Exhibit 10.6

EXECUTION VERSION

 

 

 

 

 

 

 

AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

among

PNMAC GMSR ISSUER TRUST

 (“Buyer”)

and

PENNYMAC LOAN SERVICES, LLC

 (“Seller”)

and

PRIVATE NATIONAL MORTGAGE ACCEPTANCE COMPANY, LLC

 (“Guarantor”)

Dated as of April 1, 2020

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

 

 

 

 

Page

 

 

 

ARTICLE I

DEFINITIONS

3

 

 

 

Section 1.01.

Certain Defined Terms

3

Section 1.02.

Other Defined Terms; Interpretation

23

 

 

 

ARTICLE II

GENERAL TERMS

24

 

 

 

Section 2.01.

Transactions

24

Section 2.02.

Procedure for Entering into Transactions

24

Section 2.03.

Repurchase; Payment of Repurchase Price

25

Section 2.04.

Price Differential

25

Section 2.05.

Margin Maintenance

25

Section 2.06.

Payment Procedure

26

Section 2.07.

Net Payments

26

Section 2.08.

Recourse

27

Section 2.09.

Taxes

27

Section 2.10.

Indemnity

28

Section 2.11.

Dedicated Account

28

Section 2.12.

Additional Participation Agreements and Participation Certificates

28

Section 2.13.

Termination

29

Section 2.14.

Purchased MSR Excess Spread

29

 

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

29

 

 

 

Section 3.01.

Seller and Guarantor Existence

29

Section 3.02.

Licenses

29

Section 3.03.

Power

30

Section 3.04.

Due Authorization

30

Section 3.05.

No Event of Default

30

Section 3.06.

Solvency

30

Section 3.07.

No Conflicts

30

Section 3.08.

True and Complete Disclosure

30

Section 3.09.

Approvals

31

Section 3.10.

Ownership

31

Section 3.11.

The Servicing Contracts and Participation Agreements

31

Section 3.12.

Investment Company

31

Section 3.13.

Chief Executive Office; Jurisdiction of Organization

32

Section 3.14.

Location of Books and Records

32

Section 3.15.

ERISA

32

Section 3.16.

Ginnie Mae Approvals; Servicing Facilities

32

Section 3.17.

Plan Assets

32

Section 3.18.

No Prohibited Persons

33

Section 3.19.

Compliance with 1933 Act

33

Section 3.20.

Eligible Assets

33

-i-

ARTICLE IV

CONVEYANCE; REPURCHASE ASSETS; SECURITY INTEREST

33

 

 

 

Section 4.01.

Ownership

33

Section 4.02.

Security Interest

33

Section 4.03.

Further Documentation

35

Section 4.04.

Limited Pledge of Ginnie Mae Servicing

35

Section 4.05.

Changes in Locations, Name, etc

36

Section 4.06.

Buyer’s Appointment as Attorney-in-Fact

36

Section 4.07.

Performance by Buyer of Seller’s Obligations

38

Section 4.08.

Proceeds

38

Section 4.09.

Remedies

39

Section 4.10.

Limitation on Duties Regarding Preservation of Repurchase Assets

40

Section 4.11.

Powers Coupled with an Interest

40

Section 4.12.

Release of Security Interest

40

Section 4.13.

Reinstatement

40

Section 4.14.

Subordination

40

 

 

 

ARTICLE V

CONDITIONS PRECEDENT

41

 

 

 

Section 5.01.

Initial Transaction

41

Section 5.02.

All Transactions

42

 

 

 

ARTICLE VI

COVENANTS

44

 

 

 

Section 6.01.

Financial Covenants

44

Section 6.02.

Prohibition of Fundamental Changes

44

Section 6.03.

[Reserved.]

44

Section 6.04.

Asset Schedule

44

Section 6.05.

No Adverse Claims

45

Section 6.06.

Assignment

45

Section 6.07.

Security Interest

45

Section 6.08.

Records

45

Section 6.09.

Books

45

Section 6.10.

Approvals

46

Section 6.11.

Material Change in Business

46

Section 6.12.

Collections on Assets and the Dedicated Account

46

Section 6.13.

Applicable Law

47

Section 6.14.

Existence

47

Section 6.15.

Chief Executive Office; Jurisdiction of Organization

47

Section 6.16.

Taxes

47

Section 6.17.

Termination of Servicing Notice

48

Section 6.18.

True and Correct Information

48

Section 6.19.

Servicing

48

Section 6.20.

No Pledge

48

Section 6.21.

Plan Assets

48

Section 6.22.

Sharing of Information

48

Section 6.23.

Modification of the Servicing Contracts and Participation Agreements

48

Section 6.24.

No Amendments/Waivers of PMH Documents

49

-ii-

 

Section 6.25.

No Modification of the Participation Agreements

49

Section 6.26.

No Subservicing

49

 

 

 

ARTICLE VII

DEFAULTS/RIGHTS AND REMEDIES OF BUYER UPON DEFAULT

49

 

 

 

Section 7.01.

Events of Default

49

Section 7.02.

No Waiver

52

Section 7.03.

Due and Payable

52

Section 7.04.

Fees

52

Section 7.05.

Default Rate

52

 

 

 

ARTICLE VIII

ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; SEPARATE ACTIONS BY BUYER

53

 

 

 

Section 8.01.

Entire Agreement; Amendments

53

Section 8.02.

Waivers, Separate Actions by Buyer

53

 

 

 

ARTICLE IX

SUCCESSORS AND ASSIGNS

53

 

 

 

Section 9.01.

Successors and Assigns

53

Section 9.02.

Transfers

53

Section 9.03.

Buyer and Participant Register

54

 

 

 

ARTICLE X

MISCELLANEOUS

54

 

 

 

Section 10.01.

Survival

54

Section 10.02.

Nonliability of Buyer Parties

55

Section 10.03.

Governing Law; Jurisdiction, Waiver of Jury Trial:  Waiver of Damages

55

Section 10.04.

Notices

56

Section 10.05.

Severability

57

Section 10.06.

Section Headings

57

Section 10.07.

Counterparts

57

Section 10.08.

Periodic Due Diligence Review

58

Section 10.09.

Hypothecation or Pledge of Repurchase Assets

58

Section 10.10.

Non-Confidentiality of Tax Treatment

58

Section 10.11.

Set-off

59

Section 10.12.

Intent

59

Section 10.13.

Third Party Beneficiaries

60

Section 10.14.

Owner Trustee Limitation of Liability

60

Section 10.15.

Actions and Discretion of Buyer

61

Section 10.16.

Amendment and Restatement; Consent

61

 

Schedule 1-A

–

Representations and Warranties Regarding the Assets

Schedule 1-B

–

Representations and Warranties Regarding the Assets Consisting of Participation
Certificates

Schedule 1-C

–

Representations and Warranties with respect to the PMH Transactions

 

-iii-

 

Schedule 2

–

Participation Agreements and Participation Certificates

Schedule 3

–

Responsible Officers of Seller and Guarantor

Schedule 4-A

–

Originated MSR Mortgage Pools

Schedule 4-B

–

Purchased MSR Mortgage Pools

Exhibit A

–

Form of Transaction Notice

Exhibit B

–

Form of Request for Approval of Participation Agreements and Participation
Certificates

 

 

-iv-

 

MASTER REPURCHASE AGREEMENT

This Master Repurchase Agreement (as the same may be amended, restated,
supplemented or otherwise modified from time to time, this “Agreement”) is made
as of April 1, 2020 (the “Effective Date”), among PNMAC GMSR ISSUER TRUST, as
buyer (the “Buyer” or “Issuer”), PENNYMAC LOAN SERVICES, LLC (“PLS”), as
seller  (the “Seller”) and PRIVATE NATIONAL MORTGAGE ACCEPTANCE COMPANY, LLC, as
guarantor (the “Guarantor”), and is consented to by CITIBANK, N.A. (“Citibank”),
as indenture trustee (the “Indenture Trustee”), CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC, as administrative agent (the “Administrative Agent”) and
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH (“CSCIB”), as noteholder of the
Outstanding VFNs (the “Noteholder”).

W I T N E S S E T H:

WHEREAS, the Buyer, Seller and Guarantor have entered into that certain Master
Repurchase Agreement, dated as of December 19, 2016 (the “Original PC Repurchase
Agreement”);

WHEREAS, the Buyer, Seller and Guarantor have agreed, subject to the terms of
this Agreement, that the Original PC Repurchase Agreement be amended and
restated on the Effective Date;

WHEREAS, the Buyer, Citibank, as Indenture Trustee, as calculation agent (in
such capacity, the “Calculation Agent”), as paying agent (in such capacity, the
“Paying Agent”) and as securities intermediary (in such capacity, the
“Securities Intermediary”), PLS, as administrator (in such capacity, the
“Administrator”) and as servicer (in such capacity, the “Servicer”), the
Administrative Agent and Pentalpha Surveillance LLC, as credit manager, are
parties to that certain Third Amended and Restated Base Indenture, dated as of
the date hereof (as may be amended, restated, supplemented, or otherwise
modified from time to time, the “Base Indenture”), as supplemented by the
Amended and Restated Series 2016-MSRVF1 Indenture Supplement, dated as of
February 28, 2018, as amended by Amendment No. 1, dated as of August 10, 2018, 
by and among the Issuer, the Indenture Trustee, the Calculation Agent, the
Paying Agent, the Securities Intermediary, the Administrator, the Servicer and
the Administrative Agent (as may be further amended, restated, supplemented, or
otherwise modified from time to time, the “Series 2016-MSRVF1 Indenture
Supplement”), and the Series 2016-MBSADV1 Indenture Supplement, dated as of
December 19, 2016, by and among the Issuer, the Indenture Trustee, the
Calculation Agent, the Paying Agent, the Securities Intermediary, the
Administrator, the Servicer and the Administrative Agent, as amended by the
Omnibus Amendment No. 1, dated as of February 16, 2017 (and as may be further
amended, restated, supplemented, or otherwise modified from time to time, the
“Series 2016-MSRADV1 Indenture Supplement”);

WHEREAS, there are currently two Outstanding Series of Variable Funding Notes,
(i) the Series 2016-MSRVF1 Note (the “Series 2016-MSRVF1 Note”), which was
issued to PLS pursuant to the terms of the Series 2016-MSRVF1 Indenture
Supplement, and which was purchased by CSCIB under the VFN Repurchase Agreement,
dated as of December 19, 2016, among PLS, the Administrative Agent and CSCIB
(the “VFN Repurchase Agreement”), pursuant to which PLS sold all of rights,
title and interest in the Series 2016-MSRVF1 Note to CSCIB and

 

 

(ii) the Series 2016-MSRADV1 Note (the “Series 2016-MSRADV1 Note”), which was
issued pursuant to the Series 2016-MSRADV1 Indenture Supplement and sold to
CSCIB pursuant to the Note Purchase Agreement, dated as of December 19, 2016,
among the Issuer, the Administrative Agent and CSCIB (the “Note Purchase
Agreement”);

WHEREAS, pursuant to Section 10.15 of the Original PC Repurchase Agreement, any
provision providing for the exercise of any action or discretion by Buyer shall
be exercised by the Indenture Trustee at the written direction of either 100% of
the VFN Noteholders or the Majority Noteholders of all Outstanding Notes;

WHEREAS, pursuant to Section 10.3(e)(iii) of the Base Indenture, so long as any
Note is Outstanding and until all obligations have been paid in full, PLS shall
not consent to any amendment, modification or waiver of any term or condition of
any Transaction Document, without the prior written consent of the
Administrative Agent;

WHEREAS, pursuant to Section 4.1(a)(iii) of the Trust Agreement, the consent of
each of the Owners (as defined in the Trust Agreement) (unless an Event of
Default has occurred and is continuing), the Administrative Agent and the Series
Required Noteholders (as defined in the Base Indenture) of all Variable Funding
Notes is required for the amendment or other change to any Transaction Document
in circumstances where the consent of any Noteholder or the Administrative Agent
is required (other than an amendment or supplement to the Base Indenture
pursuant to Section 12.1 thereof);

WHEREAS, the Original PC Repurchase Agreement is a Transaction Document;

WHEREAS, (i) pursuant to the Trust Agreement, PLS is the sole Owner, (ii)
pursuant to the Series 2016-MSRVF1 Indenture Supplement, with respect to the
Series 2016-MSRVF1 Note, any Action provided by the Base Indenture or the Series
2016-MSRVF1 Indenture Supplement to be given or taken by a Noteholder shall be
taken by CSCIB, as the buyer of the Series 2016-MSRVF1 Note under the VFN
Repurchase Agreement and (iii) pursuant to the terms of the Note Purchase
Agreement, CSCIB is the purchaser of the Series 2016-MSRADV1 Note, and therefore
CSCIB is 100% of the VFN Noteholders of the Outstanding Notes;

WHEREAS, the Seller has made, and may in the future make, the MSRs (as defined
below) subject to this Agreement, subject to certain Participation Agreements in
order to create Portfolio Excess Spread (as defined below) and Advance
Reimbursement Amounts (as defined below) evidenced by Participation Certificates
(as defined below);

WHEREAS, from time to time the parties hereto may enter into transactions in
which Seller agrees to transfer to Buyer Participation Certificates against the
delivery of Consideration (as defined below) by Buyer, with a simultaneous
agreement by Buyer to transfer to Seller such Participation Certificates at a
date certain or on demand, against the transfer of funds by Seller.  Each such
transaction shall be referred to herein as a “Transaction” and, unless otherwise
agreed in writing, shall be governed by this Agreement, including any
supplemental terms or conditions contained in any annexes identified herein, as
applicable hereunder;

WHEREAS, Seller has pledged to Buyer certain MSRs in connection with the
Transactions;

2

 

WHEREAS, Buyer has required and Guarantor has agreed that it will Guarantee (as
defined below) the Obligations (as defined below) hereunder; and

WHEREAS, the Guarantor will receive a benefit, either directly or indirectly,
from the Seller for entering into the PC Guaranty (as defined below).

NOW, THEREFORE, in consideration of the mutual agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Buyer, Seller and Guarantor hereby agree as follows.

ARTICLE I

 

DEFINITIONS

Section 1.01.   Certain Defined Terms.  Capitalized terms used herein shall have
the indicated meanings:

“1933 Act” means the Securities Act of 1933, as amended from time to time.

“Accepted Servicing Practices” means, with respect to any Mortgage Loan,
(i) those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located, and (ii) those
practices required by Ginnie Mae.

“Acknowledgment Agreement” means the Third Amended and Restated Acknowledgment
Agreement, dated as of April 1, 2020, by and among Ginnie Mae, PLS and the
Indenture Trustee, as amended, restated, supplemented or otherwise modified from
time to time.

“Act of Insolvency” means, with respect to any Person or its Affiliates, (i) the
filing of a petition, commencing, or authorizing the commencement of any case or
proceeding, or the voluntary joining of any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law
relating to the protection of creditors, or suffering any such petition or
proceeding to be commenced by another which is consented to, not timely
contested or results in entry of an order for relief; (ii) the seeking of the
appointment of a receiver, trustee, custodian or similar official for such party
or an Affiliate or any substantial part of the property of either; (iii) the
appointment of a receiver, conservator, or manager for such party or an
Affiliate by any governmental agency or authority having the jurisdiction to do
so; (iv) the making or offering by such party or an Affiliate of a composition
with its creditors or a general assignment for the benefit of creditors; (v) the
admission by such party or an Affiliate of such party of its inability to pay
its debts or discharge its obligations as they become due or mature; or
(vi) that any governmental authority or agency or any person, agency or entity
acting or purporting to act under governmental authority 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 such party or of any of its
Affiliates, or shall have taken any action to displace the management of such
party or of any of its Affiliates or to curtail its authority in the conduct of
the business of such party or of any of its Affiliates.

3

“Acquired MSRs” means MSRs related to previously issued Ginnie Mae MBS that the
Servicer acquired, provided that Ginnie Mae has acknowledged that the Servicer
is deemed the “issuer” of the Pooled Mortgages related to such Acquired MSRs by
execution of the Assignment Agreement (Ginnie Mae MBS Guide Appendix VIII-3), or
any such successor form approved by Ginnie Mae from time to time.

 “Administrative Agent” means Credit Suisse First Boston Mortgage Capital LLC or
any party identified as an “Administrative Agent” pursuant to the Indenture.

“Advance Reimbursement Amount” means, with respect to any MBS Advance or
Servicing Advance, any amount collected on a Mortgage Pool, withdrawn from a
custodial account in accordance with the applicable Servicing Contract, or
received from any Successor Issuer, to reimburse any MBS Advance or Servicing
Advance, including any Liquidation Proceeds, FHA Claim Proceeds, USDA Claim
Proceeds, PIH Claim Proceeds or VA Claim Proceeds.

“Advance Reimbursement Balance” means, on any date of determination, the
aggregate outstanding balance in U.S. dollars of all Advance Reimbursement
Amounts owed with respect to the related Portfolio Mortgage Loans.

“Adverse Claim” means a lien, security interest, charge, encumbrance or other
right or claim of any Person (other than (A) the liens created in favor of Buyer
or assigned to or by Buyer by (i) this Agreement (ii) the Indenture or (iii) any
other Program Agreement and (B) the liens created in favor of Ginnie Mae by the
Ginnie Mae Contract).

“Advance PC” means, the P&I Advance PC and the Servicing Advance PC.

“Agreement” shall have the meaning set forth in the preamble.

“Ancillary Income” means all income derived from a Mortgage Loan (other than
payments or other collections in respect of principal, interest, escrow
payments, Advance Reimbursement Amounts and prepayment penalties attributable to
such Mortgage Loan) and to which Seller, as the servicer of the Mortgage Loan,
is entitled in accordance with the Ginnie Mae Contract, including, but not
limited to (i) all late charges, fees received with respect to checks or bank
drafts returned by the related bank for insufficient funds, assumption fees,
optional insurance administrative fees, all interest, income, or credit on funds
deposited in the escrow accounts and custodial accounts or other receipts on or
with respect to such Mortgage Loan (subject to Applicable Law and the Ginnie Mae
Contract), (ii) reconveyance fees, subordination fees, speedpay fees, mortgage
pay on the web fees, automatic clearing house fees, demand statement fees,
modification fees, if any, and other similar types of fees arising from or in
connection with any Mortgage Loan to the extent not otherwise payable by the
mortgagor under Applicable Law or pursuant to the terms of the related Mortgage
Note, and (iii) any incentive fees payable by FHA under the applicable FHA
Mortgage Insurance Contract, by USDA under the USDA Loan Guarantee Document, or
by VA under the applicable VA Loan Guaranty Agreement, as applicable, to Seller,
as servicer of the Mortgage Loans, including incentive amounts payable in
connection with Mortgage Loan modifications and other loss mitigation
activities.

“Asset” means (a) any MSRs and (b) without duplication, the related
Participation Certificates (including all Portfolio Excess Spread and Advance
Reimbursement Amounts as more

4

 

particularly set forth on Schedule 2), in each case, sold or pledged to secure
the Obligations hereunder.

“Asset Base” means, in the aggregate, for any date of determination, the sum of
the following for each Participation Certificate, an amount that is equal to the
product of (1) the related Purchase Price Percentage and (2) the related
then-current Market Value.

“Asset Schedule” means a list of all Assets pledged and/or delivered from time
to time by Seller to Buyer, as such schedule shall be updated from time to time
in accordance with Section 2.02 hereof.

“Bankruptcy Code” means the United States Bankruptcy Code of 1978, as amended
from time to time.

“Base Indenture” means the Third Amended and Restated Base Indenture, dated as
of April 1, 2020, among Buyer, as issuer, Citibank, N.A., as indenture trustee,
as calculation agent, as paying agent and as securities intermediary, Seller, as
administrator and as servicer, the Administrative Agent, and the Credit Manager,
as amended, restated, supplemented or otherwise modified from time to time,
including the schedules and exhibits thereto.

“Base Servicing Fee” means, for any Mortgage Loan, a monthly fee equal to 0.10%
multiplied by the principal balance of such Mortgage Loan and divided by 12.

“Business Day” means any day other than (i) a Saturday or Sunday or (ii) any
other day on which national banking associations or state banking institutions
in New York, New York, the State of California, the State of Texas, the city and
state where the Corporate Trust Office is located or the Federal Reserve Bank of
New York, are authorized or obligated by law, executive order or governmental
decree to be closed.

“Buyer” means PNMAC GMSR ISSUER TRUST, together with its successors, and any
assignee of any Participant or Transferee in the Transaction.

“Buyer MBS Advance” means any advance disbursed on behalf of Buyer pursuant to
the Indenture with respect to any Mortgage Pool pursuant to the Ginnie Mae
Contract in order to provide for the payment of principal and interest amounts
due on the related MBS on the required remittance date under the Ginnie Mae
Contract.

“Buyer Parties” shall mean any or all of the Buyer, any Administrative Agent,
the Indenture Trustee, the Owner Trustee, the Credit Manager and any other
parties acting on behalf of Buyer.

“Capital Lease Obligations” means, for any Person, all obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.

