Exhibit 10.4

 

Execution Version

 

SECOND AMENDED AND RESTATED

MSR RECAPTURE AGREEMENT

 

This Second Amended and Restated MSR Recapture Agreement (the “Agreement”) is
dated as of June 30, 2020, by and between PennyMac Loan Services, LLC, a
Delaware limited liability company (the “Servicer”), and PennyMac Corp., a
Delaware corporation (the “MSR Owner”), and is effective as of July 1, 2020.

 

RECITALS

 

WHEREAS, the MSR Owner engages in the business of purchasing conventional,
government and jumbo residential mortgage loans from originators under the
correspondent lending program established by the MSR Owner and its affiliates
and owning the related mortgage servicing rights;

 

WHEREAS, the MSR Owner has caused or will cause the appointment of the Servicer
as servicer to perform the servicing duties with respect to certain of such
mortgage loans pursuant to the Fourth Amended and Restated Flow Servicing
Agreement (the “Servicing Agreement”), dated as of June 30, 2020, between the
Servicer, as servicer, and the MSR Owner, as owner;

 

WHEREAS, the Servicer obtains a competitive benefit from so serving as the
servicer of such mortgage loans;

 

WHEREAS, the MSR Owner and the Servicer entered into the Amended and Restated
MSR Recapture Agreement dated as of September 12, 2016 (the “Original
Agreement”) and Amendment No. 1 to MSR Recapture Agreement, dated as of December
1, 2017 (“Amendment No. 1,” and the Original Agreement, as amended by Amendment
No. 1, the “Existing MSR Recapture Agreement”), pursuant to which the MSR Owner
engaged the Servicer as a service provider to provide other services to the MSR
Owner and its affiliates in connection with the purchasing activities of MSR
Owner; and

 

WHEREAS, the MSR Owner and the Servicer have agreed to amend and restate the
Existing MSR Recapture Agreement on the terms set forth herein.

 

NOW, THEREFORE, in consideration of the mutual premises and agreements set forth
herein and for other good and valuable consideration, the receipt and the
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.01        Definitions. For purposes of this Agreement, the following
capitalized terms, unless the context otherwise requires, shall have the
respective meanings set forth below:

 

“AAA” has the meaning set forth in Section 3.02(f).

 

 

 

 

“Acknowledgment Letter” means that certain letter of even date herewith between
the MSR Owner and the Servicer, to which letter a mortgage loan schedule is
attached.

 

“Affiliate” means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, “control” when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by management contract or otherwise and the terms “controlling” and
“controlled” have meanings correlative to the foregoing; provided, however, that
Affiliates of the MSR Owner shall include only PennyMac Mortgage Investment
Trust and its wholly-owned subsidiaries, and Affiliates of the Servicer shall
include only PennyMac Financial Services, Inc., Private National Mortgage
Acceptance Company, LLC and their wholly-owned subsidiaries.

 

“Arbitrator” has the meaning set forth in Section 3.02(f).

 

“Correspondent” means any lender that originates conventional, government and
jumbo residential mortgage loans under the correspondent lending program
established by the MSR Owner and its Affiliates.

 

“Correspondent Loan” means a newly originated Mortgage Loan acquired by the MSR
Owner or one of its wholly-owned subsidiaries from a Correspondent.

 

“Dispute” has the meaning set forth in Section 3.02(f).

 

“Fannie Mae” means the Federal National Mortgage Association, or any successor
thereto.

 

“Fee Amendment” has the meaning set forth in Section 3.02(e).

 

“Fee Negotiation Request” has the meaning set forth in Section 3.02(e).

 

“Freddie Mac” means the Federal Home Loan Mortgage Corporation, or any successor
thereto.

 

“HUD” means the United States Department of Housing and Urban Development, or
any successor thereto.

 

“Mortgage File” means, with respect to each Mortgage Loan, the documents and
instruments relating to such Mortgage Loan and set forth in an exhibit to the
applicable custodial agreement.

