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Master Exchange Agreement

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Title:

Master Exchange Agreement

Entities:

JPMorgan Chase Bank; PHH Corp; Wachovia Bank, NA; Bank of America, NA

Date:

2006

Size:

110KB total

Price:

$61

ID:

#1650924

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MASTER EXCHANGE AGREEMENT

Dated as of March 7, 2006

by and among

PHH FUNDING, LLC

CHESAPEAKE FINANCE HOLDINGS LLC

D.L. PETERSON TRUST

Table of Contents

Page

ARTICLE I DEFINITIONS		2
1.1	Capitalized Terms.	2
1.2	Rules of Interpretation	3
ARTICLE II GENERAL PROVISIONS FOR EXCHANGES		3
2.1	Exchange of Properties	3
2.2	Disposition and Transfer of Relinquished Property; Transfer of Relinquished Property Subject to Liabilities	3
2.3	Acquisition and Transfer of Replacement Property	4
2.4	Assignment of Agreements.	4
2.5	Notice to Buyers and Sellers	5
2.6	Direct Transfers	5
2.7	Exclusivity	6
2.8	Records - Monitoring and Retention	6
2.9	Non-Matched Properties	6
2.10	Matching of Relinquished and Replacement Property	7
ARTICLE III IDENTIFICATION OF REPLACEMENT PROPERTIES		7
3.1	Manner of Deemed Identification	7
3.2	Manner of Written Identification	7
3.3	Content of Written Identification	7
ARTICLE IV RECEIPT AND DISBURSEMENT OF FUNDS		8
4.1	Accounts	8
4.2	Separation and Application of Funds in Joint Collection
	Accounts; Proceeds from Transfer of Relinquished Property by PHF	9
4.3	Payment for Replacement Property	10
4.4	Investment of Funds in the Reservoir Account	12
4.5	Disbursements from Account	12
4.6	Security Procedures	12
ARTICLE V INDEMNITY BY EXCHANGOR		12
5.1	Indemnification	12
5.2	Notice and Defense of Claims	13
5.3	Survival	13
5.4	No Setoff	13
ARTICLE VI REPRESENTATIONS, WARRANTIES AND COVENANTS		13
6.1	Representations and Warranties of PHF	13
6.2	Representations and Warranties of Holdings	15
6.3	Survival of Representations and Warranties	16
6.4	Covenants of PHF	17
6.5	Treasury Regulations Disclosure Requirements	17

6.6	Maintenance of Separate Existence	17
6.7	Mergers	18
6.8	Organizational Documents	18
6.9	No Other Agreements	18
6.10	Other Business	18
ARTICLE VII TERM AND COMPENSATION		18
7.1	Term	18
7.2	Compensation	19
ARTICLE VIII MISCELLANEOUS		19
8.1	Pending Litigation	19
8.2	Communication in Writing	19
8.3	Further Assurances	20
8.4	Amendments	20
8.5	Assignment	20
8.6	Successors and Assigns; No Third-Party Beneficiaries	21
8.7	No Benefit to Others	21
8.8	Strict Performance	21
8.9	Time	21
8.10	Severability	21
8.11	Jury Trial Waiver	22
8.12	Waiver of Automatic Stay	22
8.13	Counterparts and Telecopied Signatures	22
8.14	Entire Agreement	22
8.15	Electronic Signature	22
8.16	Indebtedness	23
8.17	Dates, Descriptions, Values, and Matching	23
8.18	Acknowledgment of Independent Relationship	23
8.19	Force Majeure	23
8.20	Consequential Damages	23
8.21	Investment Losses	24
8.22	Governing Law, Venue and Jury Trial Waiver	24
8.23	No Petitions; Subordination	24
8.24	Headings	26

MASTER EXCHANGE AGREEMENT

This MASTER EXCHANGE AGREEMENT (?Agreement?) is entered into as of March 7, 2006, by and among PHH FUNDING, LLC, a Delaware limited liability company, (?PHF?), CHESAPEAKE FINANCE HOLDINGS LLC, a Delaware limited liability company (?Holdings?), and D.L. PETERSON TRUST, a Delaware statutory trust (?D.L. Peterson? and collectively with Holdings, the ?Exchangor?).