5

 

“Change in Control” means:

(A)       any transaction or event as a result of which Guarantor ceases to own,
beneficially or of record, 100% of the stock of Seller, except with respect to
an initial public offering of Seller’s common stock on a U.S. national
securities exchange;

(B)       the sale, transfer, or other disposition of all or substantially all
of Seller’s or Guarantor’s assets (excluding any such action taken in connection
with any securitization transaction); or

(C)       the consummation of a merger or consolidation of Seller or Guarantor
with or into another entity or any other corporate reorganization, if more than
50% of the combined voting power of the continuing or surviving entity’s stock
outstanding immediately after such merger, consolidation or such other
reorganization is owned by Persons who were not stockholders of Seller or
Guarantor immediately prior to such merger, consolidation or other
reorganization.

“Closing Date” means December 19, 2016.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Collection Policy” means Seller’s policies regarding Collections and remittance
in accordance with the provisions of this Agreement and the Servicing Contracts
and shall include the charging and collection of fees for servicing functions,
including, without limitation, the charging of late fees, assumption fees,
modification fees and other clerical or administrative fees in the ordinary
course of servicing.

“Collections” means, (i) with respect to the Originated MSR Excess Spread PC,
the MSR Retained Spread PC and the Purchased MSR Excess Spread PC, the Portfolio
Excess Spread and any amounts representing reimbursements of Buyer MBS Advances,
but excluding all or any portion of any cash Proceeds with respect to any
Mortgage Loan repurchased by Seller from the related Mortgage Pool in accordance
with the Ginnie Mae Contract, (ii) with respect to the P&I Advance PC, any MBS
Advance Reimbursement Amounts and (iii) with respect to the Servicing Advance
PC, any Servicing Advance Reimbursement Amounts.

“Commitment Period” means the period from and including the Closing Date to but
not including the Termination Date or such earlier date on which the obligations
of the Buyer under this Agreement shall have terminated pursuant to the terms of
this Agreement.

“Confidential Information” has the meaning set forth in Section 10.10(b).

“Consideration” means, any or all of (i) the Owner Trust Certificate, including
increases in the value thereof pursuant to Sections 4.4(b) or 4.5(e) of the Base
Indenture, (ii) one or more Variable Funding Notes, including Additional Note
Payments added thereto pursuant to Sections 4.4(b) or 4.5(e) of the Base
Indenture, and (iii) cash.

6

 

“Corporate Advance”  means any advance disbursed by or on behalf of the Servicer
with respect to any Mortgage Pool as required by the Ginnie Mae Contract with
respect to any Mortgage Loan included in the related Mortgage Pool (other than
amounts advanced as MBS Advances or Escrow Advances), excluding any advance
disbursed by an Interim Servicer related to Acquired MSRs until such time as
Servicer completes reconciliation of such advances with the Interim Servicer and
pays the Interim Servicer for such advances.

“Credit Manager” means Pentalpha Surveillance LLC or any successor thereto.

“Dedicated Account” means the demand deposit account “PennyMac Loan Services,
LLC – Dedicated Account”, which account has been established by Buyer for the
purpose of holding cash proceeds of the MSRs for the benefit of Buyer at Bank of
America, N.A.

“Dedicated Account Control Agreement” means, the Deposit Account Control
Agreement dated as of December 19, 2016, among Buyer, Seller, Indenture Trustee,
Guarantor and Bank of America, N.A., as amended, restated, supplemented or
otherwise modified from time to time.

“Default” means an event, condition or default that, with the giving of notice,
the passage of time, or both, would constitute an Event of Default.

“Dollars” and “$” means dollars in lawful currency of the United States of
America.

“Effective Date” shall have the meaning set forth in the preamble.

“Eligible Advance Reimbursement Amounts” means has the meaning assigned to such
term in the Base Indenture.

“Eligible Asset” means any Asset:

(a)        which relates to a Servicing Contract for Mortgage Loans in an
Eligible Securitization Transaction in which Seller is acting in the capacity of
servicer;

(b)       which complies with all Applicable Laws and other legal requirements,
whether federal, state or local;

(c)        which provides for payment in Dollars;

(d)       which was not originated in or subject to the Laws of a jurisdiction
whose Laws would make such Asset, or the financing thereof contemplated hereby
unlawful, invalid or unenforceable and is not subject to any legal limitation on
transfer;

(e)        which is owned solely by Seller (or with respect to Purchased MSR
Excess Spread, PMH) subject to the relevant Servicing Contract free and clear of
all Liens other than Liens in favor of Buyer (and in the case of Purchased MSR
Excess Spread, Liens in favor of the Seller) and has not been sold, conveyed,
pledged or assigned to any lender, purchaser, investor or other Person;

7

 

(f)        in respect of which Seller has complied in all material respects with
the Collection Policy and the related Servicing Contract or Participation
Agreement, as applicable;

(g)       which is not an obligation of the United States of America, any State
or any agency or instrumentality or political subdivision thereof (other than
Ginnie Mae, FHA, USDA, PIH or VA);

(h)       in respect of which the information set forth in the Asset Schedule
and the related Servicing Contract and, with respect to the Participation
Certificates, the Participation Agreement, is true and correct in all material
respects;

(i)        in respect of which Seller has obtained from each Person that may
have an interest in such Asset all acknowledgments or approvals, if any, that
are necessary to pledge such Asset as contemplated hereby;

(j)        which complies with the representations and warranties set forth on
Schedules 1-A,  1-B and 1-C, as applicable, hereto;

(k)       which with respect to any Asset that constitutes MSRs:

(i)        constitutes an “account” or a “general intangible” as defined in the
Uniform Commercial Code and is not evidenced by an “instrument,” as defined in
the Uniform Commercial Code as so in effect;

(ii)       relates to an Eligible Securitization Transaction, where the related
Participation Certificate is sold to the Buyer hereunder;

(iii)      arose pursuant to a Servicing Contract that is in full force and
effect and under which the Servicer has not been terminated; and

(iv)      the related Participation Certificate is an Eligible Asset hereunder;
and

(l)        which with respect to any Asset that constitutes a Participation
Certificate:

(i)        is intended to constitute a “security” as defined in the Uniform
Commercial Code and is evidenced by a certificate;

(ii)       for which the related MSRs relate to an Eligible Securitization
Transaction and have been pledged to the Buyer hereunder;

(iii)      for which the Participation Certificate arose pursuant to a
Participation Agreement that is in full force and effect; and

(iv)      for which the related MSRs are an Eligible Asset hereunder;

in each case as of the related Purchase Date and as of each day that such Asset
shall be subject to a Transaction hereunder.

8

 

“Eligible Securitization Transaction” means any Ginnie Mae MBS which, as of the
date of the related Transaction and as of each day that any Asset shall be
subject to a Transaction hereunder (unless expressly agreed upon in writing by
Buyer to the contrary) with respect to which the related Servicing Contract is
in full force and effect, at any time any Asset related to such Servicing
Contract is subject to a Transaction, and under which the servicer has not been
terminated, resigned or become subject to a right of termination or other
“trigger event.”

“EO13224” has the meaning set forth in Section 3.18.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means any corporation or trade or business that, together with
Seller or Guarantor is treated as a single employer under Section 414(b) or (c)
of the Code or solely for purposes of Section 302 of ERISA and Section 412 of
the Code is treated as single employer described in Section 414 of the Code.

“Escrow Advance”  means any advance disbursed by Servicer with respect to any
Mortgage Pool as required by the Ginnie Mae Contract in order to pay tax
obligations or insurance premiums due under any Mortgage Loan included in the
related Mortgage Pool when the funds on deposit in any escrow custodial account
or any other account containing escrow funds related to the applicable Mortgage
Pool are insufficient to make the required payment, excluding any advance
disbursed by an Interim Servicer related to Acquired MSRs until such time as
Servicer completes reconciliation of such advances with the Interim Servicer and
pays the Interim Servicer for such advances.

“Event of Default” has the meaning assigned to such term in Section 7.01.

“Excess Spread” means, for the Purchased MSR Excess Spread PC, “Purchased MSR
Excess Spread” as defined in the Purchased MSR Excess Spread Participation
Agreement; and for the Originated MSR Excess Spread PC, “Originated MSR Excess
Spread” as defined in the Originated MSR Excess and Retained Spread
Participation Agreement.

“Excess Spread PC” means any or all of the MSR Retained Spread PC, the
Originated MSR Excess Spread PC and the Purchased MSR Excess Spread PC.

“Excess Spread Rate” means, for the Purchased MSR Excess Spread PC, the rate per
annum set forth as such in the Purchased MSR Excess Spread Participation
Agreement.  For the Originated MSR Excess Spread PC, the rate per annum set
forth as such in the Originated MSR Excess and Retained Spread Participation
Agreement.  For any other Participation Certificate, if applicable, as set forth
in the related Participation Agreement.

“Expenses” means all present and future expenses reasonably incurred by or on
behalf of Buyer in connection with the negotiation, execution or enforcement or
the ongoing operations relating to this Agreement, the Indenture or any of the
other Program Agreements and PMH Documents, and Participation Agreements, and
any amendment, supplement or other modification or waiver related hereto or
thereto, whether incurred heretofore or hereafter, which expenses shall include
any Buyer MBS Advance amounts, any trustee or other service provider

9

 

fees, indemnification payments, MSR transfer costs, the cost of title, lien,
judgment and other record searches, reasonable attorneys’ fees, any ongoing
audits or due diligence costs in connection with valuation, entering into
Transactions or determining whether a Margin Deficit may exist, and costs of
preparing and recording any UCC financing statements or other filings necessary
to perfect the security interest created hereby.

“FDIA” has the meaning set forth in Section 10.12(c).

“FDICIA” has the meaning set forth in Section 10.12(d).

“FHA” means the Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto,
and including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.

“FHA Approved Mortgagee” means a corporation or institution approved as a
mortgagee by the FHA under the National Housing Act, as amended from time to
time, and applicable FHA Regulations, and eligible to own and service mortgage
loans such as the FHA Loans.

“FHA Claim Proceeds” means the portion of insurance proceeds which are received
from FHA under an FHA Mortgage Insurance Contract in the event of a default with
respect to an FHA Loan and are permitted reimbursements to the Seller, in its
capacity as servicer, for MBS Advances or Servicing Advances, including but not
limited to any debenture interest on such MBS Advances or Servicing Advances.

“FHA Loan” means a Mortgage Loan which is the subject of an FHA Mortgage
Insurance Contract.

“FHA Mortgage Insurance Contract” means the contractual obligation of the FHA
respecting the insurance of a Mortgage Loan.

“FHA Regulations” means the regulations promulgated by the Department of Housing
and Urban Development under the National Housing Act, as amended from time to
time and codified in 24 Code of Federal Regulations, and other Department of
Housing and Urban Development issuances relating to FHA Loans, including the
related handbooks, circulars, notices and mortgagee letters.

“Fidelity Insurance” means insurance coverage with respect to employee errors,
omissions, dishonesty, forgery, theft, disappearance and destruction, robbery
and safe burglary, property (other than money and securities) and computer fraud
in an aggregate amount acceptable to Seller’s regulators.

“Financial Statements” means the consolidated financial statements of Guarantor
and Seller prepared in accordance with GAAP for the year or other period then
ended.

“GAAP” means U.S. generally accepted accounting principles that are
(i) consistent with the principles promulgated or adopted by the Financial
Accounting Standards

10

 

Board and its successors, as in effect from time to time, and (ii) applied
consistently with principles applied to past financial statements of Seller and
its subsidiaries; provided,  that a certified public accountant would, insofar
as the use of such accounting principles is pertinent, be in a position to
deliver an unqualified opinion (other than a qualification regarding changes in
generally accepted accounting principles) that such principles have been
properly applied in preparing such financial statements.

“Ginnie Mae” means the Government National Mortgage Association and any
successor thereto.

“Ginnie Mae Approvals” shall have the meaning set forth in Section 6.10.

“Ginnie Mae Contract” means (a) 12 U.S.C. § 1721(g) and the implementing
regulations governing the Ginnie Mae MBS Program, 24 C.F.R. Part 300, (b)
applicable guaranty agreements and contractual agreements between Ginnie Mae and
Servicer, and (c) the Ginnie Mae Guide, and other guides and amendments.

“Ginnie Mae Guide”  means the Ginnie Mae Mortgage-Backed Securities Guide,
Handbook 5500.3, Rev. 1, as amended from time to time, and any related
announcements, directives and correspondence issued by Ginnie Mae.

“Ginnie Mae MBS” means Ginnie Mae I MBS and Ginnie Mae II MBS issued by Seller
and guaranteed by Ginnie Mae, backed by pools of Ginnie Mae eligible mortgage
loans in accordance with section 306(g) of the National Housing Act, 12 U.S.C.
§1721(g), the issuance of which, and the servicing of such Ginnie Mae eligible
mortgage loans by Seller, being governed in all respects by the Ginnie Mae
Contract.

“GLB Act” shall have the meaning set forth in Section 10.10(b).

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, or any entity exercising executive, legislative,
judicial, regulatory or administrative functions over Seller, Guarantor or
Buyer, as applicable.

“Guarantee” means, 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.  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.

11

 

“Guarantor” means Private National Mortgage Acceptance Company, LLC, in its
capacity as guarantor under the PC Guaranty.

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

“Indebtedness” means, for 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 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 ninety (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 the account of
such Person; (e) Capital Lease Obligations of such Person; (f) obligations of
such Person under repurchase agreements, sale/buy-back agreements or like
arrangements, including, without limitation, any Indebtedness arising hereunder;
(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) with respect to clauses (a)-(i) above both
on and off balance sheet.

“Indenture” means the Base Indenture, collectively with each Indenture
Supplement thereto.

“Indenture Supplement”  means each supplement to the Base Indenture, executed
and delivered in conjunction with the issuance of the related Series of Notes,
including the schedules and exhibits thereto, as amended, restated, supplemented
or otherwise modified from time to time.

“Indenture Trustee” means Citibank, N.A. or its permitted successors and
assigns.

“Interim Servicer” means the transferor of an Acquired MSR acting in its
capacity as subservicer for the benefit of the Servicer in connection with the
purchase thereof.

 “Investment Company Act” means the Investment Company Act of 1940, as amended
from time to time.

“Laws” means any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, order, injunction, writ, decree or award of any
Governmental Authority.

“License” means any license, permit, approval, right, privilege, quota,
concession, or franchise issued, granted, conferred or otherwise created by a
Governmental Authority.

12

 

“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.

“Liquidated Asset”  means a  Mortgage Loan that has been repurchased from a
Mortgage Pool underlying Ginnie Mae MBS or was subject to a short sale or with
respect to which the Mortgaged Property has been sold (including REO Property
resulting from the foreclosure of the related Mortgaged Property).

“Liquidation Proceeds” means, with respect to any Mortgage Loan that becomes a
Liquidated Asset, the portion of Advance Reimbursement Amounts recovered from
the proceeds received on account of the liquidation of such Mortgage Loan.

“Margin Call” has the meaning set forth in Section 2.05(a).

“Margin Deadlines” has the meaning set forth in Section 2.05(b).

“Margin Deficit” has the meaning set forth in Section 2.05(a).

“Margin Excess” has the meaning set forth in Section 2.05(d).

“Market Value” means, as of any date of determination,

(i) with respect to any Excess Spread PC, the product of (a) the Market Value
Percentage as of the most recent Market Value Report and (b) the aggregate
unpaid principal balance of the Mortgage Loans included in the Mortgage Pool
related to the MSRs evidenced by the related Excess Spread PCs as of the last
day for which such information is available, and

(ii) with respect to any Advance PC, the aggregate outstanding balance in U.S.
dollars of all Eligible Advance Reimbursement Amounts attributable to such
Advance PC.

“Market Value Percentage” has the meaning assigned to such term in the Base
Indenture.

“Master Spread Acquisition Agreement” means that certain Second Amended and
Restated Master Spread Acquisition and MSR Servicing Agreement, dated as of
December 19, 2016, between PMH and the Seller, as amended, restated,
supplemented or otherwise modified from time to time.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, condition (financial
or otherwise) or prospects of Seller, Guarantor or any Affiliate thereof that is
a party to any Program Agreement taken as a whole; (b) a material impairment of
the ability of Seller, Guarantor or any Affiliate thereof that is a party to any
Program Agreement to perform under any Program Agreement and to avoid any Event
of Default; (c) a material adverse effect upon the legality, validity, binding
effect or enforceability of any Program Agreement against Seller, Guarantor or
any Affiliate

13

 

thereof that is a party to any Program Agreement; or (d) a material adverse
effect on the rights and remedies of Seller under any of the PMH Documents.

“MBS” means a mortgage backed security guaranteed by Ginnie Mae pursuant to the
Ginnie Mae Contract.

“MBS Advance”  means any advance disbursed by the Servicer from its own funds
with respect to any Mortgage Pool as required by the Ginnie Mae Contract in
order to provide for the payment of principal and interest amounts due on the
related MBS on its remittance date under the Ginnie Mae Contract and
specifically excluding (a) the Servicer’s use of excess funds from one Mortgage
Pool to cover MBS Advances attributable to another Mortgage Pool, as permitted
under Section 15-5(A) of the Ginnie Mae Guide, and (b) any advance disbursed by
an Interim Servicer related to Acquired MSRs until such time as Servicer
completes reconciliation of such advances with the Interim Servicer and pays the
Interim Servicer for such advances.

“MBS Advance Reimbursement Amounts” means any Advance Reimbursement Amounts
related to reimbursements for previously made MBS Advances.

“Mortgage Loan” means a loan secured by a Mortgage on real property (including
REO Property resulting from the foreclosure of the real property that had
secured such loan), which loan has been included in a Mortgage Pool underlying
Ginnie Mae MBS.

“Mortgage Pool” means a pool or loan package securing an MBS for which the
Seller is the issuer.

“Mortgaged Property” means the real property (including all improvements,
buildings, fixtures and building equipment thereon and all additions,
alterations and replacements made at any time with respect to the foregoing) and
all other collateral securing repayment of the related Mortgage Loan.

“MRA Payment Date” means the Business Day immediately preceding a “Payment Date”
as defined in the Base Indenture.

“MSR”  means with respect to the Mortgage Loans, the mortgage servicing rights,
including any and all of the following:  (a) any and all rights to service the
Mortgage Loans; (b) any payments to or monies received by the Servicer for
servicing the Mortgage Loans including, without limitation, any Servicing Fees
and Advance Reimbursement Amounts; (c) any late fees, penalties or similar
payments with respect to the Mortgage Loans; (d) all agreements or documents
creating, defining or evidencing any such servicing rights to the extent they
relate to such servicing rights and all rights of the Servicer thereunder; (e)
escrow or other similar payments with respect to the Mortgage Loans and any
amounts actually collected by the Servicer with respect thereto; (f) all
accounts and other rights to payment related to any of the property described in
this paragraph; and (g) any and all documents, files, records, servicing files,
servicing documents, servicing records, data tapes, computer records, or other
information pertaining to the Mortgage Loans or pertaining to the past, present
or prospective servicing of the Mortgage Loans.

“MSR Retained Spread PC” means the Participation Certificate issued pursuant to
the Originated MSR Excess and Retained Spread Participation Agreement which
evidences the

14

 

Participation Interest in the Retained Servicing Spread related to (i) the
Originated MSR Portfolio and (ii) the Purchased MSR Portfolio.

“Multiemployer Plan” means a multiemployer plan defined as such in Section 3(37)
of ERISA to which contributions have been or are required to be made by Seller
or any ERISA Affiliate and that is covered by Title IV of ERISA.

“Net Payment Amount” means with respect to any MRA Payment Date or Interim
Payment Date, an amount equal to the sum of (i) the amounts payable by Seller
pursuant to Sections 2.03,  2.04 or 2.05, as applicable, minus (ii) the amounts,
if any, that will be distributable under Sections 4.04(a)(v) or 4.05(a)(i)(x) of
the Indenture to the Seller, as the holder of the Owner Trust Certificate.

“Non-Excluded Taxes” has the meaning set forth in Section 2.09(a).

“Notice” or “Notices” means all requests, demands and other communications, in
writing (including facsimile transmissions and e-mails), sent by overnight
delivery service, facsimile transmission, electronic transmission or
hand-delivery to the intended recipient at the address specified in Section
10.04 or, as to any party, at such other address as shall be designated by such
party in a written notice to the other party.

“Obligations” means (a) all of Seller’s indebtedness, obligations to pay the
Repurchase Price, on the Termination Date, outstanding interest due on each MRA
Payment Date, and other obligations and liabilities, to Buyer arising under, or
in connection with, the Program Agreements, whether now existing or hereafter
arising; (b) any and all sums reasonably incurred and paid by Buyer or on behalf
of Buyer in order to preserve any Repurchase Asset or its interest therein;
(c) in the event of any proceeding for the collection or enforcement of any of
Seller’s indebtedness, obligations or liabilities referred to in this
definition, the reasonable expenses of retaking, holding, collecting, preparing
for sale, selling or otherwise disposing of or realizing on any Repurchase
Asset, or of any exercise by Buyer of its rights under the Program Agreements,
including, without limitation, reasonable attorneys’ fees and disbursements and
court costs; and (d) all of Seller’s indemnity obligations to Buyer pursuant to
the Program Agreements.

“OFAC” has the meaning set forth in Section 3.18.

“Originated MSR Excess Spread” means the portion of the Servicing Fee relating
to the Originated MSR Portfolio owing to the Seller at the applicable Excess
Spread Rate.

“Originated MSR Excess and Retained Spread Participation Agreement” means the
Amended and Restated Originated MSR Excess and Retained Spread Participation
Agreement, dated as of April 1, 2020, between the Seller, as company, and the
Seller, as initial purchaser, as amended, restated, supplemented or otherwise
modified from time to time.