 

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“Mortgage Loan” means a one-to-four family residential loan that is secured by a
mortgage, deed of trust or other similar security instrument. A Mortgage Loan
includes the Mortgage Loan Documents, the Mortgage File, the monthly payments,
any principal payments or prepayments, any related escrow accounts, the mortgage
servicing rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan.

 

“Mortgage Loan Documents” means, with respect to a mortgage loan, the mortgage,
deed of trust or other similar security instrument, the promissory note, any
assignments and an electronic record or copy of the mortgage loan application.

 

“Mortgage Loan Identification Date” means, with respect to each calendar month
in which the Servicer originates one or more New Mortgage Loans, the 25th day of
the immediately succeeding calendar month.

 

“New Mortgage Loan” has the meaning set forth in Section 3.02(c).

 

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

 

“Portfolio” means the entire group of Correspondent Loans for which the MSR
Owner owns the Servicing Rights from time to time and the Servicer is serving as
the servicer or subservicer.

 

“Recapture Payment” means, for each month, the sum of the following: (i) the
product of (A) .040, and (B) the fair market value of the Servicing Rights
relating to New Mortgage Loans subject to the first 15% of Recapture Rate for
such month, plus (ii) the product of (A) .035, and (B) the fair market value of
the Servicing Rights relating to New Mortgage Loans subject to the Recapture
Rate in excess of 15% and up to 30% for such month, plus (iii) the product of
(A) .030, and (B) the fair market value of the Servicing Rights relating to New
Mortgage Loans subject to the Recapture Rate in excess of 30% for such month.

 

“Recapture Rate” means, during each month, the ratio of (i) the aggregate unpaid
principal balance of all New Mortgage Loans originated in such month, to (ii)
the aggregate unpaid principal balance of all Mortgage Loans from the Portfolio
that were refinanced or otherwise paid off in such month.

 

“REIT Requirements” means the requirements imposed on real estate investment
trusts pursuant to Sections 856 through and including 860 of the Code.

 

“Servicing Rights” means, with respect to each Mortgage Loan, the right to do
any and all of the following: (a) service and administer such Mortgage Loan; (b)
collect any payments or monies payable or received for servicing such Mortgage
Loan; (c) collect any late fees, assumption fees, penalties or similar payments
with respect to such Mortgage Loan; (d) enforce the provisions of all agreements
or documents creating, defining or evidencing any such servicing rights and all
rights of the servicer thereunder, including, but not limited to, any clean-up
calls and termination options; (e) collect and apply any escrow payments or
other similar payments with respect to such Mortgage Loan; (f) control and
maintain all accounts and other rights to payments related to any of the
property described in the other clauses of this definition; (g) possess and use
any and all documents, files, records, servicing files, servicing documents,
servicing records, data tapes, computer records, or other information pertaining
to such Mortgage Loan or pertaining to the past, present or prospective
servicing of such Mortgage Loan; and (h) enforce any and all rights, powers and
privileges incident to any of the foregoing.

 

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Section 1.02        General Interpretive Principles. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:

 

(a)               The terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;

 

(b)               Accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;

 

(c)               References herein to “Articles,” “Sections,” “Subsections,”
“Paragraphs,” and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;

 

(d)               A reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;

 

(e)               The words “herein,” “hereof,” “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and

 

(f)                The term “include” or “including” shall mean without
limitation by reason of enumeration.

 

ARTICLE 2

 

REPRESENTATIONS AND WARRANTIES

 

Section 2.01        Representations, Warranties and Agreements of the Servicer.
The Servicer hereby makes to the MSR Owner, as of the date hereof and as of the
date of each transfer hereunder, the representations and warranties set forth on
Exhibit B.

 

Section 2.02       Representations, Warranties and Agreements of the MSR Owner.
The MSR Owner hereby makes to the Servicer, as of the date hereof and as of the
date of each transfer hereunder, the representations and warranties set forth on
Exhibit C.

