Exhibit 10.1

 

 

 

 

 

MASTER REPURCHASE AGREEMENT

 

(PARTICIPATION CERTIFICATES AND SERVICING)

 

among

 

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as buyer (“Buyer”)

 

and

 

PENNYMAC LOAN SERVICES, LLC, as seller (“Seller”)

 

and

 

PRIVATE NATIONAL MORTGAGE ACCEPTANCE COMPANY, LLC, as guarantor (“Guarantor”)

 

 

 

 

 

Dated as of November 10, 2015

 

 

 

 

 

 
 

 

TABLE OF CONTENTS

Page

 

ARTICLE I DEFINITIONS 2     Section 1.01   Certain Defined Terms. 2 Section
1.02   Other Defined Terms. 24     ARTICLE II GENERAL TERMS 25     Section
2.01   Transactions. 25 Section 2.02   Procedure for Entering into Transactions.
25 Section 2.03   Repurchase; Payment of Repurchase Price. 26 Section
2.04   Price Differential. 26 Section 2.05   Margin Maintenance. 26 Section
2.06   Payment Procedure. 27 Section 2.07   Application of Payments. 27 Section
2.08   Use of Purchase Price and Transaction Requests. 29 Section
2.09   Recourse. 29 Section 2.10   Requirements of Law. 29 Section 2.11   Taxes.
30 Section 2.12   Indemnity. 31 Section 2.13   Intentionally Omitted. 31 Section
2.14   Dedicated Accounts. 31 Section 2.15   Additional Securitization
Transactions, Servicing Contracts and Participation Agreements. 32 Section
2.16   Commitment Fee. 32 Section 2.17   Termination. 32 Section 2.18   Repledge
Portfolio Excess Spread. 33     ARTICLE III REPRESENTATIONS AND WARRANTIES 33  
  Section 3.01   Seller and Guarantor Existence. 33 Section 3.02   Licenses. 33
Section 3.03   Power. 33 Section 3.04   Due Authorization. 33 Section
3.05   Financial Statements. 34 Section 3.06   No Event of Default. 35 Section
3.07   Solvency. 35 Section 3.08   No Conflicts. 35 Section 3.09   True and
Complete Disclosure. 35 Section 3.10   Approvals. 35 Section 3.11   Litigation.
35 Section 3.12   Material Adverse Change. 36

 

 i 

 

 

Section 3.13   Ownership. 36 Section 3.14   The Servicing Contracts and
Participation Agreements. 36 Section 3.15   Taxes. 37 Section 3.16   Investment
Company. 37 Section 3.17   Chief Executive Office; Jurisdiction of Organization.
37 Section 3.18   Location of Books and Records. 37 Section 3.19   Adjusted
Tangible Net Worth. 37 Section 3.20   ERISA. 37 Section 3.21   Financing of
Assets. 37 Section 3.22   Agreements. 38 Section 3.23   Other Indebtedness. 38
Section 3.24   Agency Approvals; Servicing Facilities. 38 Section 3.25   No
Reliance. 38 Section 3.26   Plan Assets. 38 Section 3.27   No Prohibited
Persons. 39 Section 3.28   Compliance with 1933 Act. 39     ARTICLE IV
CONVEYANCE; REPURCHASE ASSETS; SECURITY INTEREST 39     Section
4.01   Ownership. 39 Section 4.02   Security Interest. 39 Section 4.03   Further
Documentation. 41 Section 4.04   Limited Pledge of Fannie Mae Servicing 41
Section 4.05   Limited Pledge of Ginnie Mae Servicing 42 Section 4.06   Limited
Pledge of Freddie Mac Servicing 43 Section 4.07   Acknowledgement Agreements 44
Section 4.08   Changes in Locations, Name, etc. 44 Section 4.09   Buyer’s
Appointment as Attorney-in-Fact. 45 Section 4.10   Performance by Buyer of
Seller’s Obligations. 46 Section 4.11   Proceeds. 47 Section 4.12   Remedies. 47
Section 4.13   Limitation on Duties Regarding Preservation of Repurchase Assets.
48 Section 4.14   Powers Coupled with an Interest. 48 Section 4.15   Release of
Security Interest. 48 Section 4.16   Reinstatement. 48 Section
4.17   Subordination. 49     ARTICLE V CONDITIONS PRECEDENT 50     Section
5.01   Initial Transaction. 50 Section 5.02   All Transactions. 51     ARTICLE
VI COVENANTS 54     Section 6.01   Financial Covenants. 54 Section
6.02   Litigation. 54 Section 6.03   Prohibition of Fundamental Changes. 54

 

 ii 

 

 

Section 6.04   Portfolio Performance Data. 54 Section 6.05   Weekly Reporting.
55 Section 6.06   Insurance. 55 Section 6.07   No Adverse Claims. 55 Section
6.08   Assignment. 55 Section 6.09   Security Interest. 55 Section
6.10   Records. 56 Section 6.11   Books. 56 Section 6.12   Approvals. 56 Section
6.13   Material Change in Business. 56 Section 6.14   Collections on Assets and
the Dedicated Accounts. 56 Section 6.15   Distributions. 57 Section
6.16   Applicable Law. 57 Section 6.17   Existence. 57 Section 6.18   Chief
Executive Office; Jurisdiction of Organization. 57 Section 6.19   Taxes. 57
Section 6.20   Transactions with Affiliates. 57 Section 6.21   Guarantees. 58
Section 6.22   Indebtedness. 58 Section 6.23   Termination of Servicing Notice.
58 Section 6.24   True and Correct Information. 58 Section 6.25   Servicing. 58
Section 6.26   Assets Not To Be Evidenced by Promissory Notes. 58 Section
6.27   No Pledge. 58 Section 6.28   Servicing Appraisals. 59 Section 6.29   Plan
Assets. 59 Section 6.30   Sharing of Information. 59 Section 6.31   Modification
of the Servicing Contracts and Participation Agreements. 59 Section 6.32   No
Amendments/Waivers of Underlying Spread Documents. 59 Section 6.33   Reserved.
59 Section 6.34   Quality Control. 59 Section 6.35   Reporting Requirements. 60
Section 6.36   Most Favored Status. 63 Section 6.37   Liens on Substantially All
Assets. 63 Section 6.38   No Modification of the Participation Agreements. 63
Section 6.39   No Subservicing. 63     ARTICLE VII DEFAULTS/RIGHTS AND REMEDIES
OF LENDER UPON DEFAULT 64     Section 7.01   Events of Default. 64 Section
7.02   No Waiver. 67 Section 7.03   Due and Payable. 67 Section 7.04   Fees. 67
Section 7.05   Default Rate. 67

 

 iii 

 

 

ARTICLE VIII ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; SEPARATE ACTIONS BY
LENDER 67     Section 8.01   Entire Agreement. 67 Section 8.02   Waivers,
Separate Actions by Buyer. 67     ARTICLE IX SUCCESSORS AND ASSIGNS 68    
Section 9.01   Successors and Assigns. 68 Section 9.02   Participations and
Transfers. 68 Section 9.03   Buyer and Participant Register. 69     ARTICLE X
MISCELLANEOUS 69     Section 10.01   Survival. 69 Section
10.02   Indemnification. 69 Section 10.03   Nonliability of Buyer. 70 Section
10.04   Governing Law; Jurisdiction, Waiver of Jury Trial:  Waiver of Damages.
70 Section 10.05   Notices. 71 Section 10.06   Severability. 72 Section
10.07   Section Headings. 73 Section 10.08   Counterparts. 73 Section
10.09   Periodic Due Diligence Review. 73 Section 10.10   Hypothecation or
Pledge of Repurchase Assets. 73 Section 10.11   Non-Confidentiality of Tax
Treatment. 73 Section 10.12   Set-off. 74 Section 10.13   Intent. 75 Section
10.14   Amendment and Restatement.  The terms and provisions of the Existing
Agreement shall be amended and restated in their entirety by the terms and
provisions of this Agreement. 75

 

 

 iv 

 

 

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 Underlying Spread Transactions       Schedule 2 – Eligible
Securitization Transactions and Servicing Contracts       Schedule 3 –
Responsible Officers of Seller and Guarantor       Exhibit A – Reserved.      
Exhibit B-1 – Form of Power of Attorney (Buyer)       Exhibit B-2 – Form of
Power of Attorney (SPS)       Exhibit C – Form of Transaction Notice      
Exhibit D – Existing Indebtedness       Exhibit E – Reserved       Exhibit F –
Form of Request for Approval of Eligible Securitization or Servicing Contract  

 

 

 

 

 

 v 

 

 

MASTER REPURCHASE AGREEMENT

 

This Master Repurchase Agreement (as the same may be amended, modified, restated
or supplemented from time to time, this “Agreement”) is made as of November 10,
2015 among CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as buyer (the
“Buyer”), PENNYMAC LOAN SERVICES, LLC, as seller (the “Seller”) and PRIVATE
NATIONAL MORTGAGE ACCEPTANCE COMPANY, LLC, as guarantor (the “Guarantor”) and
restructures, amends and restates that certain Third Amended and Restated Loan
and Security Agreement, among Buyer, Seller and Guarantor, dated as of March 27,
2015, as amended by Amendment No. 1 to Third Amended and Restated Loan Security
Agreement, dated as of June 5, 2015, Amendment No. 2 to Third Amended and
Restated Loan Security Agreement, dated as of July 27, 2015 and Amendment No. 3
to Third Amended and Restated Loan Security Agreement, dated as of August 26,
2015 (collectively, the “Existing Agreement”).

 

W I T N E S S E T H:

 

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

 

WHEREAS, from time to time the parties hereto may enter into transactions in
which Seller agrees to transfer to Buyer Participation Certificates against the
transfer of funds 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 which will be used by Seller to finance
Eligible Assets (as defined below). 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 will pledge certain Servicing Rights in connection with the
Transactions;

 

WHEREAS, in order to finance Servicing Rights and the related Portfolio Excess
Spread (as defined below) and Receivables owned by Seller from time to time,
Seller has requested and Buyer has made and will make available to Seller a
revolving credit facility in an amount not to exceed the Maximum Purchase Price
(the “Facility”);

 

WHEREAS, the Seller and the Buyer desire to restructure the transactions
documented herein as repurchase transactions;

 

WHEREAS, the parties hereto have agreed that the Existing Agreement be
restructured, amended and restated, in its entirety, on the terms and subject to
the conditions set forth herein; and

 

 1 

 

 

WHEREAS, Buyer has required and Guarantor has agreed that it will Guarantee the
Obligations hereunder;

 

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 and Seller 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, 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 with respect
to Agency Servicing Rights, those practices required by the Agencies.

 

“Acknowledgment Agreement” means (a) with respect to Agency Servicing Rights, an
acknowledgment agreement in the form prescribed by Fannie Mae, Freddie Mac or
Ginnie Mae, as applicable to be executed by Seller, Buyer and such Agency as a
condition to the Seller’s pledging Fannie Mae, Freddie Mac or Ginnie Mae (as the
case may be) Servicing Rights to the Buyer and otherwise acceptable to Buyer in
its sole discretion and (b) with respect to a Participation Certificate related
to Agency Servicing Rights, an acknowledgment in form and substance acceptable
to Buyer in its sole discretion; provided that such form of acknowledgment with
respect to the Participation Certificates related to Ginnie Mae Servicing Rights
shall be an acknowledgment agreement in the form prescribed by Ginnie Mae to be
executed by Seller (in its capacities as Seller and as Initial Participant),
Buyer (in its capacities as Buyer and as registered Participant) and Ginnie Mae;
provided further that the Underlying Spread Counterparty has joined in the
acknowledgment agreement for the limited purpose of agreeing to be bound by the
terms thereof which are applicable to Seller.

 

“Act” has the meaning set forth in Section 10.11(b).

 

“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.

 

 2 

 

 

“Additional Repurchase Assets” has the meaning set forth in Section 4.01(c).

 

“Adjusted Tangible Net Worth” shall have the meaning set forth in the Pricing
Side Letter.

 

“Advance Financing Person” has the meaning set forth in the definition of
“Eligible Securitization Transaction”.

 

“Affiliate” means, with respect to any Person, any “affiliate” of such Person,
as such term is defined in the Bankruptcy Code; provided, however, that in
respect of Seller or Guarantor the term “Affiliate” shall include only Guarantor
and its wholly owned subsidiaries.

 

“Agency” means Freddie Mac, Fannie Mae or Ginnie Mae, as applicable.

 

“Agency Approvals” has the meaning set forth in Section 6.12.

 

“Agency MBS” means an MBS issued by an Agency.

 

“Agency Servicing Rights” means Servicing Rights of Seller with respect to
Mortgage Loans that are subject to an Agency MBS or are owned by or administered
by an Agency.

 

“Agent” means DLJ Mortgage Capital, Inc.

 

“Agreement” means this Master Repurchase Agreement among Buyer, Seller and
Guarantor, as it may be amended, supplemented or otherwise modified from time to
time.

 

“Applicable Lending Office” means the “lending office” of Buyer (or of an
Affiliate of Buyer) designated on the signature page hereof or such other office
of Buyer (or of an Affiliate of Buyer) as Buyer may from time to time specify to
Seller as the office by which the Transactions are to be made and/or maintained.

 

“Appraised Value” means, as of any date in respect of any Mortgaged Property,
the value of such Mortgaged Property as determined by a licensed or otherwise
qualified, disinterested and independent appraiser who meets the standards of
the Financial Institutions Reform Recovery and Enforcement Act or the most
recently delivered BPO Value, to the extent one has been delivered.

 

 3 

 

 

“Asset” means any (a) Receivable, (b) any Servicing Rights and (c) without
duplication, the related Participation Certificates (including, for the
avoidance of doubt, all Portfolio Excess Spread), in each case, pledged to
secure the Obligations hereunder as more particularly set forth on Schedule 2.

 

“Asset Base” means either the Servicing Rights Asset Base or the Receivables
Asset Base.

 

“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.

 

“Asset Value” has the meaning assigned to such term in the Pricing Side Letter.