“Originated MSR Excess Spread PC” means the Participation Certificate issued
pursuant to the Originated MSR Excess and Retained Spread Participation
Agreement which evidences the Participation Interest in the Excess Spread for
the Originated MSR Portfolio.

15

 

“Originated MSR Mortgage Pools” means the Mortgage Pools listed on the
Originated MSR Excess Spread PC in the form of Schedule 4-A hereto, which may be
in electronic form.

“Originated MSR Portfolio” means the MSRs relating to the Mortgage Loans
included in the Originated MSR Mortgage Pools.

“Other Taxes” has the meaning set forth in Section 2.09(b).

“Owner Trust Certificate” means a certificate evidencing a 100% undivided
beneficial interest in the Buyer.

“Owner Trustee” means WSFS, or any successor thereto.

“P&I Advance PC” means the Participation Certificate issued pursuant to the
Originated MSR Excess and Retained Spread Participation Agreement which
evidences the Participation Interest in the MBS Advance Reimbursement Amounts
for the Portfolio Mortgage Loans.

“Participant” means any Person that has purchased a participation in this
Agreement pursuant to Section 9.02.

“Participation Agreement” means each of (i) the Originated MSR Excess and
Retained Spread Participation Agreement, and (ii) the Purchased MSR Excess
Spread Participation Agreement, each as may be amended, restated, supplemented
or otherwise from time to time, related to servicing rights with respect to the
Originated MSR Portfolio and the Purchased MSR Portfolio subject to this
Agreement, in form and substance acceptable to the Administrative Agent and
identified on Schedule 2 hereto, as amended and restated in connection with each
Transaction.  With respect to any Participation Certificate added as a Purchased
Asset in the future, the applicable “Participation Agreement” shall be as
specified in a written instrument, which shall include an amended and restated
Schedule 2 hereto, executed by, and delivered to, all parties hereto.

“Participation Certificate” means each of (i) the Originated MSR Excess Spread
PC, (ii) the MSR Retained Spread PC, (iii) the Purchased MSR Excess Spread PC,
(iv) the P&I Advance PC, (v) the Servicing Advance PC and (vi) any other
participation certificate issued and delivered in connection with a
Participation Agreement, in form and substance acceptable to the Administrative
Agent and identified on Schedule 2 hereto.

“Participation Interest” means each participating beneficial ownership interest
(of the type and nature contemplated by 11 U.S.C. § 541(d) of the United States
Bankruptcy Code) in (i) Excess Spread, or (ii) in the case of the MSR Retained
Spread PC, in Retained Servicing Spread, with respect to a Portfolio, or (iii)
in the case of the P&I Advance PC, in MBS Advance Reimbursement Amounts with
respect to the Portfolio Mortgage Loans, or (iv) in the case of the Servicing
Advance PC, in Servicing Advance Reimbursement Amounts with respect to the
Portfolio Mortgage Loans, and, in each case, proceeds thereof together with the
other rights and privileges specified in a Participation Agreement as evidenced
by the issuance of a Participation Certificate.

16

 

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.

“PC Guaranty” shall have the meaning set forth in the Base Indenture.

“Pension Protection Act” means the Pension Protection Act of 2006.

“Person” means an individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.

“PIH” means the Office of Public and Indian Housing within the United States
Department of Housing and Urban Development, or any successor thereto.

“PIH Claim Proceeds” means the portion of guaranty claim proceeds which are
received from PIH in the event of a default with respect to a PIH Loan and are
permitted reimbursements to the Servicer for MBS Advances or Servicing Advances,
including but not limited to any accrued unpaid interest on such MBS Advances or
Servicing Advances.

“Plan” means an employee benefit or other plan established or maintained by any
Seller or any ERISA Affiliate and covered by Title IV of ERISA, other than a
Multiemployer Plan.

“PLS” has the meaning given to such term in the preamble to this Agreement.

“PMH” means PennyMac Holdings, LLC, a limited liability company organized under
the laws of the State of Delaware.

“PMH Documents” means the PMH Repurchase Agreement, PMH Subordination Agreement,
pricing letter, side letter, confirmations and all documents ancillary thereto
that evidence an PMH Transaction in the form approved by Buyer in writing in its
sole discretion with any material modifications approved by Buyer in writing in
its sole discretion (excluding provisions related to the advance rate or
interest rate of such PMH Transactions, which shall not be subject to Buyer
review or approval).

“PMH Repurchase Agreement” means the Master Repurchase Agreement, dated as of
December 19, 2016, between PMH, as seller, and PLS, as buyer, related to the
Purchased MSR Excess Spread PC, as amended, restated, supplemented or otherwise
modified from time to time.

“PMH Subordination Agreement” means the Subordination, Acknowledgment and Pledge
Agreement, dated as of December 19, 2016, between Buyer and PMH, as amended,
restated, supplemented or otherwise modified from time to time.

“PMH Transaction” means a transaction between Seller and PMH whereby PMH pledges
the Purchased MSR Excess Spread and the corresponding Purchased MSR Excess
Spread PC to Seller against the transfer of funds by Seller, which Purchased MSR
Excess Spread is concurrently or consecutively pledged to Buyer hereunder.

17

 

“Portfolio” means each of (i) the Originated MSR Portfolio, (ii) the Purchased
MSR Portfolio, and (iii) any other portfolio identified in, and underlying, a
Participation Certificate.

“Portfolio Excess Spread” means, collectively, the Originated MSR Excess Spread,
the Retained Servicing Spread, the Purchased MSR Excess Spread and with respect
to any other Participation Certificate, the Excess Spread related thereto.

“Portfolio Mortgage Loan” means a Mortgage Loans that is included in the
Portfolio.

“Price Differential”  means with respect to any Transaction as of any date of
determination, an amount equal to the sum of (i) the product of (A) the Pricing
Rate for such Transaction, (B) the Purchase Price for such Transaction and (C) a
fraction, the numerator of which is the number of days elapsed from and
including the preceding MRA Payment Date to and excluding such date of
determination and the denominator of which equals 360, (ii) the aggregate
expected related fees (including Default Supplemental Fees, and Step-Up Fees),
costs and expenses (including any Fees, Expenses, reasonable out-of-pocket
expenses and indemnification amounts owed for Administrative Expenses of the
Issuer described in Section 4.5(a)(1)(ii) of the Base Indenture, and Specified
Call Premium Amounts) as of such date of determination (as determined by the
Administrative Agent), and (iii) if an MBS Advance VFN has a positive VFN
Principal Balance, the amount of any unreimbursed Buyer MBS Advances.

“Price Differential Statement Date” has the meaning set forth in Section 2.04.

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

“Pricing Side Letter” means the letter agreement, dated as of the Effective
Date, among Buyer, Seller and the Guarantor as the same may be amended from time
to time.

“Proceeds” means “proceeds” as defined in Section 9-102(a)(64) of the UCC.

“Program Agreements” means this Agreement, the Pricing Side Letter, the
Dedicated Account Control Agreement, the PC Guaranty, the Indenture, the PMH
Subordination Agreement, the Participation Agreements, and the PMH Documents as
each of the same may hereafter be amended, restated, supplemented or otherwise
from time to time.

“Prohibited Person” has the meaning set forth in Section 3.18 hereof.

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

“Purchase Date” means, subject to the satisfaction of the conditions precedent
set forth in Article V hereof, (i) the 25th day of such month (or, if such 25th
day is not a Business Day, the next Business Day following such 25th day) or
(ii) each calendar week, the second (2nd) Business Day of each such week (or if
any such date is not a Business Day, the next succeeding Business Day) following
one (1) Business Day’s written notice from Seller to Buyer and the
Administrative Agent, in each case on which a Transaction is entered into by
Buyer pursuant to

18

 

Section 2.02 or such other mutually agreed upon date as more particularly set
forth on Exhibit A hereto.

“Purchase Price” means the price at which each Purchased Asset (or portion
thereof) is transferred by Seller to Buyer, which shall equal:

(a)        on the Purchase Date, the product of (1) the related Purchase Price
Percentage and (2) the applicable Market Value; and

(b)       on any day after the Purchase Date, the amount determined under the
immediately preceding clause (a) increased by the amount of any Margin Excess
relating to such Purchased Asset pursuant to Section 2.05(d) and decreased by
the sum of (i) any Repurchase Price or Required Payments relating to such
Purchased Asset paid pursuant to Section 2.03, and (ii) with respect to any
Excess Spread PC, the amount of Consideration transferred by the Seller to Buyer
relating to such Purchased Asset pursuant to Section 2.05(a) equal to the sum of
(x) any cash, (y) the principal amount of any Additional Note Payment with
respect to the Variable Funding Note and (z) the amount of any reduction in the
Owner Trust Certificate, to the extent provided in Section 2.05.

“Purchase Price Percentage” has the meaning assigned to the term in the Pricing
Side Letter.

“Purchased Assets” means the collective reference to Participation Certificates
together with the Repurchase Assets related to such Participation Certificates
transferred by Seller to Buyer in a Transaction hereunder, listed on the related
Asset Schedule attached to the related Transaction Notice.  For the sake of
clarity, notwithstanding that related MSRs are pledged, and not sold, to Buyer
hereunder, such MSRs will nevertheless be included herein as Purchased Assets.

“Purchased MSRs” means MSRs relating to Mortgage Loans included in Purchased MSR
Mortgage Pools and which are subject to PMH’s rights, as purchaser, under the
Purchased MSR Excess Spread Participation Agreement, and as seller, under the
PMH Repurchase Agreement.

“Purchased MSR Excess Spread” means the portion of the Servicing Fee relating to
the Purchased MSR Portfolio and owing to PMH at the applicable Excess Spread
Rate.

“Purchased MSR Excess Spread Participation Agreement” means the Second Amended
and Restated Master Spread Acquisition and MSR Servicing Agreement, dated as of
December 19, 2016, between Seller, as seller, and PMH, as purchaser, as amended,
restated, supplemented or otherwise modified from time to time.

“Purchased MSR Excess Spread PC” means the Participation Certificate issued
pursuant to the Purchased MSR Excess Spread Participation Agreement which
evidences the Participation Interest in the Excess Spread related to the
Purchased MSRs.

“Purchased MSR Mortgage Pools” means the Mortgage Pools listed on the Purchased
MSR Excess Spread PC in the form of Schedule 4-B hereto, which may be in
electronic form.

19

 

“Purchased MSR Portfolio” means the MSRs relating to the Mortgage Loans included
in the Purchased MSR Mortgage Pool(s).

“Records” means all instruments, agreements and other books, records, and
reports and data generated by other media for the storage of information
maintained by Seller, or any other person or entity with respect to the
Purchased Assets or any other Repurchase Assets.

“Register” has the meaning set forth in Section 9.02(a).

“Related Security” means with respect to any Asset, (a) all security interests
or Liens and property subject thereto from time to time, if any, purporting to
secure payment of such Asset, whether pursuant to the related Servicing Contract
related to such Asset or otherwise, together with all financing statements
covering any collateral securing such Asset; (b) all guarantees, indemnities,
letters of credit, insurance or other agreements or arrangements of any kind
from time to time supporting or securing payment of such Asset whether pursuant
to the related Servicing Contract related to such Asset or otherwise; and
(c) any and all Proceeds of the foregoing.

“Repurchase Assets” has the meaning set forth in Section 4.02(a).

“Repurchase Date” means the earlier of (i) the Termination Date or (ii) the date
requested by Seller on which the Repurchase Price is paid pursuant to
Section 2.03 hereof.

“Repurchase Price” means the price at which Purchased Assets are to be
transferred from Buyer to Seller (other than the MSRs, which are pledged, and
not sold, to Buyer) upon termination of a Transaction, which will be determined
in each case (including Transactions terminable upon demand) as the sum of the
Purchase Price for such Purchased Assets and the accrued but unpaid Price
Differential as of the date of such determination.

“Required Payment”  means, with respect to any Purchased Asset, the amounts
required to be paid by Seller to Buyer on an MRA Payment Date, equal to any
“Scheduled Principal Payment Amounts” due on such MRA Payment Date under the
Indenture.

“Required Reserve Amount” means, with respect to any MRA Payment Date, the
amounts estimated to be due and owing by Seller pursuant Sections 2.03,  2.04 or
2.05; provided, that with respect to any Advance Reimbursement Amounts and
Section 2.03, so long as (a) no Event of Default has occurred hereunder or (b)
no Event of Default (as defined in the Series 2016-MSRVF1 Repurchase Agreement
or Series 2020 SPIADVF1 Repurchase Agreement, as applicable) has occurred under
the Series 2016-MSR VF1 Repurchase Agreement or the Series 2020-SPIADVF1
Repurchase Agreement, such amount shall be:

(i)         with respect to any MBS Advance Reimbursement Amounts, 100% of all
MBS Advance Reimbursement Amounts until the Advance Reimbursement Balance with
respect to such amounts has been reduced to zero; and

(ii)       with respect to Servicing Advance Reimbursement Amount, 100% of all
Servicing Advance Reimbursement Amounts until the Advance Reimbursement Balance
with respect to such amounts has been reduced to zero.

20

 

“Requirement of Law” means, with respect to any Person, any law, treaty, rule or
regulation or determination of an arbitrator, a court or other Governmental
Authority, applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.

“Responsible Officer” means as to any Person, the chief executive officer or,
with respect to financial matters, the chief financial officer or treasurer of
such Person.  The Responsible Officers of Seller and Guarantor as of the Closing
Date are listed on Schedule 3 hereto.

“Retained Servicing Spread” means all Servicing Fees in respect of the
Originated MSR Portfolio and the Purchased MSR Portfolio in excess of the Base
Servicing Fee, net of the related Excess Spread, and not including any Ancillary
Income or Advance Reimbursement Amounts.

“Sanctions” has the meaning set forth in Section 3.18.

“SEC” means the Securities and Exchange Commission, or any successor thereto.

“Seller” means PennyMac Loan Services, LLC or its permitted successors and
assigns.

“Seller Termination Option” means (a) (i) Buyer has or shall incur costs in
connection with those matters provided for in Section 2.09 or 2.10 and (ii)
Buyer requests that Seller pay to Buyer those costs in connection therewith or
(b) Buyer has declared in writing that an event described in Section 5.02(h)(A)
has occurred.

“Servicing Advance PC” means the Participation Certificate issued pursuant to
the Originated MSR Excess and Retained Spread Participation Agreement which
evidences the Participation Interest in the Servicing Advance Reimbursement
Amounts for the Portfolio Mortgage Loans.

“Servicing Advance Reimbursement Amounts” means any Advance Reimbursement
Amounts related to reimbursements for previously made Servicing Advances.

“Servicing Advances” means Corporate Advances and Escrow Advances.

“Servicing Contract” means, the Ginnie Mae Contract and any and all instruments,
agreements, invoices or other writings, which gives rise to or otherwise
evidences any of the MSRs.  Without limiting the generality of the foregoing,
any reference herein to a “Servicing Contract” shall be deemed to include the
Acknowledgment Agreement.

“Servicing Fee” has the meaning assigned to such term in the Base Indenture.

“Subsidiary” means, 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 of

21

 

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.

“Successor Issuer” means any party designated as successor to Seller by Ginnie
Mae on behalf of Buyer.

“Taxes” has the meaning assigned to such term in Section 2.09(a).

“Termination Date” has the meaning assigned to such term in the Pricing Side
Letter.

“Transaction” has the meaning assigned to such term in the recitals to this
Agreement.

“Transaction Notice” has the meaning assigned to such term in Section 2.02.

“Transaction Register” has the meaning assigned to such term in Section 9.03(b).

“Transferee” has the meaning set forth in Section 9.02(a).

“Trust Agreement” has the meaning assigned to such term in the Base Indenture.

“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as in
effect on the Effective Date in the State of New York or the Uniform Commercial
Code as in effect in the applicable jurisdiction.

“USDA” means the Rural Housing Service of the Rural Development Agency of the
United States Department of Agriculture, or any successor.

“USDA Claim Proceeds” means the portion of guarantee claim proceeds which are
received from USDA in the event of a default with respect to a USDA Loan and are
permitted reimbursements to the Servicer for MBS Advances or Servicing Advances,
including but not limited to any accrued unpaid interest on such MBS Advances or
Servicing Advances.

“USDA Loan” means a Mortgage Loan which is guaranteed by USDA, as evidenced by a
USDA Loan Guarantee Document.

“USDA Loan Guarantee Document” means a loan guarantee document issued by USDA in
accordance with 7 CFR § 3555.107.

“VA” means the U.S. Department of Veterans Affairs, an agency of the United
States of America, or any successor thereto including the Secretary of Veterans
Affairs.

“VA Approved Lender” means a lender which is approved by the VA to act as a
lender in connection with the origination of VA Loans.

22

 

“VA Claim Proceeds”  means the portion of guaranty claim proceeds which are
received from VA in the event of a default with respect to a VA Loan and are
permitted reimbursements to the Servicer for MBS Advances or Servicing Advances,
including but not limited to any accrued unpaid interest on such MBS Advances or
Servicing Advances.

“VA Loan” means a Mortgage Loan which is subject of a VA Loan Guaranty Agreement
as evidenced by a loan guaranty certificate, or a Mortgage Loan which is a
vendor loan sold by the VA.

“VA Loan Guaranty Agreement” means the obligation of the United States to pay a
specific percentage of a Mortgage Loan (subject to a maximum amount) upon
default of the mortgagor pursuant to the Servicemen’s Readjustment Act, as
amended, restated, supplemented or otherwise modified from time to time.

“WSFS” means Wilmington Savings Fund Society, FSB.

Section 1.02.   Other Defined Terms; Interpretation.  Any capitalized terms used
and not defined herein shall have the meaning set forth in the Indenture.  For
all purposes of this Agreement, except as otherwise expressly provided or unless
the context otherwise requires:

(i)        reference to and the definition of any document (including this
Agreement) shall be deemed a reference to such document as it may be amended or
modified from time to time;

(ii)       all references to an “Article,” “Section,” “Schedule” or “Exhibit”
are to an Article or Section hereof or to a Schedule or an Exhibit attached
hereto;

(iii)      defined terms in the singular shall include the plural and vice versa
and the masculine, feminine or neuter gender shall include all genders;

(iv)      the words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement;

(v)       unless otherwise specified herein, the term “or” has the inclusive
meaning represented by the term “and/or” and the term “including” is not
limiting;

(vi)      in the computation of periods of time from a specified date to a later
specified date, unless otherwise specified herein, the words “commencing on”
mean “commencing on and including,” the word “from” means “from and including”
and the words “to” and “until” each means “to but excluding”;

(vii)     periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are expressly prescribed and references in
this Agreement to months and years shall be to months and calendar years unless
otherwise specified;

23

 

(viii)    accounting terms not otherwise defined herein and accounting terms
partly defined herein to the extent not defined, shall have the respective
meanings given to them under GAAP;

(ix)      “including” and words of similar import will be deemed to be followed
by “without limitation”;

(x)       references to any Program Agreement (including this Agreement) and any
other agreement shall be deemed a reference to such Program Agreement or such
Program Agreement as it may be amended, restated, supplement or otherwise
modified from time to time; and

(xi)      references to any statute, law, rule or regulation shall be deemed a
reference to such statute, law, rule or regulation as it may be amended or
modified from time to time.

ARTICLE II

 

GENERAL TERMS

Section 2.01.   Transactions.  (a) During the Commitment Period, and subject to
the terms and conditions of this Agreement, Buyer agrees to enter into
Transactions with Seller for the applicable Purchase Price.  Subject to Section
2.03(c), Seller may pay the Repurchase Price in whole or in part at any time
during the Commitment  Period, and additional Transactions may be entered into
in accordance with the terms and conditions hereof.  Buyer’s obligation to enter
into Transactions pursuant to the terms of this Agreement shall terminate on the
Termination Date.  Notwithstanding the foregoing, Buyer shall have no commitment
or obligation to enter into Transactions to the extent the Purchase Price of
such Transaction exceeds the Asset Base (determined after giving effect to such
proposed purchase).

Section 2.02.   Procedure for Entering into Transactions.  (a) Seller may enter
into Transactions with Buyer during the Commitment Period on any Purchase Date;
provided,  that Seller shall have given Buyer irrevocable notice (each, a
“Transaction Notice”) with a copy to the Administrative Agent and the Indenture
Trustee, which notice (i) shall be substantially in the form of Exhibit A
hereto, (ii) shall be signed by a Responsible Officer of Seller and be received
by Buyer prior to 1:00 p.m. (New York time) one (1) Business Day prior to the
related Purchase Date, and (iii) shall specify (A) the Dollar amount of the
requested Purchase Price, (B) the requested Purchase Date, (C) the information
required to be included in the Asset Schedule with respect to each Participation
Certificate subject of such Transaction in mutually acceptable electronic form
and (D) a copy of the related “Funding Certification” being delivered pursuant
to the Indenture in connection with such Transaction, if applicable.  Each
Transaction Notice on any Purchase Date shall be in an amount equal to at least
$25,000.