 

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ARTICLE 3

 

TERM; MSR RECAPTURE

 

Section 3.01        Term of Agreement; Rights to Terminate. This Agreement shall
have an initial term of five years from the date hereof (the “Initial Term”).
After the Initial Term, this Agreement shall be deemed renewed automatically
every 18 months for an additional 18 month period (an “Automatic Renewal Term”)
unless the MSR Owner or the Servicer terminates this Agreement upon the
expiration of the Initial Term or any Automatic Renewal Term and upon at least
180 days’ prior written notice to the MSR Owner or the Servicer, as applicable.
Notwithstanding the foregoing, if (i) the Amended and Restated Mortgage Banking
Services Agreement, between the Servicer and the MSR Owner, dated as of June 30,
2020 (the “MBS Agreement”), is terminated by the MSR Owner without cause as
provided in such agreement, (ii) the Servicing Agreement is terminated by
PennyMac Operating Partnership, L.P. without cause as provided in such agreement
or (iii) the Second Amended and Restated Management Agreement, among PennyMac
Mortgage Investment Trust, PennyMac Operating Partnership, L.P. and PNMAC
Capital Management, LLC, dated as of June 30, 2020 (the “Management Agreement”),
is terminated by PennyMac Mortgage Investment Trust without cause as provided in
such agreement, the Servicer shall have the right to terminate this Agreement
without cause upon notice to the MSR Owner. In addition, if (i) either of the
MBS Agreement or the Servicing Agreement is terminated by PennyMac Loan Services
without cause as provided in each such agreement or (ii) the Management
Agreement is terminated by PNMAC Capital Management, LLC without cause as
provided in such agreement, the MSR Owner shall have the right to terminate this
Agreement without cause upon notice to the Servicer. Further, if PennyMac
Operating Partnership, L.P. exercises its right to terminate the Servicing
Agreement without cause under Section 8.01(a)(iii) thereof with respect to one
or more Mortgage Loans, then such loans shall be deemed to be removed from the
Portfolio upon such termination and this Agreement shall continue in effect with
respect to the remaining loans in the Portfolio until scheduled expiration or
early termination with respect to such remaining loans pursuant to this Section
3.01. Following any such termination of this Agreement, the Servicer shall not
take any action with respect to the refinancing of any loans in the Portfolio
(or, if termination occurs with respect to some such loans and not others
pursuant to this Section 3.01, the loans that are deemed to be removed from the
Portfolio as described in the preceding sentence); provided, however, that such
restrictions shall not prohibit the Servicer from generalized advertising not
targeted exclusively to the borrowers under such mortgage loans, including on
its website, monthly account statements, or VRU (voice response unit), mortgage
leads purchased from third parties, recorded communications, or otherwise
engaging in a program directed to the general public at large to encourage or
recommend mortgage loan products and other products and services provided by the
Servicer or its affiliates, or from taking applications for refinance from such
borrowers as a result thereof.

 

Section 3.02        MSR Recapture.

 

(a)               The Servicer acknowledges that the Mortgage Loans described in
the Acknowledgment Letter constitute the initial Portfolio.

 

(b)               On each date when the MSR Owner acquires the Servicing Rights
with respect to any Correspondent Loan and appoints the Servicer as servicer
therefor under the Servicing Agreement, such Correspondent Loan shall be added
to the Portfolio.

 

(c)               The MSR Owner hereby waives any right it has to contractually
prohibit the Servicer from soliciting the Mortgage Loans in the Portfolio. In
consideration for such waiver and for other value received, if, during any
calendar month, the Servicer or its Affiliates originate new residential
mortgage loans the proceeds of which are used to refinance a Mortgage Loan in
the Portfolio (such new mortgage loan, a “New Mortgage Loan”), the Servicer
shall wire to the MSR Owner cash in an amount equal to the Recapture Payment.
Such Recapture Payment shall be made within five (5) calendar days of the
Mortgage Loan Identification Date related to such month. Further, the Servicer
covenants and agrees to allocate resources to achieve a Recapture Rate of at
least 15% and report, from time to time and no less than quarterly, on monthly
Recapture Rates and any other relevant metrics or other activities involving
such allocated resources that support this covenant.

