Exhibit 10.1

 

EXECUTION

 

 

SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

dated as of March 24, 2017

among

PENNYMAC CORP.,

as a Borrower,

PENNYMAC HOLDINGS, LLC

as a Borrower,

and

CITIBANK, N.A.,
as Lender

 

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Table of Contents

 

Page

 

 

ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS

1

 

 

 

 

Section 1.01

 

Definitions; Construction

1

Section 1.02

 

Accounting Matters

2

 

 

 

 

ARTICLE II LOANS, BORROWING, PREPAYMENT

2

 

 

 

 

Section 2.01

 

Loans

2

Section 2.02

 

Note

3

Section 2.03

 

Servicing Schedules and Funding Requests

3

Section 2.04

 

Borrowing Base Reports

4

Section 2.05

 

Interest

4

Section 2.06

 

Increased Capital Costs

5

Section 2.07

 

Alternate Rate of Interest

6

Section 2.08

 

Mandatory Repayment of Loans

6

Section 2.09

 

Optional Prepayment

7

Section 2.10

 

Commitment Fee

7

Section 2.11

 

Subservicer Credit Event

7

Section 2.12

 

Subordination

7

 

 

 

 

ARTICLE III PAYMENTS; COMPUTATIONS; TAXES; FEES

8

 

 

 

 

Section 3.01

 

Payments and Computations, Etc.

8

Section 3.02

 

Taxes

8

Section 3.03

 

Fees and Expenses

11

 

 

 

 

ARTICLE IV SECURITY INTEREST

11

 

 

 

 

Section 4.01

 

Security Interest

11

Section 4.02

 

Provisions Regarding Pledge of Eligible Assets to Be Included In Financing

Statements

12

Section 4.03

 

Authorization of Financing Statements

12

Section 4.04

 

Lender’s Appointment as Attorney In Fact

12

Section 4.05

 

Release of Security Interest

14

 

 

 

 

ARTICLE V CONDITIONS PRECEDENT

14

 

 

 

 

Section 5.01

 

Conditions Precedent

14

Section 5.02

 

Further Conditions Precedent

15

 

 

 

 

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ARTICLE VI REPRESENTATIONS AND WARRANTIES

15

 

 

 

 

Section 6.01

 

Representations and Warranties of the Borrower

15

Section 6.02

 

Representations Concerning the Collateral

21

 

 

 

 

ARTICLE VII COVENANTS

22

 

 

 

 

Section 7.01

 

Affirmative Covenants of Borrower

22

Section 7.02

 

Negative Covenants of the Borrower

30

Section 7.03

 

Notice of Certain Occurrences

32

 

 

 

 

ARTICLE VIII EVENTS OF DEFAULT

34

 

 

 

 

Section 8.01

 

Events of Default

34

Section 8.02

 

Remedies

38

 

 

 

 

ARTICLE IX ASSIGNMENT

40

 

 

 

 

Section 9.01

 

Restrictions on Assignments

40

Section 9.02

 

Evidence of Assignment; Endorsement on Notes

40

Section 9.03

 

Rights of Assignee

40

Section 9.04

 

Permitted Participants; Effect

40

Section 9.05

 

Voting Rights of Participants

41

 

 

 

 

ARTICLE X INDEMNIFICATION

41

 

 

 

 

Section 10.01

 

Indemnities by the Borrower

41

Section 10.02

 

General Provisions

41

 

 

 

 

ARTICLE XI MISCELLANEOUS

42

 

 

 

 

Section 11.01

 

Amendments, Etc.

42

Section 11.02

 

Notices, Etc

42

Section 11.03

 

No Waiver; Remedies

42

Section 11.04

 

Binding Effect; Assignability

42

Section 11.05

 

AGREEMENT CONSTITUTES SECURITY AGREEMENT; GOVERNING LAW; SUBMISSION TO
JURISDICTION; WAIVERS

43

Section 11.06

 

Entire Agreement

44

Section 11.07

 

Acknowledgement

44

Section 11.08

 

Captions and Cross References

44

Section 11.09

 

Execution in Counterparts

44

Section 11.10

 

Confidentiality

44

Section 11.11

 

Survival

44

Section 11.12

 

Set-Off

45

Section 11.13

 

Joint and Several Liability

45

Section 11.14

 

Amendment and Restatement

45

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Schedules

 

 

 

Schedule I

 

Definitions

 

Schedule 5.01

 

Conditions Precedent to the Effectiveness of this Agreement

 

Schedule 5.02

 

Conditions Precedent to each Loan

 

Schedule 6.01(t)

 

Borrower’s Existing Financing Facilities

 

Schedule 6.02

 

Eligibility Criteria with respect to the Eligible Assets

 

Schedule 7.01(i)

 

Citibank, N.A. Required Investor Reports

 

Schedule 11.02

 

Notices

 

 

 

 

 

 

 

 

 

Exhibits

 

 

 

Exhibit 2.02(a)

 

Form of Note

 

Exhibit 2.03

 

Form of Borrower Funding Request

 

Exhibit 2.08(a)

 

Form of Repayment Notice

 

Exhibit 2.08(b)

 

Form of Prepayment Notice

 

Exhibit 4.04

 

Form of Power of Attorney

 

Exhibit 7.01

 

Form of Compliance Certificate

 

 

 

iii

 

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This SECOND AMENDED AND RESTATED  LOAN AND SECURITY AGREEMENT (as amended or
supplemented from time to time, this “Agreement”) dated as of March 24, 2017, is
by and among PENNYMAC CORP., a Delaware corporation, (“PMAC” or a “Borrower”),
PENNYMAC HOLDINGS, LLC (“Holdings” or a “Borrower”; together with PMAC, the
“Borrowers”) and CITIBANK, N.A., a national banking association, (the “Lender”).

BACKGROUND

The Borrowers wish to obtain financing from time to time to provide funding for
the origination or acquisition of certain Eligible Servicing Rights and Eligible
Excess Servicing Spreads, which Eligible Servicing Rights and Eligible Excess
Servicing Spreads shall secure Loans (as defined herein) to be made by the
Lender hereunder.

Lender has agreed, subject to the terms and conditions of this Agreement (as
defined herein), to provide such financing to the Borrowers.

Accordingly, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING MATTERS

Section 1.01Definitions; Construction.

(a)Capitalized terms used herein and not otherwise defined herein shall have the
meanings specified in Schedule I.

(b)All terms used in Article 9 of the UCC, and not specifically defined herein,
are used herein as defined in such Article 9.

(c)The following rules of this subsection (c) apply unless the context requires
otherwise.  A gender includes all genders.  Where a word or phrase is defined,
its other grammatical forms have a corresponding meaning.  A reference to a
subsection, Section, Annex or Exhibit is, unless otherwise specified, a
reference to a Section of, or annex or exhibit to, this Agreement.  A reference
to a party to this Agreement or another agreement or document includes the
party’s successors and permitted substitutes or assigns. A reference to an
agreement or document (including any Facility Document) is to the agreement or
document as amended, modified, novated, supplemented or replaced, except to the
extent prohibited thereby or by any Facility Document and in effect from time to
time in accordance with the terms thereof.  A reference to legislation or to a
provision of legislation includes a modification or re-enactment of it, a
legislative provision substituted for it and a regulation or statutory
instrument issued under it.  A reference to writing includes a facsimile
transmission and any means of reproducing words in a tangible and permanently
visible form.  A reference to conduct includes, without limitation, an omission,
statement or undertaking, whether or not in writing.  The words “hereof”,
“herein”, “hereunder” and similar words refer to this Agreement as a whole and
not to any particular provision of this Agreement.  The term “including” is not
limiting and means “including without limitation”.  In the computation of
periods of time from a specified date to a later specified date,

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the word “from” means “from and including”, the words “to” and “until” each mean
“to but excluding”, and the word “through” means “to and including”.

(d)Except where otherwise provided in this Agreement, any determination,
consent, approval, statement or certificate made or confirmed in writing with
notice to Borrowers by Lender or an authorized officer of Lender provided for in
this Agreement is conclusive and binds the parties in the absence of manifest
error. A reference to an agreement includes a security interest, guarantee,
agreement or legally enforceable arrangement whether or not in writing related
to such agreement.

(e)A reference to a document includes an agreement (as so defined) in writing or
a certificate, notice, instrument or document, or any information recorded in
computer disk form.  Where Borrower is required to provide any document to
Lender under the terms of this Agreement, the relevant document shall be
provided in electronic, written or printed form unless Lender requests
otherwise.  At the request of Lender, the document shall be provided in computer
disk form or both printed and computer disk form.

(f)This Agreement is the result of negotiations among, and has been reviewed by
counsel to, Lender and Borrowers, and is the product of all parties.  In the
interpretation of this Agreement, no rule of construction shall apply to
disadvantage one party on the ground that such party proposed or was involved in
the preparation of any particular provision of this Agreement or this Agreement
itself.  Except where otherwise expressly stated, Lender may give or withhold,
or give conditionally, approvals and consents and may form opinions and make
determinations at its absolute discretion.  Any requirement of good faith,
discretion or judgment by Lender shall not be construed to require Lender to
request or await receipt of information or documentation not immediately
available from or with respect to a Borrower or the Collateral.

Section 1.02Accounting Matters.  Except as otherwise expressly provided herein,
all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be
delivered to the Lender hereunder shall be prepared in accordance with GAAP.

ARTICLE II

LOANS, BORROWING, PREPAYMENT

Section 2.01Loans.  On the terms and subject to the conditions set forth in this
Agreement, the Lender (i) shall make loans in an aggregate amount not to exceed
the Commitment Amount, and (ii) in the event that the Outstanding Aggregate Loan
Amount is equal to, or greater than, the Commitment Amount, may, in its sole
discretion, make loans on an uncommitted basis in an aggregate amount not to
exceed the Uncommitted Amount (each loan under the preceding subclauses (i) and
(ii), a “Loan”) to the Borrowers from time to time. Lender shall distribute the
proceeds of such Loan to the Borrowers on the related Funding Date in accordance
with Section 2.03.

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Section 2.02Note.

(a)The Loans made by the Lender shall be evidenced by a single promissory note
executed by the Borrowers jointly and severally, substantially in the form of
Exhibit 2.02(a) hereto (the “Note”), dated as of March 3, 2017, payable to the
Lender in a principal amount not to exceed the sum of the Commitment Amount plus
the Uncommitted Amount.

(b)The date, amount, and interest rate of each Loan made by the Lender to the
Borrowers, and each payment made on account of the principal thereof, shall be
recorded by the Lender on its books and, prior to any transfer of the Note,
noted by the Lender on the grid attached to the Note or any continuation
thereof, provided, that failure of the Lender to make any such recordation or
notation shall not affect the obligations of the Borrowers to make a payment
when due of any amount hereunder or under the Note in respect of the Loans.

Section 2.03Servicing Schedules and Funding Requests.  (a)  On any Funding
Notice Date, the Borrowers may request the Lender to make a Loan on the related
Funding Date by delivering to the Lender an irrevocable Borrower Funding Request
no later than 3:00 p.m. (New York City time) on such Funding Notice Date.  The
amount of any Loan requested pursuant to a Borrower Funding Request shall be not
greater than the related Available Loan Amount and shall not result in the
Outstanding Aggregate Loan Amount exceeding the Borrowing Base.

Except with respect to the Excess Servicing Spread, no later than seven (7)
Business Days prior to the related Funding Date, the Borrowers and Guarantor
shall deliver to the Lender (i) a Servicing Schedule and any related ESS
Confirmations identifying all Eligible Assets to be pledged to Lender as
Collateral under the terms and conditions of this Agreement and all Agency
Obligations outstanding on the related Funding Date, (ii) any information
regarding the calculation of any Excess Servicing Spreads (including without
limitation any Junior Excess Strip) as reasonably requested by  Lender or any
Valuation Agent, (iii) information regarding any ESS Callable Events as
reasonably requested by Lender and (iv) any other information requested by
Lender with respect to either the Eligible Assets or any proposed acquisition of
additional Servicing Rights by any Borrower. With respect to the Excess
Servicing Spread, the Borrowers and Guarantor shall deliver such information to
the Lender no later than two (2) Business Days prior to the related Funding
Date.  Regardless of whether the Borrowers intend to deliver a Borrower Funding
Request during any calendar month, the Borrowers and Guarantor shall deliver to
the Lender as soon as is available, but in no event later than the 10th day of
each month or as otherwise requested by Lender (any such Business Day, the
“Collateral Reporting Date”), additional updated Servicing Schedules and any new
ESS Confirmations, with respect to all Eligible Assets that constitute the
Collateral under the terms and conditions of this Agreement, which shall include
all updates to the Collateral and any information regarding the calculation of
any Excess Servicing Spreads (including without limitation any Junior Excess
Strip) as reasonably requested by Lender or any Valuation Agent since the
delivery of the preceding Servicing Schedule and ESS Confirmation.  Upon request
Borrowers shall provide Lender with copies of any ESS Transaction Documents.

In Lender’s determination of Collateral Value for any of the Pledged Assets
hereunder, it shall apply the Market Value of the Pledged Assets in a related
Borrowing Base Report.  Any

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excess of the amount funded on such Loan over the Borrowing Base shall result in
a Borrowing Base Deficiency as set forth in Section 2.08(b).

Notwithstanding anything to the contrary contained in this Section 2.03(a), the
Lender shall have the right to determine Market Value at any time in its sole
discretion.  For purposes of preparing each Borrowing Base Report, the Lender
shall calculate the Collateral Value of the Eligible Assets described in the
Servicing Schedule and ESS Confirmations.

(b)By delivering a Borrower Funding Request, the Borrowers represent and warrant
to the Lender that, after taking into account the amount of the requested Loan,
all conditions precedent to such Loan specified in Section 5.02 have been
satisfied.

Section 2.04Borrowing Base Reports.  With respect to each Funding Date, the
Lender shall determine the Market Value of the Eligible Assets to be pledged as
security for a Loan on such Funding Date and shall communicate such
determination by providing Borrowers with a Borrowing Base Report prior to such
Funding Date.  In connection with each such determination, the Lender shall have
the option to obtain a third-party valuation by a Valuation Agent of the related
Eligible Assets to be included in such Funding Date at the expense of the
Borrowers.  Further, Borrowers shall provide to Lender (i) each Borrower’s
internal valuation of all Eligible Assets on a monthly basis and (ii) a
third-party valuation by a Valuation Agent of all Eligible Assets on a quarterly
basis and more frequently to the extent any Borrower may obtain the same.  Each
Borrower shall provide each valuation required pursuant to clause (i) and (ii)
above at the time it delivers each Monthly Compliance Certificate or earlier to
the extent any Borrower obtains the same.  Notwithstanding the foregoing, the
Lender shall have no obligation to use a Borrower’s internal valuation or either
third-party valuation and shall have the right to determine the Market Value of
the related Eligible Assets at any time in its sole discretion.  For purposes of
preparing each Borrowing Base Report, the Lender shall calculate the Collateral
Value of the Eligible Assets described in the related Servicing Schedule.

Section 2.05Interest.  Interest shall accrue on each Loan for each day during a
related Interest Period at a per annum rate equal to the product of (x) the
outstanding principal balance of such Loan on such day, multiplied by (y) the
sum of (i) the applicable LIBO Rate for such day and (ii) the Applicable Margin.
Interest shall be payable on each Monthly Settlement Date in arrears with
respect to each Loan through the final day of each Interest Period (regardless
of whether such day is a Business Day), such amount to be payable on each
Monthly Settlement Date. Lender shall determine the LIBO Rate for each Loan,
which may be reset on a daily basis, as set forth in the definition of “LIBO
Rate” and provide notice of such determination to the Borrowers. Lender shall
also calculate the amount of interest or other amounts due to be paid by the
Borrowers from time to time hereunder (including in connection with any
prepayment or repayment of Loans permitted hereunder) and shall provide a
written statement thereof to the Borrowers at least one (1) Business Day prior
to the due date of such payments (or the relevant repayment or prepayment after
having received a notice thereof); provided, that failure to provide such
statements on a timely basis shall not relieve the Borrowers of the obligation
to pay any interest and principal due on the applicable payment date (based upon
its good faith calculation of the amount due, such amount to be promptly
reconciled after receipt of a subsequent statement from the Lender) and other
such amounts hereunder promptly upon receipt of such statement.

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Section 2.06Increased Capital Costs.  If any Requirement of Law (other than with
respect to any amendment made to Lender’s organizational or governing documents)
or any change in the interpretation or application thereof or compliance by
Lender with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority made subsequent to the
date hereof:

(a)shall subject Lender to any tax of any kind whatsoever with respect to this
Agreement or any Loans made pursuant to it (excluding net income taxes) or
change the basis of taxation of payments to Lender in respect thereof;

(b)shall impose, modify or hold applicable any reserve, special deposit,
compulsory advance or similar requirement against assets held by deposits or
other liabilities in or for the account of the Loans or extensions of credit by,
or any other acquisition of funds by any office of Lender which is not otherwise
included in the determination of the LIBO Base Rate hereunder; or

(c)shall impose on Lender any other condition; and the result of any of the
foregoing is to increase the cost to Lender, by an amount which Lender deems to
be material, of effecting or maintaining Loans hereunder, or to reduce any
amount receivable hereunder in respect thereof, then, in any such case,
Borrowers shall promptly pay to Lender such additional amount or amounts as will
compensate Lender for such increased cost or reduced amount receivable
thereafter incurred.

If the Lender shall have determined that either (i) the adoption of or any
change in any  Requirement of Law (other than with respect to any amendment made
to the Lender’s certificate of incorporation and by-laws or other organizational
or governing documents) regarding capital adequacy or in the interpretation or
application thereof or compliance by the Lender or any corporation controlling
the Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority or Official Body
made subsequent to the date hereof; or (ii) compliance by Lender or any
corporation controlling Lender with: (x) any directive or request from any
Governing Authority or Official Body imposed after the date hereof or (y) the
requirements of, whether such compliance is commenced prior to or after the date
hereof, any of (a) Basel III or (b) the Dodd-Frank Act, or any existing rules,
regulations, guidance, interpretations or directives from the United States bank
regulatory agencies relating to Basel III or the Dodd-Frank Act, shall have the
effect of reducing the rate of return on the Lender’s or such corporation’s
capital (taking into consideration the Lender’s or such corporation’s policies
with respect to capital adequacy) by an amount deemed by the Lender in its
reasonable discretion to be material and to the extent Lender determines such
reduced rate of return to be attributable to the existence of the obligations or
agreements of Lender hereunder, then from time to time, Borrowers shall promptly
pay to the Lender such additional amount or amounts as will thereafter
compensate the Lender for such reduction.

If Lender becomes entitled to claim any additional amounts pursuant to this
Section 2.06, it shall promptly notify Borrowers of the event by reason of which
it has become so entitled.  A certificate as to any additional amounts payable
pursuant to this subsection submitted by Lender to Borrowers shall be conclusive
in the absence of manifest error.  To the extent that Lender demands
compensation for such amounts, Borrowers shall have the right to designate the

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Termination Date by written notice given to Lender at least thirty (30) days
before such Termination Date has occurred and Borrowers shall only be obligated
to pay Lender the amounts under this Section 2.06(c) to the extent such amounts
are necessary to compensate Lender through the Termination Date and upon
repayment of all Obligations outstanding on such Termination Date.

Section 2.07Alternate Rate of Interest.  Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any LIBO Base Rate:

(a)Lender determines, which determination shall be conclusive, that quotations
of interest rates for the relevant deposits referred to in the definition of
“LIBO Base Rate” are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining rates of interest for Loans as
provided herein;

(b)Lender determines, which determination shall be conclusive, that the
Applicable Margin plus the relevant rate of interest referred to in the
definition of “LIBO Base Rate” upon the basis of which the rate of interest on
Loans is to be determined is not likely to adequately cover the cost to Lender
of making the Loans hereunder; or

(c)it becomes unlawful for Lender to make Loans with an Interest Rate based on
the LIBO Base Rate; then Lender shall give Borrowers prompt notice thereof and,
so long as such condition remains in effect, Lender shall be under no obligation
to make Loans hereunder, and Borrower shall, at its option, either repay any
outstanding Loans or pay an Interest Rate determined by Lender taking into
account the increased cost to Lender of making the Loans.

Section 2.08Mandatory Repayment of Loans.

(a)Borrowers shall repay the Outstanding Aggregate Loan Amount with respect to
all Loans and all other amounts due under this Agreement in full on the Loan
Repayment Date. Loans may be prepaid in accordance with the terms of Section
2.09 hereof and, to the extent prepaid, may be re-borrowed hereunder in
accordance with the terms hereof (including satisfaction of all conditions
precedent contained in Section 5.02).

(b)If, on any Business Day (a “Borrowing Base Shortfall Day”), the Lender
provides written notice to the Borrowers that the Lender has determined in its
sole reasonable discretion based on the Borrowing Base Report most recently
delivered by the Lender pursuant to Section 2.04 that the Outstanding Aggregate
Loan Amount on such day exceeds the lesser of (i) the Borrowing Base and (ii)
the Commitment Amount plus the Uncommitted Amount on such day (such
circumstance, a “Borrowing Base Deficiency”), the Borrowers shall within one (1)
Business Day after the Borrowing Base Shortfall Day repay outstanding Loans
(including accrued Interest thereon), in an amount equal to the amount of the
Borrowing Base Deficiency specified in the notice provided to the Borrowers by
the Lender (such requirement a “Margin Call”).  Any Borrowing Base Deficiency
shall be cured, and the related Margin Call satisfied, in cash.

(c)Borrowers shall deliver a Repayment Notice with respect to each repayment of
outstanding Loan amounts made pursuant to Section 2.08(b) by 3:00 p.m. (New York
City time) on the first Business Day following the related Borrowing Base
Shortfall Day.

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Section 2.09Optional Prepayment.  Borrowers may, at their option, prepay any
Loan advanced hereunder in full or in part on any Business Day (each an
“Optional Prepayment Date”). Any such prepayment received by the Lender by 3:00
p.m. (New York City time) on such Optional Prepayment Date shall be applied by
the Lender on such Business Day.  Any such prepayment received by the Lender
after 3:00 p.m. (New York City time) on such Optional Prepayment Date shall be
applied by the Lender on the following Business Day.

Section 2.10Commitment Fee.  Borrowers jointly and severally agree to pay to
Lender the Commitment Fee, such payment to be made in Dollars, in immediately
available funds, without deduction, set off or counterclaim, in eleven (11)
equal installments, each of which shall be equal to the Commitment Fee
Installment Amount.  The Commitment Fee is and shall be deemed to be fully
earned and non-refundable when paid.  The first installment of the Commitment
Fee shall be payable on or prior to April 15, 2017 and each subsequent
installment shall be payable on or prior to the 15th day of each succeeding
month (or in each case if such date is not a Business Day, the preceding
Business Day).  Lender may, in its sole, good faith discretion, with notice to
Borrowers, net all or any portion or installment of the Commitment Fee or
additional commitment fee that is due and payable from the proceeds of any Loan
made to any Borrower.   In the event that the Termination Date is accelerated
pursuant to Section 8.02 to a date which is prior to the payment in full of all
installments of the Commitment Fee, any unpaid installments of the Commitment
Fee shall be payable on the Termination Date.

Section 2.11Subservicer Credit Event.  Notwithstanding anything herein to the
contrary, Lender shall have no obligation to make any new Loans with respect to
the Commitment Amount or the Uncommitted Amount at any time upon or following
the occurrence of a Subservicer Credit Event.

Section 2.12Subordination.  Each of PMAC and Holdings hereby agrees that all
claims and demands (the “Subordinate Claims”), which Holdings now has or may
hereafter have or acquire against PMAC under any Excess Servicing Spread
Acquisition Agreement, and all interest accrued or that may hereafter accrue
thereon, are subordinated to the prior payment and satisfaction in full of all
Obligations (as hereafter defined) and after the occurrence and during the
continuance of any Default or Event of Default, such Subordinate Claims are not
to be payable, and that no payment on account thereof, nor any security
therefor, shall be received, accepted or retained by Holdings unless and until
the Borrowers have paid and satisfied in full all of the Obligations to the
Lender (including all amounts of interest accrued or to accrue thereon up to the
date of full payment thereof) of every kind and nature whatsoever (including but
not limited to such amounts due under this Agreement and other Facility
Documents), whether represented by negotiable instruments or other writings,
whether direct or indirect, absolute or contingent, due or not due, secured or
unsecured, original, renewed, modified or extended, now in existence or
hereafter incurred, including without limitation pursuant to the Citi Repurchase
Facilities).  Borrowers further agree that until such time that the Borrowers
have paid and satisfied in full all of their Obligations to Lender, Lender shall
also be granted a security interest to the extent provided pursuant to Section
4.01 of this Agreement in the collateral pledged to Holdings pursuant to any
Excess Servicing Spread Acquisition Agreement (the “Subordinate Collateral”) and
accordingly the rights of Holdings in and to the Subordinate Collateral are
hereby subordinated to the prior payment and satisfaction in full of all
Obligations, subject to the terms of the related Acknowledgement Agreement and
Servicing Contract.  The Borrowers also

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agree that any additional Subordinate Collateral given as security for the
Subordinate Claims shall be subordinate to the prior payment and satisfaction in
full of all Obligations, subject to the terms of the related Acknowledgement
Agreement and Servicing Contract.  After the occurrence and during the
continuance of any Default or Event of Default under this Agreement, until the
prior payment and satisfaction in full of all Obligations, PMAC agrees not to
make payment of, or give any security for, the Subordinate Claims to
Holdings.  For the avoidance of doubt, PMAC shall be permitted to make to
Holdings, and Holdings may receive, accept and retain payments of interest and
principal on account of any Excess Servicing Spread Acquisition Agreement prior
to the occurrence and continuance of any Default or Event of Default under this
Agreement.

ARTICLE III

PAYMENTS; COMPUTATIONS; TAXES; FEES

Section 3.01Payments and Computations, Etc.

(a)Unless otherwise expressly stated herein, all amounts to be paid or deposited
hereunder shall be paid or deposited in accordance with the terms hereof no
later than 1:00 p.m. (New York City time) on the day when due in lawful money of
the United States of America in same day funds.

(b)Borrowers shall, to the extent permitted by law, pay interest on all amounts
(including principal, interest and fees) due but not paid on the date such
payment is due hereunder as provided herein, for the period from, and including,
such due date until, but excluding, the date paid, at the applicable Default
Rate, payable on demand; provided, however that such interest rate shall not at
any time exceed the maximum rate permitted by applicable law.

(c)All computations of interest and fees hereunder shall be made on the basis of
a year of 360 days for the actual number of days elapsed (including the first
day but excluding the last day) occurring in the period for which payable.

