonably acceptable to Citi 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).

9

 

          (b) Alternative Calculations and Citi Payment on Early Termination and on Certain
Extraordinary Events. If, Citi 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 “Citi Payment
Obligation”), Counterparty shall have the right, in its sole discretion, to require Citi to
satisfy any such Citi Payment Obligation by delivery of Termination Delivery Units (as defined
below) by giving irrevocable telephonic notice to Citi, 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 Citi Termination Delivery”);
provided that (i) if Counterparty does not validly request Citi to satisfy its Citi Payment
Obligation by Termination Delivery Units, Citi shall have the right, in its sole discretion, to
satisfy its Citi 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 Citi to satisfy its Citi Payment Obligation by Termination Delivery
Units unless on the date of any such notice, Counterparty represents to Citi 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 Citi
Termination Delivery, Citi shall deliver to Counterparty a number of Termination Delivery Units
having a cash value equal to the amount of such Citi 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 Citi 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 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
Citi may impose, including but not limited, to the following conditions:

10

 

          (A) With respect to any Transfer Options, Counterparty shall not be released from its notice
and indemnification obligations to Citi 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 Citi,
will not expose Citi 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 Citi;

          (D) Citi 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 Citi 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 Citi to permit Citi 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 Citi in connection with such transfer or assignment.

          (ii) Citi may transfer or assign its rights and obligations hereunder and under the Agreement,
in whole or in part, to any of its affiliates without the consent of Counterparty, provided that
Counterparty shall have recourse to Citi in the event of the failure by the transferee to perform
any of such obligations hereunder. If at any time at which (1) Citi’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%, or (3) 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 Citi divided by (y) the
number of Counterparty’s outstanding Shares (the “Control Share Percentage”) exceeds 8.0%, Citi, 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 Citi and within a time
period reasonably acceptable to Citi such that (1) Citi’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 or (3) the Control Share Percentage is reduced to 8.0% or less, Citi 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) its “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% or (3) the Control Share Percentage following such
partial termination will be equal to or less than 8.0%. In the event that Citi 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.

11

 

          (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.

          (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 Citi and upon receipt thereof, Citi 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) Citi 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

12

 

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 Citi to
Counterparty in connection with such Additional Termination Event, payment of such amount shall be
satisfied by delivery by Citi to Counterparty of an amount of cash and/or a number of Shares or
Termination Delivery Units, in such percentages as notified to Citi in writing at the time the
relevant “Conversion Notice” is forwarded by Counterparty to Citi, 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 Citi to
Counterparty in connection with such Additional Termination Event.

          (f) Status of Claims in Bankruptcy. Citi acknowledges and agrees that this Master
Confirmation, together with any Confirmation, is not intended to convey to Citi 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 Citi’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 Citi’s rights in respect of any transactions other
than the Transactions.

          (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 Citi, 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 Citi, 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. Citi has the right to delegate any or
all of its rights and obligations under a Transaction to deliver or accept delivery of Shares to
any of its Affiliates; provided that Counterparty shall have recourse to Citi in the event
of failure by the assignee to perform any of such obligations hereunder. Notwithstanding the
foregoing, the recourse to Citi shall be limited to recoupment of Counterparty’s monetary damages
and Counterparty hereby waives any right to seek specific performance by Citi of its obligations
hereunder. Such failure after any applicable grace period shall be deemed to be an Additional
Termination Event, such Transaction shall be the only Affected Transaction and Citi shall be the
only Affected Party.

          (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 CITI 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 CITI
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.

13

 

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.

          (m) Extension of Settlement. Citi may postpone any Potential Exercise Date or any
other date of valuation or delivery by Citi, 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 Citi determines, in its reasonable discretion, that such extension is reasonably necessary or
advisable to preserve Citi hedging activity hereunder in light of existing liquidity conditions or
to enable Citi to effect purchases of Shares in connection with its hedging or settlement activity
hereunder in a manner that would, if Citi 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 Citi.

          (n) Staggered Settlement. If upon advice of counsel with respect to applicable legal
and regulatory requirements, including any requirements relating to Citi’s hedging activities
hereunder, Citi 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 Citi on the Settlement
Date for the Transaction, Citi 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, Citi 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 Citi will deliver to Counterparty hereunder on
all such Staggered Settlement Dates and delivery times will equal the number of Shares that
Citi 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 Citi 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 8.0% 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

14

 

the date hereof). The “Units Equity Percentage” as of any day is the fraction the
numerator of which is the aggregate Number of Shares for all Transactions hereunder and the
denominator of which is the number of Shares outstanding on such day. Counterparty agrees to
indemnify and hold harmless Citi 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 Citi’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 Citi 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 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 o
r 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 Citi 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. The purchase price paid by
Counterparty shall be Citi’s actual cost of such Shares and derivatives as Citi informs
Counterparty and shall be paid in immediately available funds on such Early Unwind Date.

          (q) Registration. Counterparty hereby agrees that if the Shares (the “Hedge
Shares”) acquired by Citi for the purpose of hedging its obligations pursuant to the
Transaction, in Citi’s good faith and

15

 

reasonable judgment, cannot be sold in the U.S. public market by Citi without registration
under the Securities Act, Counterparty shall, at its election: (i) in order to allow Citi to sell
the Hedge Shares in a registered offering, make available to Citi 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 Citi 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 Citi, (D) provide other customary opinions, certificates and closing documents customary in form
for registered offerings of equity securities and (E) afford Citi 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 Citi, 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 Citi to sell the Hedge Shares in a private placement, enter into a private placement
agreement substantially similar to private placement Underwriting Agreements customary for private
placements of equity securities, in form and substance satisfactory to Citi and Counterparty,
including customary representations, covenants, blue sky and other governmental filings and/or
registrations, indemnities to Citi, due diligence rights (for Citi or any designated buyer of the
Hedge Shares from Citi), opinions and certificates and such other documentation as is customary for
private placements agreements, all reasonably acceptable to Citi (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 Citi 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 Citi at the price 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 Citi; 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 Citi 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 Citi, 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 Equity Definitions. (i) Section 12.6(a)(ii) of the Equity
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 Citi’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 Equity Definitions is hereby amended by (1) replacing “either
party may elect” with “Citi may elect” and (2) replacing “notice to the other party” with “notice
to Counterparty” in the first sentence of such section.

16

 

          (t) Amendment. If the Initial Purchasers (as defined in the Purchase Agreement)
exercise their right to purchase additional Convertible Notes as set forth therein (the
“Additional Convertible Notes”), then on the closing date for the purchase and sale of the
Additional Convertible Notes, (i) the Number of Units will be automatically increased by additional
Units (the “Additional Units”) equal to the number of Additional Convertible Notes in
denominations of USD 1,000 principal amount purchased pursuant to such exercise by the Initial
Purchaser affiliated with Citi; and (ii) Counterparty shall pay to Citi, on the closing date for
such Additional Convertible Notes, an additional premium in USD equal to the product of the
Additional Units and a fraction, the numerator of which is the Premium and the denominator of which
is the Number of Units (prior to any such increase).

           12. Addresses for Notice:

	 	 	 	 	 
	 

	 	If to Citi:
	 	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 Counterparty:
	 	PHH Corporation
	 

	 	 	 	3000 Leadenhall Road,
	 

	 	 	 	Mt. Laurel New Jersey 08054
	 

	 	 	 	Fax: (856) 917-4278
	 

	 	 	 	Attention: Treasurer
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Wm. David Chalk, Esq.,
	 

	 	 	 	DLA Piper US LLP
	 

	 	 	 	6225 Smith Avenue
	 

	 	 	 	Baltimore, Maryland 21209-3600,
	 

	 	 	 	Fax: (410) 580-3120

           13. Accounts for Payment:

	 	 	 	 	 
	 

	 	To Citi:
	 	Citibank, N.A.
	 

	 	 	 	ABA #021000089
	 

	 	 	 	DDA 00167679
	 

	 	 	 	Ref: 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:

17

 

	 	 	 	 	 
	 

	 	To Counterparty:
	 	Counterparty to advise.

18

 

	 	 	 	 	 
	 	Yours sincerely,

CITIBANK, N.A.

 	 
	 	By:  	/s/ Jason Shrednick
 	 
	 	 	Name:  	Jason Shrednick 	 
	 	 	Title:  	Authorized Signatory 	 
	 

	 	 	 	 	 
	Confirmed as of the
date first above written:

PHH CORPORATION

 	 	 
	By:  	/s/ Mark E. Johnson
 	 	 
	 	Name:  	Mark E. Johnson 	 	 
	 	Title:  	Vice President & Treasurer 	 	 

 

 

EXHIBIT A

CONFIRMATION

	 	 	 
	Date:

	 	March 27, 2008
	 
	 	 
	To:

	 	PHH Corporation (“Counterparty”)
	 
	 	 
	Facsimile:

	 	(856) 917-4278
	 
	 	 
	Attention:

	 	Treasurer
	 
	 	 
	From:

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

	 	(212) 615-8985
	 
	 	 
	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 March 27, 2008 (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:

	 	March 27, 2008

	 
	 	 	 	 
	Effective Date:

	 	The closing date for the initial issuance of the Convertible Notes

	 
	 	 	 	 
	Premium:

	 	USD 13,587,900

	 
	 	 	 	 
	Premium Payment Date:

	 	The Effective Date

	 
	 	 	 	 
	Convertible Notes:

	 	4.0% Convertible Senior Notes due 2012, offered pursuant to an Offering Memorandum to be dated as of
March 27, 2008 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:

	 	30%
	 
	 	 	 	 
	Number of Shares:

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

	 
	 	 	 	 
	Expiration Date:

	 	April 15, 2012

	 
	 	 	 	 
	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 April 2, 2008 by and between Counterparty and The Bank of New York, 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 5.06(g), 5.02 and 5.17 of the Indenture

	 
	 	 	 	 
	Dilution Provisions:

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

	 
	 	 	 	 
	Merger Provision:

	 	Section 5.12 of the Indenture

	 
	 	 	 	 
	Tender Offer Provision:

	 	Section 5.12 of the Indenture

	 
	 	 	 	 
	Make-Whole Provisions:

	 	Section 5.02(a) of the Indenture

	 
	 	 	 	 
	Early Unwind Date:

	 	April 2, 2008, or such later date as agreed by the parties hereto.

A-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 or in the Master Confirmation 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:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	Confirmed as of the
date first above written:

PHH CORPORATION

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:

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