 

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

 

“Base Rate” means the “CS Base Rate” as identified in Buyer’s warehouse system
from time to time.

 

“BPO” means a brokers price opinion, delivered by a certified independent
broker, and in form and substance, in each case, satisfactory to Buyer.

 

“BPO Value” means the property value of a Mortgaged Property determined pursuant
to a BPO. All BPO Values shall be delivered to Buyer in electronic form
acceptable to Buyer. With respect to each BPO Value, upon the request of Buyer,
Seller shall deliver to Buyer the related BPO, in form acceptable to Buyer.
Notwithstanding anything else set forth herein, Seller shall deliver to Buyer a
BPO Value with respect to each Mortgaged Property on or before the date on which
the related Mortgage Loan is 90 or more days delinquent and every twelve (12)
months thereafter, unless otherwise agreed to by Buyer.

 

“Business Day” means any day other than (A) a Saturday or Sunday and (B) a
public or bank holiday in New York City.

 

“Buyer” means Credit Suisse First Boston Mortgage Capital LLC, together with its
successors, and any assignee of and Participant or Transferee in the
Transaction.

 

“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.

 

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

 

 4 

 

 

“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 November 10, 2015.

 

“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 (a) the application of reimbursements of Servicer Advances to
Receivables in accordance with its usual and customary procedures with respect
to priority for reimbursements, which is to apply such reimbursements to the
earliest Servicer Advances that have been made under a particular Servicing
Contract and with respect to a particular Mortgage Loan that remains
unreimbursed and (b) with respect to Servicing Rights and the related Servicing
Contracts, 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, with respect to any Mortgage Loan as of any date: (a) the
sum of all amounts, whether in the form of wire transfer, cash, checks, drafts,
or other instruments, received by Seller in payment of, or applied to, any
amount owed with respect to a Mortgage Loan on or before such date, including,
without limitation, all amounts received on account of such Mortgage Loan, and
(b) cash Proceeds with respect to such Mortgage Loan.

 

 5 

 

 

“Commitment” means the obligation of Buyer to enter into Transactions with
Seller in an aggregate outstanding Purchase Price at any one time not to exceed
the Maximum Purchase Price.

 

“Commitment Fee” has the meaning assigned to the term in the Pricing Side
Letter.

 

“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 Commitment
shall have terminated pursuant to this Agreement.

 

“Confidential Information” has the meaning set forth in Section 10.11(b).

 

“Dedicated Accounts” means the Receivables Dedicated Account and each Servicing
Rights Dedicated Account.

 

“Dedicated Account Control Agreement” means the second amended and restated
letter agreement among Buyer, Seller and City National Bank in form and
substance reasonably acceptable to Buyer, as it may be amended, 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.

 

“Delinquency Advance” means any advance made by Seller under the Servicing
Contracts, to cover due, but uncollected or unavailable as a result of funds not
yet being cleared, principal and interest payments on the Mortgage Loans
included in the portfolio of Mortgage Loans serviced by Seller pursuant to the
Servicing Contracts, including Mortgage Loans with respect to which the related
Mortgaged Property is being held pending liquidation.

 

“Deposit Account Control Agreement” means the Amended and Restated Deposit
Account Control Agreement among Buyer, Seller and City National Bank, as may be
amended, supplemented or replaced, from time to time.

 

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

 

 6 

 

 

“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) with respect to Assets related to Servicer Advances, which was originated in
connection with the making of a Servicer Advance pursuant to a Servicing
Contract or added to such schedule in the Buyer’s sole discretion, and is in
full force and effect and under which the Servicer has not been terminated;

 

(d) in the case of Receivables, in respect of which Seller has no knowledge of
any fact that has led it to expect that such Receivable will not be fully
recoverable;

 

(e) which is genuine and constitutes a legal, valid, binding and irrevocable
payment obligation, enforceable in accordance with the terms of the Servicing
Contract or (subject to the applicable Servicing Contract) Participation
Agreement, as applicable, under which it has arisen, subject to no offsets,
counterclaims or defenses;

 

(f) which provides for payment in U.S. Dollars;

 

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

 

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

 

(i) which in respect of which no payments have been received relating to such
Asset which have not been attributed to such Asset;

 

(j) for which there exists no dispute regarding the Asset that results in the
Asset being invalid or otherwise not recoverable or payable; and in respect of
which Asset Seller has complied in all material respects with the Collection
Policy and the related Servicing Contract or Participation Agreement, as
applicable;

 

(k) which is not an obligation of the United States of America, any State or any
agency or instrumentality or political subdivision thereof (other than Fannie
Mae, Freddie Mac or Ginnie Mae);

 

 7 

 

 

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

 

(m) in respect of which Seller has obtained from each Person that may have an
interest in such Asset (i) all acknowledgements or approvals, if any, that are
necessary to pledge such Asset as contemplated hereby (including, without
limitation, the acknowledgement of any securitization trustee relating thereto)
and (ii) other than with respect to an Agency, if applicable, releases of any
security interests in such Asset;

 

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

 

(o) which is a Ginnie Mae Advance, which advance (i) is subject to reimbursement
by HUD, FHA or VA for FHA Mortgage Insurance Contract or VA Loan Guaranty
Agreement, as applicable, and (ii) is a claim which has not been rejected by
HUD, VA or FHA for any reason which impairs the FHA Mortgage Insurance Contract
or VA Loan Guaranty Agreement, as applicable;

 

(p) which with respect to any Asset that constitutes Servicing Rights,

 

(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;

 

(q) with respect to any Asset that constitutes a Participation Certificate,

 

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

 

(ii) for which the related Servicing Rights 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 Servicing Rights 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 of those Securitization
Transactions approved by Buyer in its sole discretion and listed on Schedule 2
hereof, which may be amended from time to time with the consent of Buyer in its
sole discretion and in accordance with Section 2.15 hereof, and 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):

 

(a) other than with respect to Ginnie Mae Servicing Rights, which are
reimbursable only after making payments on any related mortgage-backed
securities, provides that each Asset and/or amounts due in respect thereof are
reimbursable or payable to Seller under the related Servicing Contract from
amounts subsequently received in collections on account of the related Mortgage
Loan;

 

(b) other than with respect to Ginnie Mae Servicing Rights, provides that to the
extent that any Receivable is non-recoverable from the proceeds related to such
Mortgage Loan, following liquidation of such Mortgage Loan or the determination
that such Receivable is non-recoverable, as the case may be, as described in the
related Servicing Contract, such Receivable is recoverable from all cash-flows
on the related Securitization Transaction prior to such cash flows being
available to make payments on any related mortgage-backed securities;

 

(c) other than with respect to Ginnie Mae Servicing Rights, in respect of which
the Servicing Contract provides for the reimbursement of all Servicer Advances
and payment of all servicing fees at the time of a servicing transfer upon the
termination or resignation of the servicer for any reason, with or without
cause;

 

(d) provides that the servicer thereunder may enter into a facility with another
Person to acquire or finance the related Servicer Advances and that such Person
may finance, or re-pledge, assign or otherwise transfer the Receivables related
to such Servicer Advances (any such Person, an “Advance Financing Person”);

 

(e) provides that the Advance Financing Person shall not be required to meet the
eligibility criteria for a successor servicer;

 

(f) provides that the Advance Financing Person shall be entitled to
reimbursement of all Servicer Advances other than in respect of loans in a
Ginnie Mae Pool directly by the trustee, servicer, master servicer or other
party approved by the Advance Financing Person, or by withdrawal itself, in the
same manner and to the same extent as if the Advance Financing Person were the
servicer thereunder, free and clear of any rights of any other party but subject
to all terms, conditions and other requirements of the relevant Servicing
Contracts(s);

 

(g) with respect to which the Servicing Contract is acceptable to Buyer prior to
the initial funding date for such Servicing Contract and is in full force and
effect, at any time any Asset related to such Servicing Contract 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”;

 

 9 

 

 

(h) with respect to which the Servicing Contract (other than Servicing Contracts
related to Agency Servicing Rights) does not permit the reimbursement of
Servicer Advances or the payment of servicing fees to be subject to set-off
rights of a successor servicer, trustee or any other third party; and

 

(i) with respect to which the Servicing Contract (other than Servicing Contracts
related to Agency Servicing Rights) is non-recourse to Seller, except for breach
of contract claims made against Seller, remedies for breaches and
representations and warranties made by Seller, and indemnification provisions
with respect to breaches by Seller.

 

“Encumbered Mortgage Servicing Rights” means any mortgage servicing rights that
are subject to any Lien, claim, restriction or other encumbrance that limits in
any way the ability to dispose of or transfer such asset whether or not such
Lien, claim, restriction or other encumbrance relates to any outstanding debt.

 

“Encumbered Mortgage Servicing Rights Equity” means that portion of the MSR
Valuation of the Encumbered Mortgage Servicing Rights that exceeds the
Indebtedness encumbering such mortgage servicing rights.

 

“EO13224” has the meaning set forth in Section 3.27.

 

“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.

 

“ERISA Event of Termination” means with respect to Seller or Guarantor (i) with
respect to any Plan, a reportable event, as defined in Section 4043 of ERISA, as
to which the PBGC has not by regulation waived the requirement of Section
4043(a) of ERISA that it be notified with 30 days of the occurrence of such
event, or (ii) the withdrawal of Seller, Guarantor or any ERISA Affiliate
thereof from a Plan during a plan year in which it is a substantial employer, as
defined in Section 4001(a)(2) of ERISA, or (iii) the failure by Seller,
Guarantor or any ERISA Affiliate thereof to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA with respect to any Plan,
including, without limitation, the failure to make on or before its due date a
required installment under Section 412(m) of the Code (or Section 430(j) of the
Code as amended by the Pension Protection Act) or Section 302(e) of ERISA (or
Section 303(j) of ERISA, as amended by the Pension Protection Act), or (iv) the
distribution under Section 4041 of ERISA of a notice of intent to terminate any
Plan or any action taken by Seller, Guarantor or any ERISA Affiliate thereof to
terminate any plan, or (v) the failure to meet requirements of Section 436 of
the Code resulting in the loss of qualified status under Section 401(a)(29) of
the Code, or (vi) the institution by the PBGC of proceedings under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan, or (vii) the receipt by Seller, Guarantor or any ERISA Affiliate
thereof of a notice from a Multiemployer Plan that action of the type described
in the previous clause (vi) has been taken by the PBGC with respect to such
Multiemployer Plan, or (viii) any event or circumstance exists which may
reasonably be expected to constitute grounds for Seller, Guarantor or any ERISA
Affiliate thereof to incur liability under Title IV of ERISA or under Sections
412(b) or 430(k) of the Code with respect to any Plan.

 

 10 

 

 

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

 

“Existing Indebtedness” has the meaning specified in Section 3.23 hereof.

 

“Expenses” means all present and future expenses reasonably incurred by or on
behalf of Buyer in connection with the negotiation, execution or enforcement of
this Agreement or any of the other Program Agreements and Underlying Spread
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 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.

 

“Facility” has the meaning given to such term in the recitals to this Agreement.

 

“Facility Payment Date” means the last Business Day of each calendar week.

 

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

 

“Fannie Mae Contract” has the meaning set forth in Section 4.03.

 

“Fannie Mae Servicing Rights” means Servicing Rights of Seller with respect to
Mortgage Loans owned, or that have been securitized in MBS guaranteed, by Fannie
Mae.

 

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

 

 11 

 

 

“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 Statement Date” has the meaning set forth in Section 3.05(a).

 

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

 

“Fitch” means Fitch Ratings, Inc., or any successor thereto.

 

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

 

“Freddie Mac Servicing Rights” means Servicing Rights of Seller with respect to
Mortgage Loans owned, or that have been securitized in MBS guaranteed, by
Freddie Mac.

 

“GAAP” means generally accepted accounting principles in the United States of
America, applied on a consistent basis and applied to both classification of
items and amounts, and shall include, without limitation, the official
interpretations thereof by the Financial Accounting Standards Board, its
predecessors and successors.

 

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

 

“Ginnie Mae Account” means (a) the account designated as: Seller, in its
capacity as seller under the Mortgage Loan Repurchase Agreement, as agent,
trustee, and/or bailee for Buyer, in its capacity as buyer under the Mortgage
Loan Repurchase Agreement, and/or payments of various mortgagors and/or various
owners of interest in loans – EBO P&I, Account No. 555230001, City National
Bank, ABA # 122016066, (b) the account designated as: Seller, in its capacity as
seller under the Mortgage Loan Repurchase Agreement, as agent, trustee, and/or
bailee for Buyer, in its capacity as buyer under the Mortgage Loan Repurchase
Agreement, and/or payments of various mortgagors and/or various owners of
interest in loans – FHA/VA Claims, Account No. 555230036, City National Bank,
ABA # 122016066, or (c) such other account as designated in writing by Buyer, in
each case, as contemplated by Section 14.ii of the Mortgage Loan Repurchase
Agreement.

 

 12 

 

 

“Ginnie Mae Advance” means a Servicer Advance made by Seller in connection with
servicing the Ginnie Mae Loans.

 

“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 Loan” means a Mortgage Loan that is subject to a Transaction (as
defined in the Mortgage Loan Repurchase Agreement) under the Mortgage Loan
Repurchase Agreement and was purchased from a Ginnie Mae Security in accordance
with the terms of the Ginnie Mae Guide, or purchased by the Seller shortly after
its purchase from a Ginnie Mae Security.

 

“Ginnie Mae Pool” means a group of mortgage loans that back securities issued by
Ginnie Mae, as contemplated by the Acknowledgment Agreement with Ginnie Mae.

 

“Ginnie Mae Security” means a mortgage-backed security guaranteed by Ginnie Mae
pursuant to the Ginnie Mae Guide.

 

“Ginnie Mae Servicing Rights” means Servicing Rights of Seller with respect to
Mortgage Loans that are subject to a Ginnie Mae MBS or arise from a Servicing
Contract with Ginnie Mae.

 

“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.

 

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

 

“Guaranty” means the Third Amended and Restated Guaranty, dated as of the
Closing Date, as the same may be amended from time to time, pursuant to which
Guarantor fully and unconditionally guarantees the obligations of Seller
hereunder.