(d)Borrowers agree that the principal of and interest on the Loans shall be
recourse obligations of the Borrower.

(e)All payments made by the Borrowers under this Agreement shall be made without
set-off or counterclaim.

Section 3.02Taxes.

(a)Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.

(i)Any and all payments by or on account of any obligation of the Borrowers
hereunder or under any other Facility Document shall to the extent permitted by
Applicable Law be made free and clear of and without reduction or withholding
for any Taxes.  If, however, Applicable Law requires any Borrower to withhold or
deduct

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any Tax, such Tax shall be withheld or deducted in accordance with Applicable
Law as determined by such Borrower upon the basis of the information and
documentation to be delivered pursuant to subsection (d) below.

(ii)If any Borrower shall be required by Applicable Law to withhold or deduct
any Taxes, including both United States federal backup withholding and
withholding taxes, from any payment, then (A) such Borrower shall withhold or
make such required deductions, (B) such Borrower shall timely pay the full
amount withheld or deducted to the relevant Governmental Authority in accordance
with Applicable Law, and (C) to the extent that the withholding or deduction is
made on account of Indemnified Taxes or Other Taxes, the sum payable by such
Borrower shall be increased as necessary so that after any required withholding
or the making of all required deductions (including deductions applicable to
additional sums payable under this Section) the Lender receives an amount equal
to the sum it would have received had no such withholding or deduction been
made.

(b)Tax Indemnification.  Without limiting the provisions of subsection (a) above
or duplicating the payment obligations set forth therein, each Borrower shall,
and does hereby, indemnify the Lender and shall make payment in respect thereof
within ten (10) days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
otherwise imposed on the Lender, and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority; provided that the Lender gives Borrowers
written evidence of the imposition or assertion of such Indemnified Taxes or
Other Taxes and/or the incurrence of such penalties, interest or expenses, as
the case may be.

(c)Evidence of Payments.  Upon request by the Lender, after any payment of Taxes
by any Borrower to a Governmental Authority as provided in this Section 3.02,
such Borrower  shall deliver to the Lender the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
any return required by Applicable Law to report such payment or other evidence
of such payment reasonably satisfactory to the Lender.

(d)Status of Lenders; Tax Documentation.

(i)Lender shall deliver to the Borrowers, at the time or times prescribed by
Applicable Law or when reasonably requested by a Borrower, such duly and
properly completed and executed documentation prescribed by Applicable Law or by
the taxing authorities of any jurisdiction and such other reasonably requested
information as will permit the Borrowers to determine (A) whether or not
payments made hereunder or under any other Facility Document are subject to
Taxes, (B) if applicable, the required rate of withholding or deduction, and (C)
the Lender’s entitlement to any available exemption from, or reduction of,
applicable Taxes in respect of all payments to be made to such Lender by any
Borrower pursuant to this Agreement or any other Facility

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Document or otherwise to establish such Lender’s status for withholding tax
purposes in the applicable jurisdiction.

(ii)Without limiting the generality of the foregoing, if any Borrower is a
resident for tax purposes in the United States,

(1)any Lender that is a “United States person” within the meaning of Section
7701(a)(30) of the Code shall deliver to such Borrower duly completed and
executed originals of Internal Revenue Service Form W-9 or such other
documentation or information prescribed by applicable Laws or reasonably
requested by such Borrower as will enable such Borrower to determine whether or
not such Lender is subject to backup withholding or information reporting
requirements; and

(2)each Foreign Lender that is entitled under the Code or any applicable treaty
to an exemption from or reduction of withholding tax with respect to payments
hereunder or under any other Facility Document shall deliver to such Borrower
(in such number of copies as shall be requested by such Borrower) on or prior to
the date on which such Foreign Lender becomes a Lender under this Agreement (and
from time to time thereafter upon the request of such Borrower, but only if such
Foreign Lender is legally entitled to do so), whichever of the following is
applicable:

(I)duly completed and executed originals of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the United
States is a party,

(II)duly completed and executed originals of Internal Revenue Service Form
W-8ECI,

(III)duly completed and executed originals of Internal Revenue Service Form
W-8IMY and all required supporting documentation,

(IV)in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of such
Borrower  within the meaning of section 881(c)(3)(B) of the Code, or (C) a
“controlled foreign corporation” described in section 881(c)(3)(C) of the Code
and (y) duly completed and executed originals of Internal Revenue Service Form
W-8BEN, or

(V)duly completed and executed originals of any other form prescribed by
applicable Laws as a basis for claiming exemption from or a reduction in United
States Federal withholding tax together with such supplementary documentation as
may be prescribed by Applicable Law to permit such Borrower to determine the
withholding or deduction required to be made.

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(iii)Lender shall (A) promptly notify such Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction, and (B) cooperate, in its reasonable discretion, with such Borrower
to mitigate any requirement of Applicable Law of any jurisdiction in which such
Borrower may be required to withhold or deduct any taxes from amounts payable to
Lender hereunder.

Section 3.03Fees and Expenses. Each Borrower, jointly and severally, agrees to
pay as and when billed by Lender all of the reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation, negotiation,
administration, enforcement and execution of, and any amendment, waiver,
supplement or modification to, this Agreement, any other Facility Document or
any other documents prepared in connection herewith or therewith and
consummation and administration of the Loans contemplated hereby and thereby
including, without limitation, (i) all the reasonable fees, disbursements and
expenses of counsel to Lender, and (ii) all the due diligence, valuation,
inspection, testing and review expenses (including but not limited to any asset
level review of any Collateral and all on-going due diligence and valuation
costs) incurred by Lender with respect to the Collateral under this Agreement.

ARTICLE IV

SECURITY INTEREST

Section 4.01Security Interest.  As security for the prompt payment and
performance of all of its Obligations, each Borrower hereby assigns and pledges
to the Lender, and grants a security interest, subject to the interests of the
Applicable Agency as set forth in Section 4.02 and in the Acknowledgement
Agreements, to the Lender, all of each Borrower’s right, title and interest, in,
to, and under, whether now owned or hereafter acquired, in all of the following,
whether now or hereafter existing and wherever located: (i) the Pledged Assets
whether or not yet accrued, earned due or payable as well as all other present
and future rights and interests of each Borrower in such Pledged Assets, (ii)
the applicable Freddie Mac Servicing Contracts and Fannie Mae Servicing
Contracts and all rights and claims thereunder, (iii) the applicable
Acknowledgement Agreements with Freddie Mac and Fannie Mae and all rights and
claims thereunder, (iv) if applicable, the Excess Servicing Spreads with respect
to the Fannie Mae Servicing Rights identified on the attached Servicing
Schedule, as the same may be amended by the delivery of each subsequent
Servicing Schedule hereunder, whether or not yet accrued, earned, due or payable
as well as all other present and future rights and interests of each Borrower in
such Excess Servicing Spreads, (v) all books and records, including computer
disks and other records or physical or virtual data or information, related to
the foregoing (but excluding computer programs) (vi) the Subordinate Collateral
and (vii) all monies due or to become due with respect to the foregoing and all
proceeds of the foregoing (collectively, the “Collateral”); provided that
Borrowers do not assign or pledge to the Lender, or grant a security interest in
any of Borrower's right, title and interest, in, to or under any reimbursement
for any servicing advances related to mortgage servicing rights subject to any
Servicing Contract.

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Section 4.02Provisions Regarding Pledge of Eligible Assets to Be Included In
Financing Statements.

(a)Reserved.

(b)Notwithstanding anything to the contrary in the Agreement or any of the other
Facility Documents, the security interest of the Lender created hereby with
respect to the Eligible Assets is subject to the following provision to be
included in each financing statement filed in respect hereof:

For Freddie Mac Servicing Rights: The security interest publicized or perfected
by this financing statement is subject and subordinate in each and every respect
(a) to all rights, powers and prerogatives of the Federal Home Loan Mortgage
Corporation (“Freddie Mac”) under and in connection with the Purchase Documents,
as that term is defined in the Freddie Mac Single-Family Seller/Servicer Guide,
which rights include, without limitation, the right of Freddie Mac to disqualify
(in whole or in part) the debtor named herein as an approved Freddie Mac
Seller/Servicer, with or without cause, and the right to terminate (in whole or
in part) the unitary, indivisible master servicing contract and to transfer and
sell all or any portion of said servicing contract rights, as provided in the
Purchase Documents; and (b) to all claims of Freddie Mac arising out of or
relating to any and all breaches, defaults and outstanding obligations of the
debtor to Freddie Mac.

For Fannie Mae Servicing Rights: The Security Interest in this financing
statement is subordinate to all rights of Fannie Mae under (i) the terms and
conditions of that certain Acknowledgement Agreement, with respect to the
Security Interest among Fannie Mae, Borrowers and Citibank, N.A., and (ii) the
Mortgage Selling and Servicing Contract, the Fannie Mae Selling Guide, the
Fannie Mae Servicing Guide and any supplemental servicing instructions or
directives provided by Fannie Mae, all applicable master agreements, recourse
agreements, repurchase agreements, indemnification agreements, loss-sharing
agreements, and any other agreements between Fannie Mae and Borrowers, and all
as amended, restated or supplemented from time to time  (collectively, the
“Fannie Mae Lender Contract”), which rights include the right of Fannie Mae to
terminate the Fannie Mae Lender Contract with or without cause and the right to
sell, or have transferred, the Servicing Rights.

Section 4.03Authorization of Financing Statements.  To the extent permitted by
applicable law, the Borrowers hereby authorize the Lender to file any financing
or continuation statements required to perfect, protect, or more fully evidence
the Lender’s security interest in the Collateral granted hereunder. Lender will
notify the Borrowers of any such filing (but the failure to deliver such notice
shall not prejudice any rights of the Lender under this Section 4.03).

Section 4.04Lender’s Appointment as Attorney In Fact.  

(a)Each Borrower hereby irrevocably constitutes and appoints the Lender and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney‑in‑fact with full irrevocable power and authority in the place
and stead of such Borrower and in the name of such Borrower or in its own name,
from time to time in the Lender’s discretion, if an Event of Default shall have
occurred and be continuing, for the purpose of carrying out the terms

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of this Agreement (or any Servicing Contract or Excess Servicing Spread
Acquisition Agreement), to take any action on behalf of such Borrower pursuant
to any Acknowledgement Agreement and to take any and all appropriate action and
to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement (or any Servicing
Contract or Excess Servicing Spread Acquisition Agreement) to the extent such
actions are permitted to be taken by the Lender under any Acknowledgement
Agreement, and, without limiting the generality of the foregoing, each Borrower
hereby gives the Lender the power and right, on behalf of such Borrower, without
assent by, but with notice to, such Borrower, if an Event of Default shall have
occurred and be continuing, to do the following (subject to limitations
contained in any Acknowledgement Agreement):

(i)in the name of such Borrower or its own name, or otherwise, to take
possession of and endorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due under any mortgage insurance or
with respect to any other Collateral and to file any claim or to take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Lender for the purpose of collecting any and all such moneys
due under any such mortgage insurance or with respect to any other Collateral
whenever payable;

(ii)(A) to direct any party liable for any payment under any Collateral to make
payment of any and all moneys due or to become due thereunder directly to the
Lender or as the Lender shall direct; (B) to ask or demand for, collect, receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral; (C) to
sign and endorse any invoices, assignments, verifications, notices and other
documents in connection with any of the Collateral; (D) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral; (E) in connection with the
above, to give such discharges or releases as the Lender may deem appropriate;
and (F) generally, to sell, transfer, pledge and make any agreement with respect
to or otherwise deal with any of the Collateral as fully and completely as
though the Lender were the absolute owner thereof for all purposes, and to do,
at the Lender’s option and the Borrowers’ expense, at any time, or from time to
time, all acts and things which the Lender deems necessary to protect, preserve
or realize upon the Collateral and the Lender’s Liens thereon and to effect the
intent of this Agreement, all as fully and effectively as either Borrower might
do; and

(iii)perform or cause to be performed, each Borrower’s obligations under each
applicable Excess Servicing Spread Acquisition Agreement or any Servicing
Contract to the extent permitted by the related Acknowledgement Agreement.

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Borrower hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable but shall terminate upon release of the
Lender’s security interest as provided in Section 4.05. This power of attorney
shall not revoke any prior powers of attorney granted by any Borrower.

(b)Borrower also authorizes the Lender, at any time and from time to time, to
execute, in connection with the sale provided for in Section 8.02(c) hereof, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; provided that the exercise of such powers are in
accordance with the Acknowledgement Agreements.

(c)The powers conferred on the Lender are solely to protect the Lender’s
interest in the Collateral and shall not impose any duty upon the Lender to
exercise any such powers. Lender shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers, and neither the
Lender nor any of its officers, directors, or employees shall be responsible to
each Borrower for any act or failure to act hereunder, except for its or their
own gross negligence or willful misconduct; provided that the Lender shall
exercise such powers only in accordance with the Acknowledgement Agreements.

Section 4.05Release of Security Interest.  Upon termination of this Agreement
and repayment to the Lender of all Obligations and the performance of all
obligations under the Facility Documents, the Lender shall release its security
interest in any remaining Collateral; provided that if any payment, or any part
thereof, of any of the Obligations is rescinded or must otherwise be restored or
returned by the Lender upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of any Borrower, or upon or as a result of the appointment of
a receiver, intervener or conservator of, or a trustee or similar officer for
any Borrower or any substantial part of its Property, or otherwise, this
Agreement, all rights hereunder and the Liens created hereby shall continue to
be effective, or be reinstated, until such payments have been made.

Lender may, in its sole discretion, release its interest in a pool of Pledged
Servicing Rights and the related Pledged Excess Servicing Spreads; provided,
however, that prior to such release, Lender shall have been paid the full amount
of any Loans outstanding and any accrued interest and other Obligations
hereunder with respect to such Pledged Servicing Rights and related Pledged
Excess Servicing Spreads.  Notwithstanding the foregoing, the Lender shall have
no obligation to release any Collateral hereunder to the extent such release
would result in a (i) Borrowing Base Deficiency or to the extent a Default has
occurred, (ii) the release of any Pledged Servicing Rights without the release
of the related Pledged Excess Servicing Spreads, or (iii) the release of any
Pledged Excess Servicing Spreads without the release of the related Pledged
Servicing Rights.

ARTICLE V

CONDITIONS PRECEDENT

Section 5.01Conditions Precedent.  The effectiveness of this Agreement is
subject to the condition precedent that the Lender shall have received each of
the items set forth in

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Schedule 5.01 (unless otherwise indicated) dated such date, and in such form and
substance, as is satisfactory to the Lender.

Section 5.02Further Conditions Precedent.  The funding of each Loan hereunder,
and the automatic continuation of each Loan after the termination of the
immediately preceding calendar month related to any Loan, shall in all events be
subject to satisfaction of the further conditions precedent set forth in
Schedule 5.02 as of the making of such Loan and as of each day on which the
Loans remain outstanding.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

Section 6.01Representations and Warranties of the Borrower.  Each Borrower
represents and warrants to the Lender that throughout the term of this Agreement
and as to itself:

(a)Organization and Good Standing.  Each Borrower Party (a) is a corporation or
real estate investment trust as specified in this Agreement, duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it was formed, (b) has all requisite corporate or other power, and has all
governmental licenses, authorizations, consents and approvals, necessary to own
its assets and carry on its business as now being or as proposed to be
conducted, except where the lack of such licenses, authorizations, consents and
approvals would not be reasonably likely to have a Material Adverse Effect, (c)
is qualified to do business and is in good standing in all other jurisdictions
in which the nature of the business conducted by it makes such qualification
necessary, except where failure so to qualify would not be reasonably likely
(either individually or in the aggregate) to have a Material Adverse Effect, and
(d) is in compliance in all material respects with all Requirements of
Law.  PMAC’s tax identification number is 80-0463416.  PMAC’s fiscal year is the
calendar year. Holdings’ tax identification number is 27-2199755.  Holdings’
fiscal year is the calendar year.  Neither Borrower has changed its name within
the past twelve (12) months.

(b)Power and Authority, Due Authorization.  Each Borrower Party (i) has all
necessary power and authority and legal right to (A) execute and deliver each of
the Facility Documents to be executed and delivered by it in connection
herewith, (B) carry out the terms of the Facility Documents to which it is a
party, and (C) with respect to Borrower, borrow the Loans and grant a security
interest in the Collateral on the terms and conditions herein provided, and (ii)
has taken all necessary corporate action to duly authorize (A) such borrowing
and grant and (B) the execution, delivery, and performance of this Agreement and
all of the Facility Documents to which it is a party.

(c)Binding Obligations.  Each Facility Document to which a Borrower Party is a
party, when duly executed and delivered by it will constitute, legal, valid and
binding obligations of such Borrower Party enforceable against it in accordance
with its respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.

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(d)No Violation.  No Borrower Party’s execution and delivery of the Facility
Documents nor the consummation of the transactions contemplated hereby and
thereby will conflict with, result in any breach of (i) any of the terms and
provisions of, or constitute (with or without notice, lapse of time or both) a
default under any Borrower Party’s organizational documents, or any material
indenture, loan agreement, mortgage, deed of trust, or other material agreement
or instrument to which it is a party or by which it is otherwise bound, or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such material indenture, loan agreement, mortgage,
deed of trust, or other material agreement or instrument, other than this
Agreement, or (ii) any Legal Requirement applicable to it of any Governmental
Authority having jurisdiction over it or any of its properties if such
violation, individually, or in the aggregate, is reasonably likely to have a
Material Adverse Effect.

(e)No Proceedings. There are no actions, suits, arbitrations, investigations or
proceedings pending or, to its knowledge, threatened against any Borrower Party
or any of its Subsidiaries or Affiliates or Subservicer or affecting any of
their respective Property before any Governmental Authority, (1) as to which
there is a reasonable likelihood of an adverse decision, and which, in the event
of an adverse decision, would reasonably be likely to have a Material Adverse
Effect, (2) which questions the validity or enforceability of any of the
Facility Documents or any action to be taken in connection with the transactions
contemplated thereby, or (3) which seeks to prevent the consummation of any of
the transactions contemplated by any Facility Documents.

(f)Government and Agency Approvals.  No authorization, consent, approval, or
other action by, and no notice to or filing with, any court, governmental
authority or regulatory body or other Person domestic or foreign, including
Fannie Mae, Freddie Mac, HUD or Ginnie Mae is required for any Borrower Party’s
or Subservicer’s due execution, delivery or performance of any Facility Document
to which it is a party except for (i) consents that have been obtained in
connection with transactions contemplated by the Facility Documents, (ii)
filings to perfect the security interest created by this Agreement, (iii)
consents and approvals that may be required by Fannie Mae, Freddie Mac, HUD or
Ginnie Mae from time to time after the Closing Date, and (iv) authorizations,
consents, approvals, filings, notices, or other actions the failure to make
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

(g)Solvency; Fraudulent Conveyance.  Each Borrower Party and its Affiliates are
Solvent and will not cease to be Solvent due to any Loan hereunder (both
immediately before and after giving effect to such Loan).  The amount of
consideration being received by the Borrowers after giving effect to each Loan
by the Lender constitutes reasonably equivalent value and fair consideration for
such Loan.  No Borrower is pledging any Collateral with any intent to hinder,
delay, or defraud any of its creditors.  As used herein, the term “Solvent”
means, with respect to any Borrower Party on a particular date, that on such
date (i) the most recently reported value of the assets of such Borrower Party,
taking into account the fair value of assets accounted for on a fair value basis
and the carrying value of other assets, is greater than the total amount of the
most recently reported liabilities of such Borrower Party (including the fair
value of liabilities reported on a fair value basis), (ii) after giving effect
to each Loan, such Borrower Party is able to realize upon its assets and pay its
debts and other liabilities as they mature,

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assuming an orderly disposition, and (iii) such Borrower Party does not have an
unreasonably small capital with which to conduct its business.

(h)Margin Regulations.  Margin Stock (as defined in the regulations of the
Board), constitutes less than 25% of the value of those assets of the Borrowers
that are subject to any limitation on sale, pledge, or other restriction
hereunder.

(i)Accurate Reports.  The information, reports, financial statements, exhibits
and schedules furnished in writing by or on behalf of any Borrower Party to
Lender in connection with this Agreement and the other Facility Documents
(including any information provided in connection with Lender’s current or due
diligence review prior to the date hereof) or included herein or therein or
delivered pursuant hereto or thereto, when taken as a whole, do not contain any
untrue statement of material fact or omit to state any material fact necessary
to make the statements herein or therein, in light of the circumstances under
which they were made, not misleading. All written information furnished after
the date hereof by or on behalf of any Borrower Party to Lender in connection
with this Agreement and the other Facility Documents and the transactions
contemplated hereby and thereby will be true, complete and accurate in every
material respect, or (in the case of projections) based on reasonable estimates,
on the date as of which such information is stated or certified. There is no
fact known to a Responsible Officer that, after due inquiry, could reasonably be
expected to have a Material Adverse Effect that has not been disclosed herein,
in the other Facility Documents or in a report, financial statement, exhibit,
schedule, disclosure letter or other writing furnished to Lender for use in
connection with the transactions contemplated hereby or thereby.

(j)No Default.  No Default or Event of Default has occurred and is continuing.

(k)Investment Company Act. No Borrower Party is an “investment company” or a
company controlled by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.  No Borrower Party is subject to any
Federal or state statute or regulation which limits its ability to incur
indebtedness.  Each Borrower Party (i) has been structured so as not to
constitute, and is not, a “covered fund” for purposes of Section 619 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”),
and (ii) is relying upon an exception or exemption from the registration
requirements of the Investment Company Act other than those set forth in
Sections 3(c)(1) and 3(c)(7) of the Investment Company Act.

(l)Taxes.  Each Borrower Party has filed all Federal income tax returns and all
other tax returns that are required to be filed by them and have paid all taxes
due and payable pursuant to such returns or pursuant to any assessment received
by any of them, except for any such taxes that are being appropriately contested
in good faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves have been provided. The charges, accruals and
reserves on the books of such Borrower Party and its Subsidiaries in respect of
taxes and other governmental charges are, in the opinion of such Borrower Party,
adequate. Any taxes, fees and other governmental charges payable by such
Borrower Party in connection with the Loans and the execution and delivery of
the Facility Documents have been paid.

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(m)No Adverse Actions.  No Borrower Party or Subservicer has received a notice
from Fannie Mae, Freddie Mac, or Ginnie Mae  indicating any adverse fact or
circumstance in respect of such Borrower Party or Subservicer, as applicable,
which adverse fact or circumstance may reasonably be expected to entitle Fannie
Mae, Freddie Mac, or Ginnie Mae to terminate such Borrower Party or Subservicer
with cause or with respect to which such adverse fact or circumstance has caused
Fannie Mae, Freddie Mac or Ginnie Mae to threaten to terminate, or consider the
termination of, such Borrower Party or Subservicer in such notice.

(n)Financial Statements.  Each Borrower Party has heretofore furnished to Lender
a copy of its audited consolidated balance sheets and the audited consolidated
balance sheets of its consolidated Subsidiaries, each as at December 31, 2015
with the opinion thereon of Deloitte & Touche LLP, a copy of which has been
provided to Lender. Each Borrower Party has also heretofore furnished to the
Lender the related consolidated statements of income and retained earnings and
of cash flows for such Borrower Party and its consolidated Subsidiaries for the
one year period ending December 31, 2015, setting forth in comparative form the
figures for the previous year.  All such financial statements are complete and
correct in all material respects and fairly present the consolidated financial
condition of such Borrower Party and its Subsidiaries and the consolidated
results of their operations for the fiscal year ended on said date, all in
accordance with GAAP applied on a consistent basis. Since December 31, 2015,
there has been no development or event nor any prospective development or event
which has had or should reasonably be expected to have a Material Adverse
Effect.  No Borrower Party has any material contingent liability or liability
for taxes or any long term lease or unusual forward or long term commitment,
which is not reflected in the foregoing statements or notes.  Since the date of
the financial statements and other information delivered to Lender prior to the
date of this Agreement, no Borrower Party has sold, transferred or otherwise
disposed of any material part of its property or assets (except pursuant to the
Facility Documents) or acquired any property or assets (including any equity
interests of any other Person) that are material in relation to its financial
condition.

(o)Chief Executive Office.  PMAC’s corporate headquarters on the date hereof is
located at 3043 Townsgate Road, Suite 300, Westlake Village,
CA  91361.  Holdings’ corporate headquarters on the date hereof is located at
3043 Townsgate Road, Suite 310, Westlake Village, CA  91361.

(p)Agency Set Off Rights.  No Borrower Party has any actual notice, including
any notice received from any Applicable Agency, or any reason to believe, that,
other than in the normal course of any Borrower Party’s business, any
circumstances exist that would result in a Borrower Party being liable to any
Applicable Agency for any amount due by reason of: (i) any breach of servicing
or subservicing obligations or breach of mortgage selling warranty to such
Applicable Agency under any Servicing Contract or any other similar contracts
relating to a Borrower Party’s servicing or subservicing portfolio (including
without limitation any unmet mortgage repurchase obligation), (ii) any
unperformed obligation with respect to mortgages in an MBS pool that any
Borrower Party is servicing or subservicing for an Agency under the regular
servicing or subservicing option or other mortgages subject to recourse
agreements, (iii) any loss or damage to any Applicable Agency by reason of any
inability to transfer to a purchaser of the Servicing Rights any Borrower
Party’s (as applicable) selling, servicing or subservicing representations,
warranties and obligations, as well as any existing MBS recourse (regular

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servicing option) obligations, or other recourse obligations, and (iv) any other
unmet obligations to an Applicable Agency under any Servicing Contract with
respect to Fannie Mae or with respect to any other Agency,  any other similar
contracts relating to a Borrower Party’s servicing portfolio.

(q)Use of Subservicers.  No Borrower shall use a subservicer, other than the
Subservicer, with respect to any Mortgage Loan without Lender’s prior written
consent; provided that Lender will be deemed to consent if the subservicer is
approved by the Applicable Agency.  Each Borrower shall provide prior notice to
Lender with respect to the use of a subservicer, other than the Subservicer, or
a change in subservicer.