RECITALS

WHEREAS, Exchangor desires to effect an LKE Program consisting of a series of Exchanges of one or more Relinquished Properties for one or more Replacement Properties; and

WHEREAS, the Relinquished Properties as they are sold from time to time will be sold to various Buyers; and

WHEREAS, the Replacement Properties as they are purchased from time to time will be purchased from various Sellers; and

WHEREAS, it is the intention of the parties that each disposition of one or more Relinquished Properties and acquisition of one or more Replacement Properties be effectuated pursuant to the terms of this Agreement; and

WHEREAS, Exchangor desires to effectuate each disposition of one or more Relinquished Properties hereunder and each acquisition of one or more Replacement Properties hereunder in a manner that will qualify as one or more like-kind exchanges within the meaning of Section 1031 of the Code and the Treasury Regulations promulgated thereunder (and any applicable corresponding provisions of state tax legislation) pursuant to one or more of the ?safe harbors? described in Section 1.1031(k)-1(g) of the Treasury Regulations; and

WHEREAS, Exchangor desires to effectuate the Exchanges in a manner that will qualify as an LKE program as described in Revenue Procedure 2003-39, Section 3.02 and qualify under one or more of the ?safe harbors? of Revenue Procedure 2003-39, Sections 4, 5 and 6; and

WHEREAS, PHF desires to act as a Qualified Intermediary to facilitate the Exchanges and the LKE Program; and

WHEREAS, it is the intention of the parties that, subject to the terms and provisions of this Agreement, Exchangor assign to PHF, in its capacity as Exchangor?s Qualified Intermediary, Exchangor?s rights (but not its obligations) with respect to each Relinquished Property Agreement; and

WHEREAS, it is the intention of the parties that, as provided in Section 1.1031(k)-1(g)(4)(iv) and (v) of the Treasury Regulations, PHF be considered to have acquired the Relinquished Property from Exchangor and transferred it to the Buyer notwithstanding that Exchangor will transfer legal title to the Relinquished Property directly to the Buyer; and

WHEREAS, it is the intention of the parties that, subject to the terms and provisions of this Agreement, Exchangor assign to PHF in its capacity as Exchangor?s Qualified Intermediary, Exchangor?s rights (but not its obligations) with respect to each Replacement Property Agreement; and

WHEREAS, it is the intention of the parties that, as provided in Section 1.1031(k)-(1)(g)(4)(iv) and (v) of the Treasury Regulations, PHF be considered to have acquired the Replacement Property from the Seller and transferred it to Exchangor notwithstanding that the Seller will transfer legal title to the Replacement Property directly to Exchangor; and

WHEREAS, it is the intention of the parties that Exchangor and PHF will establish certain accounts to facilitate the receipt, sorting and disbursement of funds as may be necessary or helpful in the efficient execution of the LKE Program and that such accounts shall qualify as ?Joint Accounts?; and

WHEREAS, it is the intention of the parties to maintain a Reservoir Account and one or more Joint Collection Accounts and Joint Disbursement Accounts so that for purposes of the Treasury Regulations the Exchangor not be determined to be in actual or constructive receipt of any Relinquished Property Proceeds; and

WHEREAS, it is the intention of the parties hereto that, as provided in Section 1.1031(b)-1(c) of the Treasury Regulations, consideration received by the Exchangor, in the form of relief of liabilities (or a transfer subject to a liability), shall be offset against consideration given by the Exchangor in the form of cash, an assumption of liabilities, or a receipt of property subject to a liability; and

WHEREAS, Exchangor and PHF desire and intend this Agreement to satisfy the requirement of a written agreement referred to in Section 1.1031(k)-1(g)(4)(iii)(B) of the Treasury Regulations and Section 3.02(3) of Revenue Procedure 2003-39;

NOW, THEREFORE, for and in consideration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.1 Capitalized Terms.

Unless the context shall otherwise require, capitalized terms used and not defined herein shall have the meanings assigned thereto in (x) Appendix A attached hereto or (ii) if not defined in Appendix A, then in Schedule 1 to the Base Indenture.

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