(b)       If Seller shall deliver to Buyer a Transaction Notice that satisfies
the requirements of Section 2.02(a), Buyer will notify Seller prior to the
requested Purchase Date of its intent to remit the requested Purchase Price, and
the form or forms of the Consideration that will be provided, including (i) the
portion of such Purchase Price that will paid in cash, if any

24

 

(ii) the Note Balance, or increased Note Balance, of any Variable Funding Note
and (iii) the increased value of the Owner Trust Certificate, which increase
will result from the deemed capital contribution to Buyer of any portion of the
Purchase Price not paid pursuant to Clause (i) or (ii) above.  If all applicable
conditions precedent set forth in Article V have been satisfied on or prior to
the Purchase Date, then subject to the foregoing, on the Purchase Date, Buyer
shall deliver the Consideration to Seller, including remitting any cash portion
of the requested Purchase Price identified by Buyer in Dollars and in
immediately available funds to the account specified by Seller.

(c)        Upon entering into each Transaction hereunder, the Asset Schedule
shall be automatically updated to include each of the Assets listed on the Asset
Schedule attached to the Transaction Notice.

Section 2.03.  Repurchase; Payment of Repurchase Price.  (a) Seller hereby
promises to (i) repurchase the Purchased Assets and pay all outstanding
Obligations on the related Repurchase Date and (ii) pay any and all Required
Payments on the related MRA Payment Date.

(b)       Without limiting the foregoing, on each MRA Payment Date (and, in
addition, with respect to MBS Advance Reimbursement Amounts, on the third
Business Day of each week other than the week of an MRA Payment Date or Interim
Payment Date), Seller shall sweep all amounts received with respect to MSRs
(including the related Advance Reimbursement Amounts) to the Collection and
Funding Account subject to Section 6.12 hereof to be applied in accordance with
Section 2.07 hereof.

(c)        If permitted pursuant to the terms of the Indenture, Seller may, at
its option, prepay, subject to Section 2.10 of this Agreement and Section 13.1
of the Indenture, the Purchase Price in whole or in part at any time, together
with accrued and unpaid Price Differential on the amount so prepaid, together
with the applicable Specified Call Premium Amounts (as defined in any Indenture
Supplement) then due and payable, if any.

Section 2.04.   Price Differential.

(a)        On each MRA Payment Date, Seller hereby promises to pay to Buyer all
accrued and unpaid Price Differential on the Transactions, as invoiced by Buyer
two (2) Business Days prior to the related MRA Payment Date (the “Price
Differential Statement Date”); provided that if Buyer fails to deliver such
statement on the Price Differential Statement Date, on such MRA Payment Date
Seller shall pay the amount which Seller calculates as the Price Differential
due and upon delivery of the statement, Seller shall remit to Buyer any
shortfall, or Buyer shall refund to Seller any excess, in the Price Differential
paid.  Price Differential shall accrue each day on the Purchase Price at a rate
per annum equal to the Pricing Rate.

(b)       In addition to the payment of the Price Differential, on each MRA
Payment Date, Seller hereby promises to pay to Buyer all accrued and unpaid
amounts representing Expenses, if any.

Section 2.05.   Margin Maintenance.  (a) If at any time the aggregate
outstanding amount of the Purchase Price exceeds the Asset Base in effect at
such time, as determined on each Interim Payment Date after taking into account
any Transaction being effected on such date (such

25

 

excess, a “Margin Deficit”), then Buyer may by notice to Seller require Seller
to eliminate the Margin Deficit (such requirement, a “Margin Call”) by effecting
any or all of the following actions: (i) the transfer of cash to Buyer, (ii) the
application of an Additional Note Payment to a Variable Funding Note (to the
extent allowed under the related Indenture Supplement) or (iii) the reduction of
the value of the Owner Trust Certificate; provided, however, that to the extent
that there is a Borrowing Base Deficiency, Seller must cure any Margin Deficit
pursuant to clause (i) or (ii) only.

(b)       Notice delivered pursuant to Section 2.05(a) may be given by any
written or electronic means.  With respect to a Margin Call, any notice given
before 5:00 p.m. (New York City time) on a Business Day shall be met, and the
related Margin Call satisfied, no later than 5:00 p.m. (New York City time) on
the following Business Day.  With respect to a Margin Call, any notice given
after 5:00 p.m. (New York City time) on a Business Day shall be met, and the
related Margin Call satisfied, no later than 5:00 p.m. (New York City time) on
the second (2nd) Business Day following the date of such notice.  The foregoing
time requirements for satisfaction of a Margin Call are referred to as the
“Margin Deadlines”.  The failure of Buyer, on any one or more occasions, to
exercise its rights hereunder, shall not change or alter the terms and
conditions to which this Agreement is subject or limit the right of Buyer to do
so at a later date.  Seller and Buyer each agree that a failure or delay by
Buyer to exercise its rights hereunder shall not limit or waive Buyer’s rights
under this Agreement or otherwise existing by law or in any way create
additional rights for Seller.

(c)        In the event that a Margin Deficit exists, Buyer may retain any funds
received by it to which Seller would otherwise be entitled hereunder, which
funds (i) may be held by Buyer against the related Margin Deficit or (ii) may be
applied by Buyer against the Purchase Price.  Notwithstanding the foregoing,
Buyer retains the right, in its sole discretion, to make a Margin Call in
accordance with the provisions of this Section 2.05.

(d)       If at any time the aggregate outstanding amount of the Asset Base in
effect at such time exceeds the Purchase Price, as determined on each Interim
Payment Date after taking into account any Transaction being effecting on such
date (such excess, a “Margin Excess”), then on any Purchase Date on which such
Margin Excess exists, Seller may deliver a Transaction Notice to Buyer and
request Buyer to deliver additional Consideration in the amount of such Margin
Excess.

Section 2.06.  Payment Procedure.  Seller shall deposit or cause to be deposited
all amounts constituting collection, payments and proceeds of Assets (including,
without limitation, all fees and proceeds of sale) in the Dedicated Account as
set forth in Section 6.12.  Seller absolutely, unconditionally, and irrevocably,
shall make, or cause to be made, all payments required to be made by Seller
hereunder whether or not sufficient amounts are on deposit in the Dedicated
Account.

Section 2.07.   Net Payments.  (a) On each MRA Payment Date (and, in addition,
with respect to MBS Advance Reimbursement Amounts, on the third Business Day of
each week other than the week of a MRA Payment Date or Interim Payment Date),
Seller shall pay all amounts due and owing under Sections 2.03,  2.04 or 2.05;
however, prior to the occurrence of an Event of Default, such payments shall be
netted against amounts otherwise distributable to Seller as the holder of the
Owner Trust Certificate under the Indenture, and such payment obligation shall

26

 

be deemed paid and satisfied upon the payment of the Net Payment Amount for such
MRA Payment Date.

(b)       Notwithstanding any other provision of this Agreement, Seller shall be
entitled to retain, from payments on, or relating to, the Mortgage Loans, all
Ancillary Income.  Ancillary Income shall not be required to be deposited into
the Dedicated Account, and shall not be subject to any offset, netting or
withdrawal under this Agreement.

Section 2.08.  Recourse.  Notwithstanding anything else to the contrary
contained or implied herein or in any other Program Agreement, Buyer shall have
full, unlimited recourse against Seller and Guarantor and their respective
assets in order to satisfy the Obligations.

Section 2.09.   Taxes.  (a) Any and all payments by Seller or Guarantor under or
in respect of this Agreement or any other Program Agreements to which Seller or
Guarantor is a party shall be made free and clear of, and without deduction or
withholding for or on account of, any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities (including
penalties, interest and additions to tax) with respect thereto, whether now or
hereafter imposed, levied, collected, withheld or assessed by any taxation
authority or other Governmental Authority (collectively, “Taxes”), unless
required by law.  If Seller or Guarantor shall be required under any applicable
Requirement of Law to deduct or withhold any Taxes from or in respect of any sum
payable under or in respect of this Agreement or any of the other Program
Agreements to Buyer (including for purposes of this Section 2.09, any assignee,
successor or participant), (i) Seller or Guarantor, as applicable, shall make
all such deductions and withholdings in respect of Taxes, (ii) Seller or
Guarantor, as applicable, shall pay the full amount deducted or withheld in
respect of Taxes to the relevant taxation authority or other Governmental
Authority in accordance with any applicable Requirement of Law, and (iii) the
sum payable by Seller or Guarantor, as applicable, shall be increased as may be
necessary so that after Seller or Guarantor, as applicable, has made all
required deductions and withholdings (including deductions and withholdings
applicable to additional amounts payable under this Section 2.09) such Buyer
receives an amount equal to the sum it would have received had no such
deductions or withholdings been made in respect of Non-Excluded Taxes.  For
purposes of this Agreement the term “Non-Excluded Taxes” are Taxes other than,
in the case of Buyer, Taxes that are imposed on its overall net income (and
franchise taxes imposed in lieu thereof) by the jurisdiction under the laws of
which such Buyer is organized, or any political subdivision thereof, unless such
Taxes are imposed as a result of Buyer having executed, delivered or performed
its obligations or received payments under, or enforced, this Agreement or any
of the other Program Agreements (in which case such Taxes will be treated as
Non-Excluded Taxes).

(b)       In addition, Seller and Guarantor hereby agree to pay any present or
future stamp, recording, documentary, excise, property or value-added taxes, or
similar taxes, charges or levies that arise from any payment made under or in
respect of this Agreement or any other Program Agreement or from the execution,
delivery or registration of, any performance under, or otherwise with respect
to, this Agreement or any other Program Agreement (collectively, “Other Taxes”).

(c)        Seller and Guarantor hereby agree to indemnify Buyer for, and to hold
it harmless against, the full amount of Non-Excluded Taxes and Other Taxes, and
the full amount of

27

 

Taxes of any kind imposed by any jurisdiction on amounts payable by Seller or
Guarantor, as applicable, under this Section 2.09 imposed on or paid by such
Buyer and any liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto.  The indemnity by Seller
and Guarantor provided for in this Section 2.09 shall apply and be made whether
or not the Non-Excluded Taxes or Other Taxes for which indemnification hereunder
is sought have been correctly or legally asserted.  Amounts payable by Seller
and Guarantor under the indemnity set forth in this Section 2.09(c) shall be
paid within ten (10) days from the date on which Buyer makes written demand
therefor.

(d)       Without prejudice to the survival of any other agreement of the Seller
hereunder, the agreements and obligations of the Seller contained in this
Section 2.09 shall survive the termination of this Agreement and the other
Program Agreements.  Nothing contained in this Section 2.09 shall require any
Buyer to make available any of its tax returns or any other information that it
deems to be confidential or proprietary.

Section 2.10.   Indemnity.  The Seller agrees to indemnify the Buyer and to hold
the Buyer harmless from any loss or expense that the Buyer may sustain or incur
as a consequence of (i) a default by the Seller in payment when due of the
Repurchase Price, Required Payment, Margin Deficit or Price Differential or
(ii) a default by the Seller in making any prepayment of Repurchase Price after
the Seller has given a notice thereof in accordance with Section 2.03.

Section 2.11.   Dedicated Account.

Buyer shall establish and maintain the Dedicated Account in the form of a time
deposit or demand account.  Amounts received on account of MSRs, including
Advance Reimbursement Amounts and Portfolio Excess Spread (including Purchased
MSR Excess Spread but excluding Ancillary Income) and retained by Seller
pursuant to the related Servicing Contract or Participation Agreement, as the
case may be, shall, subject to Section 6.12, promptly, in any event within two
(2) Business Days after receipt, be deposited in the Dedicated Account.  Funds
deposited in the Dedicated Account (including any interest paid on such funds)
may only be used in accordance with Section 6.12 and, further, on or after the
occurrence of an Event of Default may only be used to pay the Obligations
hereunder.  Upon the Termination Date and the payment of all amounts due by
Seller hereunder, all amounts on deposit in the Dedicated Account shall be
remitted to Seller.

Section 2.12.   Additional Participation Agreements and Participation
Certificates.

In the event that Seller wishes to enter into a Transaction with respect to a
Participation Agreement or Participation Certificate not listed on Schedule 2
hereto, Seller shall deliver a written request, substantially in the form of
Exhibit B hereto.  Upon receipt of the request and filing of a UCC-3 amendment
adding the additional Participation Agreement or Participation Certificate,
Schedule 2 shall be automatically updated to include each additional
Participation Agreement and Participation Certificate identified thereon, and
Schedules 4-A and 4-B shall also be updated.

28

 

Section 2.13.   Termination.  (a) Notwithstanding anything to the contrary set
forth herein, if a Seller Termination Option occurs, Seller may, upon five (5)
Business Days’ prior notice of such event, terminate this Agreement and the
Termination Date shall be deemed to have occurred (upon the expiration of the
five (5) Business Days).

(b)       In the event that a Seller Termination Option as described in
clause (a) of the definition thereof has occurred and Seller has notified Buyer
of its option to terminate this Agreement, Buyer shall have the right to
withdraw such request for payment within three (3) Business Days of Seller’s
notice of its exercise of the Seller Termination Option and Seller shall no
longer have the right to terminate this Agreement.

(c)        Seller shall remain responsible for all costs incurred by Buyer
pursuant to Section 2.09 hereunder and any cost or expenses incurred by Buyer
under the Indenture.

Section 2.14.   Purchased MSR Excess Spread.

(a)        With respect to any Purchased MSR Excess Spread that is made subject
to a Transaction hereunder, PMH shall first pledge such Purchased MSR Excess
Spread under the PMH Repurchase Agreement; provided that Seller provides notice
thereof to Buyer and such Purchased MSR Excess Spread is and continues to be an
Eligible Asset.

(b)       Seller hereby agrees and acknowledges that such PMH Transaction is
subject to and subordinate to (i) Buyer’s rights hereunder and (ii) Buyer’s
security interest in the Purchased MSR Excess Spread and rights under the PMH
Subordination Agreement.

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

Each of Seller and Guarantor represents and warrants to Buyer as of the Closing
Date, as of the Effective Date and as of each Purchase Date for any Transaction
that:

Section 3.01.  Seller and Guarantor Existence.  Each of Seller and Guarantor has
been duly organized and is validly existing as a limited liability company in
good standing under the laws of the State of Delaware.

Section 3.02.   Licenses.  Each of Seller and Guarantor is duly licensed or is
otherwise qualified in each jurisdiction in which it transacts business for the
business which it conducts and is not in default of any applicable federal,
state or local laws, rules and regulations unless, in either instance, the
failure to take such action is not reasonably likely (either individually or in
the aggregate) to cause a Material Adverse Effect and is not in default of such
state’s applicable laws.  Seller has the requisite power and authority and legal
right to own, sell and grant a lien on all of its right, title and interest in
and to the Assets.  Each of Seller and Guarantor has the requisite power and
authority and legal right to execute and deliver, engage in the transactions
contemplated by, and perform and observe the terms and conditions of, this
Agreement, each Program Agreement and any Transaction Notice.

29

 

Section 3.03.   Power.  Each of Seller and Guarantor 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.

Section 3.04.   Due Authorization.  Each of Seller and Guarantor has all
necessary corporate or other power, authority and legal right to execute,
deliver and perform its obligations under each of the Program Agreements, as
applicable.  This Agreement, any Transaction Notice and the Program Agreements
have been (or, in the case of Program Agreements and any Transaction Notice not
yet executed, will be) duly authorized, executed and delivered by Seller and
Guarantor, all requisite or other corporate action having been taken, and each
is valid, binding and enforceable against Seller and Guarantor in accordance
with its terms except as such enforcement may be affected by bankruptcy, by
other insolvency laws, or by general principles of equity.

Section 3.05.   No Event of Default.  There exists no Event of Default under
Section 7.01 hereof, which default gives rise to a right to accelerate
indebtedness as referenced in Section 7.03 hereof, under any mortgage, borrowing
agreement or other instrument or agreement pertaining to indebtedness for
borrowed money or to the repurchase of mortgage loans or securities, and there
is no Event of Default by PMH under the PMH Documents.

Section 3.06.   Solvency.  Each of Seller and Guarantor is solvent and will not
be rendered insolvent by any Transaction (including the inclusion therein of any
Purchased MSR Excess Spread by Seller) and, after giving effect to such
Transaction, will not be left with an unreasonably small amount of capital with
which to engage in its business.  Neither Seller nor Guarantor intends to incur,
nor believes that it has incurred, debts beyond its ability to pay such debts as
they mature and is not contemplating the commencement of insolvency, bankruptcy,
liquidation or consolidation proceedings or the appointment of a receiver,
liquidator, conservator, trustee or similar official in respect of such entity
or any of its assets.  Seller is not selling and/or pledging any Repurchase
Assets with any intent to hinder, delay or defraud any of its creditors.

Section 3.07.   No Conflicts.  The execution, delivery and performance by each
of Seller and Guarantor of this Agreement, any Transaction Notice hereunder and
the Program Agreements do not conflict with any term or provision of the
organizational documents of Seller or Guarantor or any law, rule, regulation,
order, judgment, writ, injunction or decree applicable to Seller or Guarantor of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over Seller or Guarantor, which conflict would have a Material
Adverse Effect and will not result in any violation of any such mortgage,
instrument, agreement, obligation or Servicing Contract to which Seller or
Guarantor is a party.

Section 3.08.  True and Complete Disclosure.  All information, reports,
exhibits, schedules, financial statements or certificates of Seller, Guarantor
or any Affiliate thereof or any of their officers furnished or to be furnished
to Buyer in connection with the initial or any ongoing due diligence of Seller,
Guarantor or any Affiliate thereof or officer thereof, negotiation, preparation,
or delivery of the Program Agreements are true and complete in all material
respects

30

 

and do not omit to disclose any material facts necessary to make the statements
herein or therein, in light of the circumstances in which they are made, not
misleading.

Section 3.09.   Approvals.  No consent, approval, authorization or order of,
registration or filing with, or notice to any Governmental Authority or court is
required under Applicable Law in connection with the execution, delivery and
performance by Seller or Guarantor of this Agreement, any Transaction Notice and
the Program Agreements.

Section 3.10.   Ownership.  (a) Seller has good title to all of the Repurchase
Assets (other than the Purchased MSR Excess Spread for which Seller has the
right to pledge such Purchased MSR Excess Spread hereunder), free and clear of
all mortgages, security interests, restrictions, Liens and encumbrances of any
kind other than the Liens created hereby or contemplated herein.

(b)       Each item of the Repurchase Assets was acquired by Seller in the
ordinary course of its business, in good faith, for value and without notice of
any defense against or claim to it on the part of any Person.

(c)        There are no agreements or understandings between Seller and any
other party which would modify, release, terminate or delay the attachment of
the security interests granted to Buyer under this Agreement.

(d)       The provisions of this Agreement are effective to create in favor of
Buyer a valid security interest in all right, title and interest of Seller in,
to and under the Repurchase Assets.

(e)        Upon the filing of financing statements on Form UCC-1 naming Buyer as
“Secured Party” and Seller as “Debtor”, and describing the Repurchase Assets, in
the recording offices of the Secretary of State of Delaware the security
interests granted hereunder in the Repurchase Assets will constitute fully
perfected first priority security interests under the Uniform Commercial Code in
all right, title and interest of Seller in, to and under such Repurchase Assets
which can be perfected by filing under the Uniform Commercial Code.

Section 3.11.   The Servicing Contracts and Participation Agreements.  Buyer has
received copies of each Servicing Contract and Participation Agreement
(including, without limitation, all exhibits and schedules referred to therein
or delivered pursuant thereto), all amendments thereto, waivers relating thereto
and other side letters or agreements affecting the terms thereof and all
agreements and other material documents relating thereto, and Seller hereby
certifies that the copies delivered to Buyer by Seller are true and
complete.  None of such documents has been amended, supplemented or otherwise
modified (including waivers) since the respective dates thereof, except by
amendments, copies of which have been delivered to Buyer.  Each such document to
which Seller is a party has been duly executed and delivered by Seller and is in
full force and effect, and no default or material breach has occurred and is
continuing thereunder.

Section 3.12.   Investment Company.  Neither Seller nor any of its Subsidiaries
is an “investment company”, or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act; provided,  however,
that any entity that is under the management of PNMAC Capital Management LLC in
its capacity as an “investment adviser”

31

 

within the meaning of the Investment Advisers Act of 1940 and is otherwise not
directly or indirectly owned or controlled by Seller shall not be deemed a
“Subsidiary” for the purposes of this Section 3.12.

Section 3.13.  Chief Executive Office; Jurisdiction of Organization.  On the
Effective Date, Seller’s chief executive office, is, and has been, located at
3043 Townsgate Road, Westlake Village, CA 91361.  On the date hereof, Seller’s
jurisdiction of organization is the State of Delaware.  Seller shall provide
Buyer with thirty (30) days advance notice of any change in Seller’s principal
office or place of business or jurisdiction.  Seller has no trade name.  During
the preceding five (5) years, Seller has not been known by or done business
under any other name, corporate or fictitious, and has not filed or had filed
against it any bankruptcy receivership or similar petitions nor has it made any
assignments for the benefit of creditors.

Section 3.14.   Location of Books and Records.  The location where Seller keeps
its books and records, including all computer tapes and records relating to the
Repurchase Assets is its chief executive office.

Section 3.15.   ERISA.  Each Plan to which Seller, Guarantor or their
Subsidiaries make direct contributions, and, to the knowledge of Seller and
Guarantor, each other Plan and each Multiemployer Plan, is in compliance in all
material respects with, and has been administered in all material respects in
compliance with, the applicable provisions of ERISA, the Code and any other
Federal or State law.