(r)Leverage Ratio; Liquidity; Adjusted Tangible Net Worth; Profitability. (i)
(A) The ratio of PMAC’s Total Indebtedness to Adjusted Tangible Net Worth is not
greater than 12:1; (B)  the Liquidity of PMAC is greater than $10,000,000 as of
the last day of the prior calendar month; (C) the Adjusted Tangible Net Worth of
PMAC is greater than or equal to $140,000,000;  (ii) (A) The ratio of Holdings’
Total Indebtedness to Adjusted Tangible Net Worth is not greater than 10:1;
(B)  the combined Liquidity of PMAC and Holdings is greater than
$25,000,000;  (C) the Adjusted Tangible Net Worth of Holdings is greater than or
equal to $220,000,000 (iii) (A) Guarantor’s Adjusted Tangible Net Worth is
greater than or equal to $830,000,000; (B) the combined amount of unrestricted
cash of Guarantor and its Subsidiaries is greater than or equal to $40,000,000;
(C) the ratio of Guarantor’s Total Indebtedness to Adjusted Tangible Net Worth
is less than 7:1; and (D) Guarantor’s consolidated Net Income has been equal to
or greater than $1.00 for at least one (1) of the previous two (2) consecutive
fiscal quarters, as of the end of the last fiscal quarter.

(s)Fannie Mae/Freddie Mac/Ginnie Mae/HUD.  Subservicer is approved by and has
all consents and licenses necessary to service loans on behalf of Fannie Mae,
Freddie Mac, Ginnie Mae and HUD and is in good standing to service mortgages and
has remained at all times in compliance with the guidelines of Fannie Mae,
Freddie Mac, Ginnie Mae and HUD and has not been suspended as a mortgagee or
servicer by Fannie Mae, Freddie Mac, Ginnie Mae and HUD on and after the date on
which Subservicer first obtained such approval from Fannie Mae, Freddie Mac,
Ginnie Mae and HUD.  No Borrower Party is, and Subservicer is not, under review
or investigation, and no Borrower Party has, and the Subservicer does not have,
knowledge of imminent or future investigation, by Fannie Mae, Freddie Mac,
Ginnie Mae and HUD on and after the date on which such Borrower Party or
Subservicer, as applicable, became a Fannie Mae, Freddie Mac, Ginnie Mae and HUD
approved seller/servicer or lender, as the context may require.

(t)Borrower’s Existing Financing Facilities.  As of the date hereof, each of the
Borrower’s financing facilities currently in place for the financing of any
mortgage servicing rights (other than the Collateral) (including without
limitation any excess servicing spread) or servicing advances (other than those
related to the Collateral)  owned by Borrower is listed in detail on Schedule
6.01(t) attached hereto.  The Borrowers shall provide any updates to Schedule
6.01(t) to the Lender at the time it delivers each monthly Compliance
Certificate hereunder.

(u)Subservicer Power and Authority.  The Subservicer (a) is a limited liability
company, duly organized, validly existing and in good standing under the laws of
the

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jurisdiction in which it was formed, (b) has all necessary power and authority
and legal right to service the Mortgage Loans subject to this Agreement and (c)
is qualified to do business and is in good standing in all other jurisdictions
in which the nature of the business conducted by it makes such qualification
necessary.

(v)USA Patriot Act; OFAC.  None of the Borrowers, or any of their Affiliates, is
a Prohibited Person and each Borrower is in full compliance with all applicable
orders, rules, regulations and recommendations of OFAC.  None of the Borrowers
or any of their members, directors, executive officers, parents or Subsidiaries:
(1) is subject to U.S. or multilateral economic or trade sanctions currently in
force; (2) is owned or controlled by, or acts on behalf of, any governments,
corporations, entities or individuals that are subject to U.S. or multilateral
economic or trade sanctions currently in force; (3) is a Prohibited Person or is
otherwise named, identified or described on any blocked persons list, designated
nationals list, denied persons list, entity list, debarred party list,
unverified list, sanctions list or other list of individuals or entities with
whom U.S. Persons may not conduct business, including but not limited to lists
published or maintained by OFAC, lists published or maintained by the U.S.
Department of Commerce, and lists published or maintained by the U.S. Department
of State.  Each Borrower has established an anti-money laundering compliance
program as required by all applicable anti-money laundering laws and
regulations, including, without limitation, the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56) (the “USA Patriot Act”) (collectively,
the “Anti-Money Laundering Laws”).

(w)Anti-Money Laundering.  Each Borrower has complied with all applicable
Anti-Money Laundering Laws, has conducted the requisite due diligence in
connection with the acquisition of each Loan for purposes of the Anti-Money
Laundering Laws, and will maintain sufficient information to identify the
applicable Mortgagor for purposes of the Anti-Money Laundering Laws; no Loan is
subject to nullification pursuant to the Executive Order 13224 or the
regulations promulgated by OFAC (the “OFAC Regulations”) or in violation of the
Executive Order or the OFAC Regulations, and no Mortgagor is subject to the
provisions of the Executive Order or the OFAC Regulations or listed as a
“blocked person” for purposes of the OFAC Regulations.

(x)Non-Exempt Person. No Borrower is a Non-Exempt Person.

(y)Anti-Money Laundering/International Trade Law Compliance. As of the date of
this Agreement, and at all times until this Agreement has been terminated and
all Obligations hereunder have been paid in full: (A) no Covered Entity (1) is a
Sanctioned Person; (2) has any of its assets in a Sanctioned Country or in the
possession, custody or control of a Sanctioned Person in violation of any
Anti-Terrorism Law; (3) does business in or with, or derives any of its income
from investments in or transactions with, any Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Law; or (4) engages in any dealings or
transactions prohibited by any Anti-Terrorism Law; (B) the proceeds of any
Facility Document will not be used to fund any operations in, finance any
investments or activities in, or make any payments to, a Sanctioned Country or
Sanctioned Person in violation of any law; (C) the funds used to pay any
Borrower or Lender are not derived from any unlawful activity; and (D) each
Covered Entity is in compliance with, and no Covered Entity engages in any
dealings or

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transactions prohibited by, any Requirements of Law, including but not limited
to any Anti-Terrorism Laws. Each Borrower covenants and agrees that it shall
immediately notify Lender in writing upon the occurrence of a Reportable
Compliance Event.

Section 6.02Representations Concerning the Collateral.  Each Borrower represents
and warrants to the Lender that as of each day that a Loan is outstanding
pursuant to this Agreement:

(a)No Borrower has assigned, pledged, conveyed, or encumbered any Collateral
(other than a Permitted Excess Servicing Spread Acquisition) to any other Person
or any right to any Collateral to any Person (including without limitation any
right to control or transfer or otherwise effectuate any remedy relating to any
Collateral), and immediately prior to the pledge of the Collateral in which such
Borrower has rights, such Borrower was the sole owner of such Collateral and had
good and marketable title thereto (subject to the rights of the related
Applicable Agency with respect to the related Servicing Rights and Excess
Servicing Spread), free and clear of all Liens, and no Person, other than the
Lender has any Lien on any Collateral.  No Eligible Assets are related to
Mortgage Loans owned or financed by a third-party (including without limitation
any Affiliate of Borrower) other than the Applicable Agency pursuant to the
related Acknowledgement Agreement, and no Person has any interest in any
Eligible Assets or any related Mortgage Loans, other than Lender, Borrower or
the related Applicable Agency pursuant to the related Acknowledgement Agreement
(including without limitation any right to control or transfer or otherwise
effectuate any remedy relating to any Eligible Assets).

(b)The provisions of this Agreement are effective to create in favor of the
Lender a valid security interest in all right, title, and interest of each
Borrower in, to and under the Collateral, subject only to the interests of the
related Applicable Agency.

(c)All Agency Obligations have been identified as such in a schedule attached to
the Servicing Schedule most recently delivered to the Lender. All information
concerning all Servicing Rights set forth on the Servicing Schedule pursuant to
which such Servicing Rights and Excess Servicing Spread were, are or will be (as
applicable) pledged to the Lender will not contain any material misstatement of
fact or omit to state a material fact or any fact necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading as of the date of delivery of such Servicing Schedule.

(d)Upon the filing of financing statements on Form UCC-1 naming the Lender as
“Secured Party” and the Borrowers as “Debtors”, and describing the Collateral,
in the appropriate jurisdictions, the Lender has a duly perfected first priority
security interest under the UCC in all right, title, and interest of each
Borrower in, to and under, subject to the interests of the related Applicable
Agency, the Pledged Servicing Rights and Pledged Excess Servicing Spread.

(e)Subject to the rights of the related Applicable Agency as set forth in
Section 4.02 and in the related Acknowledgement Agreement, the Borrowers are the
legal and beneficial owner of the Collateral free and clear of any Lien, except
for the Liens created or permitted under the Facility Documents.

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(f)Each applicable Acknowledgement Agreement is in full force and effect and
neither Fannie Mae nor Freddie Mac has provided written notice to either
Borrower or Lender that it will terminate, revoke, modify or amend the related
Acknowledgement Agreement or its consent to the pledge of the Pledged Excess
Servicing Spreads by Holdings to Lender or the pledge of the Pledged Servicing
Rights by PMAC to Lender.

(g)In connection with any repurchase agreement, loan and security agreement or
similar credit facility or agreement for borrowed funds entered into by each
Borrower or any of its Affiliates on the one hand and any third party (including
an Affiliate of each Borrower or any of its Affiliates but excluding the Lender
or any Affiliate of Lender) on the other, including without limitation, any
other facility for the funding of servicing advances, no such third party has
the right pursuant to the terms of such repurchase agreement, loan and security
agreement or similar credit facility or agreement, to cause any Borrower to
terminate, rescind, cancel, pledge, hypothecate, liquidate or transfer any of
the Collateral.

ARTICLE VII

COVENANTS

Section 7.01Affirmative Covenants of Borrower.  Each Borrower  covenants and
agrees with the Lender as so long as any Loan is outstanding and until all
Obligations have been paid in full:

(a)Existence, Etc.  Each Borrower Party will:

(1)(A) preserve and maintain its legal existence and all of its material rights,
privileges, franchises; (B) maintain all licenses, permits or other approvals
necessary to conduct its business and to perform its obligations under the
Facility Documents; (C) except as would not be reasonably likely to have a
Material Adverse Effect or would have a material adverse effect on the
Collateral or Lender’s interest therein, remain in good standing under the laws
of each state in which it conducts business or the related Mortgaged
Property  of any Mortgage Loan is located; and (D) not change its tax
identification number, fiscal year or method of accounting without prior written
notice to the Lender;

(2)comply with the requirements of and conduct its business in all material
respects in accordance with all applicable laws, rules, regulations and orders
of Governmental Authorities (including, without limitation, truth in lending,
real estate settlement procedures and all environmental laws) if failure to
comply with such requirements would be reasonably likely (either individually or
in the aggregate) to have a Material Adverse Effect;

(3)keep adequate records and books of account, in which complete entries will be
made in accordance with GAAP consistently applied;

(4)not move its chief executive office or chief operating office from the
addresses referred to in Section 6.01(o) unless it shall have provided Lender
thirty (30) days prior written notice of such change;

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(5)pay and discharge all taxes, assessments and governmental charges or levies
imposed on it or on its income or profits or on any of its Property prior to the
date on which penalties attach thereto, except for any such tax, assessment,
charge or levy the payment of which is being contested in good faith and by
proper proceedings and against which adequate reserves are being maintained;

(6)permit representatives of Lender, during normal business hours upon three (3)
Business Days’ prior written notice at a mutually desirable time or at any time
during the continuance of an Event of Default, to examine, copy and make
extracts from each Borrower Party or Subservicer’s books and records, to inspect
any of its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by Lender; and

(7)not directly or indirectly enter into any agreement that would be violated or
breached by any Loan or the performance by such Borrower Party of any Facility
Document.

(b)Performance and Compliance with the Servicing Contracts.  Each Borrower Party
will comply with all terms, provisions, covenants and other promises required to
be observed by it under each of the Facility Documents to which it is a party
and each applicable Excess Servicing Spread Acquisition Agreement, maintain each
applicable Excess Servicing Spread Acquisition Agreement and the Facility
Documents to which it is a party in full force and effect in all material
respects and enforce the Servicing Contracts in all material respects in
accordance with the terms thereof.  No Borrower shall amend or permit the
amendment of any sections of the Subservicing Agreement which would materially
affect the Servicing Contracts referenced herein or Subservicer’s servicing of
the Mortgage Loans subject to this Agreement, without Lender’s prior written
consent.  Each Borrower shall diligently enforce its rights under the
Subservicing Agreement, including all rights to terminate and replace
Subservicer upon the occurrence of a Subservicer Termination Event.  No Borrower
shall waive any material default or other material failure to perform under or
breach of the Servicing Contracts or Subservicing Agreement without Lender’s
prior written consent.  For the avoidance of doubt, any default, failure or
breach by the Subservicer that would permit the termination and replacement of
the Subservicer under the Subservicing Agreement shall be deemed “material” and
shall not be waived by Borrower or its Affiliates without Lender’s prior written
consent.

(c)Taxes.  Each Borrower Party will pay and discharge promptly when due all
Taxes and governmental charges imposed upon it or upon its income or profits or
in respect of its property, in each case before the same shall become delinquent
or in default and before penalties accrue thereon, unless and to the extent the
same are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves shall, to the extent required by GAAP, have
been set aside.

(d)Due Diligence.  Each Borrower acknowledges that the Lender has the right to
perform and/or appoint a third party to perform, continuing due diligence
reviews with respect to the Servicing Rights, Excess Servicing Spread and the
Subservicer, any Borrower Party and the other Collateral, for purposes of
verifying compliance with the representations, warranties, and specifications
made hereunder and under the other Facility Documents, or

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otherwise. Borrower agrees that the Lender and its Authorized Representatives,
upon reasonable notice, will be permitted during normal business hours to
examine, inspect, make copies of, and make extracts of, any and all documents,
records, agreements, instruments or information relating to the Collateral or
any Agency in the possession of a Borrower or Subservicer; provided, however,
the foregoing shall not apply with respect to any information that Borrower or
Subservicer is required by any Agency to keep confidential.

(e)Changes in Servicing Contracts.  A Borrower shall provide written notice to
the Lender of any changes in any  Servicing Contract or the Subservicing
Agreement that may materially affect the Servicing Rights or Excess Servicing
Spread within three (3) Business Days after any Borrower Party receives notice
thereof.

(f)Records. Each Borrower Party shall keep adequate records and books of
account, in which complete entries will be made in accordance with GAAP
consistently applied.

(g)Eligible Cash Reserve Amounts.  With respect to each of the Eligible Cash
Reserve Amounts (as defined in subclause (i) thereof) applied to offset
repurchase and indemnity obligations pursuant to Section 8.01(u), Borrower
covenants and agrees that such funds have been established and maintained for
such purpose in accordance with the related correspondent agreement(s), and that
any such amounts are, as of the date of such application, available to
a  Borrower for such purpose free and clear of any obligation of such Borrower
to the related correspondent(s).  Each Borrower shall provide to Lender on a
monthly basis or more frequently as requested by Lender, copies of the related
account statements evidencing any such Eligible Cash Reserve Amounts.  In
addition, Borrower shall provide to Lender upon request, any other documentation
or information related to the establishment and maintenance of the accounts
holding such amounts, including without limitation copies of the related account
agreements, and copies of the related correspondent agreements.  .

(h)Financial Statements.  Each Borrower shall deliver to the Lender:

(1)As soon as available and in any event within forty (40) days after the end of
each calendar month, the consolidated balance sheets of each Borrower Party and
each of their consolidated Subsidiaries as at the end of such month, the related
unaudited consolidated statements of income and retained earnings , and if
requested by Lender, of cash flows, of each Borrower Party and their
consolidated Subsidiaries for such period and the portion of the fiscal year
through the end of such period;

(2)As soon as available and in any event within forty-five (45) days after the
end of each of the first three quarterly fiscal periods of each fiscal year of
such Borrower Party, the consolidated balance sheets of each Borrower Party and
their consolidated Subsidiaries as at the end of such period and the related
unaudited consolidated statements of income and retained earnings and of cash
flows for such Borrower Party and its consolidated Subsidiaries for such period
and the portion of the fiscal year through the end of such period;

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(3)As soon as available and in any event within ninety (90) days after the end
of each fiscal year of each Borrower Party, the consolidated balance sheets of
such Borrower Party and their respective consolidated Subsidiaries as at the end
of such fiscal year and the related consolidated statements of income and
retained earnings and of cash flows for such Borrower Party, as applicable,
accompanied by an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall not be qualified as to scope
of audit or going concern and shall state that said consolidated financial
statements fairly present the consolidated financial condition and results of
operations of such Borrower Party and their respective consolidated Subsidiaries
at the end of, and for, such fiscal year in accordance with GAAP;

(4)Together with each set of the financial statements delivered pursuant to
clauses (1) through (3) above, a certificate of a Responsible Officer of such
Borrower Party in the form of Exhibit 7.01 attached hereto; and

(5)as soon as available and in any event within ninety (90) days after the end
of each fiscal year of each of Borrower, the Borrower, at its expense, shall
either (a) cause a firm of independent public accountants which is a member of
the American Institute of Certified Public Accountants to furnish a statement to
the Lender to the effect that such firm has examined certain documents and
records for the preceding fiscal year with respect to each of Borrower, and
that, on the basis of such examination conducted substantially in compliance
with the Uniform Single Attestation Program for Mortgage Bankers, such firm is
of the opinion that Borrower’s overall servicing operations have been conducted
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
except for such exceptions that, in the opinion of such firm, the Uniform Single
Attestation Program for Mortgage Bankers requires it to report, in which case
such exceptions shall be set forth in such statement, or (b) furnish to Lender
the Borrower’s assessment of Subservicer’s compliance with the subservicing
criteria set forth in Section 1122(d) of Securities and Exchange Commission
Regulation AB (17 C.F.R. Section 229.1122(d)), which assessment shall be
attested to by a firm of independent public accountants which is a member of the
American Institute of Certified Public Accountants; and

(6)From time to time such other information regarding the financial condition,
operations, well being or business of any Borrower Party or Subservicer
(including but not limited to any information regarding any repurchase and
indemnity requests or demands made upon Borrower by any third party investors
(including any Agency), as the Lender may reasonably request, within three (3)
Business Days of such request.

(7)In addition to Borrower’s obligation set forth in Section 2.04, within (i)
three (3) Business Days after receipt by a Borrower Party (to the extent such
Borrower Party owns any servicing rights with respect to any mortgage loans) of
a request from Lender, the servicing valuation conducted by such Borrower Party
and used to support the calculation of the servicing multiple

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used in determining the book value of such Borrower Party’s servicing portfolio
in accordance with GAAP; and (ii) if so requested by Lender, within (3) Business
Days of its completion, the servicing valuation conducted by a Valuation Agent
with respect to the value of such Borrower Party’s servicing portfolio in
accordance with GAAP.

(i)Applicable Agency Approval.  Each Borrower Party and Subservicer shall at all
times maintain copies of relevant portions of all final written Fannie Mae,
Freddie Mac, Ginnie Mae and HUD audits, examinations, evaluations, monitoring
reviews and reports of its origination and servicing and subservicing operations
(including those prepared on a contract basis for any such agency) in which
there are material adverse findings, including without limitation notices of
defaults, notices of termination of approved status, notices of imposition of
supervisory agreements or interim servicing agreements, and notices of
probation, suspension, or non-renewal, and all necessary approvals from Fannie
Mae, Freddie Mac, Ginnie Mae and HUD.  Each Borrower shall not, and each
Borrower shall not permit Subservicer to take any action, or fail to take any
action, that would permit Fannie Mae, Freddie Mac, Ginnie Mae and HUD to
terminate or threaten to terminate its right to service loans for Fannie Mae,
Freddie Mac, Ginnie Mae and HUD with cause.

(j)Quality Control.  The Borrowers shall and shall cause Subservicer to conduct
quality control reviews of Borrower’s and Subservicer’s servicing operations in
accordance with industry standards and Fannie Mae, Freddie Mac, Ginnie Mae and
HUD requirements.  Each Borrower shall promptly report to Lender quality control
findings as such reports are produced.

(k)Special Affirmative Covenants Concerning Servicing Rights.

(i)With respect to its respective rights, each Borrower warrants and shall
defend the right, title and interest of the Lender in and to the Pledged
Servicing Rights and Pledged Excess Servicing Spread to the Lender against the
claims and demands of all Persons whomsoever, subject to the restrictions
imposed by the Acknowledgement Agreements to the extent that such restrictions
are valid and enforceable under the applicable UCC and other Requirements of
Law.

(ii)With respect to its respective rights, each Borrower shall preserve the
security interests granted hereunder and upon request by the Lender undertake
all actions which are necessary or appropriate, in the reasonable judgment of
the Lender, to (x) maintain the Lender’s security interest (including the
priority thereof) in the Collateral in full force and effect at all times prior
to the satisfaction of all obligations under this Agreement and the release of
the Lender’s lien in accordance with the terms and provisions of this Agreement
(including upon a Change of Control with respect to the Borrower), and (y)
preserve and protect the Collateral and protect and enforce the rights of the
Lender to the Collateral, including the making or delivery of all filings and
recordings (of financing or continuation statements), or amendments thereto or
assignments thereof, and such other instruments or notices, as may be necessary
or appropriate, cause to be marked conspicuously its master data processing
records with a

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legend, acceptable to the Lender, evidencing that such security interest has
been granted in accordance with this Agreement.

(iii)Each Borrower Party and Subservicer shall diligently fulfill its duties and
obligations under the Servicing Contracts and the Subservicing Agreement in all
material respects and shall not default in any material respect under any
Servicing Contract, the Subservicing Agreement or any Acknowledgement
Agreement.  Each Borrower shall diligently enforce its rights under the
Subservicing Agreement, including without limitation, Borrower’s right to
terminate and replace Subservicer upon the occurrence of a Subservicer
Termination Event.  Each Borrower shall not waive any Subservicer Termination
Event without Lender’s prior written consent.

(iv)Each Borrower acknowledges and agrees that Lender has the right to impose a
minimum threshold based on any system adopted by any Agency to rate or score the
quality of servicers, and to apply such threshold to such Borrower and/or
Subservicer.

(l)Maintenance of Property; Insurance.  Each Borrower shall, and shall cause
Guarantor and Subservicer to keep all property useful and necessary in its
business in good working order and condition.  Each Borrower shall and shall
cause Subservicer to maintain errors and omissions insurance and/or mortgage
impairment insurance and blanket bond coverage in such amounts as are in effect
on the Effective Date and are customarily required by Fannie Mae and Freddie Mac
(as disclosed to Lender in writing) and neither Borrower nor Subservicer shall
reduce such coverage without the written consent of Lender, and shall also
maintain such other insurance with financially sound and reputable insurance
companies, and with respect to property and risks of a character usually
maintained by entities engaged in the same or similar business similarly
situated, against loss, damage and liability of the kinds and in the amounts
customarily maintained by such entities.

(m)Use of Proceeds.  No Borrower shall use the proceeds of the Loans in
contravention of the requirements, if any, of any Applicable Agency.

(n)Monthly Compliance Certificate.  No later than the times set forth in Section
7.01(h)(4), Borrower shall deliver to the Lender a completed Officer’s
Certificate for each Borrower Party in the form of Exhibit 7.01 attached hereto,
which shall include any updates to Schedule 6.01(t) since the previously
delivered Compliance Certificate.

(o)Borrowing Base Deficiency. If at any time there exists a Borrowing Base
Deficiency, Borrower shall cure the same in accordance with Section 2.08(b)
hereof.

(p)Excess Servicing Spread Acquisitions. With respect to any Excess Servicing
Spread Acquisition, (i) Borrowers shall deliver to the Lender a new Servicing
Schedule and the related ESS Confirmation reflecting such Eligible Servicing
Spread Acquisition, (ii) such acquisition shall be a Permitted Excess Servicing
Spread Acquisition, and (iii) a Borrowing Base Deficiency shall not have
occurred after giving effect to such transaction unless Borrower cures such
Borrowing Base Deficiency in accordance with 2.08(b).

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(q)Changes in Excess Servicing Spread Acquisition Agreement.  Subject to Section
7.01(dd), the Borrowers shall provide written notice to the Lender of any
changes in any applicable Excess Servicing Spread Acquisition Agreement that may
materially affect the Excess Servicing Spread within three (3) Business Days
after any Borrower Party receives notice thereof.

(r)Further Identification of Collateral.  Each Borrower will furnish to Lender
from time to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral as
Lender may reasonably request, all in reasonable detail.

(s)Notice of Disposal of Servicing Rights.  In the event that the Borrowers sell
or otherwise dispose of any of the Pledged Servicing Rights and Pledged Excess
Servicing Spread (other than in connection with prepayments in full on the
Mortgage Loans or a sale, transfer or other reallocation of the Pledged Assets
amongst the Borrowers), it shall give the Lender seven (7) Business Days’ prior
written notice of such sale or disposition, during which time the Lender shall
recalculate the Collateral Value for the Collateral remaining after such sale or
disposition.  Lender shall have no obligation to release its interest in any
Pledged Servicing Rights or Pledged Excess Servicing Spread (i) until all
amounts required to be paid pursuant to Section 4.05 have been paid and (ii)
unless the Pledged Servicing Rights and Pledged Excess Servicing Spread are sold
or disposed of together in the same transaction.

(t)Requests for Information.  Each Borrower shall furnish to the Lender within
three (3) Business Days after the Lender’s request, any reasonable information,
documents, records or reports with respect to the Collateral, any Borrower
Party’s or Subservicer’s business or its relationship with any Agency, as the
Lender may from time to time request.

(u)Agency Collateral Account.  On the last day of each month (beginning with the
date hereof), Borrower shall deliver a notice to the Lender setting forth the
amount on deposit in each Collateral Account established by Borrower at each
Agency; provided that if any such date is not a Business Day, such notice shall
be delivered to the Lender on the next succeeding Business Day.  To the extent
not prohibited by the related Agency, Borrower shall promptly (and in any event
within three (3) Business Days thereof) notify the Lender (and provide a copy of
any written request) of any request it receives from any Agency indicating
either (i) that Borrower or Subservicer must deposit additional amounts in the
related Collateral Account or (ii) that Borrower or Subservicer is entitled to
withdraw amounts from the related Collateral Account and such notice shall
include the amount required to be deposited or withdrawn, as applicable.

(v)Agency Information.  Each Borrower shall make available the President, Chief
Financial Officer and any other applicable officers of such Borrower to
participate in discussions with Lender and provide information with respect to
the following: (i) a projection of the obligations of such Borrower in
connection with (A) all Agency Obligations and (B) amounts that may have been
required to be deposited or withdrawn from any Collateral Account with any
Agency (the “Collateral Account Activity”), (ii) a projection of the impact the
Agency Obligations may have on the operations of Borrower, including but not
limited to, the net impact

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on liquidity, statements of income, retained earnings and cash flows, (iii) the
projected date of resolution of the Agency Obligations, and (iv) such other
information as may be reasonably requested by the Lender, including information
related to Subservicer’s financial condition, in all cases to the extent
Borrower is not prohibited from disclosing such information.