 

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(d)               Not later than the Mortgage Loan Identification Date related
to each month in which the Servicer or an Affiliate thereof has originated New
Mortgage Loans, the Servicer shall prepare and maintain a schedule (or
schedules), available upon the MSR Owner’s request, (i) identifying, in order of
origination date, each New Mortgage Loan and the related Mortgage Loan in the
Portfolio that was refinanced using proceeds of such New Mortgage Loan, and (ii)
setting forth the Servicer’s calculations of the fair market value of the
Servicing Rights relating to such New Mortgage Loans.

 

(e)               Notwithstanding anything to the contrary contained herein,
upon the written request (a “Fee Negotiation Request”) of the MSR Owner or the
Servicer following a determination by the MSR Owner or the Servicer that the
Recapture Payments payable to the MSR Owner hereunder differ materially from
market rates of compensation for agreements comparable to this Agreement, which
request includes a proposal for revised rates of compensation hereunder, the
parties hereto shall negotiate in good faith to amend the provisions of this
Agreement relating to the Recapture Payments in order to cause such compensation
to be materially consistent with market rates of compensation for agreements
comparable to this Agreement (a “Fee Amendment”); provided, however, that no
such request shall be made until eighteen (18) months after the effective date
of this Agreement, after which time each such party may make such request (i)
once with respect to compensation to be paid during the remainder of the Initial
Term, which request shall be made prior to the expiration of the Initial Term,
and (ii) once with respect to compensation to be paid during any Automatic
Renewal Term, which request shall be made at least 210 days prior to the start
of such Automatic Renewal Term. If the parties are unable to reach agreement on
the terms of a Fee Amendment within thirty (30) days of the date of delivery of
the relevant Fee Negotiation Request, then the terms of such Fee Amendment shall
be determined by final and binding arbitration in accordance with Section
3.02(f).

 

(f)                All disputes, differences and controversies of the MSR Owner
or the Servicer relating to a Fee Amendment (individually, a “Dispute” and,
collectively, “Disputes”) shall be resolved by final and binding arbitration
administered by the American Arbitration Association (“AAA”) under its
Commercial Arbitration Rules, subject to the following provisions:

 

(i)                Following the delivery of a written demand for arbitration by
either the MSR Owner or the Servicer, each party shall choose one (1) arbitrator
within ten (10) business days after the date of such written demand and the two
chosen arbitrators shall mutually, within ten (10) business days after selection
select a third (3rd) arbitrator (each, an “Arbitrator” and together, the
“Arbitrators”), each of whom shall be a retired judge selected from a roster of
arbitrators provided by the AAA. If the third (3rd) Arbitrator is not selected
within fifteen (15) business days after delivery of the written demand for
arbitration (or such other time period as the MSR Owner and the Servicer may
agree), the MSR Owner and the Servicer shall promptly request that the
commercial panel of the AAA select an independent Arbitrator meeting such
criteria.

 

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(ii)              The rules of arbitration shall be the Commercial Rules of the
American Arbitration Association; provided, however, that notwithstanding any
provisions of the Commercial Arbitration Rules to the contrary, unless otherwise
mutually agreed to by the MSR Owner and the Servicer, the sole discovery
available to each party shall be its right to conduct up to two (2) non-expert
depositions of no more than three (3) hours of testimony each.

 

(iii)              The Arbitrators shall render a decision by majority decision
within three (3) months after the date of appointment, unless the MSR Owner and
the Servicer agree to extend such time. The decision shall be final and binding
upon the MSR Owner and the Servicer; provided, however, that such decision shall
not restrict either the MSR Owner or the Servicer from terminating this
Agreement pursuant to the terms hereof.

 

(iv)              Each party shall pay its own expenses in connection with the
resolution of Disputes, including attorneys’ fees, unless determined otherwise
by the Arbitrator.

 

(v)               The MSR Owner and the Servicer agree that the existence,
conduct and content of any arbitration pursuant to this Section 3.02(f) shall be
kept confidential and neither the MSR Owner nor the Servicer shall disclose to
any Person any information about such arbitration, except in connection with
such arbitration or as may be required by law or by any regulatory authority (or
any exchange on which such party’s securities are listed) or for financial
reporting purposes in such party’s financial statements.

