MASTER TERMS AND CONDITIONS FOR WARRANTS ISSUED BY PHH CORPORATION

Exhibit 10.3

MASTER TERMS AND CONDITIONS FOR WARRANTS
ISSUED BY PHH CORPORATION

          The purpose of this Master Terms and Conditions for Warrants (this “ Master Confirmation ”), dated as of March 27, 2008, is to set forth certain terms and conditions for warrant transactions that PHH Corporation (“ Issuer ”) shall enter into with JPMorgan Chase Bank, National Association (“JPMorgan”), as initial purchaser. Each such transaction (a “ Transaction ”) entered into between JPMorgan and Issuer that is to be subject to this Master Confirmation shall be evidenced by a written confirmation substantially in the form of Exhibit A hereto, with such modifications thereto as to which Issuer and JPMorgan mutually agree (a “ Confirmation ”). This Master Confirmation and each Confirmation together constitute a “Confirmation” as referred to in the Agreement specified below.

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

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

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

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

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

          2. Each party will make each payment specified in this Master Confirmation or a Confirmation as being payable by such party, not later than the due date for value on that date in the place of the account specified

below or otherwise specified in writing, in freely transferable funds and in a manner customary for payments in the required currency.

           3. Confirmations and General Terms :

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

Components:		Each Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Warrants and Expiration Date set forth in the Confirmation for such Transaction. The payments and deliveries to be made upon settlement of each Transaction will be determined separately for each Component or such Transaction as if each Component were a separate Transaction under the Agreement.
Warrant Style:		European
Warrant Type:		Call
Seller:		Issuer
Buyer:		JPMorgan
Shares:		The common stock, USD 0.01 par value per share, of Issuer (Ticker Symbol: “PHH”).
Trade Date:		As set forth in the Confirmation for such Transaction
Effective Date:		As set forth in the Confirmation for such Transaction
Number of Warrants:		For each Component, as set forth in the Confirmation for such Transaction.
Multiple Exercise:		Not Applicable
Warrant Entitlement:		One Share Per Warrant
Minimum Number of Warrants:		0
Maximum Number of Warrants:		For any Transaction, the Number of Warrants for such Transaction.
Strike Price:		As set forth in the Confirmation for such Transaction
Premium:		As set forth in the Confirmation for such Transaction
Premium Payment Date:		As set forth in the Confirmation for such Transaction

Exchange:		New York Stock Exchange
Related Exchanges:		All Exchanges
Calculation Agent:		Buyer.

           4. Procedure for Exercise and Valuation :

In respect of any Component:
Expiration Time:		The Valuation Time
Expiration Dates:		As set forth in the Confirmation for such Transaction (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component); provided that if that date is a Disrupted Day, the Expiration Date for such Component shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an Expiration Date in respect of any other Component of a Transaction hereunder; and provided , further , that if the Expiration Date has not occurred pursuant to the preceding proviso as of the Final Disruption Date, the Final Disruption Date shall be the Expiration Date (irrespective of whether such date is an Expiration Date in respect of any other Component for a Transaction). Notwithstanding the foregoing and anything to the contrary in the Definitions, if a Market Disruption Event occurs on any Expiration Date, the Calculation Agent may determine that such Expiration Date is a Disrupted Day only in part, in which case the Calculation Agent shall make adjustments to the number of Warrants for the relevant Component for which such day shall be the Expiration Date and shall designate the Scheduled Trading Day determined in the manner described in the immediately preceding sentence as the Expiration Date for the remaining Warrants for such Component. Section 6.6 of the Definitions shall not apply to any Valuation Date occurring on an Expiration Date.
Automatic Exercise:		Applicable. The Warrants for any Component shall be deemed automatically exercised at the Expiration Time on the Expiration Date for such Component if at such time the Warrants are In-the-Money; provided that all references in Section 3.4(b) of the Equity Definitions to “Physical Settlement” shall be read as references to “Net Share Settlement.” “ In-the-Money ” means, for any Transaction, that the Reference Price is greater than the Strike Price for such Transaction.
Reference Price:		For any Valuation Date, the per Share volume-weighted average price on the Exchange as displayed under the heading “Bloomberg VWAP” on Bloomberg page PHH.N <equity> AQR (or any successor thereto) in respect of the period from

		the scheduled opening time to the Scheduled Closing Time (New York City time) on such Valuation Date (or if such volume-weighted average price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent). Notwithstanding anything to the contrary in the Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the Reference Price for such Valuation Date on the basis of its good faith estimate of the market value for the relevant Shares on such Valuation Date.
Valuation Time:		As defined in Section 6.1 of the Definitions
Valuation Date:		Each Exercise Date
Final Disruption Date:		For any Transaction, the eighth Scheduled Trading Day immediately following the scheduled Expiration Date for the last Component of such Transaction.
Market Disruption Event:		The third and fourth lines of Section 6.3(a) of the Definitions are hereby amended by deleting the words “during the one hour period that ends at the relevant Valuation Time” and replacing them with “at any time prior to the relevant Valuation Time”.

           5. Settlement Terms :

In respect of any Component:
Net Share Settlement:		On each Settlement Date, Issuer shall deliver to Buyer a number of Shares equal to the Net Share Amount for such Settlement Date to the account specified by Buyer and cash in lieu of any fractional shares valued at the Reference Price for the Valuation Date corresponding to such Settlement Date. If Buyer reasonably determines that, for any reason, the Shares deliverable upon Net Share Settlement would not be immediately freely transferable by Buyer under Rule 144 under the Securities Act of 1933, as amended (the “ Securities Act ”), then Buyer may elect to either (x) accept delivery of such Shares notwithstanding any restriction on transfer or (y) have the provisions set forth in Section 12(c) below apply.
Net Share Amount:		For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the product of (i) the number of Warrants being exercised or deemed exercised on the Exercise Date corresponding to such Settlement Date, and (ii) the excess, if any, of the Reference Price for the Valuation Date corresponding to such Settlement Date over the Strike Price for the relevant Transaction (such product, the “ Net Share Settlement Amount ”), divided by such Reference Price.
Settlement Currency:		USD

Failure to Deliver:		Applicable
Representation and Agreement:		To the extent Seller is obligated to deliver Shares hereunder, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 and 9.12 of the Definitions will be applicable as if Physical Settlement were applicable to the Transaction; provided that the Representation and Agreement contained in Section 9.11 of the Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Seller is the Issuer of the Shares.
Maximum Delivery Amount:		As set forth in the Confirmation for such Transaction

           6. Dividends :

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

           7. Share Adjustments :

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

           8. Extraordinary Events :

Consequences of Merger Events:
(a) Share-for-Share:		Modified Calculation Agent Adjustment
(b) Share-for Other:		Cancellation and Payment (Calculation Agent Determination)
(c) Share-for-Combined:		Cancellation and Payment (Calculation Agent Determination); provided that JPMorgan may elect, in its commercially reasonable judgment, Component Adjustment (Calculation Agent Determination)
Tender Offer:		Applicable
Consequences of Tender Offers:
(a) Share-for-Share:		Modified Calculation Agent Adjustment
(b) Share-for-Other:		Modified Calculation Agent Adjustment
(c) Share-for-Combined:		Modified Calculation Agent Adjustment; provided, however, that if an event occurs that constitutes both a Tender Offer under Section 12.1(d) of the Equity Definitions and an Additional Termination Event under Section 12(f) of this Master Confirmation, JPMorgan may elect, in its commercially reasonable judgment, whether the provisions of Section 12.3 of the Equity Definitions or Section 12(f) of this Master Confirmation will apply
Composition of Combined Consideration:		Not Applicable
Nationalization, Insolvency or Delisting:		Cancellation and Payment (Calculation Agent Determination).
		In addition to the provisions of Section 12.6(a)(iii) of the Definitions, it will also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed or re-traded on any of the New York Stock Exchange, the American Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed or re-traded on any such exchange, such exchange shall thereafter be deemed to be the Exchange and the Calculation Agent shall make any adjustments it deems necessary to the terms of the Transaction, as if Modified Calculation Agent Adjustment were applicable to such event.
Determining Party:		Buyer

           9. Additional Disruption Events :

Change in Law:		Applicable; provided that Section 12.9(a)(ii) of the Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “or

		public announcement of the formal or informal interpretation” and (ii) immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”.
Failure to Deliver:		Applicable
Insolvency Filing:		Applicable, except if Issuer is a debtor (or similar participant) with respect to such Insolvency Filing.
Hedging Disruption:		Applicable
Increased Cost of Hedging:		Applicable
Loss of Stock Borrow:		Applicable
Maximum Stock Loan Rate:		2.00%
Increased Cost of Stock Borrow:		Applicable
Initial Stock Loan Rate:		0.25%
Hedging Party:		For all applicable Additional Disruption Events, Buyer
Determining Party:		For all applicable Additional Disruption Events, Buyer

           10. Acknowledgements :

Non-Reliance:		Applicable
Agreements and Acknowledgments Regarding Hedging Activities:		Applicable
Additional Acknowledgments:		Applicable

           11. Representations, Warranties and Agreements :

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

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

     (ii) it is an “eligible contract participant” as defined in Section 1a(12) of the Commodity Exchange Act, as amended (the “ CEA ”), and this Master Confirmation and each Transaction hereunder are subject to individual negotiation by the parties and have not been executed or traded on a “trading facility” as defined in Section 1a(33) of the CEA.

          (b) Issuer hereby repeats the representations and warranties of Issuer set forth in Section 1 of the Purchase Agreement (the “ Purchase Agreement ”) dated as of March 27, 2008 between, among others, Issuer

and Buyer as a representative of the Initial Purchasers (as defined in the Purchase Agreement), and, in addition, represents and warrants to, and agrees with, Buyer on the Trade Date of each Transaction that:

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

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

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

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

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

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

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

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

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

           12. Miscellaneous :

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

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

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

          (c) Registration/Private Placement Procedures . (i) With respect to each Transaction, the following provisions shall apply to the extent provided for above opposite the caption “Net Share Settlement” in Section 5, if Buyer reasonably determines that, for any reason, the Shares deliverable upon Net Share Settlement would not be immediately freely transferable by Buyer under Rule 144 under the Securities Act, or in paragraph (b)

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

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

     (A) Buyer (or an Affiliate of Buyer designated by Buyer) shall be afforded a reasonable opportunity to conduct a due diligence investigation with respect to Issuer that is customary in sco