(w)Servicer Rating. If Lender shall receive a notice pursuant to Section 7.03(h)
hereof, Lender shall have the right in its discretion to require that Borrower
enter into an amendment to this Agreement to require that Borrower maintain such
thresholds with the Applicable Agencies as Lender may require at such time.

(x)Agency Obligations Report.  Each Borrower shall deliver to Lender such
reports as Lender may reasonably request from time to time with respect to all
amounts (i) previously paid by Borrower or Guarantor to any Agency as of the
date of such report to and (ii) outstanding and not yet paid by Borrower or
Guarantor to any Agency as of the date of such report, and in each case which
report includes the amount of each payment, the Agency to which such payment was
or is to be made and the nature of such payment.

(y)Subservicer Acknowledgement Letters.  Prior to permitting any subservicer
other than Subservicer to service any Mortgage Loans related to the Eligible
Servicing Rights pledged hereunder, the Borrowers shall cause such subservicer
to become a party to a subservicer side letter with Lender, pursuant to which
such subservicer shall acknowledge the Lender’s rights hereunder and agree to
follow all instructions of Lender upon the occurrence of a default hereunder,
which side letter shall be acceptable to Lender and the Applicable Agency in
form and substance (such side letter, a “Subservicer Acknowledgement Letter”).

(z)Monthly Valuation Report. Borrower shall deliver to Lender by no later than
the time set forth in Section 2.04, a servicing valuation report with respect to
all Servicing Rights owned by Borrower in form and substance acceptable to
Lender prepared by a nationally recognized third party valuation firm acceptable
to Lender.

(aa)Publicly Traded Company.  Guarantor shall at all times maintain its status
as a publicly traded company.

(bb)REIT Status.  Guarantor shall maintain its REIT Status at all times.

(cc)OFAC.  At all times throughout the term of this Agreement, each Borrower (a)
shall be in full compliance with all applicable orders, rules, regulations and
recommendations of OFAC and (b) shall not permit any Assets to be maintained,
insured, traded, or used (directly or indirectly) in violation of any United
States statutes, rules or regulations, in a Prohibited Jurisdiction or by a
Prohibited Person.

(dd)Agency Consent to Excess Servicing Spread.  Borrowers shall provide written
notice to the Lender immediately upon knowledge of any revocation or threatened
revocation of an Applicable Agency’s consent to the pledge of the Pledged Excess
Servicing Spreads by Holdings to Lender or the pledge of the Pledged Servicing
Rights by PMAC to Lender.  Borrower shall cooperate with all requests of Lender
as may be necessary to protect its

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security interest in the Collateral to the extent PMAC reacquires any Pledged
Excess Servicing Spreads from Holdings as a result of such revocation or
otherwise.

Section 7.02Negative Covenants of the Borrower.  Each Borrower covenants and
agrees with the Lender that so long as any Loan is outstanding and until all
Obligations have been paid in full, no Borrower Party shall:

(a)other than in accordance with Section 7.02(c), take any action or allow the
Subservicer to take any action that would directly or indirectly materially
impair or materially adversely affect the Borrower’s title to, or the value of,
the Collateral;

(b)create, incur or permit or allow the Subservicer to create, incur or permit
to exist any Lien in or on the Collateral or assign any right to receive income
in respect thereof except (i) the security interest granted hereunder in favor
of the Lender or (ii) the rights of any Applicable Agency under the Servicing
Contracts;

(c)sell, lease or otherwise dispose of or allow Subservicer to sell, lease or
otherwise dispose of any Collateral (other than sales or dispositions of (1)
Servicing Rights and (2) Excess Servicing Spread packaged together in the same
transaction (i) resulting from the payoff of the related Mortgage Loans or the
repurchase of the related Mortgage Loans by the Borrower, (ii) as required by
the Applicable Agency or (iii) in the ordinary course of Borrower’s servicing
business, except as expressly permitted by this Agreement);

(d)without prior consent of Lender, engage in any line or lines of business
activity other than the businesses in substantially the same fields of
enterprise as are presently conducted by it;

(e)(i)  cancel or terminate or allow Subservicer to cancel or terminate any
Facility Documents to which it is a party or consent to or accept any
cancellation or termination thereof, (ii) amend, amend and restate, supplement
or otherwise modify any Facility Document, (iii) consent to or allow Subservicer
to consent to any amendment, modification or waiver of any term or condition of
any Facility Document, without the prior written consent of the Lender, which
consent shall not be unreasonably withheld; provided that if the amendment of
any Servicing Contract is done unilaterally by any Applicable Agency, the prior
written consent of the Lender is not required; provided further, that if an
amendment to the Subservicing Agreement or the Servicing Contracts does not
relate to and would not affect Subservicer’s servicing of the Mortgage Loans
subject to this Agreement, the prior written consent of the Lender is not
required, (iv) waive or allow Subservicer to waive any material default under or
breach of any Servicing Contract or the Subservicing Agreement, or (v) take any
other action or allow Subservicer to take any other action in connection with
any such Facility Documents that would impair in any material respect the value
of the interests or rights of such Borrower thereunder or that would impair in
any material respect the interests or rights of the Lender;

(f)change the state of its organization unless such Borrower shall have given
the Lender at least thirty (30) days’ prior written notice thereof and unless,
prior to any such change, such Borrower shall have filed, or caused to be filed,
such financing statements or

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amendments as the Lender determines may be reasonably necessary to continue the
perfection of the Lender’s interest in the Collateral;

(g)at any time, directly or indirectly, (i) enter into any transaction of merger
or consolidation or amalgamation in which it is not the surviving entity, or
liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or
dissolution) or sell all or substantially all of its assets without Lender’s
prior consent; or (ii) form or enter into any partnership, joint venture,
syndicate or other combination which would have a Material Adverse Effect with
respect to Borrower;

(h)without the Lender’s consent, appoint or use any or allow Subservicer to
appoint or use any subservicers other than the Subservicer with respect to any
Eligible Servicing Rights pledged to the Lender pursuant to this Agreement;
provided that Lender will be deemed to consent if the subservicer is approved by
the Applicable Agency;

(i)take any action or allow Subservicer to take any action that would directly
or indirectly materially impair or materially adversely affect the Borrower’s
title to, or the value, of the Eligible Assets or materially increase the
duties, responsibilities or obligations of the Borrower;

(j)without Lender’s consent, make any payment on account of, or set apart assets
for a sinking or other analogous fund for the purchase, redemption, defeasance,
retirement or other acquisition of, any stock or senior or subordinate debt of
Borrower, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of any Borrower Party;

(k)make any Restricted Payments following the occurrence of a Default;

(l)(1)  enter into any transaction, including, without limitation, any purchase,
sale, lease or exchange of property or the rendering of any service, with any
Affiliate unless such transaction is  (i) not prohibited under this Agreement,
(ii) in the ordinary course of Borrower’s business and financing activities
(iii) upon fair and reasonable terms no less favorable to a Borrower than it
would obtain in a comparable arm’s length transaction with a Person which is not
an Affiliate or (2) make a payment that is not otherwise permitted by this
Agreement to any Affiliate;

(m)enter into any other financing facility with a lender other than the Lender
to provide for the financing of mortgage servicing rights or advances subject to
any Servicing Contract;

(n)without the prior written consent of Lender, purchase or otherwise acquire
any Servicing Rights from any third party other than such Servicing Rights
relating to any Mortgage Loans acquired by Borrower either (x) through its
correspondent or flow acquisition channels or (y) through its acquisition of any
originator;

(o)without the prior written consent of Lender, acquire any asset level
repurchase or indemnity obligations (including without limitation any obligation
due and payable to any Agency) in excess of 10% of the aggregate net book value
of Borrower’s servicing

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portfolio as of the Effective Date of this Agreement from any third party in
connection with its acquisition of any mortgage loan pool or mortgage originator
platform, other than in the ordinary course of Borrower’s business;

(p)enter into any other financing facility or agreement which in any way
involves the pledging any of the Borrower’s right, title and interest in, to and
under any right to reimbursement of any servicing advances under any Servicing
Contract to a third party;

(q)sell or otherwise dispose of any Pledged Servicing Rights and Pledged Excess
Servicing Spread unless such sale or disposition (i) is in accordance with
Section 7.02(c) and (ii) requires the Pledged Servicing Rights to only be sold
or otherwise disposed of collectively in  the same transaction with the related
Pledged Excess Servicing Spread; and

(r)in the case of Holdings, sell one or more participations in the Excess
Servicing Spreads or enter into any other arrangement whereby one or more
Persons have rights through, or with, Holdings with respect to the Excess
Servicing Spreads without the prior written consent of Lender, such consent to
be given at the sole discretion of the Lender.

Section 7.03Notice of Certain Occurrences.  Each Borrower covenants and agrees
with the Lender that, so long as any Loan is outstanding and until all
Obligations have been paid in full, it will provide notice to the Lender of each
of the following:

(a)Defaults.  As soon as possible, but in any event within one (1) Business Day
after a Borrower has knowledge of any Default or Event of Default under any
Facility Document or other material agreement of a Borrower Party, such Borrower
shall furnish to the Lender a written statement of a Responsible Officer of the
applicable Borrower Party setting forth details of such Default and no more than
three (3) Business Days after a Responsible Officer of such Borrower Party has
knowledge of any Default a written statement from a Responsible Officer of such
Borrower Party setting forth the action that the Borrower Party has taken or
proposes to take with respect to such Default;

(b)Litigation.  As soon as possible, but in any event within three (3) Business
Days, after, service of process on a Borrower Party, Subservicer or any of their
Subsidiaries, or any agent thereof for service of process, in respect of any
legal or arbitrable proceedings affecting a Borrower Party or any of its
Subsidiaries (i) that questions or challenges the validity or enforceability of
any of the Facility Documents, or (ii) in which the amount in controversy
exceeds $10,000,000 and as to which an adverse determination would be reasonably
likely to result in a Material Adverse Effect;

(c)Material Adverse Effect.  Upon a Borrower Party becoming aware of any
Material Adverse Effect and any event or change in circumstances which should
reasonably be expected to have a Material Adverse Effect;

(d)Change of Control.  Upon the occurrence of a Change of Control;

(e)Judgment.  Within five (5) days of the entry of a judgment or decree against
such Borrower Party or any of its Subsidiaries in an amount in excess of
$1,000,000;

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(f)Servicing Contract Transfer.  Upon transfer, expiration without renewal,
termination or other loss of all or any part of any Servicing Contract (or the
termination or replacement of a Borrower Party thereunder), the reason for such
transfer, loss or replacement, if known to it and the effects that such
transfer, loss or replacement will have (or will likely have) on the prospects
for full and timely collection of all amounts owing to a Borrower under or in
respect of a Borrower’s Servicing Contracts;

(g)Agency Notices.  Within two (2) Business Days of receipt, (i) a copy of any
notices it receives from Fannie Mae, Freddie Mac, Ginnie Mae or HUD indicating
any adverse fact or circumstance in respect of the Borrowers or Subservicer
which adverse fact or circumstance may entitle Fannie Mae, Freddie Mac, Ginnie
Mae or HUD, respectively, to terminate or to threaten to terminate Borrower or
Subservicer with cause or that may entitle Fannie Mae, Freddie Mac, Ginnie Mae
or HUD to conduct any inspection or investigation of any Borrower or
Subservicer, or either of their files or facilities, (ii) a copy of any other
notices it receives from any Agency related to the servicing of any Mortgage
Loans owned by such Agency, (iii) a copy of any demand by any Agency or an
insurer for the repurchase of or indemnification with respect to a Mortgage Loan
and the reason for such repurchase or indemnification, (iv) a copy of any notice
from an Agency indicating material breach, default or material non-compliance by
the Borrowers or Subservicer and (v) if the Fannie Mae Servicing Rights are
Pledged Assets at such time, a copy of (1) any notice from Fannie Mae regarding
any ESS Callable Event ("ESS Notice") received by PMAC or Holdings; (2) any
response from Borrower to Fannie Mae with respect to any ESS Notice; and (3) any
remedial action, plan, or cure required by Fannie Mae regarding any ESS Callable
Event.

(h)Servicer Rating.  Within two (2) Business Days of receipt of  notice of any
decrease in any servicer rating of a Borrower or Subservicer by any Agency or
any rating agency to a level below a below Moody’s rating of “SQ3” or S&P’s
rating of “Average”.

(i)Credit Default. Unless otherwise disclosed by Guarantor on Form 8-K with
separate notice by Borrower to Lender of the filing of such Form 8-K, upon, and
in any event within five (5) Business Days after, Borrower shall furnish the
Lender notice of the involuntary termination, acceleration, maturity of or
reduction in the amount available for borrowing under any repurchase agreement,
loan and security agreement or similar credit facility or agreement for borrowed
funds entered into by a Borrower Party and any third party to the extent that
such agreement or facility, prior to the effectiveness of such termination,
acceleration, maturity or reduction, provides for a minimum amount available for
borrowing by such Borrower Party equal to or greater than $10,000,000.

(j)Amendment to any Servicing Contract or the Subservicing Agreement.  Within
five (5) Business Days after Borrower or the Subservicer enters into any
amendment to the terms of any Servicing Contract or the Subservicing Agreement;
provided, that the Subservicer shall not enter into any amendment to the
Subservicing Agreement or the Servicing Contracts that would affect
Subservicer’s servicing of the Mortgage Loans subject to this Agreement without
the prior written consent of Lender.

(k)Other.  Within fifteen (15) Business Days after the Lender’s request, each
Borrower Party will furnish to the Lender such other information, documents,
records or reports

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with respect to the Collateral or the corporate affairs, conditions or
operations, financial or otherwise, of such Borrower Party as the Lender may
from time to time reasonably request.

(l)Agency Requirements. Within three (3) Business Days after Borrower or
Subservicer receives notice of any Agency’s requirements regarding a Borrower’s
or Subservicer’s minimum consolidated Tangible Net Worth or any change in any
Agency’s requirements regarding Borrower’s or Subservicer’s consolidated
liquidity.

(m)Borrower’s Financing Facilities.  Within ten (10) Business Days of the entry
by Borrower into any financing facility for the financing of any mortgage
servicing rights, excess servicing spread or servicing advances regarding any
Agency other than an Applicable Agency.

(n)Subservicer.  One (1) Business Day following the occurrence of any
Subservicer Credit Event or Subservicer Termination Event.

(o)Affiliates.  Within five (5) Business Days of becoming aware of any Agency’s
determination that the Subservicer and Borrower shall be deemed to have a joint
aggregate credit exposure to such Agency.

(p)ESS Callable Events.  One (1) Business Day following the occurrence of any
ESS Callable Event.

ARTICLE VIII

EVENTS OF DEFAULT

Section 8.01Events of Default.  The following events shall be “Events of
Default”:

(a)(i) Any Borrower shall fail to make any payment or deposit to be made by it
hereunder when due (whether of principal or interest at stated maturity, upon
acceleration, or at mandatory prepayments) or fails to cure a Borrowing Base
Deficiency as provided under Section 2.08(b), and in either case such default
shall continue unremedied for a period of one (1) Business Day, or (ii) any
Borrower or Guarantor shall default in the payment of any other amount payable
by it hereunder or under any other Facility Document after notification by
Lender of such default, and such default shall have continued unremedied for
three (3) Business Days; or

(b)A Borrower Party (as applicable) shall fail to comply with the requirements
of Section 7.01(a)(1), Section 7.02(b), Section 7.02(c), Section 7.02(g),
Section 7.02(i), Section 7.02(j), Section 7.02(k); 7.02(ee) or Section 7.03(a)
hereof, and such default shall continue unremedied for a period of one (1)
Business Day; or a Borrower Party shall otherwise fail to observe or perform any
other obligation, representation or covenant contained in this Agreement or any
other Facility Document and such failure to observe or perform shall continue
unremedied for a period of five (5) Business Days;

(c)Any representation, warranty or certification made or deemed made herein or
in any other Facility Document by a Borrower Party or any certificate furnished
to Lender

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pursuant to the provisions thereof, shall prove to have been false or misleading
in any material respect as of the time made or furnished other than the
representations and warranties set forth in Section 6.02 which shall be
considered solely for the purpose of determining the Market Value of the
Eligible Assets; unless (i) Borrower Party shall have made any such
representations and warranties with knowledge that they were materially false or
misleading at the time made or (ii) any such representations and warranties have
been determined by Lender in its reasonable discretion to be materially false or
misleading on a regular basis;

(d)(1) The failure of any Borrower or Subservicer to be an approved servicer
under the guidelines of each Applicable Agency with respect to which any
Eligible Servicing Rights pledged under this Agreement relate, (2) any Borrower
or Subservicer fails to service or subservice, as applicable, in accordance with
any Applicable Agency Guide and the Lender determines in its good faith
discretion that such failure may have a Material Adverse Effect, (3) any
Borrower or Subservicer is terminated as servicer or subservicer, as applicable,
with respect to any Eligible Servicing Rights by any Applicable Agency, (4) any
Borrower or Subservicer shall at any time be terminated, revoked or suspended as
servicer or subservicer, as applicable, with respect to any whole loan servicing
or subservicing rights that make up a material portion of such Borrower’s
servicing portfolio or Subservicer’s subservicing portfolio, (5) any Borrower or
Subservicer shall  cease to be approved by or its approval shall be revoked,
suspended, rescinded, halted, eliminated, withdrawn, annulled, repealed, voided
or terminated by any Agency as an approved seller/servicer or lender, (6) all or
a portion of a Borrower Party’s or Subservicer’s servicing or subservicing
portfolio consisting of loans of any Agency is seized, (7) any Agency shall at
any time cease to accept delivery of any loan or loans from a Borrower Party or
Subservicer under any program or notifies a Borrower Party or Subservicer that
any Agency shall cease accepting loan deliveries from such Borrower Party or
Subservicer or (8) receipt by a Borrower Party or Subservicer of a notice from
any Agency indicating material breach, default or material non-compliance by
such Borrower Party or Subservicer which the Lender reasonably determines may
entitle such Agency to terminate such Borrower Party or Subservicer, as
applicable, which notice has not been rescinded or nullified within three (3)
Business Days of its receipt by such Borrower Party or Subservicer, as
applicable, or such lesser time as Lender believes is necessary to protect its
interest and provides any Borrower with written notice thereof, as the case may
be;

(e)Any Borrower Party, any Affiliate of a Borrower Party, or any Repurchase
Party shall default under, or fail to perform as required under, or shall
otherwise breach the terms of any repurchase agreement (including without
limitation any Citi Repurchase Facility), loan and security agreement,
MSFTA/derivatives agreement, or similar credit facility or agreement for
borrowed funds between any Borrower Party or Repurchase Party or such other
entity, on the one hand, and Lender or any of Lender’s Affiliates on the other;
or a Borrower Party or Repurchase Party shall default under, or fail to perform
as required under, the terms of any repurchase agreement, loan and security
agreement or similar credit facility or agreement for borrowed funds with
outstanding amount at least $10,000,000 (including without limitation any Citi
Repurchase Facility) entered into by such Borrower Party or Repurchase Party,
which default or failure entitles any party to cause acceleration or require
prepayment of any indebtedness thereunder;

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(f)Lender does not, or ceases to, have a first priority perfected security
interest in the Collateral or any material part thereof, subject only to the
interests of each Applicable Agency with respect to Eligible Assets and any
Collateral related thereto, other than as a result of a release of such security
interest by the Lender and such default continues unremedied for a period of one
(1) Business Day after the earlier of (i) a Responsible Officer of a Borrower
Party having actual knowledge thereof and (ii) written notice of such default
from the Lender;

(g)A Borrower Party or Subservicer, as applicable, shall cease to be approved by
or its approval shall be revoked, suspended, rescinded, halted, eliminated,
withdrawn, annulled, repealed, voided or terminated by (i) with respect to
Subservicer only, Ginnie Mae as an approved issuer, (ii) HUD, pursuant to
Sections 203 and 211 of the National Housing Act, (iii) FHA, as an FHA Approved
Mortgagee or servicer, (iv) with respect to Subservicer only, VA as a VA
Approved Lender, (v) Fannie Mae as an approved seller/servicer or lender, or
(vi) with respect to Subservicer only, Freddie Mac as an approved
seller/servicer or lender;

(h)Guarantor shall fail at any time to maintain its REIT Status or shall fail to
satisfy all of the conditions set forth in Section 856(c)(2), (3) and (4) of the
Code and any Treasury Regulations promulgated thereunder;

(i)[Reserved];

(j)A Borrower Party shall fail to comply with the following financial covenants:

(i)with respect to PMAC (A) the ratio of PMAC’s Total Indebtedness, to Adjusted
Tangible Net Worth shall not at any time be greater than 12:1; (B)  PMAC’s
Liquidity is not less than $10,000,000 as of the last day of the prior calendar
month; (C) the Adjusted Tangible Net Worth of PMAC is greater than or equal to
$140,000,000;

(ii)with respect to Holdings (and PMAC as applicable) (A) the ratio of Holdings’
Total Indebtedness, to Adjusted Tangible Net Worth shall not at any time be
greater than 10:1; (B)  the combined Liquidity of Holdings and PMAC is not less
than $25,000,000 as of the last day of the prior calendar month; (C) the
Adjusted Tangible Net Worth of Holdings is greater than or equal to
$220,000,000; and

(iii)with respect to Guarantor, (A) the ratio of Guarantor’s Total Indebtedness,
to Adjusted  Tangible Net Worth shall not at any time be greater than 7:1;
(B)  the combined amount of unrestricted cash of Guarantor and its Subsidiaries
is not less than $40,000,000 as of the last day of the prior calendar month; (C)
the Adjusted Tangible Net Worth of Guarantor is greater than or equal to
$830,000,000; and (D) as of the end of the immediately preceding calendar
quarter, Guarantor’s consolidated Net Income for at least one (1) of the
previous two (2) consecutive fiscal quarters, as of the end of the last fiscal
quarter.

(k)The failure of a Borrower Party to maintain any Net Worth requirements of any
Agency;

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(l)Any final judgment or judgments or order or orders for the payment of money
in excess of $1,000,000 in the aggregate (to the extent that it is, in the
reasonable determination of Lender, uninsured and provided that any insurance or
other credit posted in connection with an appeal shall not be deemed insurance
for these purposes) shall be rendered against any Borrower Party by one or more
courts, administrative tribunals or other bodies having jurisdiction over them
and the same shall not be discharged (or provisions shall not be made for such
discharge) or bonded, or a stay of execution thereof shall not be procured,
within sixty (60) days from the date of entry thereof and such Borrower Party
shall not, within said period of sixty (60) days, or such longer period during
which execution of the same shall have been stayed or bonded, appeal therefrom
and cause the execution thereof to be stayed during such appeal;

(m)(1) A Borrower Party or any of its Affiliates or any Subservicer files a
voluntary petition in bankruptcy, seeks relief under any provision of any
Insolvency Law or consents to the filing of any petition against it under any
such law; (2) a proceeding shall have been instituted by any Borrower Party,
Affiliate of a Borrower Party or any Subservicer in a court having jurisdiction
in the premises seeking a decree or order for relief in respect of such Borrower
Party or such Affiliate or any Subservicer in an involuntary case under any
applicable Insolvency Law, or for the appointment of a receiver, liquidator,
assignee, trustee, custodian, sequestrator, conservator or other similar
official of any Borrower or such Affiliate or any Subservicer, or for any
substantial part of its Property, or for the winding-up or liquidation of its
affairs, (3) a proceeding shall have been instituted by any Person (other than
an Affiliate of the Borrower Party) in a court having jurisdiction in the
premises seeking a decree or order for relief in respect of a Borrower Party or
any of its Affiliates or any Subservicer in an involuntary case under any
applicable Insolvency Law, or for the appointment of a receiver, liquidator,
assignee, trustee, custodian, sequestrator, conservator or other similar
official of a Borrower Party or such Affiliate or any Subservicer, or for any
substantial part of its Property, or for the winding-up or liquidation of its
affairs and a Borrower Party or such Affiliate or any Subservicer shall have
failed to obtain a relief (including, without limitation, a dismissal) or a stay
of such involuntary proceeding within thirty (30) days, (4) the admission in
writing by a Borrower Party or any of its Affiliates or any Subservicer of its
inability to pay its debts as they become due, (5) a Borrower Party or any of
its Affiliates or any Subservicer consents to the appointment of or taking
possession by a custodian, receiver, conservator, trustee, liquidator,
sequestrator or similar official, of all or any part of its Property or any
custodian, receiver, conservator, trustee, liquidator, sequestrator or similar
official takes possession of all or any part of the Property of the Borrower
Party or any of its Affiliates or any Subservicer; (6) a Borrower Party or any
of its Affiliates or any Subservicer makes an assignment for the benefit of any
of its creditors; or (7) a Borrower Party or any of its Affiliates or any
Subservicer generally fails to pay its debts as they become due;

(n)Any Governmental Authority or any Person, agency or entity acting or
purporting to act under Governmental Authority (including any Agency) shall have
taken any action to condemn, seize or appropriate, or to assume custody or
control of, all or any substantial part of the Property of a Borrower Party or
any of its Affiliates, or shall have taken any action to displace the management
of any Borrower Party or any of its Affiliates or to curtail such Borrower
Party’s, or any of its Affiliates’ authority in the conduct of its business;

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(o)Any Material Adverse Effect shall have occurred as determined by Lender in
its reasonable discretion;

(p)Lender shall reasonably request, specifying the reasons for such request,
reasonable information, and/or written responses to such requests, regarding the
financial well-being of any Borrower Party or Subservicer and such reasonable
information and/or responses shall not have been provided within three (3)
Business Days of such request;

(q)A Change of Control of any Borrower Party shall have occurred without the
prior consent of Lender;

(r)If one or more of the events set forth in Section 11 of the Guaranty shall
have occurred;

(s)Borrowers fail to pay any portion of the Commitment Fee when due hereunder,
and such default shall continue unremedied for a period of one (1) Business Day;

(t)A Subservicer Credit Event shall have occurred and Subservicer shall fail to
terminate and replace the Subservicer within thirty (30) days after the
occurrence of such Subservicer Credit Event; or

(u)The aggregate amount of all outstanding repurchase obligations (after giving
effect to any applicable cure period) and indemnity obligations (to the extent
the underlying loans are not current as of the reporting date) less up to 60% of
applicable Eligible Cash Reserve Amounts available to Borrowers to offset such
outstanding repurchase and indemnity obligations (or such lesser percentage as
Lender may determine)) of such Borrower to its third party investors (including
any Agency) exceeds 30% of Guarantor’s Liquidity. Lender shall have the right in
its sole discretion to reduce the percentage of Eligible Cash Reserve Amounts
applied to offset repurchase and indemnity obligations to zero in the event that
Lender has requested documentation or information  with respect to such amounts
and either (i) such documentation or information has not been provided to
Lender’s satisfaction, or (ii) such documentation is insufficient evidence of
compliance of such Eligible Cash Reserve Amounts with the affirmative covenant
set forth in Section 7.01(g) hereof; or

(v)An applicable Excess Servicing Spread Acquisition is not a Permitted Excess
Servicing Spread Acquisition; or

(w)Either Borrower defaults under any applicable Excess Servicing Spread
Acquisition Agreement.