Section 3.16.   Ginnie Mae Approvals; Servicing Facilities.  Seller has adequate
financial standing, servicing facilities, procedures and experienced personnel
necessary for the sound servicing of mortgage loans of the same types as may
from time to time constitute Mortgage Loans and in accordance with Accepted
Servicing Practices.  Seller is a Ginnie Mae approved issuer.  To the extent
necessary, Seller is an FHA Approved Mortgagee and a VA Approved Lender.  Seller
is also approved, to the extent necessary, by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act.  In
each such case, Seller is in good standing, with no event having occurred or
Seller having any reason whatsoever to believe or suspect will occur, including
a change in insurance coverage which would either make Seller unable to comply
with the eligibility requirements for maintaining all such applicable approvals
or require notification to Ginnie Mae or to the Department of Housing and Urban
Development, FHA, VA, PIH or the USDA Rural Housing Service.  Should Seller for
any reason cease to possess all such applicable approvals, or should
notification to Ginnie Mae or to the Department of Housing and Urban
Development, FHA, VA, PIH or the USDA Rural Housing Service be required, Seller
shall so notify Buyer promptly in writing.

Section 3.17.   Plan Assets.  Neither Seller nor Guarantor is an employee
benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in
Section 4975(e)(1) of the Code, and the Purchased Assets and Repurchase Assets
are not “plan assets” within the meaning of 29 CFR § 2510.3 101 as amended by
Section 3(42) of ERISA, in Seller’s or Guarantor’s hands, and transactions by or
with Seller or Guarantor are not subject to any state or local statute
regulating investments or fiduciary obligations with respect to governmental
plans within the meaning of Section 3(32) of ERISA.

32

 

Section 3.18.   No Prohibited Persons.  Neither Seller nor any of its
Affiliates, officers, directors, partners or members, is an entity or person (or
to the Seller’s knowledge, owned or controlled by an entity or
person):  (i) that is listed in the Annex to, or is otherwise subject to the
provisions of Executive Order 13224 issued on September 24, 2001 (“EO13224”);
(ii) whose name appears on the United States Treasury Department’s Office of
Foreign Assets Control (“OFAC”) most current list of “Specifically Designated
National and Blocked Persons” (which list may be published from time to time in
various mediums including, but not limited to, the OFAC website,
http:www.treas.gov/ofac/t11sdn.pdf); (iii) who commits, threatens to commit or
supports “terrorism”, as that term is defined in EO13224; (iv) that is (1) the
subject of any sanctions administered or enforced by OFAC, the U.S. Department
of State, the U.S. Department of Commerce, the United Nations Security Council,
the European Union or Her Majesty’s Treasury (collectively, “Sanctions”) or (2)
located, organized or resident in a country or territory that is, or whose
government is, the subject of Sanctions; or (v) who is otherwise affiliated with
any entity or person listed above (any and all parties or persons described in
clauses (i) through (v) above are herein referred to as a “Prohibited Person”).

Section 3.19.   Compliance with 1933 Act.  Neither Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Participation Certificates, any interest in the Participation Certificates or
any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Participation Certificates, any
interest in the Participation Certificates or any other similar security from,
or otherwise approached or negotiated with respect to the Participation
Certificates, any interest in the Participation Certificates or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action which would constitute a distribution of the Participation
Certificates under the 1933 Act or which would render the disposition of the
Participation Certificates a violation of Section 5 of the 1933 Act or require
registration pursuant thereto.

Section 3.20.   Eligible Assets.  All Assets that are subject to a Transaction
under this Agreement are Eligible Assets.

ARTICLE IV

 

CONVEYANCE; REPURCHASE ASSETS; SECURITY INTEREST

Section 4.01.   Ownership.  Upon payment (or deemed payment) of the Purchase
Price, Buyer shall become the sole owner of the Purchased Assets and related
Repurchase Assets (other than the related MSRs, which are pledged, and not sold,
to Buyer), free and clear of all liens and encumbrances, but subject to the
rights of Ginnie Mae pursuant to the Acknowledgment Agreement with Ginnie Mae.

Section 4.02.   Security Interest.  (a) Although the parties intend that all
Transactions hereunder be sales and purchases and not loans (other than the
MSRs, which are pledged, and not sold, to Buyer), in the event any such
Transactions are deemed to be loans, and in any event, Seller hereby pledges to
Buyer as security for the performance by Seller of its Obligations and hereby
grants, assigns and pledges to Buyer a fully perfected first priority security
interest in all of Seller’s right, title and interest in, to and under each of
the following items of

33

 

property, whether now owned or hereafter acquired, now existing or hereafter
created and wherever located, is hereinafter referred to as the “Repurchase
Assets”:

(i)        all Assets identified on an Asset Schedule or Schedule 2 hereto;

(ii)       all MSRs arising under or related to any Servicing Contract;

(iii)      all rights to reimbursement or payment of Assets and/or amounts due
in respect thereof under the related Servicing Contract, Ginnie Mae MBS or
Participation Agreement identified on Schedule 2 hereto;

(iv)      any rights in the Dedicated Account and to the amounts on deposit
therein;

(v)       all rights under the PMH Documents;

(vi)      all rights under each Participation Agreement;

(vii)     all records, instruments or other documentation evidencing any of the
foregoing;

(viii)    all “general intangibles”, “accounts”, “chattel paper”, “securities
accounts”, “investment property”, “deposit accounts” and “money” as defined in
the Uniform Commercial Code relating to or constituting any and all of the
foregoing (including, without limitation, all of Seller’s rights, title and
interest in and under the Participation Agreements and the Servicing Contracts);
and

(ix)      any and all replacements, substitutions, distributions on or proceeds
of any and all of the foregoing.

(b)       Seller hereby assigns, pledges, conveys and grants a security interest
in all of its right, title and interest in, to and under the Repurchase Assets
to Buyer to secure the Obligations.  Seller agrees to mark its computer records
and tapes to evidence the interests granted to Buyer hereunder.

(c)        The parties acknowledge that Ginnie Mae has certain rights under the
Acknowledgment Agreement, including the right to cause the Seller to transfer
servicing to Buyer or Buyer’s designee under certain circumstances as more
particularly set forth therein.  To the extent that Ginnie Mae requires a
transfer of MSRs to a Successor Issuer, and in order to secure Seller’s
obligations to effect such transfer, Seller hereby assigns, pledges, conveys and
grants a security interest in all of its right, title and interest in, to and
under the MSRs to such Successor Issuer, whether now owned or hereafter
acquired, now existing or hereafter created and wherever located.  The parties
acknowledge that, to the extent that Ginnie Mae exercises its rights to cause
Seller to transfer the MSRs, including Advance Reimbursement Amounts and
Portfolio Excess Spread, to a Successor Issuer (and, if accepted by Buyer, to
cause a Successor Issuer to accept and assume the responsibility for performing
Seller’s servicing duties under, and otherwise complying with the related
Servicing Contract) without the requirement of payment therefor, such transfer
shall be deemed a transfer in exchange for debt forgiveness by Buyer in an
amount equal to the

34

 

lesser of (x) the fair market value of such MSRs, including Advance
Reimbursement Amounts and Portfolio Excess Spread and (y) the outstanding
balance of the Repurchase Price attributable to such MSRs, including Advance
Reimbursement Amounts and Portfolio Excess Spread, each as determined by
Buyer.  The Successor Issuer shall have all the rights and remedies against
Seller and the Purchased Assets and Repurchase Assets as set forth herein and
under the UCC.

(d)       Buyer and Seller hereby acknowledge and agree that PMH has acquired
the Purchased MSR Excess Spread subject to the Lien of the Buyer created under
the PMH Subordination Agreement and in order to evidence such Lien, PMH shall
reaffirm such Lien, and pursuant to the PMH Subordination Agreement, grant a
security interest in and Lien on the Purchased MSR Excess Spread and related
collateral as more particularly set forth in the PMH Subordination Agreement.

(e)        The foregoing provisions of this Section are intended to constitute a
security agreement or other arrangement or other credit enhancement related to
this Agreement and the Transactions hereunder as defined under Sections
101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.

Section 4.03.   Further Documentation.  At any time and from time to time, upon
the written request of Buyer, and at the sole expense of Seller, Seller will
promptly and duly execute and deliver, or will promptly cause to be executed and
delivered, such further instruments and documents and take such further action
as Buyer may reasonably request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code in effect in any applicable
jurisdiction with respect to the Liens created hereby.

Section 4.04.   Limited Pledge of Ginnie Mae Servicing.  The Buyer acknowledges
and agrees that (x) the Seller is entitled to servicing income with respect to a
given mortgage pool and reimbursement for advance amounts only so long as Seller
is a Ginnie Mae approved issuer; (y) upon the Seller’s loss of such approved
issuer status, the Buyer’s rights to any servicing income and reimbursement for
advance amounts related to a given mortgage pool also terminate; and (z) the
pledge of the Seller’s rights to servicing income and reimbursement for advance
amounts conveys no rights (such as a right to become a substitute servicer or
issuer) that are not otherwise specifically provided for in the Ginnie Mae
Contract, provided that this sentence shall automatically be deemed amended or
modified if and to the extent Ginnie Mae amends the Ginnie Mae Contract, the
applicable Acknowledgment Agreement, if any, or published announcements and
provided further that the security interest created hereby is subject to the
following provision to be included in each financing statement filed in respect
hereof (defined terms used below shall have the meaning set forth in the
applicable Acknowledgment Agreement):

(i)        The property subject to the security interest reflected in this
instrument includes all of the right, title and interest of PennyMac Loan
Services, LLC (“Debtor”) in certain mortgages and/or participation interests
related to such mortgages (“Pooled Mortgages”) and all right, title and interest
of PennyMac Holdings, LLC in such Pooled Mortgages, and pooled under the
mortgage-backed securities program of the

35

 

Government National Mortgage Association (“Ginnie Mae”), pursuant to section
306(g) of the National Housing Act, 12 U.S.C. § 1721(g);

(ii)       To the extent that the security interest reflected in this instrument
relates in any way to the Pooled Mortgages, such security interest is subject
and subordinate to all rights, powers and prerogatives of Ginnie Mae, whether
now existing or hereafter arising, under and in connection with: (i) 12 U.S.C.
§ 1721(g) and any implementing regulations; (ii) the terms and conditions of
that certain Third Amended and Restated Acknowledgment Agreement, dated as of
April 1, 2020, with respect to the Security Interest, by and among Ginnie Mae,
Debtor and Citibank, as indenture trustee; (iii) applicable Guaranty Agreements
and contractual agreements between Ginnie Mae and the Debtor; and (iv) the
Ginnie Mae Contract and other applicable guides;

(iii)      Such rights, powers and prerogatives of Ginnie Mae include, but are
not limited to, Ginnie Mae’s right, by issuing a letter of extinguishment to
Debtor, to effect and complete the extinguishment of all redemption, equitable,
legal or other right, title or interest of the Debtor in the Pooled Mortgages,
in which event the security interest as it relates in any way to the Pooled
Mortgages shall instantly and automatically be extinguished as well; and

(iv)      For purposes of clarification, “subject and subordinate” in clause (2)
above means, among other things, that any cash held by Citibank as collateral
and any cash proceeds received by Citibank in respect of any sale or other
disposition of, collection from, or other realization upon, all or any part of
the collateral may only be applied by Citibank to the extent that such proceeds
have been received by, or for the account of, the Debtor free and clear of all
Ginnie Mae rights and other restrictions on transfer under applicable Ginnie Mae
guidelines; provided that this clause (4) shall not be interpreted as
establishing rights in favor of Ginnie Mae except to the extent that such rights
are reflected in, or arise under, the Ginnie Mae Contract.

Section 4.05.   Changes in Locations, Name, etc.  Seller shall not (a) change
the location of its chief executive office/chief place of business from that
specified in Section 3.13 or (b) change its name or identity, unless it shall
have given Buyer at least thirty (30) days’ prior written notice thereof and
shall have delivered to Buyer all Uniform Commercial Code financing statements
and amendments thereto as Buyer shall request and taken all other actions deemed
necessary by Buyer to continue its perfected status in the Repurchase Assets
with the same or better priority.

Section 4.06.   Buyer’s Appointment as Attorney-in-Fact.

(a)        Seller hereby irrevocably constitutes and appoints Buyer 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 Seller and in the name of Seller or in its own name, from time to
time in Buyer’s discretion if an Event of Default shall have occurred and be
continuing, for the purpose of carrying out the terms of this Agreement, 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, and, without limiting the generality of

36

 

the foregoing, Seller hereby gives Buyer the power and right, on behalf of
Seller, without assent by, but with notice to, Seller to do the following:

(i)        in the name of Seller 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 with respect to any Repurchase
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 Buyer for the purpose
of collecting any and all such moneys due with respect to any Repurchase Asset
whenever payable;

(ii)       to pay or discharge taxes and Liens levied or placed on or threatened
against the Repurchase Assets;

(iii)      except to the extent inconsistent with the related Servicing
Contracts and the Acknowledgment Agreement, request that MSRs be transferred to
Buyer or to another servicer approved by Ginnie Mae and perform (without
assuming or being deemed to have assumed any of the obligations of Seller
thereunder) all aspects of each Servicing Contract that is a Purchased Asset;

(iv)      request distribution to Buyer of sale proceeds or any applicable
contract termination fees arising from the sale or termination of such MSRs and
remaining after satisfaction of Seller’s relevant obligations to Ginnie Mae,
including costs and expenses related to any such sale or transfer of such MSRs
and other amounts due for unmet obligations of Seller to Ginnie Mae under the
Ginnie Mae Contract;

(v)       deal with investors and any and all subservicers and master servicers
in respect of any of the Repurchase Assets in the same manner and with the same
effect as if done by Seller; and

(vi)      (A) to direct any party liable for any payment under any Repurchase
Assets to make payment of any and all moneys due or to become due thereunder
directly to Buyer or as Buyer 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 Repurchase
Asset; (C) to sign and endorse any invoices, assignments, verifications, notices
and other documents in connection with any of the Repurchase 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 Repurchase Assets or any
portion thereof and to enforce any other right in respect of any Repurchase
Assets; (E) to defend any suit, action or proceeding brought against Seller with
respect to any Repurchase Assets; (F) to settle, compromise or adjust any suit,
action or proceeding described in clause (E) above and, in connection therewith,
to give such discharges or releases as Buyer may deem appropriate; and
(G) generally, to sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Repurchase Assets as fully and completely as
though Buyer were the absolute owner thereof for all purposes, and to do, at
Buyer’s option and Seller’s expense, at any time, and from time to time, all
acts and things which Buyer deems necessary to protect, preserve or realize upon
the

37

 

Repurchase Assets and Buyer’s Liens thereon and to effect the intent of this
Agreement, all as fully and effectively as Seller might do.

(b)       Seller 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 until such time as all Obligations
have been paid in full and this Agreement is terminated.

(c)        Seller also authorizes Buyer, at any time and from time to time, to
execute, in connection with any sale provided for in Section 4.08 hereof, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Repurchase Assets.

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

Notwithstanding anything to the contrary herein or any of the other Program
Agreements, any appointment set forth in this Section 4.06, as well as Buyer’s
exercise (or purported exercise) of any right, power or authority given by
Seller hereunder, shall be subject to the Ginnie Mae Contract and the
Acknowledgment Agreement.

Section 4.07.   Performance by Buyer of Seller’s Obligations.  If Seller fails
to perform or comply with any of its agreements contained in the Program
Agreements and Buyer may itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the reasonable (under the
circumstances) out-of-pocket expenses of Buyer actually incurred in connection
with such performance or compliance, together with interest thereon at a rate
per annum equal to the Pricing Rate shall be payable by Seller to Buyer on
demand and shall constitute Obligations.  Such interest shall be computed on the
basis of the actual number of days elapsed from and including the preceding MRA
Payment Date to and excluding such date of determination and a 360 day year.

Section 4.08.   Proceeds.  If an Event of Default shall occur and be continuing,
(a) all proceeds of Repurchase Assets received by Seller consisting of cash,
checks and other liquid assets readily convertible to cash items shall be held
by Seller in trust for Buyer, segregated from other funds of Seller, and shall
forthwith upon receipt by Seller be turned over to Buyer in the exact form
received by Seller (duly endorsed by Seller to Buyer, if required) and (b) any
and all such proceeds received by Buyer (whether from Seller or otherwise) may,
in the sole discretion of Buyer, be held by Buyer as collateral security for,
and/or then or at any time thereafter may be applied by Buyer against, the
Obligations (whether matured or unmatured), such application to be in such order
as Buyer shall elect.  Any balance of such proceeds remaining after the
Obligations shall have been paid in full and this Agreement shall have been
terminated shall be paid over to Seller or to whomsoever may be lawfully
entitled to receive the same.  Notwithstanding anything to the contrary herein
or in any of the other Program Agreements, the provisions of this Section

38

 

4.08 shall be subject to the applicable Servicing Contracts and the
Acknowledgment Agreement entered into with Ginnie Mae.

Section 4.09.   Remedies.  If an Event of Default shall occur and be continuing,
Buyer may exercise, in addition to all other rights and remedies granted to it
in this Agreement and in any other instrument or agreement securing, evidencing
or relating to the Obligations, all rights and remedies of a secured party under
the Uniform Commercial Code (including without limitation, Buyer’s rights to a
strict foreclosure under Section 9-620 of the Uniform Commercial Code).  Without
limiting the generality of the foregoing, Buyer may seek the appointment of a
receiver, liquidator, conservator, trustee, or similar official in respect of
Seller or any of Seller’s property.  Without limiting the generality of the
foregoing, Buyer may terminate a Participation Interest in accordance with the
applicable Participation Agreement.  Without limiting the generality of the
foregoing, Buyer without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required under
this Agreement or by law referred to below) to or upon Seller or any other
Person (each and all of which demands, presentments, protests, advertisements
and notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Repurchase Assets, or any part
thereof, and/or may forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver the Repurchase Assets or any part
thereof (or contract to do any of the foregoing), in one or more parcels or as
an entirety at public or private sale or sales, at any exchange, broker’s board
or office of Buyer or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk.  Buyer shall have the
right upon any such public sale or sales, and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of the
Repurchase Assets so sold, free of any right or equity of redemption in Seller,
which right or equity is hereby waived or released.  Seller further agrees, at
Buyer’s request, to assemble the Repurchase Assets and make it available to
Buyer at places which Buyer shall reasonably select, whether at Seller’s
premises or elsewhere.  Buyer shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable (under the circumstances) out-of-pocket costs and
expenses of every kind actually incurred therein or incidental to the care or
safekeeping of any of the Repurchase Assets or in any way relating to the
Repurchase Assets or the rights of Buyer hereunder, including without limitation
reasonable attorneys’ fees and disbursements, to the payment in whole or in part
of the Obligations, in such order as Buyer may elect, and only after such
application and after the payment by Buyer of any other amount required or
permitted by any provision of law, including without limitation Section 9-615 of
the Uniform Commercial Code, need Buyer account for the surplus, if any, to
Seller.  To the extent permitted by Applicable Law, Seller waives all claims,
damages and demands it may acquire against Buyer arising out of the exercise by
Buyer of any of its rights hereunder, other than those claims, damages and
demands arising from the gross negligence or willful misconduct of Buyer.  If
any notice of a proposed sale or other disposition of Repurchase Assets shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition.  Seller shall remain liable
for any deficiency (plus accrued interest thereon as contemplated herein) if the
proceeds of any sale or other disposition of the Repurchase Assets are
insufficient to pay the Obligations and the fees and disbursements in amounts
reasonable under the circumstances, of any attorneys employed by Buyer to
collect such deficiency.  Notwithstanding anything to the contrary herein or in
any of the other Program Agreements, the

39

 

remedies set forth in this Section 4.09 shall be subject to the applicable
Servicing Contracts and the Acknowledgment Agreement entered into with Ginnie
Mae.

Section 4.10.  Limitation on Duties Regarding Preservation of Repurchase
Assets.  Indenture Trustee’s duty with respect to the custody, safekeeping and
physical preservation of the Repurchase Assets in its possession, under Section
9-207 of the Uniform Commercial Code or otherwise, shall be to deal with it in
the same manner as Buyer deals with similar property for its own
account.  Neither Buyer nor any of its directors, officers or employees shall be
liable for failure to demand, collect or realize upon all or any part of the
Repurchase Assets or for any delay in doing so or shall be under any obligation
to sell or otherwise dispose of any Repurchase Assets upon the request of Seller
or otherwise.

Section 4.11.   Powers Coupled with an Interest.  All authorizations and
agencies herein contained with respect to the Repurchase Assets are irrevocable
and powers coupled with an interest.

Section 4.12.   Release of Security Interest.  Upon the latest to occur of (a)
the repayment to Buyer of all Obligations and the performance of all obligations
under the Program Agreements, and (b) the occurrence of the Termination Date,
Buyer shall release its security interest in any remaining Repurchase Assets
hereunder and shall promptly execute and deliver to Seller such documents or
instruments as Seller shall reasonably request to evidence such release;
provided,  that such release shall not be required until such time as the
Acknowledgment Agreement is terminated.

Section 4.13.   Reinstatement.  All security interests created by this
Article IV shall continue to be effective, or be reinstated, as the case may be,
if at any time any payment, or any part thereof, of any Obligation of Seller or
Guarantor is rescinded or must otherwise be restored or returned by the Buyer
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
Seller or Guarantor or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, Seller or
Guarantor or any substantial part of its property, or otherwise, all as if such
release had not been made.

Section 4.14.   Subordination.

(a)        It is anticipated that in connection with the transactions
contemplated by the Program Agreements, that (x) PMH is pledging the Purchased
MSR Excess Spread to the Seller subject to the Lien of the Buyer and (y) Seller
hereby reaffirms such Lien.  Seller acknowledges and agrees that its rights with
respect to the Repurchase Assets under the Master Spread Acquisition Agreement
are and shall continue to be at all times junior and subordinate to (i) the
rights of Buyer under this Agreement and (ii) the rights of the Buyer under the
PMH Subordination Agreement.  In connection with the foregoing, Seller agrees to
subordinate all of the rights under the Master Spread Acquisition Agreement to
the rights of the Buyer hereunder and under the other Program Agreements.  In
furtherance of the foregoing, notwithstanding any rights or remedies available
to Seller under the Master Spread Acquisition Agreement and PMH Documents,
Applicable Law or otherwise, Seller shall not, directly or indirectly, exercise
any remedies available to it under the Master Spread Acquisition Agreement and
PMH Documents or at law or equity for ninety-one (91) days following the date
that all Obligations are paid in full under the

40

 

Program Agreements.  In no instance shall the Buyer succeed to any liabilities
or obligations of Seller under the Master Spread Acquisition Agreement or the
PMH Documents.

(b)       In furtherance of the foregoing, Seller agrees to not assert any
objection to, and shall be deemed to have otherwise consented to, a disposition
of any assets subject to the Master Spread Acquisition Agreement, PMH Documents
or the Program Agreements during an Act of Insolvency of PMH or Seller, free and
clear of any lien, encumbrance, pledge or other claims under Section 363 of the
Bankruptcy Code (or any similar bankruptcy law) if Buyer has consented to such
disposition.

(c)        If an Act of Insolvency of PMH or Seller occurs, the Seller agrees
not to contest (or support any other Person contesting) any request by Buyer for
adequate protection, or any objection by Buyer to any motion, relief, action or
proceeding based on Buyer claiming a lack of adequate protection.

(d)       Until the obligations under the Program Agreements are paid in full,
the Seller shall not oppose any request by Buyer for relief from the automatic
stay or any other stay in any Act of Insolvency of PMH or Seller.

(e)        Seller shall not oppose or seek to challenge any claim by Buyer for
allowance and payment in any Act of Insolvency of PMH or Seller, of obligations
under the Program Agreements consisting of post-petition interest, fees, costs
or other charges to the extent of the value of Buyer’s lien, encumbrance, pledge
or other claims on the assets that are the subject of this Agreement, the PMH
Subordination Agreement or the PMH Documents, without regard to the existence of
a lien, encumbrance, pledge or other claims of PMH applicable to the obligations
of the other parties to the Program Agreements.

(f)        Seller shall not seek in any Act of Insolvency of PMH or Seller, to
be treated as part of the same class of creditors as Buyer and shall not oppose
any pleading or motion by Buyer advocating that Buyer and PMH and Seller should
be treated as separate classes of creditors.  Seller acknowledges and agrees
that its rights with respect to the Repurchase Assets are and shall continue to
be at all times junior and subordinate to the rights of Buyer under this
Agreement.

ARTICLE V

 

CONDITIONS PRECEDENT

Section 5.01.   Initial Transaction.  The obligation of Buyer to enter into
Transactions with the Seller hereunder is subject to the satisfaction,
immediately prior to or concurrently with the entering into such Transaction, of
the condition precedent that Buyer shall have received all of the following
items, each of which shall be satisfactory to Buyer and its counsel in form and
substance:

(a)        Program Agreements.  The Program Agreements, in all instances duly
executed and delivered by the parties thereto and being in full force and
effect, free of any modification, breach or waiver.

41

 

(b)       Security Interest.  Evidence that all other actions necessary or, in
the opinion of Buyer, desirable to perfect and protect Buyer’s interest in the
Purchased Assets and Repurchase Assets have been taken, including, without
limitation, duly authorized and filed Uniform Commercial Code financing
statements on Form UCC-1.

(c)        Organizational Documents.  A certificate of the corporate secretary
of each of Seller and Guarantor in form and substance acceptable to Buyer,
attaching certified copies of Seller’s and Guarantor’s charter, bylaws and
corporate resolutions approving the Program Agreements and transactions
thereunder (either specifically or by general resolution) and all documents
evidencing other necessary corporate action or governmental approvals as may be
required in connection with the Program Agreements, and with respect to the
Guarantor, a certification to the effect that Guarantor has complied with,
satisfied, observed and performed in all material respects all the terms,
covenants, agreements and conditions of the Transaction Documents as required
pursuant to this Agreement.

(d)       Good Standing Certificate.  A certified copy of a good standing
certificate from the jurisdiction of organization of Seller and Guarantor, dated
as of no earlier than the date 10 Business Days prior to the Effective Date.

(e)        Incumbency Certificate.  An incumbency certificate of the corporate
secretary of each of Seller and Guarantor, certifying the names, true signatures
and titles of the representatives duly authorized to request transactions
hereunder and to execute the Program Agreements.

(f)        Servicing Contracts.  Fully executed copies of each Servicing
Contract certified as true, correct and complete by Seller.

(g)       Fees.  Buyer shall have received payment in full of all fees and
Expenses which are payable hereunder to Buyer on or before such date.

(h)       Insurance.  Evidence that Seller has added Buyer as an additional loss
payee under the Seller’s Fidelity Insurance.

Section 5.02.   All Transactions.  The obligation of Buyer to enter into each
Transaction pursuant to this Agreement is subject to the following conditions
precedent:

(a)        Due Diligence Review.  Without limiting the generality of Section
10.08 hereof, Buyer shall have completed, to its satisfaction, its due diligence
review of the related Assets and Seller and Guarantor.

(b)       Transaction Notice and Asset Schedule.  In accordance with
Section 2.02 hereof, Buyer shall have received from Seller a Transaction Notice
with an updated Asset Schedule which includes Assets related to a proposed
Transaction hereunder on such Business Day.

(c)        No Margin Deficit.  After giving effect to each new Transaction, the
aggregate outstanding amount of the Purchase Price shall not exceed the Asset
Base then in effect.

42

 

(d)       No Default.  No Default or Event of Default shall have occurred and be
continuing.

(e)        Requirements of Law.  Buyer shall not have determined that the
introduction of or a change in any Requirement of Law or in the interpretation
or administration of any Requirement of Law applicable to Buyer has made it
unlawful, and no Governmental Authority shall have asserted that it is unlawful,
for Buyer to enter into any Transaction.

(f)        Representations and Warranties.  Both immediately prior to the
related Transaction and also after giving effect thereto and to the intended use
thereof, the representations and warranties made by Seller in each Program
Agreement shall be true, correct and complete on and as of such Purchase Date in
all material respects with the same force and effect as if made on and as of
such date (or, if any such representation or warranty is expressly stated to
have been made as of a specific date, as of such specific date).

(g)       Servicing Contracts; Assets.  Buyer shall have:

(i)        received the related Servicing Contract relating to any Purchased
Assets, which Buyer shall have determined prior to financing the first Asset
that relates to such Servicing Contract that such Servicing Contract is in form
and substance satisfactory to Buyer in its sole discretion;

(ii)       received copies of all other consents and notices required under the
related Servicing Contract and with respect to the MSRs, the Acknowledgment
Agreement, each in form and substance satisfactory to Buyer; and

(iii)      received a copy of the Participation Agreement, which Buyer shall
have determined, prior to entering into the first Transaction related to an
Asset that relates to such Participation Agreement, is in form and substance
satisfactory to Buyer in its sole discretion.

Notwithstanding the requirements set forth in Section 5.02(g)(ii) hereof, the
Buyer hereby agrees to enter into Transactions with Seller with respect to the
MSRs.  Any failure to repay the Purchase Price with respect to the MSRs in
accordance with this section shall result in an immediate Event of Default.

(h)       Purchased MSR Excess Spread.  If such Transaction is with respect to
Purchased MSR Excess Spread, (i) Buyer shall have received duly executed copies
of the PMH Documents, (ii) PMH shall have satisfied all conditions precedent to
the entry into such PMH Transaction under the PMH Repurchase Agreement and (iii)
Buyer shall have received all of the following items:

(A)       an amendment to the Master Spread Acquisition and MSR Servicing
Agreement (i) requiring all cash attributable to such Purchased MSR Excess
Spread to be remitted to the Dedicated Account and (ii) in order to evidence the
transfer of the Purchased MSR Excess Spread from Seller to PMH thereunder;

43

 

(B)       an amendment to the PMH Subordination Agreement permitting all
proceeds to be remitted to the Dedicated Account; and

(C)       a security interest, general corporate and enforceability opinion or
opinions of counsel to Seller and Guarantor, including an Investment Company Act
opinion indicating that it is not necessary to register Seller under the
Investment Company Act of 1940, as amended, and (ii) an opinion of outside
counsel to Seller and Guarantor covering comparable matters with respect to the
PMH Documents.

(i)        Participation Certificate.  With respect to any Asset that
constitutes a Participation Certificate, Buyer shall have received the original
Participation Certificate registered into the name of the Indenture Trustee as
designee of the Buyer.

(j)        Financing Statements.  All financing statements and other documents
required to be recorded or filed in order to perfect the Buyer’s security
interest in such Assets, and protect such Assets and the other related Assets
against all creditors of, and purchasers from, Seller and all other Persons
whatsoever have been duly filed in each filing office necessary for such
purpose, and all filing fees and taxes, if any, payable in connection with such
filings have been paid in full.

ARTICLE VI

 

COVENANTS

Seller covenants and agrees that until the payment and satisfaction in full of
all Obligations, whether now existing or arising hereafter, shall have occurred:

Section 6.01.   Financial Covenants.  Seller shall at all times comply with all
financial covenants and/or financial ratios set forth in Section 2 of the
Pricing Side Letter.

Section 6.02.   Prohibition of Fundamental Changes.  Seller shall not enter into
any transaction of merger or consolidation or amalgamation, or liquidate, wind
up or dissolve itself (or suffer any liquidation, winding up or dissolution) or
sell all or substantially all of its assets; provided that Seller may merge or
consolidate with (a) any wholly owned subsidiary of Seller, or (b) any other
Person if Seller is the surviving entity; and provided further, that if after
giving effect thereto, no Default would exist hereunder.

Section 6.03.   [Reserved.]

Section 6.04.   Asset Schedule.  Seller shall at all times maintain a current
list (which may be stored in electronic form) of all Assets.  Seller shall
deliver to Buyer on each Determination Date for any Interim Payment Date a
cumulative Asset Schedule as of the last Business Day of the preceding week,
each of which, when so delivered, shall replace the current Asset Schedule and
which may be delivered in electronic form.  As of each date an updated Asset
Schedule is delivered in accordance with this Section 6.04, Seller hereby
certifies, represents and warrants to Buyer that each such updated Asset
Schedule is true, complete and correct in all material respects.

44

 

Section 6.05.   No Adverse Claims.  Seller warrants and will defend the right,
title and interest of Buyer in and to all Purchased Assets and the related
Repurchase Assets against all adverse claims and demands.

Section 6.06.   Assignment.  Except as permitted herein, Seller shall not sell,
assign, transfer or otherwise dispose of, or grant any option with respect to,
or pledge, hypothecate or grant a security interest in or lien on or otherwise
encumber (except pursuant to the Program Agreements), any of the Purchased
Assets or any interest therein, provided that this Section 6.06 shall not
prevent any transfer of Purchased Assets in accordance with the Program
Agreements.

Section 6.07.   Security Interest.  Seller shall do all things necessary to
preserve the Purchased Assets and the related Repurchase Assets so that they
remain subject to a first priority perfected security interest
hereunder.  Without limiting the foregoing, Seller will comply with all rules,
regulations and other laws of any Governmental Authority and cause the Purchased
Assets or the related Repurchase Assets to comply with all applicable rules,
regulations and other laws.  Seller will not allow any default for which Seller
is responsible to occur under any Purchased Assets or the related Repurchase
Assets or any Program Agreement and Seller shall fully perform or cause to be
performed when due all of its obligations under any Purchased Assets or the
related Repurchase Assets and any Program Agreement.

Section 6.08.  Records.  (a) Seller shall collect and maintain or cause to be
collected and maintained all Records relating to the Purchased Assets and the
related Repurchase Assets in accordance with industry custom and practice for
assets similar to the Purchased Assets and the related Repurchase Assets,
including those maintained pursuant to Section 6.09, and all such Records shall
be in Seller’s possession unless Buyer otherwise approves.  Seller will not
allow any such papers, records or files that are an original or an only copy to
leave Seller’s possession, except for individual items removed in connection
with servicing a specific Mortgage Loan, in which event Seller will obtain or
cause to be obtained a receipt from a financially responsible person for any
such paper, record or file.  Seller will maintain all such Records in good and
complete condition in accordance with industry practices for assets similar to
the Purchased Assets and the related Repurchase Assets and preserve them against
loss.

(b)       For so long as Buyer has an interest in or lien on any Purchased
Assets or Repurchase Assets, Seller will hold or cause to be held all related
Records in trust for Buyer.  Seller shall notify, or cause to be notified, every
other party holding any such Records of the interests and liens in favor of
Buyer granted hereby.

(c)        Upon reasonable advance notice from Buyer, Seller shall (x) make any
and all such Records available to Buyer to examine any such Records, either by
its own officers or employees, or by agents or contractors, or both, and make
copies of all or any portion thereof, and (y) permit Buyer or its authorized
agents to discuss the affairs, finances and accounts of Seller with its chief
operating officer and chief financial officer and to discuss the affairs,
finances and accounts of Seller with its independent certified public
accountants.

Section 6.09.   Books.  Seller shall keep or cause to be kept in reasonable
detail books and records of account of its assets and business and shall clearly
reflect therein the transfer

45

 

of Purchased Assets (other than the related MSRs, which are pledged, and not
sold to Buyer) to Buyer.

Section 6.10.   Approvals.  Seller shall maintain all licenses, permits or other
approvals necessary for Seller to conduct its business and to perform its
obligations under the Program Agreements, and Seller shall conduct its business
strictly in accordance with Applicable Law.  Seller shall maintain its status as
an approved Ginnie Mae issuer (“Ginnie Mae Approvals”).  Seller shall service
all Assets in accordance with the Ginnie Mae Contract in all material
respects.  Should Seller, for any reason, cease to possess all such Ginnie Mae
Approvals, or should notification to Ginnie Mae or to the Department of Housing
and Urban Development, PIH, FHA or VA as described in Section 3.16 hereof be
required, Seller shall so notify Buyer promptly in writing.  Notwithstanding the
preceding sentence, Seller shall take all necessary action to maintain all of
its Ginnie Mae Approvals at all times during the term of this Agreement.

Section 6.11.   Material Change in Business.  Neither Seller nor Guarantor shall
make any material change in the nature of its business as carried on at the
Closing Date.

Section 6.12.   Collections on Assets and the Dedicated Account.

(a)        Except as permitted under Section 6.12(b), prior to the Seller making
any withdrawal from the custodial account or any other clearing account
maintained under the related Servicing Contract, the Seller shall instruct the
related depository institution to remit all Collections and other payments and
proceeds in respect of MSRs, including the Portfolio Excess Spread and Advance
Reimbursement Amounts, to the Dedicated Account (but only to the extent that
such funds are payable to Seller free and clear of any Ginnie Mae rights or
other restrictions on transfer set forth in such Servicing Contract); provided,
however that with respect to any Pooled Mortgage and collections received with
respect thereto, Seller shall reimburse itself for any unreimbursed MBS Advances
and Servicing Advances, and shall ensure that any Interim Servicers reimburse
themselves for any unreimbursed MBS Advances and Servicing Advances,  in
accordance with current market practice for Ginnie Mae issuers from (i) with
respect to MBS Advances, any amounts collected on mortgage loans in the same
principal and interest custodial account and (ii) with respect to Servicing
Advances, from any amounts collected on the same mortgage loan, in each case,
following the date of such Advance; provided, further, that in all events, such
reimbursements shall only be made to the extent permitted under the Ginnie Mae
Contract.  Servicer shall cause (i) the portion of such Advance Reimbursement
Amounts withdrawn from a custodial account in accordance with the applicable
Servicing Contract to be deposited into the Dedicated Account within one (1)
Business Day following the receipt of such funds; and (ii) the portion of such
Advance Reimbursement Amounts recovered from  FHA Claim Proceeds, PIH Claim
Proceeds, USDA Claim Proceeds VA Claim Proceeds or Liquidation Proceeds to be
deposited into the Dedicated Account within two (2) Business Days following the
receipt of such funds.  Seller shall not withdraw or direct the withdrawal or
remittance of any Collections that constitute Advance Reimbursement Amounts from
any custodial account into which such amounts have been deposited other than to
remit to the Dedicated Account. Except as permitted under Section 6.12(b),
Seller shall not withdraw or direct the withdrawal or remittance of any
Collections other than Advance Reimbursement Amounts from any custodial account
into which such amounts have been deposited other than to remit to the Dedicated
Account.

46

 

(b)       So long as (i) no Event of Default has occurred hereunder or (ii) no
Event of Default (as defined in the Series 2016-MSRVF1 Repurchase Agreement or
the Series 2020-SPIADVF1  Repurchase Agreement, as applicable) has occurred
under the Series 2016-MSRVF1 Repurchase Agreement or the Series 2020-SPIADVF1
Repurchase Agreement, (A) Seller shall be permitted to offset, net, withdraw or
direct the withdrawal or remittance of any amounts which have been or are to be
deposited into the Dedicated Account; provided that prior to any offset, net,
withdraw or direction with respect to the withdrawal or remittance of any such
amounts, Seller shall deposit on any Business Day funds into the Servicing
Spread Available Funds Subaccount or the Advance Reimbursement Available Funds
Subaccount of the Collection and Funding Account (as defined in the Base
Indenture), as applicable until the amounts on deposit therein are at least
equal to the Required Reserve Amount for the next succeeding MRA Payment Date
(and, with respect to MBS Advance Reimbursement Amounts, for the earlier of the
third Business Day of the next succeeding week or the next MRA Payment Date or
Interim Payment Date) and (B)  Seller may withdraw from Servicing Advance
Reimbursement Amounts on deposit in the Dedicated Account, on a weekly basis, an
amount necessary to fund additional Servicing Advances, which shall, for any
Servicing Advance, be equal to the product of (1) the applicable Advance Rate
and (2) the Advance Reimbursement Balance of the Servicing Advance Reimbursement
Amount attributable to such Servicing Advance. Upon the occurrence of an Event
of Default hereunder or upon an Event of Default (as defined in the Series
2016-MSRVF1 Repurchase Agreement or the Series 2020-SPIADVF1  Repurchase
Agreement, as applicable) under the Series 2016-MSRVF1 Repurchase Agreement or
the Series 2020-SPIADVF1  Repurchase Agreement, Seller shall be required to
deposit or cause to be deposited all amounts constituting Collections and
payments and proceeds of Assets (including, without limitation, all fees and
proceeds of sale) in the Dedicated Account in accordance with the requirements
set forth in Section 6.12(a) without exercising any right of offset, netting or
withdrawal.

(c)        Seller shall be permitted to retain the Base Servicing Fee at all
times.

Section 6.13.   Applicable Law.  Seller and Guarantor shall comply with the
requirements of all Applicable Laws of any Governmental Authority.

Section 6.14.  Existence.  Each of Seller and Guarantor shall preserve and
maintain its legal existence and all of its material rights, privileges,
licenses and franchises.

Section 6.15.   Chief Executive Office; Jurisdiction of Organization.  Seller
shall not move its chief executive office from the address referred to in
Section 3.13 or change its jurisdiction of organization from the jurisdiction
referred to in Section 3.13 unless it shall have provided Buyer at least thirty
(30) days’ prior written notice of such change.

Section 6.16.   Taxes.  Seller and Guarantor shall timely file all tax returns
that are required to be filed by them and shall timely 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.

47

 

Section 6.17.   Termination of Servicing Notice.  Seller shall give notice to
Buyer promptly upon (a) receipt or notice or knowledge of any default, notice of
termination of servicing for cause under any Servicing Contract or other
servicing agreement regardless of whether such agreement or the rights
thereunder constitute “Purchased Assets” or “Repurchase Assets” hereunder or
(b) receipt or notice or knowledge of any resignation of servicing, termination
of servicing or notice of resignation of or termination of servicing, under any
Servicing Contract or other servicing agreement regardless of whether such
agreement or the rights thereunder constitute “Purchased Assets” or “Repurchase
Assets” hereunder.

Section 6.18.   True and Correct Information.  All required financial
statements, information and reports delivered by Seller and Guarantor to Buyer
pursuant to this Agreement shall be prepared in accordance with GAAP, or, if
applicable, to SEC filings, the appropriate SEC accounting regulations.

Section 6.19.   Servicing.  Seller shall maintain adequate financial standing,
servicing facilities, procedures and experienced personnel necessary for the
sound servicing of mortgage loans of the same types as may from time to time
constitute Mortgage Loans and in accordance with Accepted Servicing Practices
and the Servicing Contracts.

Section 6.20.   No Pledge.  Except as contemplated herein, neither Seller nor
Guarantor shall (a) pledge, transfer or convey any security interest in the
Dedicated Account to any Person without the express written consent of Buyer (at
the written direction of the Indenture Trustee on behalf of the Noteholders) or
(b) pledge, grant a security interest or assign any existing or future rights to
service any of the Repurchase Assets or to be compensated for servicing any of
the Repurchase Assets, or pledge or grant to any other Person any security
interest in any Assets or Servicing Contracts.

Section 6.21.   Plan Assets.  Seller shall not be an employee benefit plan as
defined in Section 3 of Title I of ERISA, or a plan described in Section
4975(e)(1) of the Code and Seller shall not use “plan assets” within the meaning
of 29 CFR § 2510.3 101, as amended by Section 3(42) of ERISA to engage in this
Agreement or any Transaction hereunder.  Transactions to or with Seller or
Guarantor shall not be subject to any state or local statute regulating
investments of or fiduciary obligations with respect to governmental plans
within the meaning of Section 3(32) of ERISA.

Section 6.22.  Sharing of Information.  Seller and Guarantor shall allow Buyer
to exchange information related to Seller and Guarantor and the Transactions
hereunder with noteholders or other third party lenders or investors and Seller
and Guarantor shall permit each such person to share such information with
Buyer.

Section 6.23.   Modification of the Servicing Contracts and Participation
Agreements.  Seller shall not consent with respect to any Servicing Contracts or
Participation Agreements related to any Asset that constitutes a Purchased Asset
or Repurchase Asset, to (i) the modification, amendment or termination of such
Servicing Contracts or Participation Agreements, (ii) the waiver of any
provision of such Servicing Contracts or Participation Agreements or (iii) the
resignation of Seller as servicer under the Servicing Contracts, or the
assignment, transfer, or material delegation of any of its rights or
obligations, under such Servicing Contracts or

48

 

Participation Agreements, without the prior written consent of Buyer (at the
written direction of the Indenture Trustee on behalf of the
Noteholders).  Notwithstanding anything to the contrary herein or any of the
other Program Agreements, Ginnie Mae has the absolute and unconditional right to
modify the Ginnie Mae Contract at any time.

Section 6.24.   No Amendments/Waivers of PMH Documents.  Without the prior
written consent of Buyer (at the written direction of the Indenture Trustee on
behalf of the Noteholders), Seller shall not, and shall not agree, consent to or
suffer to exist any material amendment, modification, supplement, waiver or
forbearance with respect to any of the PMH Documents or any of Seller’s rights
thereunder.

Section 6.25.   No Modification of the Participation Agreements.  Seller shall
not consent, with respect to the Participation Agreements related to any
Purchased Assets or Repurchase Assets, to (i) the modification, amendment or
termination of such Participation Agreements, (ii) the waiver of any provision
of such Participation Agreements or (iii) the assignment, transfer, or material
delegation of any of its rights or obligations, under Participation Agreements,
without the prior written consent of Buyer (at the written direction of the
Indenture Trustee on behalf of the Noteholders).  Notwithstanding anything to
the contrary set forth in the Participation Agreements, the Buyer is hereby
appointed and is an intended third party beneficiary thereof, with full
enforcement rights as if a party thereto.

Section 6.26.   No Subservicing.  Seller shall not permit any of the Purchased
Assets or Repurchase Assets to be subject to any subservicing agreement or
subservicing arrangement without the prior written consent of the Buyer (at the
written direction of the Indenture Trustee on behalf of the Noteholders).

ARTICLE VII

 

DEFAULTS/RIGHTS AND REMEDIES OF BUYER UPON DEFAULT

Section 7.01.   Events of Default.  Each of the following events or
circumstances shall constitute an “Event of Default”:

(a)        Payment Failure.  Failure of Seller (which failure continues for a
period of two (2) Business Days following written notice (which may be in
electronic form) from Buyer) to (i) make any payment of Price Differential or
Repurchase Price or any other sum which has become due, on an MRA Payment Date
or otherwise, whether by acceleration or otherwise, under the terms of this
Agreement, or (ii) cure any Margin Deficit when due pursuant to Section 2.05
hereof.

(b)       Assignment.  Assignment or attempted assignment by Seller or Guarantor
of this Agreement or any rights hereunder without first obtaining the specific
written consent of Buyer (at the written direction of the Indenture Trustee on
behalf of the Noteholders), or the granting by Seller of any security interest,
lien or other encumbrances on any Purchased Assets or Repurchase Assets to any
person other than Buyer.

(c)        Insolvency.  An Act of Insolvency shall have occurred with respect to
Seller, Guarantor or any Affiliate thereof.

49

 

(d)       Immediate Breach of Representation or Covenant or Obligation.  A
breach by Seller of any of the representations, warranties or covenants or
obligations set forth in Sections 3.01 (Seller and Guarantor Existence), 3.06
(Solvency), 6.02 (Prohibition of Fundamental Changes), 6.14 (Existence), 6.20
(No Pledge), 6.21 (Plan Assets) or 6.24 (No Amendments/Waivers of PMH Documents)
of this Agreement.

(e)        Additional Breach of Representation or Covenant.  A material breach
by Seller or Guarantor of any other material representation, warranty or
covenant set forth in this Agreement (and not otherwise specified in Section
7.01(d) above), if such breach is not cured within thirty (30) days.

(f)        Guarantor Breach.  A breach by Guarantor of any material
representation, warranty or covenant set forth in the PC Guaranty or any other
Program Agreement if such breach is not cured within thirty (30) days (provided
that the breach of the covenant in Section 6(c) of the PC Guaranty shall not be
entitled to such cure period), any “event of default” by Guarantor under the PC
Guaranty, any repudiation of the PC Guaranty by Guarantor, or if the PC Guaranty
is not enforceable against Guarantor.

(g)       Change in Control.  The occurrence of a Change in Control.

(h)       Government Action.  Any Governmental Authority or any person, agency
or entity acting or purporting to act under governmental authority 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 Seller, Guarantor or
any Affiliate thereof, or shall have taken any action to displace the management
of Seller, Guarantor or any Affiliate thereof or to curtail its authority in the
conduct of the business of Seller, Guarantor or any Affiliate thereof, or takes
any action in the nature of enforcement to remove, limit or restrict the
approval of Seller, Guarantor or Affiliate thereof as an issuer, buyer or a
seller/servicer of Mortgage Loans or securities backed thereby, and such action
provided for in this subparagraph (h) shall not have been discontinued or stayed
within thirty (30) days.

(i)        Inability to Perform.  A Responsible Officer of Seller or Guarantor
shall admit its inability to, or its intention not to, perform any of Seller’s
Obligations or Guarantor’s obligations hereunder or the PC Guaranty.

(j)        Security Interest.  This Agreement shall for any reason cease to
create a valid, first priority security interest in any material portion of the
Repurchase Assets purported to be covered hereby.

(k)       Financial Statements.  Seller’s or Guarantor’s audited annual
financial statements or the notes thereto or other opinions or conclusions
stated therein shall be qualified or limited by reference to the status of
Seller or Guarantor as a “going concern” or a reference of similar import.

(l)        Validity of Agreement.  For any reason, this Agreement at any time
shall not be in full force and effect in all material respects or shall not be
enforceable in all material respects in accordance with its terms, or any Lien
granted pursuant thereto shall fail to be perfected

50

 

and of first priority, or Seller or any Affiliate of Seller shall seek to
disaffirm, terminate, limit or reduce its obligations hereunder or Guarantor’s
obligations under the PC Guaranty.

(m)      Dedicated Account.  Except as permitted under Section 6.12(b), Seller
or any other Person shall have withdrawn any amounts on deposit in the Dedicated
Account without the consent of Buyer (at the written direction of the Indenture
Trustee on behalf of the Noteholders) other than funds deposited or withdrawn in
error.

(n)       Deposit and Remittance Requirements.  Seller shall fail to comply with
the deposit and remittance requirements set forth in the Ginnie Mae Contract
(subject to any cure period provided therein) or Section 4.2(a) of the Indenture
(and such failure under Section 4.2(a) of the Indenture continues unremedied for
a period of two (2) Business Days after a Responsible Officer of the Seller
obtains actual knowledge of such failure, or receives written notice from the
Indenture Trustee or any Noteholder of such failure).

(o)       Approved Ginnie Mae Issuer.

(i)        The failure of Seller to be an approved issuer under the Ginnie Mae
Contract with respect to which any Participation Certificates pledged under the
Indenture relate; or

(ii)       Seller shall cease to be approved by or its approval shall be
revoked, suspended, rescinded, halted, eliminated, withdrawn, annulled,
repealed, voided or terminated by Ginnie Mae as an approved issuer.

(p)       Approved Mortgagee; Approved Servicer.

(i)        Seller ceases to be (A) a HUD approved mortgagee pursuant to Section
203 of the National Housing Act or (B) a Fannie Mae or Freddie Mac approved
servicer (only to the extent Seller services loans for Fannie Mae or Freddie
Mac) or HUD, Fannie Mae or Freddie Mac, as applicable, suspends, rescinds,
halts, eliminates, withdraws, annuls, repeals, voids or terminates the status of
Seller as either (1) a HUD approved mortgagee pursuant to Section 203 of the
National Housing Act or (2) a Fannie Mae or Freddie Mac approved servicer.

(ii)       Seller receives (A) a notice that HUD may take such action set forth
in clause (i) above or (B) a notice from Ginnie Mae of a default by Seller under
the Ginnie Mae Contract (a “Ginnie Mae Default Notice”); provided, however, that
the receipt of such Ginnie Mae Default Notice shall not become an Event of
Default unless and until the earlier of (A) Seller receives a notice from Ginnie
Mae which provides for the termination and extinguishment of Seller’s rights or
(B) Seller receives a second Ginnie Mae Default Notice for the occurrence and
continuation of the same default for which it received the initial Ginnie Mae
Default Notice.

(q)       Fraud; Violation of Requirements.  (i) Seller engages or has engaged
in fraud or other reckless or intentional wrongdoing in connection herewith or
any other Program Agreement or any document submitted pursuant thereto or
otherwise in connection with any MBS, or in connection with any federal mortgage
insurance or loan guaranty program, or other federal

51

 

program related to any of the Mortgage Loans; or (ii) Seller has used any
payments, collections, recoveries or other funds pertaining in any way to the
Mortgage Loans in violation of the requirements of the Ginnie Mae Contract or
any Guaranty Agreement.

(r)        Change to Guaranty Agreement or Ginnie Mae Contract.  Any change to a
Guaranty Agreement or the Ginnie Mae Contract that would result in a Material
Adverse Effect on Seller.

(s)        Improper Transfer of Participation Certificate.  PLS sells and/or
contributes any Participation Certificate to any Person other than the Issuer or
the Indenture Trustee.

(t)        Cross Acceleration.  Seller or Affiliates thereof shall be in default
under (i) any Indebtedness, in the aggregate, in excess of $100,000,000 of
Seller or any Affiliate thereof which default (1) involves the failure to pay a
matured obligation, or (2) permits the acceleration of the maturity of
obligations by any other party to or beneficiary with respect to such
Indebtedness, or (ii) any other contract or contracts, in the aggregate in
excess of $100,000,000 to which Seller or any Affiliate thereof is a party which
default (1) involves the failure to pay a matured obligation, or (2) permits the
acceleration of the maturity of obligations by any other party to or beneficiary
of such contract.

Section 7.02.   No Waiver.  An Event of Default shall be deemed to be continuing
unless expressly waived by the Indenture Trustee on behalf of the Noteholders in
writing.

Section 7.03.   Due and Payable.  Upon the occurrence of any Event of Default
which has not been waived in writing by Buyer (at the written direction of the
Indenture Trustee on behalf of the Noteholders), Buyer may (at the written
direction of the Indenture Trustee on behalf of the Noteholders), by notice to
Seller, declare all Obligations to be immediately due and payable, and any
obligation of Buyer to enter into Transactions with Seller shall thereupon
immediately terminate.  Upon such declaration, the Obligations shall become
immediately due and payable, both as to Purchase Price outstanding and Price
Differential, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, anything contained herein or other evidence
of such Obligations to the contrary notwithstanding, except with respect to any
Event of Default set forth in Section 7.01(d), in which case all Obligations
shall automatically become immediately due and payable without the necessity of
any notice or other demand, and any obligation of Buyer to enter into
Transactions with Seller shall immediately terminate.  Buyer may enforce payment
of the same and exercise any or all of the rights, powers and remedies possessed
by Buyer, whether under this Agreement or any other Program Agreement or
afforded by Applicable Law.

Section 7.04.   Fees.  The remedies provided for herein are cumulative and are
not exclusive of any other remedies provided by law.  Seller agrees to pay to
Buyer reasonable attorneys’ fees and reasonable legal expenses incurred in
enforcing Buyer’s rights, powers and remedies under this Agreement and each
other Program Agreement.

Section 7.05.   Default Rate.  Without regard to whether Buyer has exercised any
other rights or remedies hereunder, if an Event of Default shall have occurred
and be continuing,

52

 

the applicable Pricing Rate shall be increased as set forth in the Pricing Side
Letter, but in no event shall the Pricing Rate exceed the maximum amount
permitted by law.

ARTICLE VIII

 

ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; SEPARATE ACTIONS BY BUYER

Section 8.01.   Entire Agreement; Amendments.  This Agreement (including the
Schedules and Exhibits hereto) constitutes the entire agreement of the parties
hereto and supersedes any and all prior or contemporaneous agreements, written
or oral, as to the matters contained herein, and no modification or waiver of
any provision hereof or any of the Program Agreements, nor consent to the
departure by Seller therefrom, shall be effective unless the same is in writing,
and then such waiver or consent shall be effective only in the specific
instance, and for the purpose, for which it is given.  Any amendment of this
Agreement which affects the rights, duties, immunities, obligations or
liabilities of the Owner Trustee in its capacity as owner trustee under the
Trust Agreement shall require the written consent of the Owner Trustee.

Section 8.02.  Waivers, Separate Actions by Buyer.  Any amendment or waiver
effected in accordance with this Article VIII shall be binding upon Buyer and
Seller; and Buyer’s failure to insist upon the strict performance of any term,
condition or other provision of this Agreement or any of the Program Agreements,
or to exercise any right or remedy hereunder or thereunder, shall not constitute
a waiver by Buyer of any such term, condition or other provision or Default or
Event of Default in connection therewith, nor shall a single or partial exercise
of any such right or remedy preclude any other or future exercise, or the
exercise of any other right or remedy; and any waiver of any such term,
condition or other provision or of any such Default or Event of Default shall
not affect or alter this Agreement or any of the Program Agreements, and each
and every term, condition and other provision of this Agreement and the Program
Agreements shall, in such event, continue in full force and effect and shall be
operative with respect to any other then existing or subsequent Default or Event
of Default in connection therewith.  An Event of Default hereunder or under any
of the Program Agreements shall be deemed to be continuing unless and until
waived in writing by Buyer, as provided in Section 7.02.

ARTICLE IX

 

SUCCESSORS AND ASSIGNS

Section 9.01.   Successors and Assigns.  This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns, any portion thereof, or any interest therein.  Seller
shall not have the right to assign all or any part of this Agreement or any
interest herein without the prior written consent of Buyer (at the written
direction of the Indenture Trustee on behalf of the Noteholders).

Section 9.02.   Transfers.

(a)        Buyer may in accordance with Applicable Law at any time assign,
pledge, hypothecate, or otherwise transfer to one or more banks, financial
institutions, investment

53

 

companies, investment funds or any other Person (each, a “Transferee”) all or a
portion of Buyer’s rights and obligations under this Agreement and the other
Program Agreements; provided, that (i) Seller has consented to such assignment,
pledge, hypothecation, or other transfer; provided, however, Seller’s consent
shall not be required in the event that (A) such Transferee is an Affiliate of
the Administrative Agent or (B) an Event of Default has occurred; (ii) absent an
Event of Default, Buyer shall give at least ten (10) days’ prior notice thereof
to Seller; and (iii) that each such sale shall represent an interest in the
Transactions in an aggregate Purchase Price of $1,000,000 or more.  In the event
of any such assignment, pledge, hypothecation or transfer by Buyer of Buyer’s
rights under this Agreement and the other Program Agreements, Seller shall
continue to deal solely and directly with Buyer in connection with Buyer’s
rights and obligations under this Agreement.  Buyer (acting as agent for Seller)
shall maintain at its address referred to in Section 10.04 a register (the
“Register”) for the recordation of the names and addresses of Transferees, and
the Purchase Price outstanding and Price Differential in the Transactions held
by each thereof.  The entries in the Register shall be prima facie conclusive
and binding, and Seller may treat each Person whose name is recorded in the
Register as the owner of the Transactions recorded therein for all purposes of
this Agreement.  No assignment shall be effective until it is recorded in the
Register.

(b)       Buyer may distribute to any prospective assignee any document or other
information delivered to Buyer by Seller.

Section 9.03.   Buyer and Participant Register.  (a) Subject to acceptance and
recording thereof pursuant to paragraph (b) of this Section 9.03, from and after
the effective date specified in each assignment and acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such assignment and acceptance, have the rights and obligations of Buyer
under this Agreement.

(b)       Seller or an agent of Seller shall maintain a register (the
“Transaction Register”) on which it will record the Transactions entered into
hereunder, and each assignment and acceptance and participation.  The
Transaction Register shall include the names and addresses of Buyers (including
all assignees, successors and Participants), and the Purchase Price of the
Transactions entered into by Buyer.  Failure to make any such recordation, or
any error in such recordation shall not affect Seller’s obligations in respect
of such Transactions.  If Buyer sells a participation in any Transaction, it
shall provide Seller, or maintain as agent of Seller, the information described
in this paragraph and permit Seller to review such information as reasonably
needed for Seller to comply with its obligations under this Agreement or under
any Applicable Law or governmental regulation or procedure.

ARTICLE X

 

MISCELLANEOUS

Section 10.01. Survival.  This Agreement and the other Program Agreements and
all covenants, agreements, representations and warranties herein and therein and
in the certificates delivered pursuant hereto and thereto, shall survive the
entering into of the Transaction and shall continue in full force and effect so
long as any Obligations are outstanding and unpaid.

54

 

Section 10.02. Nonliability of Buyer Parties.  The parties hereto agree that,
notwithstanding any affiliation that may exist between Seller and Buyer, the
relationship between Seller and Buyer shall be solely that of arms-length
participants.  No Buyer Party shall have any fiduciary responsibilities to
Seller.  Seller (i) agrees that no Buyer Party shall have any liability to
Seller (whether sounding in tort, contract or otherwise) for losses suffered by
Seller in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by this agreement,
the other loan documents or any other agreement entered into in connection
herewith or any act, omission or event occurring in connection therewith, unless
it is determined by a judgment of a court that is binding on such Buyer Party
(which judgment shall be final and not subject to review on appeal), that such
losses were the result of acts or omissions on the part of such Buyer Party
constituting gross negligence or willful misconduct and (ii) waives, releases
and agrees not to sue upon any claim against each Buyer Party (whether sounding
in tort, contract or otherwise), except a claim based upon gross negligence or
willful misconduct.  Whether or not such damages are related to a claim that is
subject to such waiver and whether or not such waiver is effective, no Buyer
Party shall have any liability with respect to, and Seller hereby waives,
releases and agrees not to sue upon any claim for, any special, indirect,
consequential or punitive damages suffered by Seller in connection with, arising
out of, or in any way related to the transactions contemplated or the
relationship established by this Agreement, the other loan documents or any
other agreement entered into in connection herewith or therewith or any act,
omission or event occurring in connection herewith or therewith, unless it is
determined by a judgment of a court that is binding on Buyer (which judgment
shall be final and not subject to review on appeal), that such damages were the
result of acts or omissions on the part of a Buyer Party, as applicable,
constituting willful misconduct or gross negligence.

Section 10.03. Governing Law; Jurisdiction, Waiver of Jury Trial:  Waiver of
Damages.  (a) This Agreement shall be binding and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.  Seller
acknowledges that the obligations of Buyer hereunder or otherwise are not the
subject of any guaranty by, or recourse to, any direct or indirect parent or
other Affiliate of Buyer or any Buyer Party.  THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

(b)       EACH OF SELLER AND GUARANTOR HEREBY WAIVES TRIAL BY JURY.  EACH OF
SELLER AND GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION
OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING OUT OF OR RELATING TO THE PROGRAM
AGREEMENTS DOCUMENTS IN ANY ACTION OR PROCEEDING.  EACH OF SELLER AND GUARANTOR
HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION IT MAY HAVE TO, EXCLUSIVE PERSONAL
JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT TO ANY
DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS.

(c)        Seller further irrevocably consents to the service of process of any
of the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by

55

 

registered or certified mail, postage prepaid, to Seller at the address set
forth in Section 10.04 hereof.

(d)       Nothing herein shall affect the right of Buyer to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against Seller in any other jurisdiction.

(e)        Seller waives the posting of any bond otherwise required of Buyer in
connection with any judicial process or proceeding to enforce any judgment or
other court order entered in favor of Buyer, or to enforce by specific
performance, temporary restraining order or preliminary or permanent injunction
this Agreement or any of the other Program Agreements.

Section 10.04. Notices.  Any and all notices (with the exception of Transaction
Notices, which shall be delivered via facsimile only), statements, demands or
other communications hereunder may be given by a party to the other by mail,
email, facsimile, messenger or otherwise to the address specified below, or so
sent to such party at any other place specified in a notice of change of address
hereafter received by the other.  All notices, demands and requests hereunder
may be made orally, to be confirmed promptly in writing, or by other
communication as specified in the preceding sentence.

If to Seller or Guarantor:

PennyMac Loan Services, LLC

3043 Townsgate Road

Westlake Village, CA 91361

Attention:  Pamela Marsh/Richard Hetzel

Phone Number:  (805) 330-6059/ (805) 254-6088

E-mail:  pamela.marsh@pnmac.com;

richard.hetzel@pnmac.com

with a copy to:

PennyMac Loan Services, LLC

3043 Townsgate Road

Westlake Village, CA 91361

Attention:  Derek Stark

Phone Number:  (818) 746-2289

E-mail:  derek.stark@pnmac.com

If to Buyer:

PNMAC GMSR ISSUER TRUST

c/o Wilmington Savings Fund Society, FSB, as Owner Trustee

500 Delaware Avenue, 11th Floor

Wilmington, Delaware 19801

Attention: Corporate Trust Administration

Phone Number:  (302) 888-7423

Fax Number:  (302) 421-9137

56

 

E-mail:  smohajer@wsfsbank.com

With a copy to

PennyMac Loan Services, LLC

3043 Townsgate Road

Westlake Village, CA 91361

Attention: Pamela Marsh

Phone Number: (805) 330-6059

Email:  pamela.marsh@pnmac.com

With a copy to the Administrative Agent:

Credit Suisse First Boston Mortgage Capital LLC

Eleven Madison Avenue

New York, New York 10010

Attention: Dominic Obaditch

Phone Number: (212) 325-3003

Fax Number:  (646) 935-7470

E-mail:  dominic.obaditch@credit-suisse.com

With a copy to the Credit Manager:

Pentalpha Surveillance LLC

375 N. French Rd., Suite 100

Amherst, New York 14228

Attention: PNMAC GMSR ISSUER TRUST

E-mail:  Notices@pentalphasurveillance.com

Section 10.05. Severability.  Each provision and agreement herein shall be
treated as separate and independent from any other provision or agreement herein
and shall be enforceable notwithstanding the unenforceability of any such other
provision or agreement.  In case any provision in or obligation under this
Agreement or any other Program Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

Section 10.06. Section Headings.  The Article and Section headings in this
Agreement are inserted for convenience of reference only and shall not in any
way affect the meaning or construction of any provision of this Agreement.

Section 10.07. Counterparts.  This Agreement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.  Delivery of an executed
counterpart of a signature page to this Agreement by facsimile or other
electronic means shall be effective as delivery of a manually executed
counterpart of this Agreement.

57

 

Section 10.08. Periodic Due Diligence Review.  Seller and Guarantor acknowledge
that Buyer has the right to perform continuing due diligence reviews with
respect to Seller and Guarantor and the Assets, for purposes of verifying
compliance with the representations, warranties and specifications made
hereunder, or otherwise, and Seller and Guarantor agree that upon reasonable
(but no less than five (5) Business Day’s) prior notice unless an Event of
Default shall have occurred, in which case no notice is required, to Seller or
Guarantor, Buyer or its authorized representatives will be permitted during
normal business hours, and in a manner that does not unreasonably interfere with
the ordinary conduct of Seller’s or Guarantor’s business, to examine, inspect,
and make copies and extracts of, any and all documents, records, agreements,
instruments or information relating to such Assets in the possession or under
the control of Seller or Guarantor.  Seller and Guarantor also shall make
available to Buyer a knowledgeable financial or accounting officer for the
purpose of answering questions respecting the Assets.  Without limiting the
generality of the foregoing, Seller and Guarantor acknowledge that Buyer may
enter into a Transaction related to any Purchased Assets from Seller based
solely upon the information provided by Seller to Buyer in the Asset Schedule
and the representations, warranties and covenants contained herein, and that
Buyer, at its option, has the right at any time to conduct a partial or complete
due diligence review on some or all of the Assets related to a
Transaction.  Seller and Guarantor agree to cooperate with Buyer and any third
party underwriter in connection with such underwriting, including, but not
limited to, providing Buyer and any third party underwriter with access to any
and all documents, records, agreements, instruments or information relating to
such Purchased Assets in the possession, or under the control, of Seller or
Guarantor.

Section 10.09. Hypothecation or Pledge of Repurchase Assets.  Subject to the
applicable Acknowledgment Agreement, Buyer shall have free and unrestricted use
of all Repurchase Assets and nothing in this Agreement shall preclude Buyer from
engaging in repurchase transactions with all or a portion of the Repurchase
Assets or otherwise pledging, repledging, transferring, hypothecating, or
rehypothecating all or a portion of the Repurchase Assets.

Section 10.10. Non-Confidentiality of Tax Treatment.  (a) This Agreement and its
terms, provisions, supplements and amendments, and notices hereunder, are
proprietary to Buyer or Seller and Guarantor, as applicable, and shall be held
by each party hereto, as applicable in strict confidence and shall not be
disclosed to any third party without the written consent of Buyer (at the
written direction of the Administrative Agent), Seller or Guarantor, as
applicable, except for (i) disclosure to Buyer’s, Seller’s or Guarantor’s direct
and indirect Affiliates and Subsidiaries, attorneys or accountants, but only to
the extent such disclosure is necessary and such parties agree to hold all
information in strict confidence, (ii) disclosure to the parties to the
Indenture, including, but not limited to, noteholders and investors related
thereto, but only to the extent such disclosure is necessary and such parties
agree to hold all information in strict confidence, or (iii) disclosure required
by law, rule, regulation or order of a court or other regulatory
body.  Notwithstanding the foregoing or anything to the contrary contained
herein or in any other Program Agreements, the parties hereto may disclose to
any and all Persons, without limitation of any kind, the federal, state and
local tax treatment of the Transactions, any fact relevant to understanding the
federal, state and local tax treatment of the Transactions, and all materials of
any kind (including opinions or other tax analyses) relating to such federal,
state and local tax treatment and that may be relevant to understanding such tax
treatment; provided that Seller may not disclose the name of or identifying
information with respect to Buyer or any pricing

58

 

terms (including, without limitation, the Pricing Rate, Purchase Price
Percentage and Purchase Price) or other nonpublic business or financial
information (including any sublimits and financial covenants) that is unrelated
to the federal, state and local tax treatment of the Transactions and is not
relevant to understanding the federal, state and local tax treatment of the
Transactions, without the prior written consent of Buyer (at the written
direction of the Administrative Agent).

(b)       Notwithstanding anything in this Agreement to the contrary, Seller
shall comply with all applicable local, state and federal laws, including,
without limitation, all privacy and data protection law, rules and regulations
that are applicable to the Repurchase Assets and/or any applicable terms of this
Agreement (the “Confidential Information”).  Seller understands that the
Confidential Information may contain “nonpublic personal information”, as that
term is defined in Section 509(4) of the Gramm-Leach-Bliley Act (the “GLB Act”),
and Seller agrees to maintain such nonpublic personal information that it
receives hereunder in accordance with the GLB Act and other applicable federal
and state privacy laws.  Seller shall implement such physical and other security
measures as shall be necessary to (a) ensure the security and confidentiality of
the “nonpublic personal information” of the “customers” and “consumers” (as
those terms are defined in the GLB Act) of Buyer, the Administrative Agent or
any Affiliate of the Administrative Agent which Seller holds, (b) protect
against any threats or hazards to the security and integrity of such nonpublic
personal information, and (c) protect against any unauthorized access to or use
of such nonpublic personal information.  Seller represents and warrants that it
has implemented appropriate measures to meet the objectives of Section 501(b) of
the GLB Act and of the applicable standards adopted pursuant thereto, as now or
hereafter in effect.  Upon request, Seller will provide evidence reasonably
satisfactory to allow Buyer to confirm that the providing party has satisfied
its obligations as required under this section.  Without limitation, this may
include Buyer’s review of audits, summaries of test results, and other
equivalent evaluations of Seller.  Seller shall notify Buyer promptly following
discovery of any breach or compromise of the security, confidentiality, or
integrity of nonpublic personal information of the customers and consumers of
Buyer, the Administrative Agent or any Affiliate of the Administrative Agent
provided directly to Seller by Buyer or the Administrative Agent or an Affiliate
of the Administrative Agent.  Seller shall provide such notice to Buyer by
personal delivery, by facsimile with confirmation of receipt, or by overnight
courier with confirmation of receipt to the applicable requesting individual.

Section 10.11. Set-off.  In addition to any rights and remedies of Buyer
hereunder and by law, Buyer shall have the right, without prior notice to Seller
or Guarantor, any such notice being expressly waived by Seller and Guarantor to
the extent permitted by Applicable Law to set-off and appropriate and apply
against any Obligation from Seller, Guarantor or any Affiliate thereof to Buyer,
the Administrative Agent or any Affiliate of the Administrative Agent any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other obligation (including to return funds to Seller),
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 or due from Buyer, the Administrative Agent or any Affiliate of the
Administrative Agent to or for the credit or the account of Seller, Guarantor or
any Affiliate thereof.  Buyer agrees promptly to notify Seller or Guarantor
after any such set off and application made by Buyer; provided that the failure
to give such notice shall not affect the validity of such set off and
application.

Section 10.12. Intent.

59

 

(a)        The parties recognize that each Transaction is a “master netting
agreement” as that term is defined in Section 101 of Title 11 of the United
States Code, as amended and a “securities contract” as that term is defined in
Section 741 of Title 11 of the United States Code, as amended and that all
payments hereunder are deemed “margin payments” or “settlement payments” as
defined in Title 11 of the United States Code.

(b)       It is understood that either party’s right to liquidate Purchased
Assets delivered to it in connection with Transactions hereunder or to exercise
any other remedies pursuant to Section 7.03 hereof is a contractual right to
liquidate such Transaction as described in Section 555 and Section 561 of
Title 11 of the United States Code, as amended.

(c)        The parties agree and acknowledge that if a party hereto is an
“insured depository institution,” as such term is defined in the Federal Deposit
Insurance Act, as amended from time to time (“FDIA”), then each Transaction
hereunder is a “qualified financial contract,” as that term is defined in FDIA
and any rules, orders or policy statements thereunder (except insofar as the
type of assets subject to such Transaction would render such definition
inapplicable).

(d)       It is understood that this Agreement constitutes a “netting contract”
as defined in and subject to Title IV of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and
payment obligation under any Transaction hereunder shall constitute a “covered
contractual payment entitlement” or “covered contractual payment obligation”,
respectively, as defined in and subject to FDICIA (except insofar as one or both
of the parties is not a “financial institution” as that term is defined in
FDICIA).

(e)        This Agreement is intended to be a “securities contract,” within the
meaning of Section 555 under the Bankruptcy Code, and a “master netting
agreement,” within the meaning of Section 561 under the Bankruptcy Code.

Section 10.13. Third Party Beneficiaries.  (a) The Administrative Agent, the
Owner Trustee and the Indenture Trustee shall be express third party
beneficiaries of this Agreement.

Section 10.14. Owner Trustee Limitation of Liability.  It is expressly
understood and agreed by the parties hereto that (a) this Agreement is executed
and delivered by WSFS, not individually or personally but solely as trustee of
the Issuer, in the exercise of the powers and authority conferred and vested in
it, (b) each of the representations, warranties, undertakings and agreements
herein made on the part of the Issuer is made and intended not as personal
representations, warranties, undertakings and agreements by WSFS but is made and
intended for the purpose of binding only the Issuer, (c) nothing herein
contained shall be construed as creating any liability on WSFS, individually or
personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by any Person claiming by, through or under the parties hereto, (d) WSFS has
made no investigation as to the accuracy or completeness of any representations
or warranties made by the Issuer in this Agreement and (e) under no
circumstances shall WSFS be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Issuer under this Agreement or any other related documents.

60

 

Section 10.15. Actions and Discretion of Buyer.  Any provision providing for the
exercise of any action or discretion by Buyer shall be exercised by the
Indenture Trustee at the written direction of either 100% of the VFN Noteholders
or the Majority Noteholders of all Outstanding Notes.  To the extent there are
conflicting directions between 100% of the VFN Noteholders and the Majority
Noteholders, the Indenture Trustee will take its direction from 100% of the VFN
Noteholders.  In addition, and notwithstanding any other provision in this
Agreement to the contrary, any approvals, consents, votes or other rights
exercisable by Buyer under this Agreement shall be exercised by the Indenture
Trustee on behalf of Noteholders.

Section 10.16. Amendment and Restatement; Consent.  As of the date hereof, the
terms and conditions of the Original PC Repurchase Agreement shall be amended
and restated as set forth herein and the Original PC Repurchase Agreement shall
be superseded by this Agreement.  The rights and obligations of the parties
evidenced by the Original PC Repurchase Agreement shall be evidenced by this
Agreement and shall continue to be in full force and effect as set forth in this
Agreement.  Each of the Buyer, Seller, the Guarantor, the Administrative Agent,
the Indenture Trustee and CSCIB, as 100% of the VFN Noteholders, hereby consents
to this Agreement and acknowledges and agrees that the amendments effected by
this Agreement shall become effective on the Effective Date.  CSCIB, as 100% of
the VFN Noteholders, hereby directs the Indenture Trustee to execute this
Agreement.

 

 

61

 

IN WITNESS WHEREOF, Seller, Guarantor and Buyer have caused this Amended and
Restated Master Repurchase Agreement to be executed and delivered by their duly
authorized officers or trustees as of the date first above written.

 

 

 

 

 

 

PNMAC GMSR ISSUER TRUST, as Buyer

 

 

 

By: Wilmington Savings Fund Society, FSB, not in its individual capacity but
solely as Owner Trustee

 

 

 

By:

/s/ Shaheen Mohajer

 

 

Name:

Shaheen Mohajer

 

 

Title:

Vice President

 

[Signature page to Amended and Restated PC Master Repurchase Agreement]

 

 

 

 

 

PENNYMAC LOAN SERVICES, LLC, as Seller

 

 

 

By:

/s/ Pamela Marsh

 

 

Name:

Pamela Marsh

 

 

Title:

Senior Managing Director and Treasurer

 

 

[Signature page to Amended and Restated PC Master Repurchase Agreement]

 

 

 

 

 

 

PRIVATE NATIONAL MORTGAGE ACCEPTANCE COMPANY, LLC, as Guarantor

 

 

 

By:

/s/ Pamela Marsh

 

 

Name:

Pamela Marsh

 

 

Title:

Senior Managing Director and Treasurer

 

[Signature page to Amended and Restated PC Master Repurchase Agreement]

 

 

 

 

 

 

CONSENTED AND AGREED TO BY:

 

 

 

CITIBANK, N.A., as Indenture Trustee and not in its individual capacity

 

 

 

By:

/s/ Valerie Delgado

 

 

Name:

Valerie Delgado

 

 

Title:

Senior Trust Officer

 

[Signature page to Amended and Restated PC Master Repurchase Agreement]

 

 

 

 

 

 

CONSENTED AND AGREED TO BY:

 

 

 

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as Administrative Agent

 

 

 

By:

/s/ Dominic Obaditch

 

 

Name:

Dominic Obaditch

 

 

Title:

Vice President

 

[Signature page to Amended and Restated PC Master Repurchase Agreement]

 

 

 

 

 

CONSENTED AND AGREED TO BY:

 

 

 

CREDIT SUISSE AG CAYMAN ISLANDS BRANCH, as Noteholder of 100% of the Outstanding
VFNs

 

 

 

By:

/s/ Dominic Obaditch

 

 

Name:

Dominic Obaditch

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

 

 

By:

/s/ Margaret D. Dellafera

 

 

Name:

Margaret D. Dellafera

 

 

Title:

Authorized Signer

 

 

[Signature page to Amended and Restated PC Master Repurchase Agreement]

 

SCHEDULE 1-A

REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICING CONTRACTS

SCHEDULE 1-B

REPRESENTATIONS AND WARRANTIES RE: ASSETS CONSISTING OF PARTICIPATION
CERTIFICATES

 

 

Schedule 1-B-1

 

SCHEDULE 1-C

REPRESENTATIONS AND WARRANTIES RE:

PMH TRANSACTIONS

 

 

Schedule 1-C-1

 

SCHEDULE 2

PARTICIPATION AGREEMENTS AND PARTICIPATION CERTIFICATES

 

 

Schedule 2-1

 

SCHEDULE 3

RESPONSIBLE OFFICERS – SELLER

SELLER AUTHORIZATIONS

 

 

Schedule 3-1

 

SCHEDULE 4-A

 

ORIGINATED MSR MORTGAGE POOLS

 

[On file with the Administrator and Administrative Agent]

 

 

Schedule 4-A-1

SCHEDULE 4-B

 

PURCHASED MSR MORTGAGE POOLS

 

[On file with the Administrator and Administrative Agent]

 

 

Schedule 4-B-1

 

EXHIBIT A

FORM OF TRANSACTION NOTICE

Dated:  [_________]

PNMAC GMSR ISSUER TRUST

c/o Wilmington Savings Fund Society, FSB, as Owner Trustee

500 Delaware Avenue, 11th Floor

Wilmington, Delaware 19801

Attention: Corporate Trust Administration

Phone Number:  (302) 888-7423

Fax Number:  (302) 421-9137

E-mail:  smohajer@wsfsbank.com

Credit Suisse First Boston Mortgage Capital LLC

Eleven Madison Avenue

New York, New York 10010

Attention: Dominic Obaditch

Phone Number: (212) 325-3003

Fax Number:  (646) 935-7470

E-mail:  dominic.obaditch@credit-suisse.com

Citibank, N.A.

Corporate and Investment Banking

388 Greenwich Street

14th Floor

New York, NY 10013,

Attention: PNMAC GMSR ISSUER TRUST MSR Collateralized Notes

Phone Number:  (714) 845-4102

Fax Number:  (714) 262-4576

email: valerie.delgado@citi.com

TRANSACTION NOTICE

Ladies and Gentlemen:

We refer to the Amended and Restated Master Repurchase Agreement, dated as of
April 1, 2020 (the “Agreement”), among PNMAC GMSR ISSUER TRUST, PennyMac Loan
Services, LLC (the “Seller”), Private National Mortgage Acceptance Company, LLC
(the “Guarantor”) and Credit Suisse First Boston Mortgage Capital LLC.  Each
capitalized term used but not defined herein shall have the meaning specified in
the Agreement.  This notice is being delivered by Seller pursuant to
Section 2.02 of the Agreement.

Please be notified that Seller hereby irrevocably requests that the Buyer enter
into the following Transaction(s) with the Seller as follows:

Exhibit A-1

 

Purchase Price of Transaction

    

Amount of Asset Base

    

Outstanding Purchase Price

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The requested Purchase Date is _______________.

Seller requests that the proceeds of the Purchase Price be deposited in Seller’s
account at _______, ABA Number _______, account number ____, References:  _____,
Attn:  _______.

Seller hereby represents and warrants that each of the representations and
warranties made by Seller in each of the Program Agreements to which it is a
party is true and correct in all material respects, in each case, on and as of
the date hereof, except to the extent such representations and warranties
expressly relate to an earlier date.  Attached hereto is a true and correct
Asset Schedule, which includes the Assets to be subject to the requested
Transaction.

 

PENNYMAC LOAN SERVICES, LLC

 

 

 

By:

 

 

 

 

Exhibit A-2

 

[Asset Schedule]

 

 

Exhibit A-3

 

EXHIBIT B

FORM OF REQUEST FOR APPROVAL OF

PARTICIPATION AGREEMENTS OR PARTICIPATION CERTIFICATES

Dated:  [_________]

PNMAC GMSR ISSUER TRUST

c/o Wilmington Savings Fund Society, FSB, as Owner Trustee

500 Delaware Avenue, 11th Floor

Wilmington, Delaware 19801

Attention: Corporate Trust Administration

Phone Number:  (302) 888-7423

Fax Number:  (302) 421-9137

E-mail:  smohajer@wsfsbank.com

REQUEST FOR APPROVAL OF

PARTICIPATION AGREEMENT OR PARTICIPATION CERTIFICATE

Ladies and Gentlemen:

We refer to the Amended and Restated Master Repurchase Agreement, dated as of
April 1, 2020 (the “Agreement”), by and among PNMAC GMSR ISSUER TRUST, PennyMac
Loan Services, LLC (“Seller”), Private National Mortgage Acceptance Company, LLC
(“Guarantor”) and Credit Suisse First Boston Mortgage Capital LLC.  Each
capitalized term used but not defined herein shall have the meaning specified in
the Agreement.  This request is being delivered by Seller pursuant to
Section 2.12 of the Agreement.

Seller hereby requests that the following Participation Agreement(s) or
Participation Certificate(s) be approved as eligible Participation Agreement(s)
or Participation Certificate(s), as applicable:

PARTICIPATION CERTIFICATES:

 

Description of Participation Certificate

Participation Date

 

 

 

PARTICIPATION AGREEMENTS:

 

Description of Participation Agreement

Pool No.

Participation Date

 

 

 

 

 

Exhibit B-1

 

 

 

PennyMac Loan Services, LLC,  as Seller

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

 

ACKNOWLEDGED AND AGREED:

 

 

PNMAC GMSR ISSUER TRUST, as Buyer

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

Exhibit B-2