 

 13 

 

 

“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 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.

 

“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.

 

“Lien” means any lien, claim, charge, restriction, pledge, security interest,
mortgage, deed of trust or other encumbrance.

 

“Low Percentage Margin Call” has the meaning specified in Section 2.05(c)
hereof.

 

“Margin” has the meaning assigned to the term in the Pricing Side Letter.

 

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

 

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

 

“Margin Deficit” means either a Servicing Rights Margin Deficit or a Receivables
Margin Deficit.

 

“Market Value” means, with respect to any Asset as of any date of determination,
and without duplication, the fair market value of such Asset on such date as
reasonably determined by Buyer (or an Affiliate thereof).

 

 14 

 

 

“Master Spread Acquisition Agreement” means that certain Amended and Restated
Master Spread Acquisition and MSR Servicing Agreement, dated as of April 30,
2015, between the Underlying Spread Counterparty and the Seller, as amended,
supplemented or replaced, from time to time.

 

“Master Spread Participation Agreement” means that certain Amended and Restated
Master Spread Participation Agreement, dated as of November 10, 2015, between
Seller and Seller, as initial participant, as amended, supplemented or replaced,
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 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 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 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 Underlying
Spread Documents.

 

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

 

“Maximum Servicer Advance Purchase Price” has the meaning assigned to the term
in the Pricing Side Letter.

 

“Maximum Servicing Rights Purchase Price” has the meaning assigned to the term
in the Pricing Side Letter.

 

“MBS” means collateralized mortgage obligations and other mortgage-backed
securities.

 

“Moody’s” means Moody’s Investors Service, Inc. or any successors thereto.

 

“Mortgage Loan” means a mortgage loan secured by a first mortgage lien on a
one-to-four family residential property.

 

“Mortgage Loan Repurchase Agreement” means that certain Amended and Restated
Master Repurchase Agreement, dated as of May 3, 2013, among Buyer, Seller and
Guarantor, as amended from time to time.

 

“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.

 

“MSR Valuation” shall mean (a) the lesser of (i) the value of the mortgage
servicing rights owned by the Seller as set forth in the Seller’s most recent
balance sheet as determined by the Seller as of such date in accordance with
GAAP and (ii) the Buyer’s valuation of such mortgage servicing rights as
determined by the Buyer, or (b) if a Third Party Evaluator is used to value the
mortgage servicing rights, the Third Party Evaluator’s valuation of such
mortgage servicing rights as determined by such Third Party Evaluator.

 

 15 

 

 

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

 

“Net Worth” means, with respect to any Person, an amount equal to, on a
consolidated basis, such Person’s stockholder equity (determined in accordance
with GAAP).

 

“Non-Excluded Taxes” has the meaning set forth in Section 2.11(a).

 

“Notice” or “Notices” means all requests, demands and other communications, in
writing (including facsimile transmissions), sent by overnight delivery service,
facsimile transmission, electronic transmission or hand-delivery to the intended
recipient at the address specified in Section 10.05 or, as to any party, at such
other address as shall be designated by such party in a written notice to the
other party.

 

“NPV” means, with respect to any Mortgaged Property or REO Property relating to
a Mortgage Loan, the net property value of such Mortgaged Property or REO
Property, as determined by Seller (which shall equal the net adjusted proceeds
amount as determined by Seller’s accretion model on a monthly basis) by
reference to the most recently available Appraised Value of such property;
provided that such determination may be adjusted further by Buyer in its sole
discretion by subtracting therefrom all outstanding and reasonably anticipated
costs and expenses in connection with such Mortgage Loan, including without
limitation, all Protective Advances and the foreclosure and liquidation of the
related Mortgaged Property or REO Property, as applicable.

 

“Obligations” means (a) all of Seller’s indebtedness, obligations to pay the
outstanding principal balance of the Purchase Price, together with interest
thereon on the Termination Date, outstanding interest due on each Price
Differential Payment Date, and other obligations and liabilities, to Buyer or
its Affiliates 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; (d) all of Seller’s indemnity
obligations to Buyer pursuant to the Program Agreements; and (e) all of Seller’s
and Guarantor’s obligations under the Mortgage Loan Repurchase Agreement and
other Repurchase Documents.

 

“OFAC” has the meaning set forth in Section 3.27.

 

 16 

 

 

“Officer’s Compliance Certificate” has the meaning assigned to such term in the
Pricing Side Letter.

 

“Other Taxes” has the meaning set forth in Section 2.11(b).

 

“Outstanding Balance” means, of any Receivable at any time, the then outstanding
amount thereof.

 

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

 

“Participation Agreement” means each Master Spread Participation Agreement or
Master Spread Acquisition Agreement, as applicable, each as amended from time to
time, related to Servicing Rights subject to this Agreement, in form and
substance acceptable to Buyer and identified on Schedule 2 hereof.

 

“Participation Certificate” means the original participation certificate issued
and delivered in connection with a Participation Agreement, and, (i) with
respect to the Participation Certificate issued pursuant to the Master Spread
Acquisition Agreement, transferred by Seller to Underlying Spread Counterparty
pursuant to the Underlying Spread Transaction, and (ii) with respect to the
Participation Certificate issued pursuant to the Master Spread Participation
Agreement, issued to Seller, then, in each case, re-registered into the name of
the Buyer.

 

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

 

“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.

 

“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.

 

“Pool Factor Event” has the meaning assigned to such term in the Pricing Side
Letter.

 

“Portfolio Excess Spread” means, collectively, the Retained Portfolio Excess
Spread and the Repledge Portfolio Excess Spread.

 

“Power of Attorney” has the meaning set forth in Section 4.08(e) hereof.

 

“Price Differential” means with respect to any Transaction as of any date of
determination, an amount equal to the product of (A) the Pricing Rate for such
Transaction and (B) the Purchase Price for such Transaction, calculated daily on
the basis of a 360 day year for the actual number of days during the Price
Differential Period.

 

 17 

 

 

“Price Differential Payment Date” means, for as long as any Obligations shall
remain owing by Seller to Buyer, the earlier of (a) the first Facility Payment
Date of each calendar month and (b) the Termination Date.

 

“Price Differential Period” means, the period from and including a Price
Differential Payment Date, up to but excluding the next Price Differential
Payment Date.

 

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

 

“Pricing Rate” means Base Rate plus the applicable Margin.

 

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

 

“Primary Repurchase Assets” has the meaning set forth in Section 4.02.

 

“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 Guaranty, the Power of Attorney, the
Underlying Spread Counterparty Power of Attorney, the Security Agreement, the
Deposit Account Control Agreement, the Participation Agreements, and the
Underlying Spread Documents as each of the same may hereafter be amended,
supplemented, restated or otherwise modified from time to time.

 

“Prohibited Person” has the meaning set forth in Section 3.27 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.

 

“Protective Advance” means any servicing advance (including, but not limited to,
any advance made to pay taxes and insurance premiums; any advance to pay the
costs of protecting the value of any real property or other security for a
mortgage loan; and any advance to pay the costs of realizing on the value of any
such security) made by Seller in connection with the Mortgage Loans included in
the portfolio of Mortgage Loans serviced pursuant to the Servicing Contracts.

 

“Purchase Date” means, subject to the satisfaction of the conditions precedent
set forth in Article V hereof, the nineteenth (19th) day of each calendar month
(or if such day is not a Business Day, the immediately preceding Business Day)
on which a Transaction is entered into by Buyer pursuant to Section 2.02 or such
other mutually agreed upon date as more particularly set forth on Exhibit C
hereto.

 

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

 

(i) on the Purchase Date, the applicable Asset Value;

 

 18 

 

 

(ii) on any day after the Purchase Date, except where Buyer and the Seller agree
otherwise, the amount determined under the immediately preceding clause (i)
decreased by the amount of any cash transferred by the Seller to Buyer pursuant
to Section 2.05 hereof.

 

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

 

“Purchase Price Percentage Reduction Trigger Event” 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 Servicing Rights are pledged, and not
sold, to Buyer hereunder, such Servicing Rights will nevertheless be included
herein as Purchased Assets.

 

“Rating Agency” means any of S&P, Moody’s or Fitch.

 

“Receivables” means, collectively, the reimbursement rights relating to Servicer
Advances under each Servicing Contract, each and every right of Seller to
receive reimbursement payments for the Servicer Advances in accordance with a
Servicing Contract, whether now existing or hereafter arising, and whether or
not constituting an “account” or a “general intangible” under the UCC but not
evidenced by “chattel paper” or an “instrument,” as defined in the UCC, and the
Related Security.

 

“Receivables Asset Base” means the aggregate Asset Value of all Servicer
Advances. The Servicer Advances to be added to the Receivables Asset Base on any
Purchase Date shall be (a) those Protective Advances disbursed during the period
from and including the second preceding Servicing Cut-off Date through but not
including the related Servicing Cut-off Date immediately prior to the Purchase
Date and (b) those newly disbursed Delinquency Advances disbursed as of the date
preceding the related Purchase Date.

 

“Receivables Dedicated Account” means the demand deposit account “PennyMac Loan
Services, LLC in trust for Credit Suisse First Boston Mortgage Capital LLC –
Receivables Dedicated Account”, which account has been established by Buyer for
the purpose of holding cash proceeds of Receivables for the benefit of Buyer at
City National Bank.

 

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

 

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

 

“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(b).

 

 19 

 

 

“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 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
Servicing Contract related to such Asset or otherwise; and (c) any and all
Proceeds of the foregoing.

 

“REO Property” means real property acquired by Seller, including a Mortgaged
Property acquired through foreclosure of a Mortgage Loan or by deed in lieu of
such foreclosure.

 

“Repledge Portfolio Excess Spread” means any Primary Portfolio Excess Spread or
Secondary Portfolio Excess Spread, each as defined in the Master Spread
Acquisition Agreement, which is subject to an Underlying Spread Transaction,
from time to time.

 

“Repurchase Assets” has the meaning set forth in Section 4.02(c) and which, for
the avoidance of doubt, shall continue to include the Repurchase Assets sold to
Underlying Spread Counterparty by Seller subject to the Lien of the Security
Agreement.

 

“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 Documents” means “Program Agreements” as defined in the Mortgage
Loan Repurchase Agreement.

 

“Repurchase Price” means the price at which Purchased Assets are to be
transferred from Buyer to Seller (other than the Servicing Rights, 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 and the accrued but unpaid Price Differential as
of the date of such determination.

 

“Repurchase Rights” has the meaning set forth in Section 4.01(c) hereof.

 

“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 Portfolio Excess Spread” means any Portfolio Excess Spread, as defined
in, and participated by, the Seller under, the applicable Participation
Agreement, from time to time, and retained by Seller.

 

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“S&P” means Standard & Poor’s Ratings Services, or any successor thereto.

 

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

 

“Securities Intermediary” means City National Bank, and its permitted successors
and assigns, or such other party specified by Buyer and agreed to by Seller,
which approval shall not be unreasonably withheld.

 

“Securitization Transaction” means a transaction whereby a Mortgage Loan is
transferred to a trust as part of a publicly-issued and/or privately placed,
rated or unrated, mortgage pass-through transaction including, without
limitation, Agency MBS.

 

“Security Agreement” means that certain Second Amended and Restated Security and
Subordination Agreement, dated as of November 10, 2015, between the Underlying
Spread Counterparty and the Buyer, as amended, supplemented or replaced, from
time to time.

 

“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 2.10 or 2.11 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.

 

“Servicer Advance” means a Delinquency Advance or a Protective Advance.

 

“Servicing Appraisal” means a written appraisal or evaluation by Buyer or an
appraiser approved by Buyer in its sole good faith discretion evaluating the
Appraised Value of the Servicing Rights pledged hereunder.

 

“Servicing Contracts” means, collectively, (i) with respect to all Assets other
than Ginnie Mae Advances, those servicing agreements described on Schedule 2
attached hereto, as amended from time to time, to which Seller is a party,
pursuant to which Seller acts as the servicer of portfolios of Mortgage Loans or
specified Mortgage Loans, and by which Seller’s servicing obligations are
governed with respect to an Eligible Securitization Transaction and with respect
to Servicing Rights, in the case of each Servicing Contract between Seller and
an Agency, subject to an Acknowledgement Agreement with such Agency, and (ii)
with respect to Ginnie Mae Advances, the Mortgage Loan Repurchase Agreement to
the extent of the servicing requirements set forth therein, pursuant to which
Seller will service the related Ginnie Mae Loans. For all purposes of this
Agreement, the term “Servicing Contracts” shall include any and all instruments,
agreements, invoices or other writings, which gives rise to or otherwise
evidence any of the Receivables or Servicing Rights. Without limiting the
generality of the foregoing, any reference herein to a “Servicing Contract”
between Seller and an Agency shall be deemed to include the relevant
Acknowledgment Agreement, if any, with such Agency.

 

“Servicing Cut-off Date” means the day of each calendar month used by the Seller
in order to determine the Purchase Price which is more particularly described in
Schedule 2 hereto.

 

 21 

 

 

“Servicing Rights” means all of the Seller’s rights and interests under any
Servicing Contract, including the rights to (a) service the Mortgage Loans that
are the subject matter of such Servicing Contract and (b) receive compensation
payments under such Servicing Contract, directly or indirectly, for doing so.

 

“Servicing Rights Asset” means (i) all Servicing Rights arising under or related
to any Servicing Contract; (ii) all rights to reimbursement of amounts due under
the related Servicing Contract; (iii) all records, instruments or other
documentation evidencing any of the foregoing; (iv) 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
Servicing Contracts); and (v) any and all replacements, substitutions,
distributions on or proceeds of any and all of the foregoing.

 

“Servicing Rights Asset Base” means the aggregate Asset Value of those Servicing
Rights and, without duplication, the related Participation Certificates sold and
pledged to Buyer hereunder.