 

ARTICLE 4

 

LIABILITIES OF SERVICER AND MSR OWNER

 

Section 4.01        Liability of the MSR Owner and the Servicer. The MSR Owner
and the Servicer shall each be liable in accordance herewith only to the extent
of the obligations specifically and respectively imposed upon and undertaken by
the MSR Owner and Servicer herein.

 

Section 4.02        Merger or Consolidation of the Servicer.

 

(a)               The Servicer shall keep in full effect its existence, rights
and franchises as an entity and maintain its qualification to service mortgage
loans for each of Fannie Mae, Freddie Mac and HUD and comply with the laws of
each State in which any Mortgaged Property is located to the extent necessary to
protect the validity and enforceability of this Agreement, and to perform its
duties under this Agreement.

 

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(b)               Any Person into which the Servicer may be merged, converted,
or consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the business of the Servicer, shall be the successor of the Servicer
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that such successor shall have expressly
assumed the duties of the Servicer hereunder.

 

Section 4.03        Indemnification.

 

(a)               The Servicer shall indemnify the MSR Owner, its directors,
officers, employees and agents and hold them harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable legal fees
and related costs, judgments, and any other costs, fees and expenses that any of
them may sustain by reason of the Servicer’s (i) willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement, (ii)
reckless disregard of its obligations or duties under this Agreement or (iii)
breach of its representations, warranties or covenants under this Agreement.

 

(b)               The MSR Owner shall indemnify the Servicer, its directors,
officers, employees and agents and hold them harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable legal fees
and related costs, judgments, and any other costs, fees and expenses that any of
them may sustain by reason of the MSR Owner’s (i) willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement, (ii)
reckless disregard of its obligations or duties under this Agreement or (iii)
breach of its representations or warranties under this Agreement.

 

ARTICLE 5

 

MISCELLANEOUS

 

Section 5.01        Notices. All notices, requests, demands and other
communications which are required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given upon the
delivery or mailing thereof, as the case may be, sent by registered or certified
mail, return receipt requested:

 

(i)           if to the Servicer:

 

PennyMac Loan Services, LLC
Attn: Director, Servicing Operations
3043 Townsgate Road
Westlake Village, CA 91361

 

With a copy to:

 

PennyMac Loan Services, LLC
Attn: Chief Legal Officer
3043 Townsgate Road
Westlake Village, CA 91361

 

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(ii)         if to the MSR Owner:

 

PennyMac Corp.
Attn: Chief Legal Officer
3043 Townsgate Road
Westlake Village, CA 91361

 

With copies to:

 

PennyMac Operating Partnership, L.P.
Attn: Chief Legal Officer
3043 Townsgate Road
Westlake Village, CA 91361

 

and

 

Stoner Fox Law Group, LLP

Attn: John E. Stoner

120 Vantis, Suite 300

Aliso Viejo, California 92656

 

or such other address as may hereafter be furnished to the other parties by like
notice.

 

Section 5.02        Amendment. Neither this Agreement, nor any terms hereof, may
be amended, supplemented or modified except in an instrument in writing executed
by the parties hereto.

 

Section 5.03        Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof.

 

Section 5.04        Binding Effect; Beneficiaries. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective permitted successors and assigns. No provision of this
Agreement is intended or shall be construed to give to any Person, other than
the parties hereto, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.

 

Section 5.05        Headings. The section and subsection headings in this
Agreement are for convenience of reference only and shall not be deemed to alter
or affect the interpretation of any provisions hereof.

 

Section 5.06        Further Assurances. The Servicer agrees to execute and
deliver such instruments and take such further actions as the MSR Owner may,
from time to time, reasonably request in order to effectuate the purposes and to
carry out the terms of this Agreement.

 

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Section 5.07        Governing Law. This Agreement shall be construed in
accordance with the substantive laws of the State of New York applicable to
agreements made and to be performed entirely in such State, and the obligations,
rights and remedies of the parties hereunder shall be determined in accordance
with such laws. The parties hereto intend that the provisions of Section 5-1401
of the New York General Obligations Law shall apply to this Agreement.

 

Section 5.08        Relationship of Parties. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the
parties. The duties and responsibilities of the Servicer shall be rendered by it
as an independent contractor and not as an agent of the MSR Owner. The Servicer
shall have full control of all of its acts, doings, proceedings, relating to or
requisite in connection with the discharge of its duties and responsibilities
under this Agreement.

 

Section 5.09        Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.

 

Section 5.10        No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of a party hereto, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.

 

Section 5.11         Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and form integral parts of this Agreement.

 

Section 5.12        Counterparts. This Agreement may be executed by the parties
to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.

 

Section 5.13         WAIVER OF TRIAL BY JURY.

 

EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND,
THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A
TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.

 

Section 5.14         LIMITATION OF DAMAGES.

 

NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE PARTIES AGREE
THAT NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL
OR PUNITIVE DAMAGES WHATSOEVER, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE
AND STRICT LIABILITY), OR ANY OTHER LEGAL OR EQUITABLE PRINCIPLE, PROVIDED,
HOWEVER, THAT SUCH LIMITATION SHALL NOT BE APPLICABLE WITH RESPECT TO ANY THIRD
PARTY CLAIM MADE AGAINST A PARTY.

 

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Section 5.15        SUBMISSION TO JURISDICTION; WAIVERS.

 

EACH OF THE MSR OWNER AND THE SERVICER HEREBY IRREVOCABLY (I) SUBMITS, FOR
ITSELF IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
JURISDICTION OF ANY NEW YORK STATE AND FEDERAL COURTS SITTING IN THE BOROUGH OF
MANHATTAN IN NEW YORK CITY WITH RESPECT TO MATTERS ARISING OUT OF OR RELATING TO
THIS AGREEMENT; (II) AGREES THAT ALL CLAIMS WITH RESPECT TO ANY ACTION OR
PROCEEDING REGARDING SUCH MATTERS MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE OR FEDERAL COURTS; (III) WAIVES, TO THE FULLEST POSSIBLE EXTENT, WITH
RESPECT TO SUCH COURTS, THE DEFENSE OF AN INCONVENIENT FORUM; AND (IV) AGREES
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW.

 

(Remainder of page intentionally left blank)

 

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IN WITNESS WHEREOF, the Servicer and the MSR Owner have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
date first above written.

 

  PENNYMAC LOAN SERVICES, LLC   (Servicer)           By: /s/ Douglas E. Jones  
Name: Douglas E. Jones   Title: President       PENNYMAC CORP.   (MSR Owner)    
  By: /s/ Andrew S. Chang   Name: Andrew S. Chang   Title: Senior Managing
Director and     Chief Financial Officer

 

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EXHIBIT A

 

(Reserved)

 

A-1 

 

 

EXHIBIT B

 

(Representations and Warranties of the Servicer)

 

(a)               Due Organization and Good Standing. The Servicer is duly
organized, validly existing and in good standing as a limited liability company
under the laws of the State of Delaware and has the power and authority to own
its assets and to transact the business in which it is currently engaged, and
the Servicer is in compliance with the laws of each state or other jurisdiction
in which any Mortgaged Property is located to the extent necessary to perform
its obligations under this Agreement.

 

(b)               No Violation of Organizational Documents or Agreements. The
execution and delivery of this Agreement by the Servicer, and the performance
and compliance with the terms of this Agreement by the Servicer, will not
violate the Servicer’s organizational documents or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, or result in the breach of, any material agreement or other instrument to
which the Servicer is a party or which is applicable to it or any of its assets.

 

(c)               Full Power and Authority. The Servicer has the full power and
authority to enter into and consummate all transactions contemplated by this
Agreement, has duly authorized the execution, delivery and performance of this
Agreement, and has duly executed and delivered this Agreement.

 

(d)               Binding Obligation. This Agreement, assuming due
authorization, execution and delivery by the other parties hereto, constitutes a
valid, legal and binding obligation of the Servicer, enforceable against the
Servicer in accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors’ rights generally, and (B) general principles of
equity, regardless of whether such enforcement is considered in a proceeding in
equity or at law.

 

(e)               No Violation of Law, Regulation or Order. The Servicer is not
in violation of, and its execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will not constitute
a violation of, any law, any order or decree of any court or arbiter, or, to the
Servicer’s knowledge, any order, regulation or demand of any federal, state or
local governmental or regulatory authority, which violation, in the Servicer’s
good faith and reasonable judgment, is likely to affect materially and adversely
either the ability of the Servicer to perform its obligations under this
Agreement or the financial condition of the Servicer.

 

(f)                No Material Litigation. No litigation is pending or, to the
best of the Servicer’s knowledge, threatened against the Servicer that, if
determined adversely to the Servicer, would prohibit the Servicer from entering
into this Agreement or that, individually or in the aggregate, in the Servicer’s
good faith and reasonable judgment, is likely to materially and adversely affect
either the ability of the Servicer to perform its obligations under this
Agreement or the financial condition of the Servicer.

 

(g)               No Consent Required. Any consent, approval, authorization or
order of any court or governmental agency or body required under federal or
state law for the execution, delivery and performance by the Servicer of or
compliance by the Servicer with this Agreement or the consummation of the
transactions contemplated by this Agreement has been obtained and is effective
except where the lack of consent, approval, authorization or order would not
have a material adverse effect on the performance by the Servicer under this
Agreement.

 

B-1 

 

 

(h)               Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement is in the ordinary course of
business of the Servicer.

 

B-2 

 

 

EXHIBIT C

 

(Representations and Warranties of the MSR Owner)

 

 

(i)                Due Organization and Good Standing. The MSR Owner is duly
organized, validly existing and in good standing as a corporation under the laws
of the State of Delaware and has the power and authority to own its assets and
to transact the business in which it is currently engaged.

 

(j)                No Violation of Organizational Documents or Agreements. The
execution and delivery of this Agreement by the MSR Owner, and the performance
and compliance with the terms of this Agreement by the MSR Owner, will not
violate the MSR Owner’s organizational documents or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, or result in the breach of, any material agreement or other instrument to
which the MSR Owner is a party or which is applicable to it or any of its
assets.

 

(k)               Full Power and Authority. The MSR Owner has the full power and
authority to enter into and consummate all transactions contemplated by this
Agreement, has duly authorized the execution, delivery and performance of this
Agreement, and has duly executed and delivered this Agreement.

 

(l)                Binding Obligation. This Agreement, assuming due
authorization, execution and delivery by the other parties hereto, constitutes a
valid, legal and binding obligation of the MSR Owner, enforceable against the
MSR Owner in accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors’ rights generally, and (B) general principles of
equity, regardless of whether such enforcement is considered in a proceeding in
equity or at law.

 

(m)              No Violation of Law, Regulation or Order. The MSR Owner is not
in violation of, and its execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will not constitute
a violation of, any law, any order or decree of any court or arbiter, or, to the
MSR Owner’s knowledge, any order, regulation or demand of any federal, state or
local governmental or regulatory authority, which violation, in the MSR Owner’s
good faith and reasonable judgment, is likely to affect materially and adversely
either the ability of the MSR Owner to perform its obligations under this
Agreement or the financial condition of the MSR Owner.

 

(n)               No Material Litigation. No litigation is pending or, to the
best of the MSR Owner’s knowledge, threatened against the MSR Owner that, if
determined adversely to the MSR Owner, would prohibit the MSR Owner from
entering into this Agreement or that, in the MSR Owner’s good faith and
reasonable judgment, is likely to materially and adversely affect either the
ability of the MSR Owner to perform its obligations under this Agreement or the
financial condition of the MSR Owner.

 

(o)               No Consent Required. Any consent, approval, authorization or
order of any court or governmental agency or body required under federal or
state law for the execution, delivery and performance by the MSR Owner of or
compliance by the MSR Owner with this Agreement or the consummation of the
transactions contemplated by this Agreement has been obtained and is effective
except where the lack of consent, approval, authorization or order would not
have a material adverse effect on the performance by the MSR Owner under this
Agreement.

 

C-1