Section 8.02Remedies.

(a)Optional Acceleration.  Upon the occurrence of an Event of Default (other
than an Event of Default described Sections 8.01(m) or 8.01(n), the Lender may
by written notice to the Borrowers, terminate the Facility and declare all Loans
and all other Obligations to be immediately due and payable.

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(b)Automatic Acceleration.  Upon the occurrence of an Event of Default described
in Sections 8.01(m) or 8.01(n), the Facility shall be automatically terminated
and the Loans and all other Obligations shall be immediately due and payable
upon the occurrence of such event, without demand or notice of any kind.

(c)Remedies. Upon any acceleration of the Loans pursuant to this Section 8.02,
the Lender, in addition to all other rights and remedies under this Agreement or
otherwise, shall have all other rights and remedies provided under the UCC of
each applicable jurisdiction and other applicable laws, which rights shall be
cumulative. The Borrowers agree, upon the occurrence of an Event of Default and
notice from the Lender, to assemble, at its expense, all of the Collateral that
is in its possession (whether by return, repossession, or otherwise) at a place
designated by the Lender. All out-of-pocket costs incurred by the Lender in the
collection of all Obligations, and the enforcement of its rights hereunder,
including reasonable attorneys’ fees and legal expenses, shall be paid out of
the Collateral. Without limiting the foregoing, upon the occurrence of an Event
of Default and the acceleration of the Loans pursuant to this Section 8.02, the
Lender may, to the fullest extent permitted by applicable law, without notice,
advertisement, hearing or process of law of any kind, (i) enter upon any
premises where any of the Collateral which is in the possession of any Borrower
(whether by return, repossession, or otherwise) may be located and take
possession of and remove such Collateral, (ii) sell any or all of such
Collateral, free of all rights and claims of any Borrower therein and thereto,
at any public or private sale, and (iii) bid for and purchase any or all of such
Collateral at any such sale. Any such sale shall be conducted in a commercially
reasonable manner and in accordance with applicable law. The Borrowers hereby
expressly waive, to the fullest extent permitted by applicable law, any and all
notices, advertisements, hearings or process of law in connection with the
exercise by the Lender of any of its rights and remedies upon the occurrence of
an Event of Default. Each of the Lender and each Borrower shall have the right
(but not the obligation) to bid for and purchase any or all Collateral at any
public or private sale. Each Borrower hereby agrees that in any sale of any of
the Collateral, the Lender is hereby authorized to comply with any limitation or
restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law (including, without
limitation, compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority, and each Borrower
further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner.
The Lender shall not be liable for any sale, private or public, conducted in
accordance with this Section 8.02(c). If an Event of Default occurs, and upon
acceleration of the Loans hereunder, the Loans and all other Obligations shall
be immediately due and payable, and Collections on the Eligible Assets and
proceeds of sales and securitizations of Eligible Servicing Rights, Eligible
Excess Servicing Spread and other Collateral will be used to pay the
Obligations.

(d)In the event a Borrower Party receives a notice from any Applicable Agency
indicating a material breach, default or material non-compliance by such
Borrower Party that the Lender reasonably determines may entitle an Applicable
Agency to terminate such Borrower or Subservicer as servicer pursuant to any
Servicing Contract, which breach, default or

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non-compliance has not been satisfactorily cured or remedied within two (2)
Business Days of the receipt by such Borrower Party of such notice, or such
lesser time as Lender believes is necessary to protect its interest and provides
Borrowers with written notice thereof, as the case may be, the Lender may by
written notice to the Borrowers, terminate the Facility and declare all Loans
and all other Obligations to be immediately due and payable.

ARTICLE IX

ASSIGNMENT

Section 9.01Restrictions on Assignments.  Borrower shall not assign its rights
hereunder or any interest herein without the prior written consent of the
Lender. Lender may, in the ordinary course of its business and in accordance
with applicable law, assign any or all of its rights and obligations under this
Agreement, under any Loan pursuant to this Agreement or under the other Facility
Documents, to any of its Affiliates or Subsidiaries and, with each Borrower’s
prior written consent, any bank or other entity; provided, that (i) such
assignment is approved by the Applicable Agency, and (ii) each Borrower, the
Applicable Agency and the related assignee enter into an acknowledgement
agreement in which the Applicable Agency acknowledges the related security
interest of such assignee in the related Servicing Contract.

Section 9.02Evidence of Assignment; Endorsement on Notes.  Lender hereby agrees
that it shall endorse the Notes to reflect any assignments made pursuant to this
Article IX or otherwise.

Section 9.03Rights of Assignee.  Upon the assignment by the Lender of all of its
rights and obligations hereunder, under the Notes and under the other Facility
Documents to an assignee in accordance with Section 9.01, such assignee shall
have all such rights and obligations of the Lender as set forth in such
assignment or delegation, as applicable, and all references to the Lender in
this Agreement or any Facility Document shall be deemed to apply to such
assignee to the extent of such interest. If any interest in any Facility
Document is transferred to any assignee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such assignee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 3.02.

Section 9.04Permitted Participants; Effect.  Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time (and from
time to time) sell to one or more banks or other entities (each a “Participant”)
participating interests in any Loan owing to the Lender, any Note held by the
Lender, any Commitment Amount of the Lender, or any other interest of the Lender
under this Agreement or the other Facility Documents. In the event of any such
sale by the Lender of a participating interest to a Participant, (i) the
Lender’s obligations hereunder and under the other Facility Documents shall
remain unchanged; (ii) the Lender shall remain solely responsible to the
Borrowers for the performance of such obligations; and (iii) the Lender shall
remain the owner of its Loans and the holder of any Note issued to it in
evidence thereof for the purposes under the Facility Documents. All amounts
payable by the Borrowers under this Agreement shall be determined as if the
Lender had not sold such participating interests. Borrowers and Lender shall
continue to deal solely and directly with each other in connection with the
Lender’s rights and obligations under the Facility Documents.

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Section 9.05Voting Rights of Participants.  Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment, modification
or waiver of any provision of the Facility Documents other than any amendment,
modification, or waiver with respect to any Loan or Commitment Amount in which
such Participant has an interest which forgives principal, interest, or fees or
reduces the interest rate or fees payable with respect to any such Loan or
Commitment Amount, extends the Loan Repayment Date, postpones any date fixed for
any regularly scheduled payment of principal of, or interest or fees on, any
such Loan or Commitment Amount or releases all or substantially all of the
Collateral (other than as expressly permitted pursuant to the Facility
Documents).

ARTICLE X

INDEMNIFICATION

Section 10.01Indemnities by the Borrower.  Without limiting any other rights
which any such Person may have hereunder or under applicable law, each Borrower,
jointly and severally, hereby agrees to indemnify, the Lender, its Affiliates,
successors, permitted transferees and assigns and all officers, directors,
shareholders, controlling persons, employees and agents of any of the foregoing
(each an “Indemnified Party”), forthwith on demand, from and against any and all
damages, losses, claims, liabilities and related costs and expenses, including
reasonable attorneys’ fees and disbursements (all of the foregoing being
collectively referred to as “Indemnified Amounts”) awarded against or incurred
by any of them arising out of or as a result of this Agreement, the other
Facility Documents (including without limitation, any Acknowledgement
Agreement), or any transaction contemplated hereby or thereby excluding,
however, (a) Indemnified Amounts to the extent a court of competent jurisdiction
determines that they resulted from gross negligence, bad faith or willful
misconduct on the part of such Indemnified Party, (b) in the event that the
Lender has assigned its rights or delegated its obligations in respect of this
Agreement, and the Indemnified Amounts with respect to such assignee exceed the
Indemnified Amounts that would otherwise have been payable by any Borrower to
the Lender, the amount of such excess, (c) Excluded Taxes (other than any
incremental Taxes arising solely by reason of a breach by any Borrower Party of
its obligations under this Agreement), and (d) any lost profits or indirect,
exemplary, punitive or consequential damages of any Indemnified Party. In any
suit, proceeding or action brought by the Lender in connection with any
Collateral for any sum owing thereunder, or to enforce any provisions of any
Collateral, each Borrower will save, indemnify and hold the Lender harmless from
and against all expense, loss or damage suffered by reason of any defense,
set-off, counterclaim, recoupment or reduction or liability whatsoever of the
account debtor or obligor thereunder, arising out of a breach by any Borrower of
any obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such account debtor or obligor or
its successors from the Borrower.

Section 10.02General Provisions.  If for any reason the indemnification provided
above in Section 10.01 (and subject to the limitations on indemnification
contained therein) is unavailable to an Indemnified Party or is insufficient to
hold an Indemnified Party harmless on the basis of public policy, then the
Borrowers shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, claim, damage or liability in such proportion as
is appropriate to reflect not only the relative benefits received by such
Indemnified Party on the one

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hand and any Borrower on the other hand but also the relative fault of such
Indemnified Party as well as any other relevant equitable considerations.

The provisions of this Article X shall survive the termination of this Agreement
and the payment of the Obligations.

ARTICLE XI

MISCELLANEOUS

Section 11.01Amendments, Etc.  Neither this Agreement nor any provision hereof
may be amended, supplemented, or modified except pursuant to an agreement or
agreements in writing entered into by the Borrowers and the Lender.

Section 11.02Notices, Etc.  All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by certified
mail or overnight air courier, postage prepaid, or by facsimile, to the intended
party at the address or facsimile number of such party set forth opposite its
name on Schedule 11.02 or at such other address or facsimile number as shall be
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, (i) if personally delivered,
when received, (ii) if sent by overnight air courier, the next Business Day
after delivery to the related air courier service, if delivery is guaranteed as
of the next Business Day, (iii) if sent by certified mail, three Business Days
after having been deposited in the mail, postage prepaid, and (iv) if
transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means, if sent during business hours (if sent after business hours,
then on the next Business Day) except that notices and communications pursuant
to Article I shall not be effective until received.  In addition to the
available means of delivering notice above, all notices and other communication
provided for hereunder shall, unless stated otherwise herein, be in writing and
shall be effective when sent via email during business hours to the Borrowers at
pamela.marsh@pnmac.com and to the Lender at bobbie.theivakumaran@citi.com, once
receipt has been confirmed by telephone or electronic means (if sent via email
after business hours, then on the next Business Day).

Section 11.03No Waiver; Remedies.  No failure on the part of the Lender to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

Section 11.04Binding Effect; Assignability.  This Agreement shall be binding
upon and inure to the benefit of the Borrowers and the Lender, and their
respective successors and assigns, provided, however, that nothing in the
foregoing shall be deemed to authorize any assignment not permitted in Section
9.01.

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Section 11.05AGREEMENT CONSTITUTES SECURITY AGREEMENT; GOVERNING LAW; SUBMISSION
TO JURISDICTION; WAIVERS.

(a)THIS AGREEMENT SHALL CONSTITUTE A SECURITY AGREEMENT WITHIN THE MEANING OF
THE UNIFORM COMMERCIAL CODE.

(b)THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH BY ITS TERMS
APPLIES TO THIS AGREEMENT).

(c)EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY:

(1)SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT, THE NOTE AND THE OTHER FACILITY DOCUMENTS, OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE
FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND APPELLATE COURTS FROM ANY THEREOF;

(2)CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS
AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT
OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;

(3)AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH
UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE LENDER SHALL
HAVE BEEN NOTIFIED;

(4)AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN
ANY OTHER JURISDICTION; AND

(5)WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

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Section 11.06Entire Agreement.  This Agreement and the Facility Documents
embodies the entire agreement and understanding of the parties hereto and
supersedes any and all prior agreements, arrangements and understanding relating
to the matters provided for herein.

Section 11.07Acknowledgement.  Borrower hereby acknowledges that:

(a)it has been advised by counsel in the negotiation, execution and delivery of
this Agreement, the Note and the other Facility Documents to which it is a
party;

(b)the Lender has no fiduciary relationship to the Borrowers, and the
relationship between the Borrowers and the Lender is solely that of debtor and
creditor; and

(c)no joint venture exists among or between the Lender and the Borrower.

Section 11.08Captions and Cross References.  The various captions (including,
without limitation, the table of contents) in this Agreement are included for
convenience only and shall not affect the meaning or interpretation of any
provision of this Agreement. References in this Agreement to any underscored
Section or Exhibit are to such Section or Exhibit of this Agreement, as the case
may be.

Section 11.09Execution in Counterparts.  This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same agreement.

Section 11.10Confidentiality.  Each party hereto agrees for the benefit of the
other party that it will hold any confidential information received from the
other party pursuant to this Agreement or any other Facility Document in strict
confidence, as long as such information remains confidential except for
disclosure to (i) its Affiliates, (ii) its legal counsel, accountants, and other
professional advisors or to a permitted assignee or participant, (iii)
regulatory officials, (iv) any Person as requested pursuant to or as required by
law, regulation, or legal process, including disclosures required of public
companies, to the extent required by law, (v) any Person in connection with any
legal proceeding to which it is a party, (vi) rating agencies if requested or
required by such agencies in connection with a rating, and (vii) any Agency. The
parties agree that this Agreement is confidential information of the
Lender.  Lender also agrees that it will comply with all applicable securities
laws with respect to any non-public information of the type referenced in the
preceding sentence in its possession. This Section 11.10 shall survive
termination of this Agreement.

Section 11.11Survival.  The obligations of the Borrowers under Sections 3.02,
6.01, 6.02, 7.01, 7.02 and 10.01 hereof shall survive the repayment of the Loans
and the termination of this Agreement. In addition, each representation and
warranty made, or deemed to be made by a request for a borrowing, herein or
pursuant hereto shall survive the making of such representation and warranty,
and the Lender shall not be deemed to have waived, by reason of making any Loan,
any Default that may arise by reason of such representation or warranty proving
to have been false or misleading, notwithstanding that the Lender may have had
notice or knowledge or reason to believe that such representation or warranty
was false or misleading at the time such Loan was made.

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Section 11.12Set-Off.  In addition to any rights and remedies of the Lender
provided by this Agreement and by law, the Lender shall have the right, without
prior notice to Borrowers, any such notice being expressly waived by Borrowers
to the extent permitted by applicable law, upon any amount becoming due and
payable by any Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all Property and deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Lender or any
Affiliate thereof to or for the credit or the account of any Borrower.  Lender
may set-off cash, the proceeds of the liquidation of any Collateral and all
other sums or obligations owed by the Lender or its Affiliates to a Borrower
against all of such Borrower’s or any Repurchase Party’s obligations to the
Lender or its Affiliates under this Loan Agreement with respect to a Borrower or
any Citi Repurchase Facility with respect to such Repurchase Party or under any
other agreement between the parties or between Borrower or any Repurchase Party
and any affiliate of the Lender, or otherwise whether or not such obligations
are then due, without prejudice to the Lender’s or its Affiliate’s right to
recover any deficiency.  Lender agrees promptly to notify Borrower and each
Repurchase Party after any such set-off and application made by the Lender;
provided that the failure to give such notice shall not affect the validity of
such set-off and application.

Section 11.13Joint and Several Liability.

The Borrowers hereby acknowledge and agree that they are jointly and severally
liable to the Lender for all representations, warranties, covenants, obligations
and liabilities of each of the Borrowers hereunder.  The Borrowers hereby
further acknowledge and agree that (a) a Default or an Event of Default is
hereby considered a Default or an Event of Default by each Borrower, and (b) the
Lender shall have no obligation to proceed against one Borrower before
proceeding against the other Borrower.  The Borrowers hereby waive any defense
to their obligations under this Agreement based upon or arising out of the
disability or other defense or cessation of liability of one Borrower versus the
other.  A Borrower’s subrogation claim arising from payments to Lender shall
constitute a capital investment in another Borrower (1) subordinated to any
claims of Lender, and (2) equal to a ratable share of the equity interests in
such Borrower.

Section 11.14Amendment and Restatement.

Borrowers and Lender entered into the Original Agreement.  Borrowers and Lender
desire to enter into this Agreement in order to amend and restate the Original
Agreement in its entirety.  Effective as of the date hereof, the terms and
provisions of that certain Amended and Restated Loan and Security Agreement,
dated as of September 15, 2016, by and between PMAC and Lender (the “Original
Agreement”) shall be and hereby are amended, superseded and restated in their
entirety by the terms and provisions of this Agreement. For the avoidance of
doubt, this Agreement is not intended to, and shall not, effect a novation of
any of the obligations of the parties to the Original Agreement, but is merely
an amendment and restatement of the terms governing such obligations.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

 

 

 

PENNYMAC CORP

as a Borrower

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Pamela Marsh

 

 

 

Name:

 

Pamela Marsh

 

 

 

Title:

 

 

Managing Director, Treasurer

 

 

 

 

PENNYMAC HOLDINGS, LLC

as a Borrower

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Pamela Marsh

 

 

 

Name:

 

Pamela Marsh

 

 

 

Title:

 

 

Managing Director, Treasurer

 

 

 

 

CITIBANK, N.A., as Lender

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Susan Mills

 

 

 

Name:

 

Susan Mills

 

 

 

Title:

 

 

Vice President

 

 

 

 

 

Citibank, N.A.

 

 

ACKNOWLEDGED AND AGREED

PENNYMAC MORTGAGE INVESTMENT TRUST

as Guarantor

By:

/s/ Pamela Marsh

 

Name:

Pamela Marsh

 

Title:

Managing Director, Treasurer

 

 

 

 

 

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SCHEDULE I

DEFINITIONS

1.1Definitions.  As used in this Agreement the following terms have the meanings
as indicated:

“Acknowledgement Agreement” means, (i) with respect to Fannie Mae Servicing
Rights, such Acknowledgement Agreement dated on or about March 24, 2017, by and
among Fannie Mae, PMAC and the Lender as secured party, pursuant to which Fannie
Mae acknowledges the security interest of the Lender in the Fannie Mae Servicing
Contracts, together with any amendments and addenda thereto, and (ii) with
respect to Freddie Mac Servicing Rights, such Acknowledgement Agreement dated on
or about September 15, 2016, by and among, the Borrowers and the Lender as
secured party, pursuant to which Freddie Mac acknowledges the security interest
of the Lender in the Freddie Mac Servicing Contracts, together with any
amendments and addenda thereto.

“Adjusted Tangible Net Worth” shall mean, with respect to any Person, the excess
of total assets (net of goodwill and intangible assets), which shall include the
value of mortgage servicing rights in an amount equal to the lesser of (i) an
amount calculated in accordance with GAAP or (ii) the MSR Value Cap, of such
Person, over total liabilities of such Person, determined in accordance with
GAAP.”

“Affiliate” shall mean, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person.  For purposes of this definition, “control” (together with
the correlative meanings of “controlled by” and “under common control with”)
means possession, directly or indirectly, of the power (a) to vote 20% or more
of the securities (on a fully diluted basis) having ordinary voting power for
the directors or managing general partners (or their equivalent) of such Person,
or (b) to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by contract, or
otherwise; provided, however, that the Subservicer shall not be deemed an
Affiliate for the purposes of this Agreement; provided, however, that in respect
of a Borrower or Guarantor the term “Affiliate” shall only refer to wholly-owned
subsidiaries of Guarantor or Borrower, which, for the avoidance of doubt, shall
not include Private National Mortgage Acceptance Company, LLC  or  PLS; and
provided further that in respect of the Subservicer, the term “Affiliate” shall
only refer to wholly-owned subsidiaries of Private National Mortgage Acceptance
Company, LLC.

“Agreement” has the meaning set forth in the preamble.

“Agency” means each of Fannie Mae, Freddie Mac and Ginnie Mae.

“Agency Obligations” means with respect to any mortgage loan, (a) any
obligation, cost, fee, claim or liability (actual or contingent) of the
Borrower, servicer or Subservicer in respect of such Mortgage Loan to indemnify
the Applicable Agency for any losses incurred in respect of any Mortgage Loan
that was determined at the time of sale to have been ineligible for sale to the
Agency due to a breach of one or more representations and warranties but
accepted for purchase

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subject to any waiver and indemnity obligations, and (b) any and all other
obligations, costs, fees, claims or liabilities described from time to time as
being sold “with recourse” as such term (or terms of similar meaning) are
defined in the related Applicable Agency Guide, as amended or supplemented from
time to time, and any successor publications thereto having the same general
contents and purpose.

“Ancillary Income” means all money which is due and payable in connection with
each Mortgage Loan other than the Servicing Fee and specifically including,
without limitation, late charge fees, assignment transfer fees, insufficient
funds check charges, amortization schedule fees, interest from escrow accounts
and all other incidental fees and charges and any Float Benefit, in each case,
to the extent such amounts are allocable to a Mortgage Loan.

“Anti-Terrorism Laws” shall mean any Requirements of Law relating to terrorism,
trade sanctions programs and embargoes, import/export licensing, money
laundering or bribery, and any regulation, order, or directive promulgated,
issued or enforced pursuant to such Requirements of Law, all as amended,
supplemented or replaced from time to time.

“Applicable Agency” means, (i) with respect to Fannie Mae Servicing Rights,
Fannie Mae and (ii) with respect to Freddie Mac Servicing Rights, Freddie Mac.

“Applicable Agency Guide” shall mean (i) with respect to Fannie Mae, the Fannie
Mae Guide, (ii) with respect to Freddie Mac, the Freddie Mac Guide and (iii)
with respect to Ginnie Mae, the Ginnie Mae Guide.

“Applicable Law” shall mean as to any Person, any law, treaty, rule or
regulation (including the Investment Company Act of 1940, as amended) or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

“Applicable Margin” shall have the meaning set forth in the Pricing Side Letter.

“Attributed Rate” shall have the meaning set forth in the Pricing Side Letter.

“Available Loan Amount” means, on any Business Day, an amount equal to (i) the
then current Commitment Amount plus the Uncommitted Amount minus (ii) the
Outstanding Aggregate Loan Amount.

“Base Servicing Fee” means, (i) with respect to Freddie Mac Servicing Rights and
each related Mortgage Loan and each related Collection Period, an amount equal
to the product of (A) the aggregate outstanding principal balance of such
Mortgage Loan as of the first day of such Collection Period and (B) one-twelfth
of the Base Servicing Fee Rate; provided, however, that (1) if the initial
Collection Period is less than a full month, such fee for each such Mortgage
Loan shall be an amount equal to the product of the fee otherwise described
above and a fraction, the numerator of which is the number of days in such
initial Collection Period and the denominator of which is 360; (2) if any
Mortgage Loan ceases to be part of the Primary Portfolio during such Collection
Period as a result of a termination of PMAC’s duties as servicer or subservicer
under the Servicing Agreement and Freddie Mac Guide, the portion of such amount
that is attributable to such Mortgage Loan shall be adjusted to an amount equal
to the product of such portion and a

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fraction, the numerator of which is the number of days in such Collection Period
during which such Mortgage Loan was included in the Primary Portfolio, and the
denominator of which is 360; and (3) if the Collections for such Primary
Portfolio and such Collection Period were used to cover prepayment interest
shortfalls on the Mortgage Loans, the fee otherwise described above shall be
reduced as provided in the related Excess Servicing Spread Acquisition Agreement
and (ii) with respect to Fannie Mae Servicing Rights and each related  Mortgage
Loan and each related Collection Period, an amount equal to the product of (A)
the aggregate outstanding principal balance of such Mortgage Loan as of the
first day of such Collection Period and (B) one-twelfth of the Base Servicing
Fee Rate; provided, however, that (1) if the initial Collection Period is less
than a full month, such fee for each such Mortgage Loan shall be an amount equal
to the product of the fee otherwise described above and a fraction, the
numerator of which is the number of days in such initial Collection Period and
the denominator of which is 360; (2) if any Mortgage Loan ceases to be part of
the Primary Portfolio during such Collection Period as a result of a termination
of PMAC’s duties as servicer or subservicer under the Servicing Agreement and
Fannie Mae Guide, the portion of such amount that is attributable to such
Mortgage Loan shall be adjusted to an amount equal to the product of such
portion and a fraction, the numerator of which is the number of days in such
Collection Period during which such Mortgage Loan was included in the Primary
Portfolio, and the denominator of which is 360; and (3) if the Collections for
such Primary Portfolio and such Collection Period were used to cover prepayment
interest shortfalls on the Mortgage Loans, the fee otherwise described above
shall be reduced as provided in the related Excess Servicing Spread Acquisition
Agreement.  

“Base Servicing Fee Rate” shall have the meaning set forth in the related ESS
Confirmation.  In no event shall the Base Servicing Fee Rate equal less than (i)
with respect to Freddie Mac Servicing Rights, twelve and a half basis points
(0.125)% or such other amount as required by Freddie Mac pursuant to the Freddie
Mac Guides and (ii) with respect to Fannie Mae Servicing Rights, the lesser of
(a) the “Minimum Retained Servicing Fee Rate” as defined in the Fannie Mae
Excess Servicing Spread Acquisition Agreement, or (b) such other amount as
required by Fannie Mae pursuant to the Fannie Mae Guides or as a result of an
ESS Callable Event.

“Basel III” means “A Global Regulatory Framework for More Resilient Banks
and  Banking Systems” developed by the Basel Committee on Banking Supervision
(or any successor or similar authority), initially published in December 2010.

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

“Borrower” has the meaning set forth in the preamble.

“Borrower Funding Request” means the request to fund a Loan on any Funding Date,
substantially in the form of Exhibit 2.03, delivered in accordance with Section
2.03(b).

“Borrower Party” shall mean each of the Borrowers and Guarantor.

“Borrowing Base” means, as of any date of determination, an amount equal to (a)
the aggregate Collateral Value of all Collateral that has been and remains
pledged to the Lender hereunder, minus (b) any Agency Obligations that are due
to any Applicable Agency but have not yet been paid by the Borrower, whether
under the Servicing Contracts or otherwise.

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“Borrowing Base Deficiency” has the meaning set forth in Section 2.08(b).

“Borrowing Base Report” means the borrowing base report, substantially in a
format agreed upon between Borrower and Lender, delivered by the Lender in
accordance with Section 2.04(b).

“Borrowing Base Shortfall Day” has the meaning set forth in Section 2.08(b).

“Business Day” means any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking institutions in the State of New York are required or
authorized by law to be closed.

“Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests, including, without limitation, limited and
general partnership interests, in a person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

“Cash Equivalents” shall mean (a) securities with maturities of 90 days or less
from the date of acquisition issued or fully guaranteed or insured by the United
States Government or any agency thereof, (b) certificates of deposit and
eurodollar time deposits with maturities of 90 days or less from the date of
acquisition and overnight bank deposits of any commercial bank having capital
and surplus in excess of $500,000,000, (c) repurchase obligations of any
commercial bank satisfying the requirements of clause (b) of this definition,
having a term of not more than seven days with respect to securities issued or
fully guaranteed or insured by the United States Government, (d) commercial
paper of a domestic issuer rated at least A-1 or the equivalent thereof by
Standard and Poor’s Ratings Group (“S&P”) or P-1 or the equivalent thereof by
Moody’s Investors Service, Inc. (“Moody’s”) and in either case maturing within
90 days after the day of acquisition, (e) securities with maturities of 90 days
or less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody’s, (f) securities with maturities of 90
days or less from the date of acquisition backed by standby letters of credit
issued by any commercial bank satisfying the requirements of clause (b) of this
definition, or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.

“Change of Control” shall mean the occurrence of any of the following: (a) with
respect to a Borrower or the Guarantor, the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) of outstanding shares of voting stock of a
Borrower or the Guarantor if after giving effect to such acquisition such Person
or Persons owns twenty-five percent (25%) or more of such outstanding shares of
voting stock, (b) Guarantor ceases to directly or indirectly own and control, of
record and beneficially, 100% of the Equity Interests of either (i) PennyMac
Operating Partnership, L.P. or (ii) PennyMac GP OP, Inc., or (c) PennyMac
Operating Partnership, L.P. shall cease to own and control, of record and
beneficially, 100% of the Equity Interests of Borrower.

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“Citi Repurchase Facilities” shall mean each of (i) that Amended and Restated
Master Repurchase Agreement dated as of March 3, 2017, as amended (“NPL
Repurchase Agreement”), among PennyMac Corp., as a seller, PennyMac Holdings,
LLC, as a seller, PennyMac Loan Services, LLC, as servicer and Citibank, N.A.,
as buyer, and any other Program Document as such term is defined in the NPL
Repurchase Agreement; or (ii) that Amended and Restated Master Repurchase
Agreement dated as of March 3, 2017, as amended (“PMAC Agency Repurchase
Agreement”), among PennyMac Corp., as seller, PennyMac Loan Services, LLC, as
servicer and Citibank, N.A., as buyer and any other Program Document as such
term is defined in the PMAC Agency Repurchase Agreement.

“Closing Date” means the date on which all of the conditions set out in Section
5.01 are satisfied.

“Collateral” has the meaning set forth in Section 4.01.

“Collateral Account” means, as applicable, each account established by the
Borrowers for the benefit of Fannie Mae, Freddie Mac or Ginnie Mae (as
applicable) as currently set forth on Schedule I-A attached hereto.

“Collateral Account Activity” has the meaning set forth in Section 7.01(v).

“Collateral Value” means, for purposes of determining the value of the Borrowing
Base from time to time, the sum of (1) with respect to the Eligible Servicing
Rights (i) the Attributed Rate for Eligible Servicing Rights, multiplied by (ii)
the Market Value of the Eligible Servicing Rights as determined by the Lender in
good faith, plus (2) with respect to the Eligible Excess Servicing Spread (i)
the Attributed Rate for Eligible Excess Servicing Spread, multiplied by (ii) the
Market Value of the Eligible Excess Servicing Spread as determined by the Lender
in good faith.

“Collection Period” means, with respect to any Monthly Settlement Date, the
calendar month most recently ended.

“Collections” means the Total Servicing Fees, any excess servicing or
subservicing rights or retained yield, and any Ancillary Income that the
Borrowers or the Subservicer as subservicer on behalf of the PMAC, is entitled
to receive pursuant to the Servicing Contracts.

“Commitment Amount” shall mean $400,000,000.

“Commitment Fee” shall have the meaning set forth in the Pricing Side Letter.

“Commitment Fee Installment Amount” shall have the meaning set forth in the
Pricing Side Letter.

“Compliance Certificate” means a certificate in form acceptable to the Lender
substantially in the form of Exhibit 7.01 hereto.

“Covered Entity” shall mean (a) each Borrower and each of their respective
Subsidiaries, all owners of the foregoing and all brokers or other agents of any
Borrower acting in any

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capacity in connection with the Servicing Agreement and (b) each Person that,
directly or indirectly, is in control of a Person described in clause (a)
above.  For purposes of this definition, control of a Person shall mean the
direct or indirect (x) ownership of, or power to vote, 25% or more of the issued
and outstanding equity interests having ordinary voting power for the election
of directors of such Person or other Persons performing similar functions for
such Person, or (y) power to direct or cause the direction of the management and
policies of such Person whether by ownership of equity interests, contract or
otherwise.

“Custodial File” means with respect to any Mortgage Loan, a file pertaining to
such Mortgage Loan being held by the Custodian that contains the mortgage
documents pertaining to such Mortgage Loan.

“Custodian” means any financial institution that holds documents for any of the
Mortgage Loans on behalf of any Applicable Agency related thereto.

“Default” means an Event of Default or an Unmatured Event of Default.

“Default Rate” means, with respect to any late payment of fees or other amounts
due hereunder, the LIBO Rate for the related Interest Period (or for all
successive Interest Periods during which such fees or other amounts were
delinquent), plus the Applicable Margin, plus 5% per annum.

“Disposition” shall mean, with respect to any Person, any sale or other whole or
partial conveyance of all or any portion of such Person’s Property, or any
direct or indirect interest therein to a third party, including the granting of
any purchase options, rights of first refusal, rights of first offer or similar
rights in respect of any portion of such assets or the subjecting of any portion
of such assets to restrictions on transfer.

“Dodd-Frank Act” means the Dodd-Frank Wall Street Reform and Consumer Protection
Act of 2010, Pub. L. No. 111-203 and any successor statute.

“Dollars” means dollars in lawful money of the United States of America.

“Eligible Cash Reserve Amounts” shall mean (i) cash reserves collected by a
Borrower from its correspondents and maintained in one or more segregated
accounts in favor of such Borrower and held and available in compliance with the
covenant set forth in Section 7.01(g) hereof and (ii) representation and
warranty reserves established and maintained for the benefit of such Borrower
for the purpose of repurchasing mortgage loans from or otherwise indemnifying
losses and liabilities incurred by third parties in connection with breaches of
representations and warranties, as set forth on the Monthly Compliance
Certificate.

“Eligible Assets” means the Eligible Servicing Rights and the Eligible Excess
Servicing Spread.

“Eligible Excess Servicing Spread” shall mean Excess Servicing Spreads, (a)
acquired by Holdings pursuant to a Permitted Excess Servicing Spread
Acquisition, (b) related to the Mortgage Loans identified on the related
Servicing Schedule, (c) that are subject to the terms and conditions of the
related Acknowledgement Agreement (d) whereby the related Servicing Rights

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are Eligible Servicing Rights or (e) owned by PMAC to the extent such Excess
Servicing Spreads have reverted to or been reacquired by PMAC. In addition, all
Eligible Excess Servicing Spreads must comply with the eligibility criteria set
out in Schedule 6.02. The eligibility criteria set forth in Schedule 6.02 hereto
are true and correct as of such date.

“Eligible Servicing Rights” means, mortgage servicing rights owned by PMAC that
are  appurtenant to Mortgage Loans pooled in securitizations by Fannie Mae or
Freddie Mac and comply with the eligibility criteria set out in Schedule 6.02.
The eligibility criteria set forth in Schedule 6.02 hereto are true and correct
as of such date.

“Equity Interests” means membership interests, shares of capital stock, or other
equity interests (including options, warrants or other rights to acquire any
such membership interests or shares of capital stock or other equity interests,
any securities convertible into or exchangeable for any such membership
interests, capital stock or other equity interests or any stock appreciation
rights, phantom stock rights or other rights), whether voting or non-voting, of
a specified Person, including common interests, preferred interests or any other
“equity security” (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the SEC under the Exchange Act).

"ESS Callable Event" means an event that entitles or requires PMAC to call any
Junior Excess Strip from Holdings, including without limitation any mandatory or
discretionary call provisions specified in Article 5 of the FNMA Excess
Servicing Spread Acquisition Agreement.

“ESS Confirmation” shall mean each letter agreement between Holdings and PMAC
and substantially in the form (i) with respect to Freddie Mac Servicing Rights,
attached to the Freddie Mac Excess Servicing Spread Acquisition Agreement as
Exhibit A that includes a mortgage loan schedule and sets forth each of a
“transaction settlement date”, a “transaction asset purchase agreement” (if
applicable), a “transaction base servicing fee rate”, a “transaction purchase
price percentage” and a “transaction excess spread percentage” and (ii) with
respect to Fannie Mae Servicing Rights, attached to the Fannie Mae Excess
Servicing Spread Acquisition Agreement as Exhibit A that includes a mortgage
loan schedule and sets forth each of a “transaction settlement date”,  a
“transaction asset purchase agreement” (if applicable), a “transaction base
servicing fee rate”, “transaction purchase price percentage", "junior excess
strips"  and a “transaction excess spread percentage”.

"ESS Transaction Documents" shall mean any Assignment (as defined in the related
Excess Servicing Spread Acquisition Agreement), Transaction Asset Purchase
Agreement (as defined in the related Excess Servicing Spread Acquisition
Agreement) (if applicable) or copy of the instrument evidencing PMAC's
acquisition of the Servicing Rights with respect to the Primary Portfolio.

“Event of Default” has the meaning set forth in Section 8.01.

“Excess Servicing Spread”  shall mean the rights of PMAC and Holdings to the
cash flow (including without limitation any Junior Excess Strips) derived from
the Eligible Servicing Rights, expressed as a percentage of the Total Servicing
Spread, which percentage is equal to the Excess Servicing Spread Percentage.

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“Excess Servicing Spread Acquisition Agreement” shall mean each of the (i)
Fannie Mae Excess Servicing Spread Acquisition Agreement and (ii) Freddie Mac
Excess Servicing Spread Acquisition Agreement, as applicable.

“Excess Servicing Spread Acquisition” shall mean the disposition by PMAC and
acquisition by Holdings of the Excess Servicing Spread with respect to the
Eligible Servicing Rights pursuant to the terms and conditions of the related
Excess Servicing Spread Acquisition Agreement and the related ESS Confirmation.

“Excess Servicing Spread Percentage” shall be an amount equal to the difference
of (i) the Total Servicing Fee minus (ii) the Base Servicing Fee expressed as a
percentage set forth in the related ESS Confirmation as the "Transaction Excess
Spread Percentage" and identified on the related Servicing Schedule.

“Excluded Taxes” shall mean any income taxes, branch profits taxes, franchise
taxes, or other taxes measured by or enforced on gross receipts or net income
that is imposed by the United States, a state, a foreign jurisdiction under the
laws of which Lender is organized, maintains its applicable lending office, or
has a present or former connection, and any political subdivision of any of the
foregoing.

“Executive Order” shall mean Executive Order 13224 -- Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism.

“Facility” means the loan facility provided to the Borrowers by the Lender
pursuant to this Agreement.

“Facility Documents” means this Agreement, the Pricing Side Letter, the Notes,
the Servicing Contracts, the Acknowledgement Agreements, the Guaranty, the
Master Netting Agreement, each Subservicer Acknowledgement Letter, the
Subservicing Agreement and all notices, certificates, financing statements and
other documents to be executed and delivered by the Borrowers in connection with
the transactions contemplated by this Agreement.

“Fannie Mae” means Fannie Mae, formerly known as The Federal National Mortgage
Association, or any successor thereto.

"Fannie Mae Excess Servicing Spread Acquisition Agreement" shall mean that
certain Second Amended and Restated Master Spread Acquisition and MSR Servicing
Agreement, dated as of March 24, 2017, pursuant to which Holdings acquired
Excess Servicing Spreads (appurtenant to Fannie Mae Servicing Rights) from PMAC.

“Fannie Mae Guides” means the Fannie Mae Selling Guide and the Fannie Mae
Servicing Guide, as amended from time to time, and any related announcements,
directives and correspondence issued by Fannie Mae.

“Fannie Mae Servicing Contract” shall have the meaning set forth in Section
4.02(b).

“Fannie Mae Servicing Rights” means all Servicing Rights with respect to Fannie
Mae.

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"Fannie Mae Subordination Agreement" shall mean that certain Second Amended and
Restated Subordination of Interest Agreement, dated as of March 24, 2017, among
PMAC, Holdings, and Fannie Mae.

“Fitch” means Fitch, Inc., and its successors in interest.

“Float Benefit” means the net economic benefit resulting from investments of
funds representing escrow and custodial deposits relating to the Mortgage Loans.

“Foreign Lender” means any successor or assignee of Lender that is organized
under the laws of a jurisdiction other than that in which a Borrower is resident
for tax purposes.  For purposes of this definition, the United States of
America, each State and Commonwealth thereof and the District of Columbia shall
be deemed to constitute a single jurisdiction.

“Freddie Mac” means Freddie Mac, formerly known as The Federal Home Loan
Mortgage Corporation, or any successor thereto.

"Freddie Mac Excess Servicing Spread Acquisition Agreement" shall mean that
certain Master Spread Acquisition and MSR Servicing Agreement, dated as of
September 15, 2016, pursuant to which Holdings acquired Excess Servicing Spreads
(appurtenant to Freddie Mac Servicing Rights) from PMAC.

“Freddie Mac Guides” shall mean the Freddie Mac Borrower/Servicer Guide, and all
amendments and additions thereto.

“Freddie Mac Servicing Contract” means (i) the Purchase Contract (as defined in
the Freddie Mac Guides), including a Purchase Contract confirmation, by and
between the Borrowers and Freddie Mac, (ii) the Freddie Mac Guides, (iii) any
Bulletins (as defined in the Freddie Mac Guides), (iv) any agreement pursuant to
which Borrower provides a guaranty or any form of credit enhancement in
connection with the sale of Mortgage Loans to Freddie Mac, (v) the Servicer
Success Scorecard (as defined in the Freddie Mac Guides), (vi) any other
document designated to be a Purchase Document by Freddie Mac, (vii) the Guide
Plus Additional Provisions (as defined in the Freddie Mac Guides), as amended
from time to time, and (viii) any other additional terms applicable to the sale
of Mortgage Loans, such as written waivers, amendments or supplements to the
Freddie Mac Guides that are made available to a Borrower by Freddie Mac through
electronic means including sources designated by Freddie Mac for distribution of
the Freddie Mac Guides.

“Freddie Mac Servicing Rights” means all Servicing Rights with respect to
Freddie Mac.

“Funding Date” shall mean the date on which Lender makes any Loan hereunder.

“Funding Notice Date” means the date on which a Borrower shall deliver a
Borrower Funding Request, which shall be at least three (3) Business Days prior
to the date which such Borrower has requested as a Funding Date as provided
therein .

“GAAP” shall mean United States Generally Accepted Accounting Principles
inclusive of, but not limited to, applicable statements of Financial Accounting
Standards issued by the

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Financial Accounting Standards Board, its predecessors and successors and SEC
Staff Accounting Guidance as in effect from time to time applied on a consistent
basis.

“Ginnie Mae” means Ginnie Mae, formerly known as The Government National
Mortgage Association, or any successor thereto.

“Ginnie Mae Guides” shall mean the Ginnie Mae Handbook 5500.3 and all amendments
and additions thereto.

“Governmental Action” means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, decrees, licenses,
exemptions, publications, filings, notices to and declarations of or with, or
required by, any Governmental Authority, or required by any Legal Requirement.

“Governmental Authority” shall mean with respect to any Person, any nation or
government, any state or other political subdivision, agency or instrumentality
thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any court or
arbitrator having jurisdiction over such Person, any of its Subsidiaries or any
of its properties.

“Guarantee” shall mean, as to any Person, any obligation of such Person directly
or indirectly guaranteeing any Indebtedness of any other Person or in any manner
providing for the payment of any Indebtedness of any other Person or otherwise
protecting the holder of such Indebtedness against loss (whether by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, or to take-or-pay or otherwise), provided that the term
“Guarantee” shall not include (i) endorsements for collection or deposit in the
ordinary course of business, or (ii) obligations to make servicing advances for
delinquent taxes and insurance, or other obligations in respect of a Mortgaged
Property, to the extent required by Lender. The amount of any Guarantee of a
Person shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by such Person in good faith. The terms
“Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.

“Guarantor” shall mean PennyMac Mortgage Investment Trust, its successors and
permitted assigns.

“Guaranty” shall mean the Amended and Restated Guaranty Agreement, dated as of
September 15, 2016, by Guarantor in favor of Lender, as such agreement may be
amended or modified from time to time in accordance with its terms.

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

“Indebtedness” means as to any Person, (a) obligations created, issued or
incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
from such Person); (b) obligations of such Person to pay

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the deferred purchase or acquisition price of property or services, other than
trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as such trade
accounts payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) indebtedness of others
secured by a Lien on the property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial institutions
for account of such Person; (e) capital lease obligations of such Person; (f)
obligations of such Person under repurchase agreements or like arrangements; (g)
indebtedness of others Guaranteed by such Person; (h) all obligations of such
Person incurred in connection with the acquisition or carrying of fixed assets
by such Person; (i) indebtedness of general partnerships of which such Person is
a general partner; and (j) any other indebtedness of such Person by a note,
bond, debenture or similar instrument, excluding non-recourse debt, including
securitization debt, and any debt classified as Intercompany Debt that is
eliminated on the accompanying consolidating financial statements of Guarantor
and its Subsidiaries.

“Indemnified Amounts” has the meaning set forth in Section 10.01.

“Indemnified Party” has the meaning set forth in Section 10.01.

“Indemnified Taxes” means Taxes other than (i) Excluded Taxes and (ii) Other
Taxes.

“Initial Borrowing Base Report” means the borrowing base report delivered by the
Lender in accordance with Section 2.04(a) based on the information set forth in
the related Servicing Schedule with respect to the Collateral then pledged to
Lender hereunder.

“Initial Borrower Funding Request” means the request to fund the Loan on the
Initial Funding Date, substantially in the form of Exhibit 2.03, delivered in
accordance with Section 2.03(a), that is current as of the end of the previous
calendar month.

“Initial Funding Date” means the Funding Date on which the first Loan is made
pursuant to this Agreement, as specified in the Initial Borrower Funding
Request.

“Insolvency Law” shall mean any bankruptcy, reorganization, moratorium,
delinquency, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction in effect at any time during the term of
this Agreement.

"Intercompany Debt" shall mean unsecured debt between Guarantor or any wholly
owned Subsidiary or Affiliate (as applicable) of Guarantor on the one hand and
Guarantor or any other wholly owned Subsidiary or Affiliate (as applicable) of
Guarantor on the other; provided that for the avoidance of doubt any debt
involving Servicer or any Affiliates or Subsidiaries of PFSI on the one hand and
Guarantor or any other wholly owned Subsidiary or Affiliate (as applicable) of
Guarantor on the other shall not qualify as Intercompany Debt.

“Interest Period” means, for any Loan, (i) an initial period beginning on the
Funding Date for such Loan and ending on the last day of the calendar month in
which such Funding Date occurs; and (ii) subsequent consecutive periods
thereafter, beginning on the first day of each

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subsequent calendar month and ending on the earlier of (x) the last day of the
same calendar month in which such Interest Period began and (y) the Loan
Repayment Date.

“Interest Rate” means, with respect to all Loans, the LIBO Rate plus the
Applicable Margin, payable on the last Business Day of each Interest Period.

“Investment Company Act” means the Investment Company Act of 1940, as amended,
together with the rules and regulations promulgated thereunder.

"Junior Excess Strip" shall have the meaning assigned in the Fannie Mae Excess
Servicing Spread Acquisition Agreement and shall be identified on the related
ESS Confirmation.

“Lender” means Citibank, N.A.

“LIBO Base Rate” shall mean the greater of (a) 0.00% and (b) the rate determined
daily by Lender on the basis of the “BBA’s Interest Settlement Rate” offered for
one-month U.S. dollar deposits, as such rate appears on Bloomberg L.P.’s page
“BBAM” as of 11:00 a.m. (London time) on such date provided that if such rate
does not appear on Bloomberg L.P.’s page “BBAM” as of such time on such date,
the rate for such date will be the rate determined by reference to the most
recently published rate on Bloomberg L.P.’s page “BBAM”; provided further that
if such rate is no longer set on Bloomberg L.P.’s page “BBAM”, the rate of such
date will be determined by reference to such other comparable publicly available
service publishing such rates as may be selected by Lender in its sole
discretion, which rates have performed or are expected by Lender to perform in a
manner substantially similar to the rate appearing on Bloomberg L.P.’s page
“BBAM”, and which rate will be communicated to Borrowers.  Notwithstanding
anything to the contrary herein, Lender shall have the sole discretion to re-set
the LIBO Base Rate on a daily basis.

“LIBO Rate” shall mean with respect to each Interest Period pertaining to a
Loan, a rate per annum determined by Lender in its sole discretion in accordance
with the following formula (rounded to five decimal places), which rate as
determined by Lender shall be conclusive absent manifest error by Lender:

LIBO Base Rate

1.00 – LIBO Reserve Requirements

 

The LIBO Rate shall be calculated on each Funding Date and each Payment Date
commencing with the first Funding Date.

“LIBO Reserve Requirements” shall mean for any Interest Period for any Loan, the
aggregate (without duplication) of the rates (expressed as a decimal fraction)
of reserve requirements applicable to Lender in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto), dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as “Eurocurrency Liabilities” in Regulation D of such Board) maintained by a

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member bank of such Governmental Authority. As of the Effective Date, the LIBO
Reserve Requirements shall be deemed to be zero.  Lender will provide Borrower
no less than 30 days prior written notice of implementation of any change in
LIBO Reserve Requirements

“Lien” means with respect to any property or asset of any Person (a) any
mortgage, lien, pledge, charge or other security interest or encumbrance of any
kind in respect of such property or asset or (b) the interest of a vendor or
lessor arising out of the acquisition of or agreement to acquire such property
or asset under any conditional sale agreement, lease purchase agreement or other
title retention agreement, and in each case, other than the interest of the
Applicable Agency’s rights and interests in the Eligible Assets.

“Liquidity” means with respect to any Person, the sum of (i) its unrestricted
cash, plus (ii) its unrestricted Cash Equivalents.  For the avoidance of doubt,
such unrestricted cash shall not include any cash collateral of such Person in
respect of letter of credit obligations of such Person.

“Loan Repayment Date” means, the earlier to occur of (i) March 2, 2018, or (ii)
such earlier date as may be notified by Lender in accordance with Section
8.02(a).

“Loans” has the meaning set forth in Section 2.01.

“Margin Call” has the meaning set forth in Section 2.08.

“Market Value” means, with respect to (i) any Eligible Asset included in the
Borrowing Base the value ascribed to such asset by the Lender in its sole
discretion, taking into account any outstanding obligations owed by any Borrower
to the Applicable Agency, as applicable, as marked to market as often as daily,
(ii) a Servicing Right or Excess Servicing Spread which is not an Eligible Asset
included in the Borrowing Base or deemed by Lender as ineligible or otherwise
uncollectible, zero.  The Lender’s determination of Market Value shall be
conclusive upon the parties, absent manifest error on the part of the
Lender.  Each Borrower acknowledges that the Lender’s determination of Market
Value is for the limited purpose of determining Collateral Value for lending
purposes hereunder without the ability to perform customary purchaser’s due
diligence and is not necessarily equivalent to a determination of the fair
market value of the Eligible Assets achieved by obtaining competing bids in an
orderly market in which no Borrower is in default under a revolving debt
facility and the bidders have adequate opportunity to perform customary loan and
servicing and subservicing due diligence.  For the purpose of determining the
related Market Value, the Lender shall have the right to use a third party
valuation of the Eligible Assets delivered pursuant to Section 2.04 provided by
a Borrower, or a valuation obtained by Lender, or both, but Lender shall have no
obligation to use any third-party valuation and shall have the right to
determine the Market Value of the related Eligible Assets at any time in its
sole discretion.  Subsequently, Lender shall have the right to reasonably
request at any time from Borrowers, an updated valuation for each Eligible
Asset, in a form acceptable to Lender in its sole discretion; provided that the
Lender shall not be obligated to rely on either valuation and shall have the
right to determine the Market Value of the Eligible Asset at any time in its
sole discretion.  The Market Value shall be deemed to be zero with respect to
each Loan for which such valuation is not provided.  The Market Value shall be
deemed to be zero with respect to each Servicing Right or Excess Servicing
Spread that is not an Eligible Asset.

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“Master Netting Agreement” shall mean that certain Second Amended and Restated
Master Netting Agreement, dated as of the date hereof, as amended, by and among
the Borrowers, the Lender, and each Repurchase Party.

“Material Adverse Effect” shall mean a material adverse effect on (a) the
property, business, operations, financial condition or prospects of a Borrower,
Subservicer or Guarantor, (b) the ability of a Borrower, Subservicer or
Guarantor  to perform its obligations under any of the Facility Documents to
which it is a party, (c) the validity or enforceability of any of the Facility
Documents, (d) the rights and remedies of Lender under any of the Facility
Documents, (e) the timely repayment of any Loan or payment of other amounts
payable in connection therewith, (f) the Collateral or (g) the validity,
perfection, priority or enforceability of Lender’s security interest in the
Collateral.

“MBS” means Mortgage Backed Security.

“Monthly Settlement Date” means the 15th day of each calendar month or, if such
15th is not a Business Day, the first Business Day thereafter, or such other
date occurring at least once each month as may be agreed to by Borrower and
Lender, commencing in the month immediately following the month in which the
initial Loan is funded.

“Moody’s” means Moody’s Investors Service, Inc. or its successor in interest.

“Mortgage” means a mortgage, mortgage deed, deed of trust, or other instrument
creating a first lien on or first priority security interest in an estate in fee
simple in real property securing a Mortgage Note including any riders,
assumption agreements or modifications relating thereto.

“Mortgage File” means, with respect to any Mortgage Loan, a file or files
pertaining to such Mortgage Loan that contains the mortgage documents pertaining
to such Mortgage Loan, and incorporated herein by reference, and any additional
mortgage documents pertaining to such Mortgage Loan required by the related
Applicable Agency Guide.

“Mortgage Loan” means any mortgage loan serviced by PMAC pursuant to any
Servicing Contract, which mortgage loan is part of a Pool and in respect of
which the Pledged Servicing Rights secure a Loan under this Agreement.

“Mortgage Note” means the note or other evidence of indebtedness of a Mortgagor
secured by a Mortgage pertaining to a Mortgage Loan.

“Mortgagor” means the obligor on a Mortgage Note.

“MSR Value Cap” shall have the meaning assigned to it in the Pricing Side
Letter.

“Net Income” shall mean, for any period, the net income of any Person for such
period as determined in accordance with GAAP.

“Net Worth” shall mean, with respect to any Person, the excess of total assets
of such Person, over total liabilities of such Person, determined in accordance
with GAAP.

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“Non-Exempt Person” shall mean any Person other than a Person who is either (a)
a U.S. Person or (b) has provided for the relevant year such duly-executed
form(s) or statement(s) which may, from time to time, be prescribed by law and
which, pursuant to applicable provisions of (i) any income tax treaty between
the United States and the country of residence of such Person, (ii) the Code, or
(iii) any applicable rules or regulations in effect under clauses (a) or (b)
above, permit the Servicer to make such payments free of any obligation or
liability for withholding.

“Note” means the amended and restated promissory note executed jointly and
severally by Borrowers issued to the Lender, in substantially the form of
Exhibit 2.02(a), as amended from time to time, and any replacement thereof or
substitution therefor.

“Obligations” means the Outstanding Aggregate Loan Amount, all accrued interest
thereon and all other amounts payable by the Borrowers to the Lender pursuant to
this Agreement, the Note or any other Facility Document.

“OFAC” shall mean the Office of Foreign Assets Control of the United States
Department of the Treasury.

“Opinion of Counsel” means a written opinion of counsel, reasonably acceptable
to each Person to whom such opinion is addressed.

“Other Taxes” means all present or future stamp or documentary taxes or any
other excise or property taxes arising from any payment made hereunder or under
any other Facility Document or from the execution, delivery or enforcement of
this Loan Agreement or any other Facility Document.

“Outstanding Aggregate Loan Amount” means, at any time, the aggregate principal
amount of the Loans funded by the Lender, minus the aggregate amount of payments
received by the Lender prior to such time and applied to reduce the principal
amount of the Loans.

“Participant” has the meaning set forth in Section 9.04.

“Permitted Excess Servicing Spread Acquisition” shall mean any Excess Servicing
Spread Acquisition (i) made solely pursuant to the terms and conditions of the
related Excess Servicing Spread Acquisition Agreement and (ii) in which Freddie
Mac or Fannie Mae, as applicable, has consented pursuant to the terms of the
related Acknowledgement Agreement.

“Person” means any individual, corporation, estate, partnership, limited
liability company, limited liability partnership, joint venture, association,
joint-stock company, business trust, trust, unincorporated organization,
government or any agency or political subdivision thereof, or other entity of a
similar nature.

"PFSI" shall mean PennyMac Financial Services, Inc.

“P&I” means principal and interest.

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“Pledged Assets” means the Pledged Servicing Rights and Pledged Excess Servicing
Spread.

“Pledged Excess Servicing Spread” means any Excess Servicing Spread a security
interest in which has been granted to the Lender pursuant to this Agreement.

“Pledged Servicing Rights” means any Eligible Servicing Rights a security
interest in which has been granted to the Lender pursuant to this Agreement.

“Pool” means a group of Mortgage Loans, which are the security for a MBS issued
by an Agency.

“Prepayment Notice” means a notice substantially in the form of Exhibit 2.08(b).

“Pricing Side Letter” means that certain Second Amended and Restated Pricing
Side Letter, dated as of March 24, 2017, between Lender and the Borrowers.

“Primary Portfolio” means the residential mortgage loans identified and listed
as such on the Servicing Schedule.

“Prohibited Person” shall mean any Person:

(i)listed in the Annex to the Executive Order, or otherwise subject to the
provisions of, the Executive Order;

(ii)that is owned or controlled by, or acting for or on behalf of, any person or
entity that is listed in the Annex to, or is otherwise subject to the provisions
of, the Executive Order;

(iii)with whom Lender is prohibited from dealing or otherwise engaging in any
transaction by any terrorism or money laundering law, including the Executive
Order;

(iv)that commits, threatens or conspires to commit or supports “terrorism” as
defined in the Executive Order;

(v)that is named as a “specially designated national and blocked person” on the
most current list published by the OFAC at its official website,
http://www.treas.gov.ofac/t11sdn.pdf or at any replacement website or other
replacement official publication of such list; or

(vi)that is an Affiliate of a Person listed above.

“Property” shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.

“Related Escrow Account Balances” means the balance, on the related Funding
Date, of any escrow or impound accounts maintained by the Borrowers which relate
to any Mortgage

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Loan, including, without limitation, items escrowed for mortgage insurance,
property taxes (either real or personal), hazard insurance, flood insurance,
ground rents, or any other escrow or impound items required by any Mortgage Note
or Mortgage, reduced by any unpaid real estate taxes or insurance premiums
required to be paid by the Borrower, with respect to which amounts have been
escrowed by the related Mortgagor.

“Related Principal and Interest Custodial Accounts” means all principal and
interest custodial accounts maintained by the Borrowers that relate to any
Mortgage Loan or Pool.

“Repayment Notice” means a notice substantially in the form of Exhibit 2.08(a).

“Reportable Compliance Event” shall mean that any Covered Entity becomes a
Sanctioned Person, or is charged by indictment, criminal complaint or similar
charging instrument, arraigned, or custodially detained in connection with any
Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or has
knowledge of facts or circumstances to the effect that it is reasonably likely
that any aspect of its operations is in actual or probable violation of any
Anti-Terrorism Law.

“Repurchase Party” shall mean any of Borrower, PennyMac Holdings, LLC or
PennyMac Mortgage Investment Trust.

“Requirement of Law” means, with respect to any Person or any of its property,
the certificate of incorporation or articles of association and by-laws,
certificate of limited partnership, limited partnership agreement or other
organizational or governing documents of such Person, and any law, treaty, rule
or regulation, or determination of any arbitrator or Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject, whether Federal, state or
local (including, without limitation, usury laws, the Federal Truth in Lending
Act and retail installment sales acts).

“Responsible Officer” means (a) with respect to each Borrower, the chief
executive officer, president, chief financial officer, treasurer, assistant vice
president, assistant treasurer, secretary or assistant secretary of such
Borrower, or any other officer having substantially the same authority and
responsibility; provided, that with respect specifically to the obligations of
any Borrower set forth in Section 7.01(i) hereof, only the chief financial
officer, treasurer, assistant treasurer, controller or comptroller of such
Borrower shall be deemed to be a Responsible Officer; and (b) with respect to
the Lender, a lending officer charged with responsibility for the day to day
management of the relationship of such institution with the Borrowers.

“Restricted Payments” shall mean with respect to any Person, collectively, all
dividends or other distributions of any nature (cash, securities, assets or
otherwise), and all payments, by virtue of redemption or otherwise, on any class
of equity securities (including, without limitation, warrants, options or rights
therefor) issued by such Person, whether such securities are now or may
hereafter be authorized or outstanding and any distribution in respect of any of
the foregoing, whether directly or indirectly; provided, however, that for the
purposes of this

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definition, Restricted Payments shall not include any amounts due, owing or
payable with respect to PennyMac Corp. 5.375% Exchangeable Senior Notes due
2020.

“Retained Servicing Spread” shall mean the rights of PMAC with respect to the
Eligible Servicing Rights, severable from each (and all) of the other rights
under the applicable Servicing Contract and Excess Servicing Spread Acquisition
Agreement, to the Retained Servicing Spread Percentage of the Total Servicing
Spread.

“Retained Servicing Spread Percentage” shall have the meaning set forth in the
Servicing Schedule.

“S&P” means Standard & Poor’s, a division of The McGraw Hill Companies, Inc.

“Sanctioned Country” shall mean a country subject to a sanctions program
maintained under any Anti-Terrorism Laws.

“Sanctioned Person” shall mean any individual person, group, regime, entity or
thing listed or otherwise recognized as a specially designated, prohibited,
sanctioned or debarred person, group, regime, entity or thing, or subject to any
limitations or prohibitions (including but not limited to the blocking of
property or rejection of transactions), under any Anti-Terrorism Laws.

“Servicing Contracts” means (i) with respect to all Fannie Mae Servicing Rights,
the Fannie Mae Servicing Contract and (ii) with respect to all Freddie Mac
Servicing Rights, the Freddie Mac Servicing Contract; and (iii) any other
agreement in any form between the Borrowers and any Applicable Agency with
respect to the servicing of any Pools regarding the Applicable Agency, in each
case as such agreements may be amended, amended and restated, supplemented or
otherwise modified from time to time.

“Servicing Fee” means the total amount of the fee payable to the Subservicer as
compensation for subservicing and administering the Mortgage Loans.

“Servicing Rights” means with respect to each Mortgage Loan, all of PMAC’s and
Holding’s right, title and interest in, to and under the related Servicing
Contract, whether now or hereafter existing, acquired or created, whether or not
yet accrued, earned, due or payable, as well as all other present and future
right and interest under such Servicing Contract, including, without limitation,
the indivisible, conditional and non-delegable right (i) to service the Mortgage
Loans under the related Servicing Contracts,  (ii) to receive the Base Servicing
Fee (and Total Servicing Fee if applicable) income payable after the related
Funding Date (including without limitation, any Uncollected Fees), (iii) any and
all Ancillary Income received after the related Funding Date, (iv) to hold and
administer the Related Escrow Account Balances, (v) any Retained Servicing
Spread, (vi) to hold and administer, in accordance with the Servicing Contract,
the Related Principal and Interest Custodial Account, the Custodial File, and
the Mortgage File arising from or connected to the servicing or subservicing of
such Mortgage Loan under this Agreement, (vii) any Excess Servicing Spreads and
(viii) all proceeds, income, profits, rents and products of any of the foregoing
including, without limitation, all of Holdings’ rights to proceeds of any sale
or other disposition of the Servicing Rights.

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“Servicing Schedule” shall mean an electronically delivered schedule delivered
by Borrower to Lender on or prior to each Funding Date and in accordance with
Section 2.03(a), and otherwise from time to time on a monthly basis or as
otherwise requested by Lender with respect to all Collateral to be pledged to
Lender hereunder. Each Servicing Schedule shall contain updated information with
respect to the Collateral and all Agency Obligations as of the date of delivery
of such Servicing Schedule.

“Servicing Spread” means with respect to any Mortgage Loan, the total servicing
fee calculated as a specified number of basis points payable to PMAC as servicer
under the Servicing Contract with respect to such Mortgage Loan, but for the
avoidance of doubt, excluding all reimbursements received for advances and other
out-of-pocket expenditures from Freddie Mac and Fannie Mae by PMAC in accordance
with the Servicing Contracts.

“Servicing Spread Collections” means for each Collection Period, the funds
collected on the Mortgage Loans and allocated as the Servicing Spread payable to
PMAC as servicer of the Mortgage Loans with respect to such Collection Period
pursuant to the Servicing Contracts, and, for the avoidance of doubt, other than
reimbursements received for Advances and other out of-pocket expenditures from
Freddie Mac and Fannie Mae by PMAC in accordance with the Servicing Contracts.

“Subservicer” shall mean PennyMac Loan Services, LLC, together with its
permitted successors and assigns.

“Subservicer Acknowledgement Letter” means, with respect to the Eligible
Servicing Rights, the acknowledgement agreement entered into by and among the
Subservicer as servicer on behalf of the Borrowers and the Lender as secured
party in accordance with Section 7.01(y), together with any amendments and
addenda thereto.

“Subservicer Credit Event” means (i) Subservicer shall default under, or fail to
perform as required under, or shall otherwise breach the terms of any repurchase
agreement (including without limitation any Citi Repurchase Facility), loan and
security agreement, MSFTA/derivatives agreement, or similar credit facility or
agreement for borrowed funds between Subservicer on the one hand, and Lender or
any of Lender’s Affiliates on the other; provided, a Subservicer Termination
Event shall also constitute a Subservicer Credit Event.

“Subservicer Termination Event” means an event that entitles a Borrower to
terminate the Subservicer for cause under the Subservicing Agreement, including
without limitation any of the events specified in Section 11.01 of the
Subservicing Agreement.

“Subservicing Agreement” means the Second Amended and Restated Flow Servicing
Agreement, dated as of March 1, 2013, between PennyMac Operating Partnership,
L.P., as Owner and Subservicer as servicer, as such agreement may be amended
from time to time.

“Subsidiary” shall mean, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes

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of such corporation, partnership or other entity shall have or might have voting
power by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person.

“Tangible Net Worth” shall mean, with respect to any Person as of any date of
determination, the consolidated Net Worth of such Person and its Subsidiaries,
less the consolidated net book value of all assets of such Person and its
subsidiaries (to the extent reflected as an asset in the balance sheet of such
Person or any Subsidiary at such date) which will be treated as intangibles
under GAAP, including, without limitation, such items as deferred financing
expenses, deferred taxes, net leasehold improvements, good will, trademarks,
trade names, service marks, copyrights, patents, licenses and unamortized debt
discount and expense; provided, that residual securities issued by such Person
or its Subsidiaries shall not be treated as intangibles for purposes of this
definition.

“Taxes” shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

“Total Indebtedness” shall mean with respect to any Person, for any period, the
aggregate Indebtedness of such Person and its Subsidiaries during such period,
less the amount of any nonspecific consolidated balance sheet reserves
maintained in accordance with GAAP.

“Total Servicing Fee” shall mean the sum of the Base Servicing Fee and Total
Servicing Spread.

“Total Servicing Spread” means  for each Collection Period, the sum of the
following: (a) the Servicing Spread Collections received during such Collection
Period and remaining after payment of the Base Servicing Fee, (b) all Sales
Proceeds received during such Collection Period; and (c) all other amounts
payable by Freddie Mac and Fannie Mae (as applicable) to PMAC with respect to
the Pledged Servicing Rights, including any termination payments in respect of
the Mortgage Loans, but for the avoidance of doubt, excluding all reimbursements
received for advances and other out-of-pocket expenditures from Freddie Mac and
Fannie Mae (as applicable) by PMAC in accordance with the Servicing Contracts.

“U.S. Person” shall mean (1) a citizen or resident of the United States, (2) a
corporation or partnership organized in or under the laws of the United States
or any state or the District of Columbia (other than a partnership that is not
treated as a United States person under any applicable Treasury regulations),
(3) an estate the income of which is includible in gross income for United
States tax purposes, regardless of its source, or (4) a trust if a court within
the United States is able to exercise primary supervision over the
administration of such trust and one or more United States persons have
authority to control all substantial decisions of such trust.  Notwithstanding
the preceding sentence, to the extent provided in regulations, certain trusts in
existence on August 20, 1996, and treated as United States persons prior to such
date that elect to continue to be so treated also will be considered United
States persons.

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“UCC” means the Uniform Commercial Code as in effect on the date hereof in the
State of New York; provided that if by reason of mandatory provisions of law,
the perfection or the effect of perfection or non-perfection of the security
interest in any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than New York, “Uniform Commercial Code” shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection.

“Uncollected Fees” With respect to any Mortgage Loan, any accrued late charges,
NSF fees, assumption fees, and other fees charged to Mortgagors in connection
with the servicing or subservicing of such Mortgage Loan which have not been
collected by PMAC or Subservicer as of the related Funding Date.

“Uncommitted Amount” shall mean $0.00.

“Unmatured Event of Default” means any event that, with the giving of notice or
lapse of time, or both, could become an Event of Default.

“Valuation Agent” shall mean a qualified, unaffiliated third party (acceptable
to Lender in its sole discretion including but not limited to any independent
third party appointed by the Lender in its sole discretion pursuant to Section
7.01(d)) that specializes in establishing a fair market value of servicing
portfolios with respect to mortgage loans substantially similar to the mortgage
loans originated, serviced or acquired by a Borrower Party, as applicable.

“Voting Stock” means, with respect to any person, such person’s Capital Stock
having the right to vote for election of directors (or the equivalent thereof)
of such person under ordinary circumstances.

 

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SCHEDULE I-A

COLLATERAL ACCOUNT

[NONE]

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SCHEDULE 5.01

CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT

(a)This Agreement duly executed by the parties hereto;

(b)The Notes, duly executed by each Borrower;

(c)The Guaranty, duly executed by Guarantor;

(d)The Master Netting Agreement, duly executed by the related parties;

(e)A certificate of a secretary or assistant secretary of each Borrower Party,
each certifying the names and true signatures of the persons authorized on such
Borrower Party’s behalf to sign, as applicable, this Agreement, the Notes and
the other Facility Documents to be delivered by such Borrower in connection
herewith;

(f)A certificate of a Responsible Officer of each Borrower Party, certifying as
to the accuracy and completeness of each of the representations and warranties
contained in each Facility Document to which the Borrower Party is a party
(except for representations and warranties made in respect of specific mortgage
loans) and as to the absence of Default under such Facility Documents to which
such Borrower is a party as of the Closing Date;

(g)The certificate of incorporation/formation of each Borrower Party, duly
certified by the Secretary of State of Delaware, as of a recent date acceptable
to Lender;

(h)An Opinion of Counsel of each Borrower Party, delivered by outside counsel
acceptable to the Lender in its reasonable discretion, opining as to: New York
enforceability, security interest creation, perfection and priority, and the
Investment Company Act of 1940;

(i)An Opinion of Counsel, which may be delivered by internal counsel, opining as
to: corporate matters and non-contravention, and no material litigation;

(j)No event shall have occurred which could cause a Material Adverse Effect with
respect to any Borrower Party, Subservicer or any Eligible Assets;

(k)No Borrower Party nor any Subservicer has received any notice by any Agency
or Government Authority that could reasonably be expected to have a Material
Adverse Effect on the Borrower Party or Subservicer or any Eligible Assets;

(l)Each Borrower shall have delivered to the Lender with respect to each
Applicable Agency, a statement prepared by such Borrower regarding such
Applicable Agency listing all outstanding obligations, fees, costs, claims and
liabilities of such Borrower to such Applicable Agency, whether under the
related Servicing Contract or otherwise. Each such statement shall be cumulative
through a recent date, not to exceed five (5) days prior than the Effective Date
of this Agreement;

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(m)A separate power of attorney of each Borrower with respect to the powers
described in Section 4.04 substantially in the form attached hereto as Exhibit
4.04; and

(n)Copies of the applicable Excess Servicing Spread Acquisition Agreements duly
executed by the related parties.

SCHEDULE 5.02

CONDITIONS PRECEDENT TO EACH LOAN

(including, with respect to paragraphs (b)-(e) inclusive,
to the automatic continuation of a Loan upon the conclusion of an Interest
Period)

(a)Lender shall have received a duly executed copy of the Borrower Funding
Request for such Loan in accordance with Section 2.03;

(b)The making of such Loan, and the application of the proceeds thereof, shall
not result in the Outstanding Aggregate Loan Amount exceeding the lesser of (a)
the then current Commitment Amount plus the Uncommitted Amount, or (b) the
Borrowing Base;

(c)The making of such Loan, and the application of the proceeds thereof, shall
not result in a Borrowing Base Deficiency;

(d)On the applicable Funding Date, the following statements shall be true (and
each Borrower by delivering such Borrower Funding Request shall be deemed to
have certified that):

(i)the representations and warranties set forth in Article VI are true and
correct on and as of such day as though made on and as of such day and shall be
deemed to have been made on such day (except to the extent any such
representation or warranty is stated to relate solely to an earlier date, in
which case, such representation or warranty shall have been true and correct as
of such date);

(ii)each Borrower Party is in compliance with all covenants set forth in Article
VII;

(iii)all conditions precedent to the making of such Loan have been satisfied;
and

(iv)no Default or Event of Default has occurred and is continuing, or would
result from such Loans;

(v)all of the Servicing Rights and Excess Servicing Spread included in the most
recently delivered Servicing Schedule are Eligible Assets, except for any
non-qualifying Servicing Rights or Excess Servicing Spread listed as such
therein, and all Agency Obligations have been identified on such Servicing
Schedule;

(e)the amount of the initial Loan shall be not less than $500,000;

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(f)the Lender shall have received (i) with respect to the Initial Borrower
Funding Request, the initial Servicing Schedule with respect to all Collateral
to be pledged on the initial Funding Date; and (ii) with respect to any
subsequent Borrower Funding Request, an updated Servicing Schedule with respect
to all Collateral to be pledged on the related Funding Date on or prior to time
required by Section 2.03;

(g)all Facility Documents have been executed and shall continue to be in full
force and effect in all material respects;

(h)No Borrower Party, any Affiliate of a Borrower Party, or any Repurchase Party
shall have defaulted under, or failed to perform as required under, or otherwise
breached the terms of any repurchase agreement (including without limitation any
Citi Repurchase Facility) loan and security agreement, MSFTA/derivatives
agreement, or similar credit facility or agreement for borrowed funds between
any, Borrower Party or Repurchase Party or such other entity, on the one hand,
and Lender or any of Lender’s Affiliates on the other; nor any Borrower Party or
Repurchase Party shall have defaulted under, or failed to perform as required
under, the terms of any repurchase agreement, loan and security agreement or
similar credit facility or agreement for borrowed funds with outstanding amount
at least $10,000,000 (including without limitation any Citi Repurchase Facility)
entered into by such Borrower Party or Repurchase Party, which default or
failure entitled any party to cause acceleration or require prepayment of any
indebtedness thereunder;

(i)the Borrowers shall have delivered to the Lender with respect to each Agency,
a statement from such Agency listing all outstanding obligations, fees, costs,
claims and liabilities of each Borrower to such Agency, whether under any
Servicing Contract or otherwise and setting forth whether or not such
obligations, fees, costs, claims and liabilities are incurred in the ordinary
course. Each such statement shall be cumulative through a recent date, not to
exceed five (5) days prior than the Effective Date or the related Funding Date
(as applicable) of this Agreement;

(j)Borrower shall have paid to Lender all fees and expenses owed to Lender in
accordance with this Agreement and any other Facility Document including,
without limitation the amount of any Commitment Fees then due and owing, and all
of Lender’s attorney fees and expenses and due diligence and valuation expenses
then due and owing;

(k)Borrower shall have approved any applicable subservicing agreements;

(l)No Subservicer Credit Event shall have occurred;

(m)Lender shall have received (i) any information regarding the calculation of
any Excess Servicing Spread as reasonably requested by Lender or any Valuation
Agent and (ii) any other information requested by Lender with respect to either
the Eligible Assets or any proposed acquisition of additional mortgage servicing
rights by any Borrower.

 

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SCHEDULE 6.01(t)

Borrower’s Existing Financing Facilities

[ATTACHED]

 

 

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SCHEDULE 6.02

ELIGIBILITY CRITERIA WITH RESPECT TO THE SERVICING RIGHTS AND EXCESS SERVICING
SPREADS

All owned Servicing Rights for Mortgage Loans serviced by the Borrowers on
behalf of Freddie Mac or Fannie Mae, provided that such Servicing Rights satisfy
all terms of the Agreement and are free and clear of any Liens other than the
subordinate lien of Holdings pursuant to the Fannie Mae Excess Servicing Spread
Acquisition Agreement or the Freddie Mac Excess Servicing Spread Acquisition
Agreement as applicable, subject to Freddie Mac’s and Fannie Mae's respective
interests in such Servicing Rights and Excess Servicing Spreads pursuant to the
related Acknowledgement Agreement and the Fannie Mae Subordination Agreement, if
applicable.

 

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SCHEDULE 7.01(i)

CITIBANK REQUIRED INVESTOR REPORTS

Address for delivery of monthly reports:

Kathryn Munkres Ferriman

Vice President

Phoenix Analytic Services, Inc.

303-539-7227

kferriman@phnxcap.com

Jeff Boyd

Senior Vice President, Analytics

Phoenix Analytic Services, Inc.

303-539-7227

jboyd@phnxcap.com

 

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SCHEDULE 11.02

NOTICES

The Borrowers:

PennyMac Corp.
3043 Townsgate Road, Suite 300

Westlake Village, CA  91361

Attention: Chief Legal Officer

Telephone No.: (818) 224-7442

Facsimile No.: (818) 224-7393

 

PennyMac Holdings, LLC

3043 Townsgate Road, Suite 310

Westlake Village, CA  91361

Attention: Chief Legal Officer

Telephone No.: (818) 224-7442

Facsimile No.: (818) 224-7393

 

The Lender:

Citibank, N.A.
390 Greenwich Street, 5th Floor

New York, NY 10013

Attention: Bobbie Theivakumaran

Email: bobbie.theivakumaran@citi.com

Facsimile No.: (646) 291-3799

Telephone No.: (212) 723-6753

 

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EXHIBIT 2.02(a)

FORM OF AMENDED AND RESTATED PROMISSORY NOTE

[DATE]

$400,000,000

New  York, New York

FOR VALUE RECEIVED, PENNYMAC CORP., a Delaware corporation (the “PMAC”) and
PENNYMAC HOLDINGS, LLC, a Delaware limited liability company ("Holdings" or a
"Borrower"; together with PMAC, the "Borrowers"), each jointly and severally,
hereby promise to pay to the order of CITIBANK, N.A. (the “Lender”), at the
principal office of the Lender at 390 Greenwich Street, New York, New York
10013, in lawful money of the United States, and in immediately available funds,
the principal sum of Four Hundred Million Dollars ($400,000,000) (or such lesser
amount as shall equal the aggregate unpaid principal amount of the Loans made by
the Lender to the Borrowers under the Loan Agreement), on the dates and in the
principal amounts provided in the Loan Agreement, and to pay interest on the
unpaid principal amount of each such Loan, at such office, in like money and
funds, for the period commencing on the date of such Loan until such Loan shall
be paid in full, at the rates per annum and on the dates provided in the Loan
Agreement.

The date, amount and interest rate of each Loan made by the Lender to the
Borrowers, and each payment made on account of the principal thereof, shall be
recorded by the Lender on its books and, prior to any transfer of this Note,
endorsed by the Lender on the schedule attached hereto or any continuation
thereof; provided, that the failure of the Lender to make any such recordation
or endorsement shall not affect the obligations of the Borrowers to make a
payment when due of any amount owing under the Loan Agreement or hereunder in
respect of the Loans made by the Lender.

This Note is the Note referred to in the Second Amended and Restated Loan and
Security Agreement dated as of March 24, 2017 (as amended, supplemented or
otherwise modified and in effect from time to time, the “Loan Agreement”)
between the Borrowers, and the Lender, and evidences Loans made by the Lender
thereunder.  Terms used but not defined in this Note have the respective
meanings assigned to them in the Loan Agreement.

The Borrowers, jointly and severally, agree to pay all the Lender’s reasonable
out-of-pocket costs of collection and enforcement (including reasonable
attorneys’ fees and disbursements of Lender's counsel) in respect of this Note
when incurred as required by Section 10.01 of the Loan Agreement.

Notwithstanding the pledge of the Collateral, the Borrowers hereby acknowledge,
admit and agree that each Borrower’s joint and several obligations under this
Note are recourse obligations of the Borrowers to which the Borrowers pledge
their full faith and credit.

Each Borrower, and any endorsers or guarantors hereof, (a) severally waive
diligence, presentment, protest and demand and also notice of protest, demand,
dishonor and nonpayments

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of this Note, (b) expressly agree that this Note, or any payment hereunder, may
be extended from time to time, and consent to the acceptance of further
Collateral, the release of any Collateral for this Note, the release of any
party primarily or secondarily liable hereon, and (c) expressly agree that it
will not be necessary for the Lender, in order to enforce payment of this Note,
to first institute or exhaust the Lender’s remedies against the Borrowers or any
other party liable hereon or against any Collateral for this Note.  No extension
of time for the payment of this Note, or any installment hereof, made by
agreement by the Lender with any person now or hereafter liable for the payment
of this Note, shall affect the liability under this Note of any Borrowers, even
if a Borrower is not a party to such agreement; provided, however, that the
Lender and the Borrowers, by written agreement between them, may affect the
liability of a Borrower.

Any reference herein to the Lender shall be deemed to include and apply to every
subsequent holder of this Note.  Reference is made to the Loan Agreement for
provisions concerning optional and mandatory prepayments, Collateral,
acceleration and other material terms affecting this Note.

Any enforcement action relating to this Note may be brought by motion for
summary judgment in lieu of a complaint pursuant to Section 3213 of the New York
Civil Practice Law and Rules.  

This Note replaces the indebtedness previously evidenced by that certain Amended
and Restated Promissory Note dated as of September 15, 2016 made by PMAC in
favor of Lender in the aggregate unpaid principal amount of all Loans made by
Lender to the Borrower pursuant to the Loan Agreement (the “Prior Note”).  This
Note is given in substitution for but not in payment of such Prior Note and does
not and shall not be deemed to constitute a novation thereof.  Upon the
execution of this Note, the indebtedness evidenced by this Note shall no longer
be evidenced by the Prior Note and the Prior Note, to the extent of such
indebtedness, shall be of no further force and effect upon the execution of this
Note; provided, however, that all outstanding indebtedness, including, without
limitation, principal and interest under the Prior Note as of the date of this
Note, is hereby deemed indebtedness evidenced by this Note and is incorporated
herein by this reference.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH BY ITS TERMS
APPLIES TO THIS NOTE). EACH BORROWER HEREBY SUBMITS TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF
MANHATTAN, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF FOR PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS
CONTEMPLATED HEREBY. EACH BORROWER HERETO IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT IN THE
BOROUGH OF MANHATTAN AND ANY CLAIM THAT ANY SUCH PROCEEDING

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BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH BORROWER
HERETO HEREBY CONSENTS TO PROCESS BEING SERVED IN ANY SUIT, ACTION OR PROCEEDING
WITH RESPECT TO THIS NOTE, OR ANY DOCUMENT DELIVERED PURSUANT HERETO BY THE
MAILING OF A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,
RETURN RECEIPT REQUESTED, TO ITS RESPECTIVE ADDRESS SPECIFIED AT THE TIME FOR
NOTICES UNDER THE LOAN AGREEMENT OR TO ANY OTHER ADDRESS OF WHICH IT SHALL HAVE
GIVEN WRITTEN OR ELECTRONIC NOTICE TO THE LENDER. THE FOREGOING SHALL NOT LIMIT
THE ABILITY OF ANY PARTY HERETO TO BRING SUIT IN THE COURTS OF ANY OTHER
JURISDICTION.

EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY
WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.

 

 

 

 

 

PENNYMAC HOLDINGS, LLC

By:______________________________
Name:
Title:

 

 

PENNYMAC CORP.

By:______________________________
Name:
Title:

 

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SCHEDULE OF LOANS

This Note evidences Loans made under the within‑described Loan Agreement to the
Borrower, on the dates, in the principal amounts and bearing interest at the
rates set forth below, and subject to the payments and prepayments of principal
set forth below:

 

Date Made

Principal Amount

of Loan

Amount Paid

or Prepaid

Unpaid Principal

Amount

Notation

Made by

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT 2.03

to Second Amended and Restated Loan and Security Agreement

FORM OF BORROWER FUNDING REQUEST

[DATE]

Citibank, N.A.
390 Greenwich Street, 6th Floor
New York, New York  10013

Attention: [       ]

Ladies and Gentlemen:

This [Initial] Borrower Funding Request is delivered to you pursuant to Section
2.03(a) of the Second Amended and Restated Loan and Security Agreement, dated as
of March 24, 2017 (as amended, supplemented, restated or otherwise modified from
time to time, the “Loan Agreement”), among PennyMac Corp. (“PMAC”), PennyMac
Holdings (“Holdings”; together with PMAC, each a “Borrower” and collectively the
“Borrowers”), PennyMac Loan Services, LLC, as Subservicer and Citibank, N.A., as
lender (the “Lender”). Unless otherwise defined herein or as the context
otherwise requires, terms used herein have the meaning assigned thereto under
Schedule I of the Loan Agreement.

[The undersigned hereby requests that a Loan be made in the aggregate principal
amount of $____ on _________, 20__ to be secured by the Eligible Servicing
Rights.]

An updated Servicing Schedule, revised to reflect the acquisition of any
additional Servicing Rights or Excess Servicing Spreads purchased by a Borrower
since the most recently delivered Servicing Schedule, has been delivered
pursuant to Section 2.03 of the Loan Agreement.  Such Servicing Schedule
reflects all Eligible Servicing Rights and Eligible Excess Servicing Spread that
constitute Collateral under the terms and conditions of the Agreement.

[TO BE USED FOR ALL FUNDINGS THAT INVOLVE NEW COLLATERAL]  [Each Borrower hereby
acknowledges and agrees that (other than with respect to the Agreement) (i) the
Servicing Rights and Excess Servicing Spread currently pledged as Collateral
under the Agreement and (ii) any of the Servicing Rights and Excess Servicing
Spread identified on Schedule One attached hereto, are not currently assigned,
pledged, conveyed or encumbered under any credit, warehouse or financing
facility.  Each Borrower further acknowledges and agrees that (other than under
the Agreement) it shall not assign, pledge, convey or encumber such Servicing
Rights Excess and Servicing Spread under any credit, warehouse or financing
facility in the future, except with prior notice to, and consent from, the
Lender.]

The undersigned hereby acknowledges that the delivery of this [Initial] Borrower
Funding Request and the acceptance by the undersigned of the proceeds of the
Loan requested hereby constitute a representation and warranty by the
undersigned that all conditions precedent

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to such Loan specified in Article V of the Loan Agreement have been satisfied
and will continue to be satisfied after giving effect to such Loan.

The undersigned further represents and warrants that either (a) the Applicable
Agency Guides and the Servicing Contracts have not been materially modified
since the last date the undersigned delivered a Borrower Funding Request or (b)
attached hereto is a true and complete description of any changes to the
Servicing Contracts since the last date the undersigned delivered a Borrower
Funding Request.

Please wire transfer the proceeds of the Loan to the following account pursuant
to the following instructions:

[______________]

The undersigned has caused this [Initial] Borrower Funding Request to be
executed and delivered, and the certification and warranties contained herein to
be made, by its duly authorized officer this ____ day of _________, 20__.

 

 

 

PENNYMAC CORP., as a Borrower

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

PENNYMAC HOLDINGS, LLC, as a Borrower

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

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SCHEDULE ONE

Reserved

EXHIBIT 2.08(a)

FORM OF REPAYMENT NOTICE

[    ], 20__

TO:Lender as defined in the Loan Agreement referred to below

Reference is hereby made to the Second Amended and Restated Loan and Security
Agreement, dated as of March 24, 2017 (as heretofore amended, the “Loan
Agreement”), among PennyMac Corp. (“PMAC”), PennyMac Holdings (“Holdings”;
together with PMAC, each a “Borrower” and collectively the “Borrowers”),
PennyMac Loan Services, LLC, as Subservicer and Citibank, N.A., as lender (the
“Lender”). Capitalized terms not otherwise defined herein are used herein as
defined in the Loan Agreement.

The Borrowers hereby notify you that, pursuant to Section 2.08[(a)/(b)] of the
Loan Agreement, it shall make a repayment of the Loans outstanding under the
Loan Agreement to the Lender on [      ], 20__ in the amount of $_____.

Also included in the repayment amount shall be accrued and unpaid interest, in
the amount of $__________________.

The undersigned has caused this Repayment Notice to be executed and delivered by
its duly authorized officer this_________ day of ____________, 20__.

 

 

 

PENNYMAC CORP., as a Borrower

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

PENNYMAC HOLDINGS, LLC, as a Borrower

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

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EXHIBIT 2.08(b)

FORM OF PREPAYMENT NOTICE

[        ], 20__

TO:Lender as defined in the Loan Agreement referred to below

Reference is hereby made to the Second Amended and Restated Loan and Security
Agreement, dated as of March 24, 2017 (as heretofore amended, the “Loan
Agreement”), among PennyMac Corp. (“PMAC”), PennyMac Holdings (“Holdings”;
together with PMAC, each a “Borrower” and collectively the “Borrowers”),
PennyMac Loan Services, LLC, as Subservicer and Citibank, N.A., as lender (the
“Lender”). Capitalized terms not otherwise defined herein are used herein as
defined in the Loan Agreement.

The Borrowers hereby notifies you that pursuant to and in compliance with
Section 2.09 of the Loan Agreement, it shall make a prepayment of Loans
outstanding under the Loan Agreement on [         ], 20__ in the amount of
$________.

Also included in the prepayment amount shall be accrued and unpaid interest, in
the amount of $____________.

The undersigned has caused this Prepayment Notice to be executed and delivered
by its duly authorized officer this_________ day of ___________, 20__.

 

 

 

PENNYMAC CORP., as a Borrower

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

PENNYMAC HOLDINGS, LLC, as a Borrower

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

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EXHIBIT 4.04

FORM OF POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, CITIBANK, N.A. (the “Lender”) and [PENNYMAC CORP.][PENNYMAC HOLDINGS,
LLC] (“Borrower”) have entered into the Second Amended and Restated Loan
Security Agreement dated as of March 24, 2017 (as amended, restated,
supplemented or otherwise modified, the “Agreement”) pursuant to which Lender
has agreed to provide financing from time to time with respect to the
origination or acquisition of certain Eligible Servicing Rights (the “Assets”)
subject to the terms therein; and

WHEREAS, Borrower has agreed to give to the Lender a power of attorney on the
terms and conditions contained herein in order for Lender to take any action
that Lender may deem necessary or advisable to accomplish the purposes of the
Agreement.

NOW THEREFORE, Borrower hereby irrevocably constitutes and appoints the Lender
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney‑in‑fact with full irrevocable power and authority in the
place and stead of Borrower and in the name of Borrower or in its own name, from
time to time in the Lender’s discretion if an Event of Default shall have
occurred and be continuing:

 

(i)

in the name of Borrower, or in its own name, or otherwise, to take possession of
and endorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due with respect to any Assets and to file
any claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Lender for the purpose of
collecting any and all such moneys due with respect to any Assets whenever
payable;

 

(ii)

to pay or discharge taxes and liens levied or placed on or threatened against
the Assets;

 

(iii)

(A) to direct any party liable for any payment under any Assets to make payment
of any and all moneys due or to become due thereunder directly to Lender or as
Lender shall direct, including, without limitation, to send “goodbye” letters
and Section 404 Notices on behalf of Borrower and any applicable Subservicer;
(B) to ask or demand for, collect, receive payment of and receipt for, any and
all moneys, claims and other amounts due or to become due at any time in respect
of or arising out of any Assets; (C) to sign and endorse any invoices,
assignments, verifications, notices and other documents in connection with any
Assets; (D) to commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or
any proceeds thereof and to enforce any other right in respect of any Assets;
(E) to defend any suit, action or proceeding brought against Borrower with
respect to any Assets; (F) to settle, compromise or adjust any suit, action or
proceeding

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described in clause (E) above and, in connection therewith, to give such
discharges or releases as Lender may deem appropriate; and (G) generally, to
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any Assets as fully and completely as though Lender were the absolute owner
thereof for all purposes, and to do, at the Lender’s option and Borrower’s
expense, at any time, and from time to time, all acts and things which Lender
deems necessary to protect, preserve or realize upon the Assets and Collateral
thereon and to effect the intent of the Agreement, all as fully and effectively
as Borrower might do;

 

(iv)

for the purpose of effecting the transfer of servicing with respect to the
Assets from Borrower or any applicable Subservicer to a successor servicer
appointed by Lender in its sole discretion and to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish such transfer of servicing, and, without
limiting the generality of the foregoing, Borrower hereby gives Lender the power
and right, on behalf of Borrower, without assent by Borrower, to, in the name of
Borrower or its own name, or otherwise, prepare and send or cause to be sent
“good‑bye” letters and Section 404 Notices on behalf of Borrower and any
applicable Subservicer in connection with such transfer of servicing; and

 

(v)

for the purpose of delivering any notices of sale to mortgagors or other third
parties, including without limitation, those required by law.

Borrower hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable and shall survive the termination of this
Agreement.

Borrower also authorizes the Lender, from time to time, to execute, in
connection with any sale, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Assets.

The powers conferred on the Lender hereunder are solely to protect the Lender’s
interests in the Assets and shall not impose any duty upon it to exercise any
such powers.  Lender shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers, and neither it nor any of
its officers, directors, employees or agents shall be responsible to Borrower
for any act or failure to act hereunder, except for its or their own gross
negligence or willful misconduct.

IN ORDER TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, BORROWER HEREBY AGREES THAT
ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT
MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE
INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE
OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY,
AND BORROWER ON ITS OWN BEHALF AND ON BEHALF OF BORROWER’S

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ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM
AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON
OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.

[REMAINDER OF PAGE INTENTIONALLY BLANK.  SIGNATURES FOLLOW.]

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IN WITNESS WHEREOF Borrower has caused this Power of Attorney to be duly
executed and Borrower’s seal to be affixed this ____ day of ___________, 2017.

 

 

[PENNYMAC CORP.][ PENNYMAC

HOLDINGS,LLC],

as Borrower

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.

State of California

County of)

On March [__], 2017, before me, personally appeared
[__________________(NAME/TITLE)], who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)

 

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EXHIBIT 7.01

FORM OF COMPLIANCE CERTIFICATE

Citibank, N.A.
390 Greenwich Street, 5th Floor
New York, New York 10013
Attn:

Re:Reporting Date

Reference is made to the Second Amended and Restated Loan and Security Agreement
(the “Loan Agreement”) dated as of March 24, 2017, as amended, and now in effect
by and between [PennyMac Corp.][PennyMac Holdings, LLC] (the “Borrower”) and
Citibank, N.A., as lender (the “Lender”). Terms defined in the Loan Agreement
and not otherwise defined herein are used herein as defined in the Loan
Agreement.

Pursuant to Section 7.01(g) of the Loan Agreement, the Borrower is furnishing to
you herewith evidence of all Eligible Cash Reserve Amounts (as defined in
subclause (i) thereof), including account statements and any other documentation
or information related to the establishment and maintenance of the accounts
holding such amounts.

Pursuant to Section 7.01(h) of the Loan Agreement, the Borrower is furnishing to
you herewith (or has recently furnished to you) the financial statements of the
Borrower for the fiscal period ended as of the reporting date shown above (the
“Reporting Date”). Such financial statements have been prepared in accordance
with GAAP and present fairly, in all material respects, the financial position
of the Borrower covered thereby at the date thereof and the results of its
operations for the period covered thereby, subject in the case of interim
statements only to normal year-end audit adjustments and the addition of
footnotes.

Pursuant to Section 7.01(n) of the Loan Agreement, the Borrower is furnishing to
you herewith the Officer’s Certificate regarding outstanding repurchase and
indemnity demands by the Applicable Agencies.

Pursuant to Section 5.01 of the Loan Agreement, the Borrower is furnishing to
you statements from each Agency (or the Borrower) listing all outstanding
obligations, costs, claims and liabilities of the Borrower to such Agency,
attached hereto as Schedule 6.

Each of the undersigned Responsible Officers of the Borrower has caused the
provisions of the Loan Agreement to be reviewed and certifies to the Lender
that: (a) the undersigned has no knowledge of any Default or Event of Default,
(b) attached hereto as Schedule 1, Schedule 2-A, Schedule 2-B, Schedule
3,Schedule 4, Schedule 5, Schedule 6 and Schedule 7 are the representations of
the Borrower and computations necessary to determine that each of the Borrower,
as applicable, is in compliance with the provisions of the Loan Agreement as of
the Reporting Date referenced thereon, and (c) to the best of the undersigned’s
knowledge no event has occurred since the date of the most recent financial
statements upon which such covenant compliance was calculated that would cause
the Borrower, to no longer be in compliance with said provisions.

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The statements made herein (and in the Schedules attached hereto) shall be
deemed to be representations and warranties made in a document for the purposes
of Section 6.01(i) of the Loan Agreement.

 

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SCHEDULE 1
To form of Compliance Certificate

1.Servicer Ratings:

[As of the date hereof, PMAC’s most recent [Peak Score] / [NEW SCORE] from
Fannie Mae equates to [ ] (which is reflective of the most recent [Peak Score] /
[NEW SCORE] received from Fannie Mae).] [Other agency ratings/benchmarks] [N/A
if no score or comparable rating is used by an Agency]

[2.Consolidated Adjusted Tangible Net Worth of [PMAC (Section 8.01(j)(i)(C))]
[Holdings (Section 8.01(j)(ii)(C))] [Guarantor (Section 8.01(j)(iii)(C))]:

As of the close of business for the calendar month ended , the [PMAC was in
compliance with the financial covenant set forth in Section 8.01(j)(i)(C)]
[Holdings was in compliance with the financial covenant set forth in
Section 8.01(j)(ii)(C)] [Guarantor was in compliance with the financial covenant
set forth in Section 8.01(j)(iii)(C)] .

3.Consolidated Liquidity of [PMAC (Section 8.01(j)(i)(B))] [Holdings
(Section 8.01(j)(ii)(B)] [Guarantor (Section 8.01(j)(iii)(B))]:

As of the close of business for the calendar month ended ,the [PMAC was in
compliance with the financial covenant set forth in Section 8.01(j)(i)(B)]
[Holdings was in compliance with the financial covenant set forth in
Section 8.01(j)(ii)(B)] [Guarantor was in compliance with the financial covenant
set forth in Section 8.01(j)(iii)(B)] .

4.Leverage of [PMAC (Section 8.01(j)(i)(A))] [Holdings (Section 8.01(j)(ii)(A)]
[Guarantor (Section 8.01(j)(iii)(A))]:

As of the close of business for the calendar month ended ,the [PMAC was in
compliance with the financial covenant set forth in Section 8.01(j)(i)(A)]
[Holdings was in compliance with the financial covenant set forth in
Section 8.01(j)(ii)(A)] [Guarantor was in compliance with the financial covenant
set forth in Section 8.01(j)(iii)(A)] .

5. Profitability of the Guarantor (Section 8.01(j)(iii)(D)):

As of the close of business for the calendar month ended , [Guarantor was in
compliance with the financial covenant set forth in Section 8.01(j)(iii)(D)] .

6.Book Value of Servicing Portfolio of the Borrower/Subservicer/Guarantor.

As of the close of business for the calendar month ended ,the book value
assigned [PMAC’s][Holdings’][Guarantor’s] aggregate portfolio of mortgage
servicing rights was _______; and the servicing multiple used to determine such
book value was ___. ]

7.Financial Covenants:

Attached as Schedule 2-A to this Compliance Certificate is the statement setting
forth the level of such Borrower Party’s compliance with the financial covenants
set forth in Section 8.01(j) as of the close of business on the Business Day
immediately preceding the date such

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certificate is delivered demonstrating Borrower Party’s compliance with the
financial covenants set forth in Section 8.01(j) of the Agreement. Attached as
Schedule 2-B to this Compliance Certificate is the statement setting forth the
calculations demonstrating such Borrower Party’s compliance with the financial
covenants set forth in Section 8.01(j) of the Agreement.

8.Fannie Mae:

(i)Compliance:

(a)As of the close of business for the calendar month ended _________, the
[PMAC/Holdings/Guarantor] was in compliance with the minimum consolidated
tangible net worth requirement of Fannie Mae.

(b)[PMAC/Holdings/Guarantor] has, at all times, complied with the minimum
consolidated liquidity requirement of Fannie Mae.

(ii)The [PMAC/Holdings/Guarantor]’s minimum consolidated tangible net worth
requirement of Fannie Mae is as follows: [_______________].

(iii)The [PMAC/Holdings/Guarantor]’s minimum consolidated liquidity requirement
of Fannie Mae is as follows: [_______________].

(iv)Attached as Schedule 3 to this Compliance Certificate are the calculations
demonstrating [PMAC/Holdings /Guarantor]’s compliance with the Fannie Mae
covenants listed in Section 8(ii) and (iii) above.

(vi)No ESS Callable Event has occurred.

9.

Freddie Mac:

(i)Compliance:

(a)As of the close of business for the calendar month ended _________, the
[PMAC/Holdings/Guarantor] was in compliance with the minimum consolidated
tangible net worth requirement of Freddie Mac.

(b)[PMAC/Holdings/Guarantor] has, at all times, complied with the minimum
consolidated liquidity requirement of Freddie Mac.

(ii)The [PMAC/Holdings/Guarantor]’s minimum consolidated tangible net worth
requirement of Freddie Mac is as follows: [_______________].

(iii)The [PMAC/Holdings/Guarantor]’s minimum consolidated liquidity requirement
of Freddie Mac is as follows: [_______________].

(iv)Attached as Schedule 4 to this Compliance Certificate are the calculations
demonstrating [PMAC/Holdings/Guarantor]’s compliance with the Freddie Mac
covenants listed in Section 9(ii) and (iii) above.

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10.

Reserved.

11.

Additional Financing Facilities:

[There have been no changes to any Borrower Party’s existing financing
facilities for mortgage servicing rights and servicing advances owned by such
Borrower Party, since the previously delivered list as specified on Schedule
6.01(t) to the Agreement, or as subsequently updated by the Borrowers by
providing an updated schedule to the Lender.] [Attached as Schedule 5 to this
Compliance Certificate is an updated schedule of each Borrower Party’s other
financing facilities, delivered pursuant to Section 6.01(t) of the
Agreement.  The attached schedule hereby updates and replaces the previously
delivered schedule of financing facilities.]

12.

Agency Liabilities:

Attached as Schedule 5 to this Compliance Certificate are, with respect to each
Agency, a statement from the [PMAC/Holdings/Guarantor] as of the date of this
Compliance Certificate, listing the amount, nature and source of all outstanding
obligations, fees, costs, claims and liabilities of the
[PMAC/Holdings/Guarantor] to such Agency, whether under the Servicing Contracts
or otherwise.

 

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SCHEDULE 2-A
To form of Compliance Certificate

1.

Level of Compliance: Consolidated Tangible Net Worth of [PMAC (Section
8.01(j)(i)(C))] [Holdings (Section 8.01(j)(ii)(C))] [Guarantor (Section
8.01(j)(iii)(C))]:

[________]

2.

Level of Compliance: Consolidated Liquidity of [PMAC (Section 8.01(j)(i)(B))]
[Holdings (Section 8.01(j)(ii)(B))] [Guarantor (Section 8.01(j)(iii)(B))]:

[________]

3. Level of Compliance: Leverage of [PMAC (Section 8.01(j)(i)(A))] [Holdings
(Section 8.01(j)(ii)(A))] [Guarantor (Section 8.01(j)(iii)(A))]:

[________]

4.Level of Compliance: Profitability of the Guarantor (Section 8.01(j)(iii)(D)):

[________]

5.

Level of Compliance: Multiple Used to Calculate Book Value of Servicing
Portfolio of PMAC/Holdings/Guarantor

[________]

 

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SCHEDULE 2-B
To form of Compliance Certificate

1.

Calculation: Consolidated Tangible Net Worth of [PMAC (Section 8.01(j)(i)(C))]
[Holdings (Section 8.01(j)(ii)(C))] [Guarantor (Section 8.01(j)(iii)(C))]:

[________]

2.

Calculation: Consolidated Liquidity of [PMAC (Section 8.01(j)(i)(B))] [Holdings
(Section 8.01(j)(ii)(B))] [Guarantor (Section 8.01(j)(iii)(B))]:

[________]

3.

Calculation: Leverage of the [PMAC (Section 8.01(j)(i)(A))] [Holdings (Section
8.01(j)(ii)(A))] [Guarantor (Section 8.01(j)(iii)(A))]:

[________]

4.

Calculation: Profitability of the Guarantor (Section 8.01(j)(iii)(D)):

[________]

5.

Calculation: Multiple of Servicing Portfolio of PMAC/Holdings/Guarantor

[________]

 

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SCHEDULE 3
To form of Compliance Certificate

1.

Calculation: consolidated tangible net worth of [PMAC/Holdings/Guarantor]
(Fannie Mae):

[________]

2.Consolidated Liquidity of [PMAC/Holdings/Guarantor] (Fannie Mae):

[________]

 

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SCHEDULE 4
To form of Compliance Certificate

1.

Calculation: consolidated tangible net worth of the [PMAC/Holdings/Guarantor]
(Freddie Mac):

[________]

2.Consolidated Liquidity of the [PMAC/Holdings/Guarantor] (Freddie Mac):

[________]

 

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SCHEDULE 5
To form of Compliance Certificate

1.

Description of all outstanding Agency Obligations with respect to all servicing
rights owned by PMAC/Holdings/Guarantor:

[________]

2.

Outstanding amounts owed to each Agency but not yet paid pursuant to any
outstanding obligations, costs, fees, claims and liabilities that are due to any
Agency, but have not yet paid by the [PMAC/Holdings /Guarantor], whether under
the related Servicing Contract or otherwise:

[________]

3.

Description of all amounts actually paid to each Agency pursuant to any
outstanding obligations, costs, fees, claims and liabilities that are due to any
Agency, whether under the related Servicing Contract or otherwise, over the
prior three (3) month period, which description includes the type of claim,
amount of claim, date on which such claim was paid and payee on such claim:

[________]

 

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SCHEDULE 7
To form of Compliance Certificate

Updated Schedule of Financing Facilities to supplement Schedule 6.01(t) to the
Agreement (if applicable)

 

Lender

Collateral Type

Maximum Committed Amount

Total Facility Amount

Date of Agreement

Termination Date

Current Amount Outstanding

1.

 

 

 

 

 

 

2.

 

 

 

 

 

 

 

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