 

“Servicing Rights Dedicated Account” means the (i) demand deposit account
“PennyMac Loan Services, LLC in trust for Credit Suisse First Boston Mortgage
Capital LLC – Servicing Rights Dedicated Account”, which account has been
established by Buyer for the purpose of holding cash proceeds of Servicing
Rights other than Agency Servicing Rights and the related Participation
Certificate for the benefit of Buyer at City National Bank and (ii) demand
deposit account “PennyMac Loan Services, LLC in trust for Credit Suisse First
Boston Mortgage Capital LLC – GNMA Servicing Rights Dedicated Account”, which
account has been established by Buyer for the purpose of holding cash proceeds
of Ginnie Mae Servicing Rights for the benefit of Buyer at City National Bank.

 

“Servicing Rights Margin Call” has the meaning set forth in Section 2.05(b).

 

“Servicing Rights Margin Deficit” has the meaning set forth in Section 2.05(b).

 

“SPS” means Select Portfolio Servicing, Inc. and its successors and permitted
assigns.

 

“Stop Advance Trigger” means, with respect to a Mortgage Loan, the point at
which, pursuant to Seller’s recoverability model, Seller is required to stop
making Delinquency Advances and/or Protective Advances.

 

“Subordinated Debt” means, Indebtedness of Seller (i) which is unsecured,
(ii) of which no part of the principal of such Indebtedness is required to be
paid (whether by way of mandatory sinking fund, mandatory redemption, mandatory
prepayment or otherwise) prior to the date which is one year following the
Termination Date and (iii) of which the payment of the principal of and interest
on such Indebtedness and other obligations of Seller in respect of such
Indebtedness are subordinated to (x) the prior payment in full of the
Obligations (including post-petition obligations) and (y) all other obligations
and liabilities of Seller to Buyer hereunder, in all cases, on terms and
conditions approved in writing by Buyer and all other terms and conditions of
which are satisfactory in form and substance to Buyer.

 

 22 

 

 

“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
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.

 

“Taxes” has the meaning assigned to such term in Section 2.11(a).

 

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

 

“Test Period” has the meaning assigned to such term in the Pricing Side Letter.

 

“Third Party Evaluator” shall mean an appraiser approved by Buyer in its sole
good faith discretion.

 

“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.

 

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

 

“Trigger Event” has the meaning assigned thereto in the Security Agreement.

 

“Underlying Spread Loan Agreement” means the Loan and Security Agreement,
between Seller, in its capacity as lender thereunder, and Underlying Spread
Counterparty, as the same may be amended, restated, supplemented or otherwise
modified from time to time.

 

“Underlying Spread Counterparty” means PennyMac Holdings, LLC, and its permitted
successors and assigns.

 

“Underlying Spread Counterparty Power of Attorney” means the Power of Attorney
required to be executed and delivered by the Underlying Spread Counterparty
pursuant to the Security Agreement, as the same may be amended from time to
time.

 

“Underlying Spread Documents” means the Underlying Spread Loan Agreement,
pricing letter, side letter, confirmations and all documents ancillary thereto
that evidence an Underlying Spread 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 Underlying Spread Transactions, which shall not be
subject to Buyer review or approval).

 

 23 

 

 

“Underlying Spread Transaction” means a transaction between Seller and
Underlying Spread Counterparty whereby Underlying Spread Counterparty pledges
the Repledge Portfolio Excess Spread and the corresponding Participation
Certificate to Seller against the transfer of funds by Seller, which Repledge
Portfolio Excess Spread is concurrently or consecutively pledged to Buyer
hereunder.

 

“Unencumbered Mortgage Servicing Rights” means any mortgage servicing rights
that are not Encumbered Mortgage Servicing Rights.

 

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

 

“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.

 

“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.

 

“Weekly Report Date” has the meaning set forth in Section 6.05.

 

Section 1.02 Other Defined Terms. (a)  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. Unless otherwise specified herein, the term “or” has the inclusive
meaning represented by the term “and/or” and the term “including” is not
limiting. All references to Sections, subsections, Articles and Exhibits shall
be to Sections, subsections, and Articles of, and Exhibits to, this Agreement
unless otherwise specifically provided.

 

(b) 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.”

 

 24 

 

 

ARTICLE II

GENERAL TERMS

 

Section 2.01  Transactions. (a)  Subject to the terms and conditions hereof,
Buyer agrees to enter into Transactions with Seller for a Purchase Price
outstanding at any one time not to exceed the Maximum Purchase Price. During the
Commitment Period, Seller may utilize the Commitment by requesting Transactions,
Seller may pay the Repurchase Price in whole or in part at any time during such
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 in connection with Servicing Rights Assets to the extent
the Purchase Price of such Transaction exceeds the lesser of i) the Maximum
Servicing Rights Purchase Price and ii) the Servicing Rights Asset Base.
Notwithstanding the foregoing, Buyer shall have no commitment or obligation to
enter into any Transactions in connection with Receivables to the extent such
Purchase Price exceeds the lesser of (i) the Maximum Servicer Advance Purchase
Price and (ii) the Receivables Asset Base.

 

Section 2.02  Procedure for Entering into Transactions. (a)  Seller may enter
into Transactions with Buyer under the Facility during the Commitment Period on
any Purchase Date; provided, that Seller shall have given Buyer irrevocable
notice (each, a “Transaction Notice”), which notice (i) shall be substantially
in the form of Exhibit C, (ii) shall be signed by a Responsible Officer of
Seller and be received by Buyer prior to 3:00 p.m. (New York time) three (3)
Business Days prior to the related Purchase Date, and (iii) shall specify
(A) the dollar amount of the requested Purchase Price, (B) the aggregate amount
of Receivables subject to the Transaction, if applicable, (C) the value of the
Portfolio Excess Spread on Seller’s books and records, if applicable, (D) the
value of the Servicing Rights on Seller’s books and records, if applicable;
provided that such value shall break out that portion attributable to the
related Portfolio Excess Spread, (E) the requested Purchase Date, (F) the
information required to be included in the Asset Schedule with respect to each
such Asset in mutually acceptable electronic form and (G) the request for
approval of the related Servicing Contract (to the extent not previously
approved hereunder). 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 of its intent to remit
the requested Purchase Price one (1) Business Day prior to the requested
Purchase Date. 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 remit the amount of the requested
Purchase Price in U.S. Dollars and in immediately available funds (i) with
respect to that portion of the Purchase Price attributable to a Delinquency
Advance, to the trustee’s account under the related Securitization Transaction
and (ii) with respect to that portion of the Purchase Price attributable to a
Servicing Right or a Protective Advance, to the account specified by Seller.

 

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(c) In the event that on the Purchase Date excess funds remain in the Dedicated
Accounts (after application of payments in accordance with Section 2.07 but not
including any amounts to be disbursed to Seller), Buyer may apply such excess
funds to the amount of the requested Purchase Price.

 

(d) 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 repurchase the Purchased Assets and pay all outstanding Obligations
on the Termination Date.

 

(b) Without limiting the foregoing, on each Price Differential Payment Date,
Seller shall sweep all amounts received with respect to (i) Servicing Rights to
the applicable Servicing Rights Dedicated Account and (ii) Receivables to the
Receivables Dedicated Account in accordance with Section 6.14 hereof to be
applied in accordance with Section 2.07 hereof (provided that Seller shall remit
to each of the applicable Dedicated Accounts, in accordance with Section 2.14
hereof, all proceeds received with respect to Assets not otherwise required to
be deposited in a clearing, custodial or escrow account pursuant to the related
Servicing Contract).

 

(c) By notifying Buyer in writing at least one (1) Business Day in advance,
Seller shall be permitted, at its option, to prepay, subject to Section 2.12,
the Purchase Price in whole or in part at any time, together with accrued and
unpaid interest on the amount so prepaid.

 

Section 2.04  Price Differential. On each Price Differential Payment Date,
Seller hereby promises to pay to Buyer all accrued and unpaid Price Differential
on the Transactions, as invoiced by Buyer three (3) Business Days prior to the
related Price Differential Payment Date (the “Price Differential Statement
Date”); provided that if Buyer fails to deliver such statement on the Price
Differential Statement Date, on such Price Differential 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. The Price Differential shall be computed on the basis
of the actual number of days in each Price Differential Period and a 360-day
year.

 

Section 2.05  Margin Maintenance. (a)  If at any time the aggregate outstanding
amount of the Purchase Price in connection with Receivables exceeds the
Receivables Asset Base in effect at such time, as determined by Buyer (such
excess, a “Receivables Margin Deficit”), then Buyer may by notice to Seller
require Seller to transfer to Buyer cash in an amount at least equal to the
Receivables Margin Deficit (such requirement, a “Receivables Margin Call”).

 

(b) If at any time the aggregate outstanding amount of the Purchase Price in
connection with Servicing Rights exceeds the Servicing Rights Asset Base in
effect at such time, as determined by Buyer (such excess, a “Servicing Rights
Margin Deficit”), then Buyer may by notice to Seller require Seller to transfer
to Buyer cash in an amount at least equal to the Servicing Rights Margin Deficit
(such requirement, a “Servicing Rights Margin Call” and together with a
Receivables Margin Call, a “Margin Call”).

 

 26 

 

 

(c) Notice delivered pursuant to Section 2.05(a) or Section 2.05(b) may be given
by any written or electronic means. With respect to a Margin Call in the amount
of less than 5% of the outstanding principal amount of the Purchase Price (a
“Low Percentage 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; 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 Business Day following the date of such notice. With respect to
all Margin Calls other than Low Percentage Margin Calls, any notice given before
10:00 a.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 such
Business Day; notice given after 10:00 a.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. 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.

 

(d) 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.

 

Section 2.06  Payment Procedure. Seller absolutely, unconditionally, and
irrevocably, shall make, or cause to be made, all payments required to be made
by Seller hereunder. 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 Accounts as set
forth in Section 6.14.

 

Section 2.07  Application of Payments. (a)  On each Facility Payment Date and
each Price Differential Payment Date, Seller shall prepare and deliver to Buyer
and the depository institution where the Dedicated Accounts have been
established a distribution worksheet detailing the application of amounts on
deposit in the Dedicated Accounts in accordance with this Section 2.07. The
application of payments by Buyer to the reduction of the Obligations shall, in
the absence of manifest error, be binding upon Seller.

 

 27 

 

 

(b) On each Facility Payment Date (other than any Facility Payment date which is
also a Price Differential Payment Date which shall be governed by Section
2.07(c)), all amounts on deposit in the Receivables Dedicated Account and then
all amounts on deposit in each Servicing Rights Dedicated Account shall be
applied as follows:

 

(i) first, to the payment of all amounts (including, without limitation,
Expenses) other than accrued and unpaid Price Differential and the Purchase
Price;

 

(ii) second, in the event that a Servicer Advance is paid in full, to the
payment of the Purchase Price therefor;

 

(iii) third, without limiting the rights of Buyer under Section 2.05, to the
payment of Purchase Price outstanding to satisfy any Margin Deficit owing;

 

(iv) fourth, to the payment of all other costs and fees payable to Buyer
pursuant to this Agreement; and

 

(v) fifth, any remainder to Seller.

 

(c) On each Price Differential Payment Date, all amounts on deposit in the
Receivables Dedicated Account and then all amounts on deposit in each Servicing
Rights Dedicated Account shall be applied as follows:

 

(i) first, to the payment of any accrued and unpaid Price Differential owing;

 

(ii) second, in the same order of priority as set forth in Section
2.07(b)(i)-(v)

 

(d) With respect to prepayments pursuant to Section 2.03(c), such amounts shall
be applied as follows:

 

(i) first, to all amounts (including, without limitation, Expenses) owing (other
than accrued and unpaid Price Differential and Purchase Price);

 

(ii) second, to the payment of the accrued and unpaid Price Differential;

 

(iii) third, to the payment of the Purchase Price until reduced to zero; and

 

(iv) fourth, to payment of all costs and fees and any other Obligations.

 

(e) Notwithstanding the preceding provisions, if an Event of Default shall have
occurred hereunder, all funds in the Receivables Dedicated Account and then all
funds in each Servicing Rights Dedicated Account shall be applied as follows:

 

(i) first, in the same order of priority as set forth in Section
2.07(c)(i)-(ii);

 

(ii) second, to the payment of Purchase Price until reduced to zero;

 

(iii) third, to payment of all costs and fees and any other Obligations; and

 

(iv) fourth, any remainder to Seller.

 

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(f) Sections 2.07(a) through 2.07(d) shall be applicable commencing on the
earlier of (i) the first Facility Payment Date following the thirtieth (30th)
day after written notice thereof is delivered by Buyer to Seller (the
“Application Notice Date”) or (ii) an Event of Default. Until the Application
Notice Date, provided no Event of Default has occurred, Seller shall be entitled
to withdraw amounts on deposit in the Dedicated Accounts as and in a manner as
Seller deems appropriate.

 

Section 2.08  Use of Purchase Price and Transaction Requests. (a)  The Purchase
Price shall be used exclusively by Seller to satisfy its obligation to make
Protective Advances and Delinquency Advances pursuant to the terms of the
related Servicing Contract and to finance the Receivables and existing Servicing
Rights or to purchase new Servicing Rights, as applicable.

 

(b) To the extent that Seller is able to apply funds on deposit in a custodial
account or trustee account in order to satisfy its obligation to make a
Protective Advance or a Delinquency Advance pursuant to the terms of the related
Securitization Transaction, Seller shall first apply such funds in the custodial
account or trustee account in order to make the related Protective Advance or
Delinquency Advance prior to requesting and entering into a Transaction
hereunder.

 

Section 2.09  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 2.10  Requirements of Law. (a)  If any Requirement of Law (other than
with respect to any amendment made to Buyer’s certificate of incorporation and
by-laws or other organizational or governing documents) or any change in the
interpretation or application thereof or compliance by Buyer with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority made subsequent to the Closing Date:

 

(i) shall subject Buyer to any tax of any kind whatsoever with respect to this
Agreement or the Transactions (excluding income taxes, branch profits taxes,
franchise taxes or similar taxes imposed on Buyer as a result of any present or
former connection between Buyer and the United States, other than any such
connection arising solely from Buyer having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement) or change
the basis of taxation of payments to Buyer in respect thereof;

 

(ii) shall impose, modify or hold any reserve, special deposit, compulsory loan
or similar requirement against assets held by, deposits or other liabilities in
or for the account of, advances, or other extensions of credit by, or any other
acquisition of funds by, any office of Buyer which is not otherwise included in
the determination of the Price Differential hereunder; or

 

(iii) shall impose on Buyer any other condition;

 

 29 

 

 

and the result of any of the foregoing is to increase the cost to Buyer, by an
amount which Buyer deems to be material, of entering, continuing or maintaining
this Agreement or any other Program Agreement, the Transactions or to reduce any
amount due or owing hereunder in respect thereof, then, in any such case, Seller
shall promptly pay Buyer such additional amount or amounts as calculated by
Buyer in good faith as will compensate Buyer for such increased cost or reduced
amount receivable.

 

(b) If Buyer shall have determined that the adoption of or any change in any
Requirement of Law (other than with respect to any amendment made to Buyer’s
certificate of incorporation and by-laws or other organizational or governing
documents) regarding capital adequacy or in the interpretation or application
thereof or compliance by Buyer or any corporation controlling Buyer with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the Closing Date
shall have the effect of reducing the rate of return on Buyer’s or such
corporation’s capital as a consequence of its obligations hereunder to a level
below that which Buyer or such corporation could have achieved but for such
adoption, change or compliance (taking into consideration Buyer’s or such
corporation’s policies with respect to capital adequacy) by an amount deemed by
Buyer to be material, then from time to time, Seller shall promptly pay to Buyer
such additional amount or amounts as will compensate Buyer for such reduction.

 

(c) If Buyer becomes entitled to claim any additional amounts pursuant to this
Section 2.10, it shall promptly notify Seller of the event by reason of which it
has become so entitled. A certificate as to any additional amounts payable
pursuant to this Section 2.10 submitted by Buyer to Seller shall be conclusive
in the absence of manifest error.

 

Section 2.11  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 Section 2.10 and this
Section 2.11, 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 2.11)
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 of its Applicable Lending Office, 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).

 

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(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 Taxes of any kind imposed by any jurisdiction on amounts payable
by Seller or Guarantor, as applicable, under this Section 2.11 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 2.11 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 2.11(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 2.11 shall survive the termination of this Agreement and the other
Program Agreements. Nothing contained in Section 2.10 or this Section 2.11 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 2.12  Indemnity. Without limiting, and in addition to, the provisions of
Section 10.02, 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 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 2.13 Intentionally Omitted.

 

Section 2.14  Dedicated Accounts.

 

Buyer shall establish and maintain each of the Dedicated Accounts in the form of
a time deposit or demand account. Receivables funds received and retained by
Seller pursuant to the applicable Servicing Contract shall promptly, in any
event within two (2) Business Days after receipt, be deposited in the
Receivables Dedicated Account. Amounts received on account of Servicing Rights
and Portfolio Excess Spread (including Repledge Portfolio Excess Spread) and
retained by Seller pursuant to the applicable Servicing Contract or
Participation Agreement, as the case may be, shall promptly, in any event within
two (2) Business Days after receipt, be deposited in the applicable Servicing
Rights Dedicated Account. Funds deposited in the Dedicated Accounts (including
any interest paid on such funds) may be distributed only in accordance with
Section 2.07. Upon the Termination Date and the payment of all amounts due by
Seller hereunder, all amounts on deposit in the Dedicated Accounts shall be
remitted to Seller.

 

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Buyer, in its capacity as buyer under the Mortgage Loan Repurchase Agreement,
has established the Ginnie Mae Account under the Mortgage Loan Repurchase
Agreement, and certain amounts on deposit therein shall constitute proceeds of
the Ginnie Mae Advances. Buyer hereby appoints and authorizes Agent to act as
agent solely with respect to performance of the following duties, in each case,
on behalf of Buyer: (i) maintaining the Ginnie Mae Account, and (ii) taking such
actions as Agent deems appropriate to administer the Ginnie Mae Account. The
Agent shall have no duties or responsibilities except those expressly set forth
in this Section 2.14.

 

Section 2.15  Additional Securitization Transactions, Servicing Contracts and
Participation Agreements. In the event that Seller wishes to enter into a
Transaction with respect to a Securitization Transaction, Servicing Contract or
Participation Agreement not listed on Schedule 2 hereto, Seller shall deliver a
written request, substantially in the form of Exhibit F hereto, for approval of
such Securitization Transaction, Servicing Contract or Participation Agreement
to Buyer for Buyer’s approval, which may be withheld in Buyer’s sole discretion.
Upon approval in writing by Buyer of such additional Securitization Transaction,
Servicing Contract or Participation Agreement as an Eligible Securitization
Transaction and filing of a UCC-3 amendment adding the Securitization
Transaction, Servicing Contract or Participation Agreement, Schedule 2 shall be
automatically updated to include each additional Eligible Securitization
Transaction, Servicing Contract or Participation Agreement identified thereon.

 

Section 2.16  Commitment Fee. Seller shall pay the Commitment Fee as specified
in the Pricing Side Letter. Such payment shall be made in Dollars, in
immediately available funds, without deduction, set off or counterclaim, to
Buyer at such account designated by Buyer.

 

Section 2.17  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) In connection with Seller’s exercise of a Seller Termination Option, Buyer
shall refund to Seller an amount equal to the Commitment Fee prorated for the
number of days remaining from and including the deemed Termination Date to but
excluding the then scheduled Termination Date.

 

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(d) For the avoidance of doubt, Seller shall remain responsible for all costs
actually incurred by Buyer pursuant to Sections 2.10 and 2.11.

 

Section 2.18  Repledge Portfolio Excess Spread.

 

(a) With respect to any Repledge Portfolio Excess Spread that is made subject to
a Transaction hereunder, Underlying Spread Counterparty shall first pledge such
Repledge Portfolio Excess Spread under the Security Agreement and also under the
Underlying Spread Loan Agreement, provided that Seller provides notice thereof
to Buyer and such Repledge Portfolio Excess Spread is and continues to be an
Eligible Asset.

 

(b) Seller hereby agrees and acknowledges that such Underlying Spread
Transaction is subject to and subordinate to (i) Buyer’s rights hereunder and
(ii) Buyer’s security interest in the Repledge Portfolio Excess Spread and
rights under the Security Agreement.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Each of Seller and Guarantor represents and warrants to Buyer as of the Closing
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, rules and regulations. Seller has the requisite power
and authority and legal right to service Mortgage Loans and 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.

 

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.

 

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Section 3.05  Financial Statements. (a)  Guarantor has heretofore furnished to
Buyer a copy of (a) its consolidated balance sheet and the consolidated balance
sheets of its consolidated Subsidiaries for the fiscal year of Guarantor ended
December 31, 2014 and the related consolidated statements of income for
Guarantor and its consolidated Subsidiaries for such fiscal year, with the
opinion thereon of Deloitte & Touche LLP and (b) its consolidated balance sheet
and the consolidated balance sheets of its consolidated Subsidiaries for the
quarterly fiscal period of Guarantor ended December 31, 2014 and the related
consolidated statements of income for Guarantor and its consolidated
Subsidiaries for such quarterly fiscal period. All such financial statements are
complete and correct and fairly present, in all material respects, the
consolidated financial condition of Guarantor and its Subsidiaries and the
consolidated results of their operations as at such dates and for such fiscal
periods, all in accordance with GAAP applied on a consistent basis as at the end
of, and for, such period (subject to normal year-end adjustments). Since
December 31, 2014, there has been no material adverse change in the consolidated
business, operations or financial condition of Guarantor and its consolidated
Subsidiaries taken as a whole from that set forth in said financial statements
nor is Guarantor aware of any state of facts which (with notice or the lapse of
time) would or could result in any such material adverse change. Guarantor has,
on the date of the statements delivered pursuant to this Section 3.05 (the
“Financial Statement Date”) no liabilities, direct or indirect, fixed or
contingent, matured or unmatured, known or unknown, or liabilities for taxes,
long-term leases or unusual forward or long-term commitments not disclosed by,
or reserved against in, said balance sheet and related statements, and at the
present time there are no material unrealized or anticipated losses from any
loans, advances or other commitments of Guarantor except as heretofore disclosed
to Buyer in writing.

 

(b) Seller has heretofore furnished to Buyer a copy of (a) its balance sheet for
the fiscal year of Seller ended December 31, 2014 and the related statements of
income for Seller for such fiscal year, with the opinion thereon of Deloitte &
Touche LLP and (b) its balance sheet for the quarterly fiscal period of Seller
ended December 31, 2014 and the related statements of income for Seller for such
quarterly fiscal period. All such financial statements are complete and correct
and fairly present, in all material respects, the financial condition of Seller
and the results of its operations as at such dates and for such fiscal periods,
all in accordance with GAAP applied on a consistent basis. Since December 31,
2014, there has been no material adverse change in the consolidated business,
operations or financial condition of Seller from that set forth in said
financial statements nor is Seller aware of any state of facts which (with
notice or the lapse of time) would or could result in any such material adverse
change. Seller has, on the Financial Statement Date no liabilities, direct or
indirect, fixed or contingent, matured or unmatured, known or unknown, or
liabilities for taxes, long-term leases or unusual forward or long-term
commitments not disclosed by, or reserved against in, said balance sheet and
related statements, and at the present time there are no material unrealized or
anticipated losses from any loans, advances or other commitments of Seller
except as heretofore disclosed to Buyer in writing.

 

 

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Section 3.06  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 Underlying Spread Counterparty under the Underlying
Spread Documents.

 

Section 3.07  Solvency. Each of Seller and Guarantor is solvent and will not be
rendered insolvent by any Transaction (including, for the avoidance of doubt,
the inclusion therein of any Repledge Portfolio 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 3.08  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 3.09  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 or officer thereof, negotiation, preparation, or delivery of
the Program Agreements are true and complete in all material respects 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.
All financial statements have been prepared in accordance with GAAP.

 

Section 3.10  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 3.11  Litigation. There is no action, proceeding or investigation
pending with respect to which either Seller or Guarantor has received service of
process or, to the best of Seller’s or Guarantor’s knowledge threatened against
it before any court, administrative agency or other tribunal (A) asserting the
invalidity of this Agreement, any Transaction, Transaction Notice or any Program
Agreement, (B) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, any Transaction Notice or any Program Agreement,
(C) makes a claim individually or in the aggregate in an amount greater than
$10,000,000, (D) which requires filing with the Securities and Exchange
Commission in accordance with the 1934 Act or any rules thereunder or (E) which
might materially and adversely affect the validity of the Purchased Assets,
Servicing Contracts or the performance by it of its obligations under, or the
validity or enforceability of, this Agreement, any Transaction Notice or any
Program Agreement.

 

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Section 3.12  Material Adverse Change. There has been no material adverse change
in the business, operations, financial condition, properties or prospects of
Seller, Guarantor or their Affiliates since the date set forth in the most
recent financial statements supplied to Buyer.

 

Section 3.13  Ownership. (a)  Seller has good title to all of the Repurchase
Assets (other than the Repledge Portfolio Excess Spread for which Seller has the
right to pledge such Repledge Portfolio 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 3.14  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.

 

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Section 3.15  Taxes. Seller, Guarantor and their Subsidiaries have timely filed
all tax returns that are required to be filed by them and have paid all taxes,
except for any such taxes as are being appropriately contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves have been provided. The charges, accruals and reserves on the books of
Seller, Guarantor and their Subsidiaries in respect of taxes and other
governmental charges are, in the opinion of Seller or Guarantor, as applicable,
adequate.

 

Section 3.16  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 of 1940, as amended; provided,
however, that any entity that is under the management of PNMAC Capital
Management LLC in its capacity as an “investment adviser” 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 3.16.

 

Section 3.17  Chief Executive Office; Jurisdiction of Organization. On the
Closing Date, Seller’s chief executive office, is, and has been, located at 6101
Condor Drive, Moorpark, CA 93021. On the Effective Date, Seller’s jurisdiction
of organization is the State of Delaware. Seller shall provide Buyer with thirty
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
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 3.18  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 3.19  Adjusted Tangible Net Worth. On the Effective Date, Seller’s
Adjusted Tangible Net Worth is not less than the amount set forth in Section 2.1
of the Pricing Side Letter.

 

Section 3.20  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 3.21  Financing of Assets. Each Transaction will be used to finance one
or more Assets which Assets will be conveyed and/or pledged by Seller to Buyer.

 

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Section 3.22  Agreements. Neither Seller nor any Subsidiary of Seller is a party
to any agreement, instrument, or indenture or subject to any restriction
materially and adversely affecting its business, operations, assets or financial
condition, except as disclosed in the financial statements described in
Section 3.05 hereof. Neither Seller nor any Subsidiary of Seller is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement, instrument, or indenture
which default could have a material adverse effect on the business, operations,
properties, or financial condition of Seller as a whole. No holder of any
indebtedness of Seller or of any of its Subsidiaries has given notice of any
asserted default thereunder.

 

Section 3.23  Other Indebtedness. All Indebtedness (other than Indebtedness
evidenced by this Agreement) of Seller existing on the Closing Date is listed on
Exhibit D hereto (the “Existing Indebtedness”).

 

Section 3.24  Agency 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. With respect to Ginnie Mae Servicing Rights, 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 by Fannie Mae as an
approved lender and Freddie Mac as an approved seller/servicer, and, to the
extent necessary, approved 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 the relevant Agency or to the Department of Housing and
Urban Development, FHA or VA. Should Seller for any reason cease to possess all
such applicable approvals, or should notification to the relevant Agency or to
the Department of Housing and Urban Development, FHA or VA be required, Seller
shall so notify Buyer immediately in writing.

 

Section 3.25  No Reliance. Each of Seller and Guarantor has made its own
independent decisions to enter into the Program Agreements and each Transaction
and as to whether such Transaction is appropriate and proper for it based upon
its own judgment and upon advice from such advisors (including without
limitation, legal counsel and accountants) as it has deemed necessary. Neither
Seller nor Guarantor is relying upon any advice from Buyer as to any aspect of
the Transactions, including without limitation, the legal, accounting or tax
treatment of such Transactions.

 

Section 3.26  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.

 

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Section 3.27  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; or (iv) who is
otherwise affiliated with any entity or person listed above (any and all parties
or persons described in clauses (i) through (iv) above are herein referred to as
a “Prohibited Person”).

 

Section 3.28  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.

 

ARTICLE IV

CONVEYANCE; REPURCHASE ASSETS; SECURITY INTEREST

 

Section 4.01  Ownership. Upon payment of the Purchase Price, Buyer shall become
the sole owner of the Purchased Assets and related Repurchase Assets (other than
the related Servicing Rights, 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
Servicing Rights, 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 property, whether now owned or hereafter
acquired, now existing or hereafter created and wherever located, is hereinafter
referred to as the “Primary Repurchase Assets”:

 

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

 

(ii) all Servicing Rights arising under or related to any Servicing Contract and
related Servicing Rights Asset;

 

 39 

 

 

(iii) all Receivables arising under or related to any Servicing Contract;

 

(iv) all rights to reimbursement or payment of Assets and/or amounts due in
respect thereof under the related Servicing Contract, Securitization Transaction
or Participation Agreement identified on Schedule 2 hereof;

 

(v) the Dedicated Accounts and the Ginnie Mae Account;

 

(vi) all rights under the Underlying Spread Documents;

 

(vii) all rights under each Participation Agreement (other than rights with
respect to Mortgage Loans that are not related to Agency Servicing Rights
included within any Participation Agreement);

 

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

 

(ix) 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

 

(x) 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) Buyer and Seller hereby agree that in order to further secure Seller’s
Obligations hereunder, Seller hereby grants to Buyer a security interest in
(i) as of the Closing Date, Seller’s rights (but not its obligations) under the
Repurchase Documents including without limitation any rights to receive payments
thereunder or any rights to collateral thereunder whether now owned or hereafter
acquired, now existing or hereafter created (collectively, the “Repurchase
Rights”) and (ii) all collateral however defined or described under the
Repurchase Documents to the extent not otherwise included under the definitions
of Repurchase Assets or Repurchase Rights (such collateral, “Additional
Repurchase Assets”, together with the Primary Repurchase Assets, collectively,
the “Repurchase Assets”). Seller hereby delivers an irrevocable instruction to
the buyer under the Repurchase Documents that upon receipt of notice of an Event
of Default under this Agreement, the buyer thereunder is authorized and
instructed to remit to Buyer hereunder directly any amounts otherwise payable to
Seller and to deliver to Buyer all collateral otherwise deliverable to Seller.
In furtherance of the foregoing, upon repayment of the outstanding purchase
price under the Mortgage Loan Repurchase Agreement and termination of all
obligations of the buyer thereunder or other termination of the Repurchase
Documents following repayment of all obligations thereunder that the Repurchase
Document buyer is hereby instructed to deliver to Buyer hereunder any collateral
(as such term may be defined under the Repurchase Documents) then in its
possession or control.

 

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(d) The parties acknowledge that each Agency has certain rights under the
applicable Acknowledgement 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 an Agency requires a
transfer of servicing to Buyer’s Affiliate, SPS or another Affiliate, 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 Servicing Rights to SPS, whether now
owned or hereafter acquired, now existing or hereafter created and wherever
located. The parties acknowledge that, to the extent that an Agency exercises
its rights to cause the Seller to transfer the Servicing Rights and Portfolio
Excess Spread to Buyer, SPS or another Affiliate (and, if accepted by Buyer, to
cause Buyer, SPS or another Affiliate of Buyer to accept and assume the
responsibility for performing Seller’s servicing duties under, and otherwise
complying with the applicable 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 lesser of (x) the fair market
value of such Servicing Rights and Portfolio Excess Spread and (y) the
outstanding balance of the Purchase Price attributable to such Servicing Rights
and Portfolio Excess Spread, each as determined by Buyer. SPS shall have all the
rights and remedies against Seller and the Purchased Assets and Repurchase
Assets as set forth herein and under the UCC.

 

(e) Buyer and Seller hereby acknowledge and agree that the Underlying Spread
Counterparty has acquired the Repledge Portfolio Excess Spread subject to the
Lien of the Buyer created under the Security Agreement and in order to evidence
such Lien, Underlying Spread Counterparty shall reaffirm such Lien, and pursuant
to the Security Agreement, grant a security interest in and Lien on the Repledge
Portfolio Excess Spread and related collateral as more particularly set forth in
the Security Agreement.

 

(f) 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. Seller also hereby
authorizes Buyer and SPS to file any such financing or continuation statement to
the extent permitted by applicable law.

 

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Section 4.04  Limited Pledge of Fannie Mae Servicing. Notwithstanding anything
to the contrary herein or any of the other Program Agreements, the pledge of the
Seller’s right, title and interest in mortgage servicing rights under servicing
contracts with Fannie Mae shall only secure the Seller’s debt to the Buyer
incurred for the purposes of (a) purchasing additional Mortgage Loan servicing
rights and retaining current Mortgage Loan servicing rights, (b) purchasing a
mortgage banking company (including a management buyout of an existing mortgage
banking company) or (c) securing a warehouse line of credit; provided, that the
foregoing provisions of this paragraph shall be deemed automatically
supplemented or amended if and to the extent Fannie Mae supplements or amends
the corresponding requirement, whether in its rules, regulations, guides,
Servicing Contracts, Acknowledgment Agreements, or published announcements or
otherwise waives or grants exceptions from such requirement, and in each
instance, with the same substantive force and effect; 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):

 

The Security Interest created by this financing statement is subject and
subordinate to all rights, powers, and prerogatives of Fannie Mae under and in
connection with (i) the terms and conditions of that certain Acknowledgment
Agreement, with respect to the Security Interest, by and between Fannie Mae,
PennyMac Loan Services, LLC (the “Debtor”) and Credit Suisse First Boston
Mortgage Capital LLC, (ii) the Mortgage Selling and Servicing Contract and all
applicable Pool Purchase Contracts between Fannie Mae and the Debtor, and (iii)
the Selling Guide, Servicing Guide, and other Guides, as each of such Guides is
amended from time to time ((ii) and (iii) collectively, the “Fannie Mae
Contract”), which rights, powers, and prerogatives include, without limitation,
the right of Fannie Mae to terminate the Fannie Mae Contract with or without
cause and the right to sell, or have transferred, the Servicing Rights as
therein provided.

 

Section 4.05  Limited Pledge of Ginnie Mae Servicing. To the extent that the
pledge of the Seller’s right, title and interest in mortgage servicing rights
under Servicing Contracts with Ginnie Mae shall at any time be included within
the security interest created hereby, the Buyer acknowledges and agrees that (x)
the Seller is entitled to servicing income with respect to a given mortgage pool
only so long as Seller is an issuer in good standing pursuant to Ginnie Mae
rules, regulations, guides and similar announcements; (y) upon the Seller’s loss
of such good-standing issuer status, the Buyer’s rights to any servicing income
related to a given mortgage pool also terminate; and (z) the pledge of the
Seller’s rights to servicing income conveys no rights (such as a right to become
a substitute servicer or issuer) that are not otherwise specifically provided
for in the rules, regulations, guides or similar announcements by Ginnie Mae,
provided that this sentence shall automatically be deemed amended or modified if
and to the extent Ginnie Mae amends the corresponding requirement, whether in
its rules, regulations, guides, Servicing Contracts, the applicable
Acknowledgment Agreements, 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):

 

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

 

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 Acknowledgment Agreement, with respect to the Security Interest, by and
among Ginnie Mae, Debtor and Credit Suisse First Boston Mortgage Capital LLC;
(iii) applicable Guaranty Agreements and contractual agreements between Ginnie
Mae and the Debtor; and (iv) the Ginnie Mae Mortgage-Backed Securities Guide,
Handbook 5500.3 Rev. 1, and other applicable guides; and

 

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.

 

Section 4.06  Limited Pledge of Freddie Mac Servicing. Notwithstanding anything
to the contrary contained herein or in any of the other Program Agreements, the
pledge of Seller’s right, title and interest in mortgage servicing rights under
Servicing Contracts with Freddie Mac shall only secure Seller’s indebtedness and
obligations to Buyer incurred for (i) the purposes of securing (a) a warehouse
line of credit and used for one of the purposes set forth in clauses (b) through
(e), (b) a loan whose proceeds have been or will be used to acquire rights in
such Freddie Mac Servicing Contract in accordance with the provisions of the
Freddie Mac Sellers’ and Servicers’ Guide, (c) a loan whose proceeds have been
or will be used to acquire assets of, or stock issued by, Seller, (d) a loan
whose proceeds have been or will be used to purchase from another mortgage
banking company the contract right to service Mortgage Loans, or to purchase
assets of, or stock issued by, such company, (e) a loan whose proceeds have been
or will be used as working capital, or (ii) any other purpose which Freddie Mac,
in its sole and absolute discretion, considers to be consistent with the
purposes of its Acknowledgment Agreement to be executed among Seller, Buyer and
Freddie Mac; provided, that the foregoing provisions of this paragraph shall be
deemed automatically supplemented or amended if and to the extent Freddie Mac
supplements or amends the corresponding requirement, whether in its rules,
regulations, guides, Servicing Contracts, Acknowledgment Agreements or published
announcements or otherwise waives or grants exceptions from such requirement,
and in each instance, with the same substantive force and effect; 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):

 

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The security interest referred to in this financing statement is subject and
subordinate in each and every respect (a) to all rights, powers and prerogatives
of one or more of the following: the Federal Home Loan Mortgage Corporation
(“Freddie Mac”), the Federal National Mortgage Association (“Fannie Mae”), the
Government National Mortgage Association (“Ginnie Mae”) or such other investors
that own mortgage loans, or which guaranty payments on securities based on and
backed by pools of mortgage loans, identified on the exhibit(s) or schedule(s)
attached to this financing statement (the “Investors”); and (b) to all claims of
an Investor arising out of any and all defaults and outstanding obligations of
the debtor to the Investor. Such rights, powers and prerogatives of the
Investors may include, without limitation, one or more of the following: the
right of an Investor to disqualify the debtor from participating in a mortgage
selling or servicing program or a securities guaranty program with the Investor;
the right to terminate contract rights of the debtor relating to such a mortgage
selling or servicing program or securities guaranty program; and the right to
transfer and sell all or any portion of such contract rights following the
termination of those rights.

 

Section 4.07  Acknowledgement Agreements. Notwithstanding any other provision
hereof to the contrary, Buyer may elect, but shall not be obligated, to treat
Agency Servicing Rights and the related Participation Certificates as having
zero Asset Value until the date on which an Acknowledgment Agreement covering
such has been executed and delivered by the Seller, Buyer and Fannie Mae,
Freddie Mac, Ginnie Mae or such other investor or guarantor, as applicable.

 

Section 4.08  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 3.17 or (b) change its name or identity, unless it shall
have given Buyer at least 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.

 

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Section 4.09  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 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 applicable Servicing Contracts
and the Acknowledgment Agreements, request that Fannie Mae Servicing Rights,
Freddie Mac Servicing Rights, Ginnie Mae Servicing Rights and Servicing Rights
in respect of Mortgage Loans owned by any other investor or guarantor be
transferred to Buyer or to another servicer approved by Fannie Mae, Freddie Mac,
Ginnie Mae or such other investor or guarantor (as the case may be) 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 consisting of Servicing Rights;

 

(iv) request distribution to Buyer of sale proceeds or any applicable contract
termination fees arising from the sale or termination of such Servicing Rights
and remaining after satisfaction of Seller’s relevant obligations to Fannie Mae,
Freddie Mac, Ginnie Mae or such other investor or guarantor (as the case may
be), including costs and expenses related to any such sale or transfer of such
Servicing Rights and other amounts due for unmet obligations of Seller to Fannie
Mae, Freddie Mac, Ginnie Mae or such other investor or guarantor (as the case
may be) under applicable Fannie Mae Guides, Freddie Mac Guides, Ginnie Mae
Guides or such other investor’s or guarantor’s 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;

 

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(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 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 4.11 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.

 

(e) In addition to the foregoing, Seller agrees to execute a power of attorney
(the “Power of Attorney”) in favor of Buyer in the form of Exhibit B-1 hereto to
be delivered on the Closing Date and in favor of SPS in the form of Exhibit B-2
hereto to be delivered on the Closing Date.

 

Notwithstanding anything to the contrary herein or any of the other Program
Agreements, any appointment set forth in this Section 4.09 shall be subject to
the Servicing Contracts and Acknowledgement Agreements entered into with Ginnie
Mae, Fannie Mae or Freddie Mac, as applicable.

 

 46 

 

 

Section 4.10  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 in each Price Differential Period and a 360-day year.

 

Section 4.11  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 near-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.

 

Section 4.12  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 the Participation Interest in accordance with the
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 remedies set forth in this Section 4.11
shall be subject to the Servicing Contracts and Acknowledgement Agreements
entered into with Ginnie Mae, Fannie Mae or Freddie Mac, as applicable.

 

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Section 4.13  Limitation on Duties Regarding Preservation of Repurchase Assets.
Buyer’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 4.14  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 4.15  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 4.16  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.

 

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Section 4.17  Subordination.

 

(a) It is anticipated that in connection with the transactions contemplated by
the Program Agreements, that (x) the Underlying Spread Counterparty is pledging
the Repledge Portfolio 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 Security 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 Underlying Spread Documents, applicable law or otherwise, Seller shall not,
directly or indirectly, exercise any remedies available to it under the Master
Spread Acquisition Agreement and Underlying Spread Documents or at law or equity
for ninety-one (91) days following the date that all Obligations are paid in
full under the Program Agreements. For the avoidance of doubt, in no instance
shall the Buyer succeed to any liabilities or obligations of Seller under the
Master Spread Acquisition Agreement or the Underlying Spread 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, Underlying Spread
Documents or the Program Agreements during an Act of Insolvency of Underlying
Spread Counterparty 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 Underlying Spread Counterparty 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 Underlying Spread Counterparty 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 Underlying Spread Counterparty
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 Security Agreement or the Underlying Spread
Documents, without regard to the existence of a lien, encumbrance, pledge or
other claims of Underlying Spread Counterparty applicable to the obligations of
the other parties to the Program Agreements.

 

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(f) Seller shall not seek in any Act of Insolvency of the Underlying Spread
Counterparty 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 Underlying Spread Counterparty 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 and a notice to the master
servicer and trustee of the Eligible Securitization Transactions and the
Servicing Contracts, as applicable, set forth on Schedule 2, 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.

 

(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.

 

(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 Closing 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.

 

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(g) Fees. Buyer shall have received payment in full of all fees and Expenses
(including, without limitation the Commitment Fee) 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 10.09
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 sum of
(i) the Receivables Asset Base then in effect (calculated as of the Servicing
Cut-off Date) and (ii) the Servicing Rights Asset Base then in effect.

 

(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 Transactions with a Pricing Rate based on Base Rate.

 

(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 applicable 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;

 

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(ii) reviewed the applicable pool of Mortgage Loans serviced by Seller pursuant
to such Servicing Contracts, which pool shall be satisfactory to Buyer in its
sole discretion;

 

(iii) if required by Buyer, received a fully executed amendment to each
Servicing Contract necessary to cause such Servicing Contract to satisfy
requirements for an Eligible Securitization Transaction or an Eligible Asset, in
form and substance satisfactory to Buyer;

 

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

 

(v) with respect to Transactions entered into in respect to Servicer Advances,
received a report from Seller indicating all Protective Advances that have been
disbursed and all Delinquency Advances will be disbursed by Seller into the
certificate account under the related Servicing Contract, which report shall
include backup setting forth the date, amount and federal reference number for
each such disbursement;

 

(vi) with respect to Transactions entered into in respect of Servicing Rights,
the Seller shall have delivered to the Buyer the Seller’s related pricing
valuation on or prior to the date which is five Business Days prior to the
requested Purchase Date; Seller shall promptly deliver to Buyer any reports or
documents ordered, created, prepared or reviewed in connection with such pricing
valuations, whether such reports or documents are created or prepared by Seller
or a third party; provided, however, that it is understood that any such pricing
valuation, report or document shall be reviewed by the Buyer for the sole
purpose of making credit decisions with respect to the related Transaction, and
the Buyer shall not use such information for any purpose other than making
credit decisions with respect to the related Transaction;

 

(vii) received an updated Servicing Appraisal in accordance with Section 6.28;
and

 

(viii) 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)(iv) hereof, the
Buyer hereby agrees to enter into Transactions with Seller with respect to the
Agency Servicing Rights that are related to Ginnie Mae (“Ginnie Mae Servicing
Rights”). Any failure to repay the Purchase Price with respect to the Ginnie Mae
Servicing Rights in accordance with this section shall result in an immediate
Event of Default.

 

(h) Repledge Portfolio Excess Spread. If such Transaction is with respect to
Repledge Portfolio Excess Spread, (i) Buyer shall have received and approved the
Underlying Spread Documents in its sole discretion and following such approval
received duly executed copies thereof by the parties thereto, (ii) the
Underlying Spread Counterparty shall have satisfied all conditions precedent to
the entry into such Underlying Spread Transaction under the Underlying Spread
Loan Agreement and (iii) Buyer shall have received all of the following items,
each of which shall be satisfactory to Buyer and its counsel in form and
substance:

 

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

 

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

 

(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
Underlying Spread Documents; and

 

(i) Material Adverse Change. None of the following shall have occurred and/or be
continuing:

 

(A) Buyer’s corporate bond rating as calculated by S&P or Moody’s has been
lowered or downgraded to a rating below investment grade by S&P or Moody’s;

 

(B) an event or events shall have occurred in the good faith determination of
Buyer resulting in the effective absence of a “lending market” for financing
debt obligations secured by mortgage loans or servicing receivables or
securities backed by mortgage loans or servicing receivables or an event or
events shall have occurred resulting in Buyer not being able to finance Eligible
Assets through the “lending market” with traditional counterparties at rates
which would have been reasonable prior to the occurrence of such event or
events; or

 

(C) there shall have occurred a material adverse change in the financial
condition of Buyer which affects (or can reasonably be expected to affect)
materially and adversely the ability of Buyer to fund its obligations under this
Agreement.

 

(j) 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 Buyer.

 

(k) Fees. Buyer shall have received payment in full of all fees and Expenses
(including, without limitation the Commitment Fee) which are payable hereunder
to Buyer on or before such date.

 

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(l) Financing Statements. If such Transaction includes Freddie Mac Servicing
Rights or Fannie Mae Servicing Rights, 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  Litigation. Seller and Guarantor, as applicable, will promptly,
and in any event within ten (10) days after service of process on any of the
following, give to Buyer notice of all litigation, actions, suits, arbitrations,
investigations (including, without limitation, any of the foregoing which are
threatened or pending) or other legal or arbitrable proceedings affecting
Seller, Guarantor or any of their Subsidiaries or affecting any of the Property
of any of them before any Governmental Authority that (i) questions or
challenges the validity or enforceability of any of the Program Agreements or
any action to be taken in connection with the transactions contemplated hereby,
(ii) makes a claim individually or in the aggregate in an amount greater than
$10,000,000, or (iii) which, individually or in the aggregate, if adversely
determined, could be reasonably likely to have a Material Adverse Effect. On the
fifth (5th) day of each calendar month (or if such day is not a Business Day,
the next succeeding Business Day), Seller and Guarantor, as applicable, will
provide to Buyer a litigation docket listing all litigation, actions, suits,
arbitrations, investigations (including, without limitation, any of the
foregoing which are threatened or pending) or other legal or arbitrable
proceedings affecting Seller, Guarantor or any of their Subsidiaries or
affecting any of the Property of any of them before any Governmental Authority.
Seller and Guarantor, as applicable, will promptly provide notice of any
judgment, which with the passage of time, could cause an Event of Default
hereunder.

 

Section 6.03  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 6.04  Portfolio Performance Data. On the first Weekly Report Date of
each calendar month, Seller will furnish to Buyer electronically, in a format
mutually acceptable to Buyer and Seller, servicing information, including,
without limitation, those fields reasonably requested by Buyer from time to
time, on a loan-by-loan basis and in the aggregate, with respect to the Mortgage
Loans serviced by Seller for the month (or any portion thereof) prior to the
Weekly Report Date.

 

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Section 6.05  Weekly Reporting. 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 the third Business Day of each week (the “Weekly Report
Date”) a cumulative Asset Schedule, each of which, when so delivered, shall
replace the current Asset Schedule and which may be delivered in electronic form
acceptable to Buyer. Each such updated Asset Schedule shall indicate the
Outstanding Balance of each Receivable as of the close of the preceding week. In
addition, Seller will deliver to Buyer a copy of each and every remittance
report (and, at Buyer’s reasonable request, any other report) prepared by Seller
or any other party to a Servicing Contract that identifies or indicates any
reimbursement to Seller of any Servicer Advance thereunder. Seller shall deliver
each such report to Buyer not more than five (5) Business Days after Seller has
either prepared or received such report pursuant to the Servicing Contract. As
of each Weekly Report Date, Seller hereby certifies, represents and warrants to
Buyer that (A) each such updated Asset Schedule is true, complete and correct in
all material respects and (B) except as set forth in the Weekly Report, as of
such Weekly Report Date, all of the Servicing Contracts are in full force and
effect and Seller has not been terminated as the servicer or subservicer under
any Servicing Contract.

 

Section 6.06  Insurance. Seller or Guarantor shall continue to maintain, for
Seller, and its Subsidiaries, Fidelity Insurance in an aggregate amount at least
equal to $1,400,000. Seller or Guarantor shall maintain, for Seller, and its
Subsidiaries, Fidelity Insurance in respect of its officers, employees and
agents, with respect to any claims made in connection with all or any portion of
the Repurchase Assets. Seller or Guarantor shall notify Buyer of any material
change in the terms of any such Fidelity Insurance.

 

Section 6.07  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 6.08  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 6.08 shall not
prevent any transfer of Purchased Assets in accordance with the Program
Agreements.

 

Section 6.09  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.

 

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Section 6.10  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 6.11, 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 6.11  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 of Purchased Assets (other than the related
Servicing Rights, which are pledged, and not sold to Buyer) to Buyer.

 

Section 6.12  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
with Fannie Mae and Ginnie Mae as an approved lender and Freddie Mac as an
approved seller/servicer, and in each case, Seller is in good standing (“Agency
Approvals”). Seller shall service all Assets in accordance with the applicable
Agency guide in all material respects. Should Seller, for any reason, cease to
possess all such applicable Agency Approvals, or should notification to the
relevant Agency or to the Department of Housing and Urban Development, FHA or VA
as described in Section 3.24 hereof be required, Seller shall so notify Buyer
immediately in writing. Notwithstanding the preceding sentence, Seller shall
take all necessary action to maintain all of its applicable Agency Approvals at
all times during the term of this Agreement.

 

Section 6.13  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.

 

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Section 6.14  Collections on Assets and the Dedicated Accounts. 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, payments
and proceeds in respect of any Receivable that are payable to Seller under such
Servicing Contract (but only to the extent that such funds are payable to Seller
free and clear of any Agency rights or other restrictions on transfer set forth
in such Servicing Contract) and pledged hereunder to be deposited into the
Receivables Dedicated Account and on account of Servicing Rights, including the
Portfolio Excess Spread, to the applicable Servicing Rights Dedicated Account;
provided that any amounts received on account of Ginnie Mae Advances in the
Ginnie Mae Account shall be remitted to the Dedicated Account in accordance with
the Deposit Account Control Agreement. Seller shall not withdraw or direct the
withdrawal or remittance of any amounts on account of any Receivables or
Servicing Rights income related to any Servicing Contract from any custodial
account into which such amounts have been deposited other than to remit to each
of the applicable Dedicated Accounts or, solely with respect to Ginnie Mae
Advances on deposit in the Ginnie Mae Account, as provided in the Deposit
Account Control Agreement.

 

Section 6.15  Distributions. If an Event of Default has occurred and is
continuing, neither Seller nor Guarantor shall pay any dividends with respect to
any capital stock or other equity interests in such entity, whether now or
hereafter outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations of Seller
or Guarantor.

 

Section 6.16  Applicable Law. Seller and Guarantor shall comply with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority.

 

Section 6.17  Existence. Each of Seller and Guarantor shall preserve and
maintain its legal existence and all of its material rights, privileges,
licenses and franchises.

 

Section 6.18  Chief Executive Office; Jurisdiction of Organization. Seller shall
not move its chief executive office from the address referred to in Section 3.17
or change its jurisdiction of organization from the jurisdiction referred to in
Section 3.17 unless it shall have provided Buyer at least 30 days’ prior written
notice of such change.

 

Section 6.19  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.

 

Section 6.20  Transactions with Affiliates. Seller will not enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction (a) does not result in a Default hereunder, (b) is in the
ordinary course of Seller’s business and (c) is upon fair and reasonable terms
no less favorable to Seller than it would obtain in a comparable arm’s length
transaction with a Person which is not an Affiliate, or make a payment that is
not otherwise permitted by this Section 6.20 to any Affiliate.

 

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Section 6.21  Guarantees. Seller shall not create, incur, assume or suffer to
exist any Guarantees, except (i) to the extent reflected in Seller’s financial
statements or notes thereto and (ii) to the extent the aggregate Guarantees of
Seller do not exceed $250,000.

 

Section 6.22  Indebtedness. Seller shall not incur any additional material
Indebtedness (other than (i) the Existing Indebtedness specified on Exhibit D
hereto; (ii) Indebtedness incurred with Buyer or its Affiliates;
(iii) Indebtedness incurred in connection with new or existing secured lending
facilities and (iv) usual and customary accounts payable for a mortgage
company), without the prior written consent of Buyer.

 

Section 6.23  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 6.24  True and Correct Information. All information, reports, exhibits,
schedules, financial statements or certificates of Seller, Guarantor any
Affiliate thereof or any of their officers furnished to Buyer hereunder and
during Buyer’s diligence of Seller and Guarantor are and will be true and
complete in all material respects 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. All required financial
statements, information and reports delivered by Seller and Guarantor to Buyer
pursuant to this Agreement shall be prepared in accordance with U.S. GAAP, or,
if applicable, to SEC filings, the appropriate SEC accounting regulations.

 

Section 6.25  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; provided, however, that within sixty (60) calendar
days of a Purchase Price Percentage Reduction Trigger Event, Seller shall
appoint a subservicer subject to written approval of Buyer, unless such
appointment is expressly waived by Buyer in writing within thirty (30) calendar
days of such event.

 

Section 6.26  Assets Not To Be Evidenced by Promissory Notes. Seller shall not
take any action, or permit any other Person to take any action, to cause any of
the Purchased Assets to be evidenced by any “instrument” (as such term is
defined in the Uniform Commercial Code); provided that each Participation
Certificate sold hereunder shall be a security (as such term is defined in the
Uniform Commercial Code).

 

Section 6.27  No Pledge. Except as contemplated herein, neither Seller nor
Guarantor shall (a) pledge, transfer or convey any security interest in the
Dedicated Account or the Ginnie Mae Account to any Person without the express
written consent of Buyer 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.

 

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Section 6.28  Servicing Appraisals. Seller shall provide a new Servicing
Appraisal to the Buyer once each calendar quarter; provided, that Buyer shall
have the right in its sole good faith discretion to require independent
appraisals or evaluations more frequently than every calendar quarter; and
provided further that the Servicing Appraisal for each calendar quarter must be
provided to Buyer no later than forty-five (45) days following the end of such
quarter.

 

Section 6.29  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 6.30  Sharing of Information. Seller and Guarantor shall allow Buyer to
exchange information related to Seller and Guarantor and the Transactions
hereunder with third party lenders and Seller and Guarantor shall permit each
third party lender to share such information with Buyer.

 

Section 6.31  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 Participation Agreements, without
the prior written consent of Buyer exercised in Buyer’s sole discretion.
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 Guide at any time, Fannie Mae has the absolute and unconditional
right to modify the Fannie Mae Guide at any time and Freddie Mac has the
absolute and unconditional right to modify the Freddie Mac Guide at any time.

 

Section 6.32  No Amendments/Waivers of Underlying Spread Documents. Without the
prior written consent of Buyer, 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 Underlying Spread Documents or any of
Seller’s rights thereunder.

 

Section 6.33  Reserved.

 

Section 6.34  Quality Control. Seller shall maintain an internal quality control
program that verifies, on a regular basis, the existence and accuracy of all
legal documents, credit documents, property appraisals, and underwriting
decisions related to Servicing Rights and Receivables. Such program shall be
capable of evaluating and monitoring the overall quality of Seller’s servicing
activities. Such program shall (i) guard against dishonest, fraudulent, or
negligent acts; and (ii) guard against errors and omissions by officers,
employees, or other authorized persons.

 

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Section 6.35  Reporting Requirements. (a)  Seller or Guarantor shall furnish to
Buyer (i) promptly, copies of any material and adverse notices (including,
without limitation, notices of defaults, breaches, potential defaults or
potential breaches) and any material financial information that is not otherwise
required to be provided by Seller or Guarantor hereunder which is given to
Seller’s lenders, (ii) immediately, notice of the occurrence of (1) any Event of
Default hereunder; (2) any default or material breach under any Servicing
Contract; (3) any default or material breach by Seller, or Guarantor of any
obligation under any Program Agreement or any material contract or agreement of
Seller or Guarantor or (4) the occurrence of any event or circumstance that such
party reasonably expects has resulted in, or will, with the passage of time,
result in, a Material Adverse Effect or an Event of Default and (iii) the
following:

 

(1) as soon as available and in any event within forty (40) calendar days after
the end of each calendar month, the unaudited consolidated balance sheets of
Guarantor and its consolidated Subsidiaries and the unaudited balance sheet of
Seller, each as at the end of such period and the related unaudited consolidated
statements of income for Guarantor and its consolidated Subsidiaries and Seller
for such period and the portion of the fiscal year through the end of such
period, accompanied by a certificate of a Responsible Officer of Guarantor or
Seller, as applicable, which certificate shall state that said consolidated
financial statements or financial statements, as applicable, fairly present in
all material respects the consolidated financial condition or financial
condition, as applicable, and results of operations of Guarantor and its
consolidated Subsidiaries or Seller, as applicable, in accordance with GAAP,
consistently applied, as at the end of, and for, such period (subject to normal
year-end adjustments);

 

(2) as soon as available and in any event within forty (40) calendar days after
the end of each calendar quarter, the unaudited consolidated cash flow
statements of Guarantor and its consolidated Subsidiaries and the unaudited cash
flow statements of Seller, each as at the end of such period and the portion of
the fiscal year through the end of such period, accompanied by a certificate of
a Responsible Officer of Guarantor or Seller, as applicable, which certificate
shall state that said consolidated financial statements or financial statements,
as applicable, fairly present in all material respects the consolidated
financial condition or financial condition, as applicable, and results of
operations of Guarantor and its consolidated Subsidiaries or Seller, as
applicable, in accordance with GAAP, consistently applied, as at the end of, and
for, such period (subject to normal year-end adjustments);

 

(3) as soon as available and in any event within ninety (90) days after the end
of each fiscal year of Guarantor and Seller, the consolidated balance sheets of
Guarantor and its consolidated Subsidiaries and the balance sheet of Seller,
each as at the end of such fiscal year and the related consolidated statements
of income and retained earnings and of cash flows for Guarantor and its
consolidated Subsidiaries and Seller for such year, setting forth in each case
in comparative form the figures for the previous year, accompanied by an opinion
thereon of independent certified public accountants of recognized national
standing, which opinion and the scope of audit shall be acceptable to Buyer in
its sole discretion, shall have no “going concern” qualification and shall state
that said consolidated financial statements or financial statements, as
applicable, fairly present the consolidated financial condition or financial
condition, as applicable, and results of operations of Guarantor and its
respective consolidated Subsidiaries or Seller, as applicable, as at the end of,
and for, such fiscal year in accordance with GAAP;

 

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(4) such other prepared statements that Buyer may reasonably request;

 

(5) if applicable, copies of any 10-Ks, 10-Qs, registration statements and other
“corporate finance” SEC filings (other than 8-Ks) by Guarantor, Seller or any
Affiliate, within 5 Business Days of their filing with the SEC; provided, that,
Guarantor, Seller or any Affiliate will provide Buyer with a copy of the annual
10-K filed with the SEC by Guarantor, Seller or their Affiliates, no later than
90 days after the end of the year;

 

(6) as soon as available, and in any event within thirty (30) days of receipt,
copies of relevant portions of all final written Agency, FHA, Governmental
Authority and investor audits, examinations, evaluations, monitoring reviews and
reports of its operations (including those prepared on a contract basis) which
provide for or relate to (i) material corrective action required, (ii) material
sanctions proposed, imposed or required, including without limitation notices of
defaults, notices of termination of approved status, notices of imposition of
supervisory agreements or interim servicing agreements, and notices of
probation, suspension, or non-renewal, or (iii) “report cards,” “grades” or
other classifications of the quality of Seller’s operations;

 

(7) from time to time such other information regarding the financial condition,
operations, or business of Seller or Guarantor as Buyer may reasonably request;

 

(8) as soon as reasonably possible, and in any event within thirty (30) days
after a Responsible Officer of Seller or Guarantor has knowledge of the
occurrence of any ERISA Event of Termination, stating the particulars of such
ERISA Event of Termination in reasonable detail;

 

(9) As soon as reasonably possible, notice of any of the following events:

 

a. change in the insurance coverage required of Seller or Guarantor, with a copy
of evidence of same attached;

 

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b. any material dispute, litigation, investigation, proceeding or suspension
between Seller on the one hand, and any Governmental Authority or any Person;

 

c. any material change in accounting policies or financial reporting practices
of Seller;

 

d. any material issues raised upon examination of Seller or Seller’s facilities
by any Governmental Authority;

 

e. any material change in the Indebtedness of Seller, including, without
limitation, any default, renewal, non-renewal, termination, increase in
available amount or decrease in available amount related thereto;

 

f. promptly upon receipt of notice or knowledge of any lien or security interest
(other than security interests created hereby or by the other Program
Agreements) on, or claim asserted against, any of the Purchased Assets or
Repurchase Assets;

 

g. the transfer, expiration without renewal, termination or other loss of all or
any part of any Servicing Contract, or the right of Seller to service Mortgage
Loans thereunder (or the termination or replacement of Seller thereunder), the
reason for such transfer, loss, termination or replacement, if known to Seller,
and the effects that such transfer, loss, termination or replacement will have
(or will likely have) on the prospects for full and timely collection of all
amounts owing to Seller under or in respect of that Servicing Contract or the
income relating to the Portfolio Excess Spread under that Servicing Contract;

 

h. any other event, circumstance or condition that has resulted, or has a
possibility of resulting, in a Material Adverse Effect with respect to Seller;
and

 

i. the occurrence of any material employment dispute and a description of the
strategy for resolving it that has the possibility of resulting in a Material
Adverse Effect.

 

(b) Officer’s Certificates. Seller will furnish to Buyer, at the time Seller
furnishes each set of financial statements pursuant to Section 6.35(a)(iii)(1),
(2) or (3) above, a certificate of a Responsible Officer of Seller in the form
of Exhibit A to the Pricing Side Letter.

 

(c) Quality Control Reports. Periodic internal quality control reports and
internal audit reports as they are distributed to the board of directors of
Seller or Guarantor.

 

(d) Other. Seller shall deliver to Buyer any other reports or information
reasonably requested by Buyer or as otherwise required pursuant to this
Agreement.

 

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Section 6.36  Most Favored Status. Seller, Guarantor and Buyer each agree that
should Seller, Guarantor or any Affiliate thereof enter into a repurchase
agreement or credit facility with any Person other than Buyer or an Affiliate of
Buyer which by its terms provides any of the following (each, a “More Favorable
Agreement”):

 

(a) more favorable terms with respect to any guaranties or financial covenants,
including without limitation covenants covering the same or similar subject
matter set forth or referred to in Section 6.15 hereof and Section 2 of the
Pricing Side Letter;

 

(b) a security interest to any Person other than Buyer or an Affiliate of Buyer
in substantially all assets of Seller, Guarantor or any Affiliate thereof; or

 

(c) a requirement that Seller has added or will add any Person other than Buyer
or an Affiliate of Buyer as a loss payee under Seller’s Fidelity Insurance;

 

then the terms of this Agreement shall be deemed automatically amended to
include such more favorable terms contained in such More Favorable Agreement,
such that such terms operate in favor of Buyer or an Affiliate of Buyer;
provided, that in the event that such More Favorable Agreement is terminated,
upon notice by Seller to Buyer of such termination, the original terms of this
Agreement shall be deemed to be automatically reinstated. Seller, Guarantor and
Buyer further agree to execute and deliver any new guaranties, agreements or
amendments to this Agreement evidencing such provisions, provided that the
execution of such amendment shall not be a precondition to the effectiveness of
such amendment, but shall merely be for the convenience of the parties hereto.
Promptly upon Seller, Guarantor or any Affiliate thereof entering into a
repurchase agreement or other credit facility with any Person other than Buyer,
Seller or Guarantor, as applicable, shall deliver to Buyer a true, correct and
complete copy of such repurchase agreement, loan agreement, guaranty or other
financing documentation.

 

Section 6.37  Liens on Substantially All Assets. Seller shall not grant a
security interest to any Person other than Buyer or an Affiliate of Buyer in
substantially all assets of Seller unless Seller has entered into an amendment
to this Agreement that grants to Buyer a pari passu security interest on such
assets.

 

Section 6.38  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 exercised in Buyer’s sole discretion.
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 6.39  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.

 

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ARTICLE VII

DEFAULTS/RIGHTS AND REMEDIES OF LENDER 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 to (i) make any payment of Price
Differential or Repurchase Price or any other sum which has become due, on a
Facility Payment Date, Price Differential Payment Date or a Repurchase Date or
otherwise, whether by acceleration or otherwise, under the terms of this
Agreement, any other warehouse and security agreement or any other document, in
each case evidencing or securing Indebtedness of Seller to Buyer or to any
Affiliate of Buyer, or (ii) cure any Margin Deficit when due pursuant to
Section 2.05 hereof.

 

(b) Cross Default. (i) Seller, Guarantor or Affiliates thereof shall be in
default under (i) any Repurchase Document; (ii) any Indebtedness, in the
aggregate, in excess of $1 million of Seller, Guarantor 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 (iii) any other contract
or contracts, in the aggregate in excess of $1 million to which Seller,
Guarantor 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.

 

(c) 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, 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.

 

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

 

(e) Material Adverse Change. Any material adverse change in the Property,
business, financial condition or operations of Seller, Guarantor or any of their
Affiliates shall occur, in each case as determined by Buyer in its sole good
faith discretion, or any other condition shall exist which, in Buyer’s sole good
faith discretion, constitutes a material impairment of Seller’s or Guarantor’s
ability to perform its obligations under this Agreement or any other Program
Agreement.

 

(f) 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), 3.07 (Solvency), 3.12
(Material Adverse Change), 3.19 (Adjusted Tangible Net Worth), 3.23 (Other
Indebtedness), 6.01 (Financial Covenants), 6.03 (Prohibition of Fundamental
Changes), 6.17 (Existence), 6.21 (Guarantees), 6.22 (Indebtedness), 6.27 (No
Pledge), 6.29 (Plan Assets) or 6.32 (No Amendments/Waivers of Underlying Spread
Documents) of this Agreement.

 

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(g) 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(f) above),
if such breach is not cured within five (5) Business Days or, in the case of a
breach of Section 6.05, three (3) Business Days.

 

(h) Guarantor Breach. A breach by Guarantor of any material representation,
warranty or covenant set forth in the Guaranty or any other Program Agreement,
any “event of default” by Guarantor under the Guaranty, any repudiation of the
Guaranty by Guarantor, or if the Guaranty is not enforceable against Guarantor.

 

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

 

(j) Failure to Transfer. Seller fails to transfer a material portion of the
Purchased Assets (other than the Servicing Rights, which are pledged, and not
sold, to Buyer) to Buyer on the applicable Purchase Date (provided Buyer has
tendered the related Purchase Price).

 

(k) Judgment. A final judgment or judgments for the payment of money in excess
of $10,000,000 shall be rendered against Seller, Guarantor or any of their
Affiliates by one or more courts, administrative tribunals or other bodies
having jurisdiction and the same shall not be satisfied, discharged (or
provision shall not be made for such discharge) or bonded, or a stay of
execution thereof shall not be procured, within 30 days from the date of entry
thereof.

 

(l) 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 as an issuer, buyer or a
seller/servicer of Mortgage Loans or securities backed thereby, and such action
provided for in this subparagraph (l) shall not have been discontinued or stayed
within 30 days.

 

(m) 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 Guaranty.

 

(n) 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.

 

(o) 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.

 

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(p) 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 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 Guaranty;

 

(q) Servicing Contracts. (i) with respect to any Asset, a notice of termination
of servicing for cause has been delivered, or a notice of termination of
servicing for any other reason has been delivered, which has not been rescinded
within five Business Days following delivery of such notice under any Servicing
Contract (following the expiration of any applicable grace or cure period in the
applicable Servicing Contract) unless all related Purchased Assets are
repurchased (A) with respect to a notice of termination of servicing for cause,
within five Business Days following delivery of such notice of termination as
described herein or (B) with respect to any other notice of termination, on or
before the date of such termination of servicing; (ii) any actual termination or
resignation of servicing under any Servicing Contract shall have occurred unless
all related Purchased Assets are repurchased on or before the date of such
termination; or (iii) a material default by Seller has occurred under the
Participation Agreement;

 

(r) