Exhibit 10.98

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED THEREUNDER.
OMITTED INFORMATION HAS BEEN REPLACED WITH [***]

CITIGROUP GLOBAL MARKETS REALTY CORP

390 Greenwich Street 5th Floor

New York, NY 10013

As of June 14, 2013

 

TO:    PennyMac Corp. (“PMC” or “Purchaser”) FROM:    Citigroup Global Markets
Realty Corp. (“Citigroup” or “Seller”) RE:    Sale of Assets to PMC

 

 

This letter agreement (“Confirmation”) will serve as the commitment by Seller to
sell and by Purchaser to purchase, on a mandatory delivery basis, without
recourse, certain first lien, fixed-rate and adjustable-rate, conventional,
residential mortgage loans (the “Mortgage Loans”) and certain residential real
property including land and improvements, together with all buildings, fixtures
and attachments thereto (the “REO Properties”, and together with the Mortgage
Loans, the “Assets”) set forth on Exhibit A attached hereto under the terms set
forth below. Purchaser will purchase all of Seller’s right, title and interest
in the Assets. The terms and provisions of this transaction, including the
purchase price for the Assets, are described below.

 

1.   Closing Date:   The Purchaser may purchase any Asset on any date following
the date hereof, which date shall be deemed a “Closing Date.” Any such Assets
purchased on any Closing Date shall be mutually agreed upon in writing by the
parties hereto. Any such Closing Date shall be agreed upon between the parties
hereto in writing, but in no event shall any Closing Date be later than,
June 16, 2014 (the “End Date”). 2.   Transfer Date:  

July 15, 2013, or such other date as may be mutually agreed upon by Citigroup
and the Initial Sellers under the Mortgage Loan Purchase and Interim Servicing
Agreement, dated as of June 14, 2013 (“Original Purchase Agreement”), by and
among such Initial Sellers, one of which has acted as servicer thereunder and
Citigroup. Subject to Paragraph 11 herein, PMC shall be the successor servicer
following such date.

 

The “Initial Sellers” shall mean those entities from which Citigroup purchased
the Assets.

3.   Aggregate Delivery Balance:   $256,696,664.48 (less any amounts
attributable to Mortgage Loans that are repurchased by Initial Sellers pursuant
to the terms and provisions of the Original Purchase Agreement).

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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED THEREUNDER.
OMITTED INFORMATION HAS BEEN REPLACED WITH [***]

 

4.   Purchase Price Percentage:  

For each Asset, the Base Purchase Price Percentage plus a percentage equal to
(i) in the event the related Closing Date shall occur within [***] ([***]) days
from the date hereof, [***]%, (ii) in the event the related Closing Date shall
occur within a period of ([***]) ([***]) to ([***]) ([***]) days from the date
hereof, [***]%, or (iii) in the event the related Closing Date shall occur
within a period of [***] ([***]) to [***] ([***]) days from the date hereof,
[***]%.

 

For purposes of this Confirmation, the “Base Purchase Price Percentage” shall
mean, with respect to each Asset, the purchase price percentage set forth on
Schedule 1.

5.   Purchase Price:  

The purchase price for each Asset purchased on any related Closing Date (the
“Purchase Price”) shall be equal to (a) (i) the unpaid principal balance of such
Asset as of June 11, 2013 (the “Original Cut-off Date”), multiplied by (ii) the
related Purchase Price Percentage less (b) any Proceeds received following June
14, 2013 (the “Original Closing Date”). In connection with the payment of the
Purchase Price, Purchaser shall pay any and all Reimbursement Amounts to Seller.
If the amount in clause (b) above exceeds the amount in clause (a) above (net of
any related Reimbursement Amounts), Seller shall remit such excess amount to
Purchaser.

 

The Purchase Price for any Assets or the excess amount after application of the
Purchase Price shall be paid to Seller or Purchaser, as applicable, in
immediately available funds by wire transfer on the related Closing Date.

 

For purposes of this Confirmation, “Proceeds” shall mean any principal and
interest payments actually received by any person or entity on any Assets.

6.   Reimbursement Amounts   With respect to each Asset, the sum of (a) any and
all out-of-pocket costs and expenses incurred by Citigroup with respect to such
Asset arising out of or relating to this Confirmation, the Servicing Agreement
or the Original Purchase Agreement, including, but not limited to, servicing,
corporate and escrow advances, servicing reimbursement made by Citigroup, any
servicing fees paid by Citigroup, any costs and expenses incurred by Citigroup
in connection with its due diligence review of the Assets (allocated based upon
the number of Assets) and any other amounts paid to Initial Sellers under the
Original Purchase Agreement (other than the Original Purchase Price for the
Assets) or to PMC under the Servicing Agreement that did not arise from [***]
thereunder and (b) Citigroup’s Cost of Carry for such Asset.

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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED THEREUNDER.
OMITTED INFORMATION HAS BEEN REPLACED WITH [***]

 

    For purposes of this Confirmation, the “Original Purchase Price” shall have
the meaning ascribed to the term “Purchase Price” in the Original Purchase
Agreement. 7.   Cost of Carry:  

An amount equal to the “cost of carry” imputed to Citigroup in connection with
any Asset purchased under the Original Purchase Agreement and held by Seller
equal to the product of (x) the sum of (a) the Original Purchase Price for such
Asset as reduced monthly by remittances of principal on the Asset received by
Citigroup and (b) any and all Reimbursement Amounts incurred by Citigroup (other
than the Cost of Carry) with respect to such Asset and (y) LIBOR plus [***]
([***]) basis points per annum.

 

For the purposes hereunder, “LIBOR” shall mean the rate determined daily by
Citigroup on the basis of the offered rate for one-month U.S. dollar deposits,
as such rate appears on Reuters Screen LIBOR01 Page as of 11:00 a.m. (London
time) on such date (rounded up to the nearest whole multiple of 1/16%); provided
that if such rate does not appear on Reuters Screen LIBOR01 Page, the rate for
such date will be the rate determined by reference to such other comparable
publicly available service publishing such rates as may be selected by the
Citigroup in its sole discretion and communicated to PMC.

8.   Liquidated Assets:  

With respect to any Liquidated Asset, in the month following the liquidation
date of such Asset, following any required reconciliation that shall be
performed on such Asset by the parties, the Purchaser shall remit to Citigroup
an amount equal to (a) the product of (i) the Liquidation Percentage and (ii)
the unpaid principal balance of such Asset as of the Original Cut-off Date,
minus (b) the difference between (i) the total amount of liquidation proceeds
received on such Asset and (ii) the sum of (1) the Original Purchase Price for
such Asset, plus (2) any and all Reimbursement Amounts for such Asset, minus (3)
any Proceeds on such Asset received following the Original Closing Date;
provided, however, if the amount in clause (b) above exceeds the amount in
clause (a) above, Citigroup shall remit such excess amount to Purchaser.

 

For the purposes of this Confirmation, “Liquidated Asset” shall mean an Asset
for which all amounts expected to be recovered (exclusive of the possibility of
recovery from deficiency judgments or default judgment) have been recovered by
the servicer, whether by way of disposition of an REO Property, refinance, offer
and compromise, charge-off or other means of liquidation.

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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED THEREUNDER.
OMITTED INFORMATION HAS BEEN REPLACED WITH [***]

 

9.   Liquidation Percentage:   The positive difference between (i) the [***]
calculated as of the liquidation date as if such Liquidated Asset was purchased
on such liquidation date and (ii) the [***] in respect of such Asset. 10.  
Subsequent Purchase Agreement:   The Assets will be sold pursuant to a separate
mortgage loan purchase agreement to be entered into between Seller and Purchaser
(the “Subsequent Purchase Agreement”). 11.   Servicing Agreement:   That certain
Flow Servicing Agreement, dated as of August 4, 2011 (the “Servicing Agreement”)
by and between PMC and Citigroup. PMC shall purchase the Mortgage Servicing
Rights (“MSRs”) relating to the Assets prior to the Transfer Date. PennyMac Loan
Services, LLC (“PLS”) shall sub-service the Assets for PMC in accordance with
standards set forth in the Servicing Agreement. 12.   Further Assurances:  
Purchaser and Seller further agree that upon reasonable request they shall do
such other and further acts and deeds, and shall execute, acknowledge and
deliver and record such other documents and instruments as may be reasonably
necessary from time to time to evidence, confirm or carry out the intent and
purposes of this Confirmation. 13.   Expenses:   Notwithstanding anything to the
contrary contained herein, each party will bear its own costs, fees and expenses
(including the costs, fees and expenses of its attorneys). Purchaser will bear
the cost of the delivery of the collateral files to the custodian; the costs of
preparing and recording the assignments from Seller to Purchaser (including
intervening assignments necessary to perfect title to Purchaser) and endorsing
notes to Purchaser, as required; the costs of notifying the mortgagors, hazard,
flood and mortgage insurance companies, and others, as necessary, and the costs
of shipping all Asset records to Purchaser. 14.   Entire Agreement:   This
Confirmation sets forth the entire understanding of the parties relating to the
subject matter hereof to date and supersedes and cancels any prior
communications, understandings and agreements between the parties. This
Confirmation may not be amended or modified except by the parties in writing.
This Confirmation may be simultaneously executed in several counterparts, each
of which shall be deemed to be an original, and all such counterparts shall
together constitute but one and the same agreement. 15.   Liquidated Damages:  
If for any reason Purchaser fails to purchase any Asset by the End Date, in
addition to any other amounts owed under this Confirmation, Purchaser shall, as
liquidated damages for such

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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED THEREUNDER.
OMITTED INFORMATION HAS BEEN REPLACED WITH [***]

 

   

failure, remit to Seller an amount equal to (a) the product of (i) the Spread
Percentage and (ii) the unpaid principal balance of such Asset as of the
Original Cut-off Date, minus (b) the difference between (i) the fair market
value of the Assets (as determined pursuant to a third party indicative bid
obtained by Citigroup within a reasonable period of time following the related
Break-up Date) or, with respect to any Liquidated Asset, the total amount of
liquidation proceeds received on such Asset and (ii) the sum of (1) the Original
Purchase Price for such Asset, (2) any and all Reimbursement Amounts for such
Asset, minus (3) any Proceeds on such Asset received following the Original
Closing Date; provided, however, if the amount in clause (b) above exceeds the
amount in clause (a) above, Seller shall remit such excess amount to Purchaser.

 

Purchaser shall promptly provide Citigroup with any information on the Assets
that it requires in connection with Citigroup’s obtaining the related third
party indicative bid.

 

For purposes of this Confirmation, the “Break-up Date” shall mean the earlier to
occur of (i) the date on which [***] in [***] of its [***] or [***] to [***] an
[***] as [***] under this Confirmation and (ii) the [***].

16.   Spread Percentage:   The positive difference between (i) the [***]
calculated as of the Break-up Date as if such Asset was [***] on the Break-up
Date and (ii) the [***] in respect of such Asset. 17.   Disposition of Assets:  
Purchaser acknowledges and agrees that Seller shall, in its sole discretion, be
permitted to sell or dispose of any Asset (or otherwise obtain a third party
indicative bid for the Assets within a reasonable period of time following any
Break-up Date) at any price and at any time that it, in its sole discretion,
deems reasonable and Purchaser waives any right to object to or contest the
price obtained by Seller in the sale, disposition and/or third party indicative
bid of any Asset. 18.   Severability:   If any provision hereof is found by a
court of competent jurisdiction to be prohibited or unenforceable, such
provision shall be ineffective only to the extent of such prohibition or
unenforceability, and such prohibition or enforceability shall not invalidate
the balance of such provision to the extent it is not prohibited or
unenforceable, nor invalidate the other provisions hereof. 19.   Governing Law:
  The parties agree that this Confirmation shall be construed in accordance with
and governed by the laws of the State of New York, excluding its rules of
conflicts of laws but including the New York General Obligations Law Sections
5-1401 and 5-1402.

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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED THEREUNDER.
OMITTED INFORMATION HAS BEEN REPLACED WITH [***]

 

    The parties consent to the exclusive jurisdiction of the following courts in
connection with any dispute between the Parties arising from or in connection
with this Confirmation (i) United States District Court for the Southern
District of New York; and (ii) Supreme Court, New York County, New York.
Purchaser hereby irrevocably waives any objection to venue of any action between
the parties in the courts described herein, whether pursuant to the doctrine of
forum non conveniens or otherwise. In the event Seller commences legal
proceedings against Purchaser in any of the courts set forth above, Purchaser
waives any objection to the selection of that court and shall not seek to change
venue to any other court. 20.   Arm’s Length Transaction:   Each party
acknowledges that it has participated in the negotiation of this Confirmation,
and agrees that no provision of this Confirmation shall be construed against or
interpreted to the disadvantage of any party by any court or other governmental
or judicial authority by reason of such party having or being deemed to have
structured, dictated or drafted such provision. All of the terms of this
Confirmation were negotiated at arm’s length, and were prepared and executed
without fraud, duress, undue influence or coercion of any kind exerted by either
party upon the other. The execution and delivery of this Confirmation is the
free and voluntary act of Seller and Purchaser. 21.   Confidentiality:   Each
party agrees for itself and its respective directors, officers, employees,
agents, representatives, subsidiaries and affiliates, to keep the terms of this
Confirmation confidential and to not disclose any such terms to anyone except:
(a) in connection with the enforcement of this Confirmation, (b) to the parties’
respective attorneys, accountants and/or regulators who have specific need for
the information; or (c) in response to or to otherwise comply with appropriate
legal process, law, regulation or governmental agency request. 22.  
Miscellaneous:   The rights granted hereunder shall be cumulative with the
rights provided under the Subsequent Purchase Agreement and shall inure to the
benefit of Seller and its successors and assigns. For the purpose of
facilitating the execution of this Confirmation, and for other purposes, this
Confirmation may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument. The parties intend that faxed signatures
and electronically imaged signatures such as .pdf files shall constitute
original signatures and are binding on all parties. The original documents shall
be promptly delivered, if requested.

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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED THEREUNDER.
OMITTED INFORMATION HAS BEEN REPLACED WITH [***]

 

Please acknowledge your acceptance and agreement to the foregoing by signing and
returning this Confirmation via email and overnight courier to Thomas Rollauer
(email: thomas.rollauer@citi.com) at Citigroup Global Markets Realty Corp., 390
Greenwich Street, 5th Floor, New York, NY 10013. Thank-you.

 

Very Truly Yours, CITIGROUP GLOBAL MARKETS REALTY CORP. BY:  

/s/ Thomas F. Rollauer, Jr.

NAME:  

Thomas F. Rollauer, Jr.

TITLE:  

Authorized Agent

 

CONFIRMED AND AGREED TO: PENNYMAC CORP. BY:  

/s/ Anne McCallion

NAME:  

Anne McCallion

TITLE:  

Chief Financial Officer

Confirmation (April 2013)

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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED THEREUNDER.
OMITTED INFORMATION HAS BEEN REPLACED WITH [***]

 

Schedule 1

Assets

[***]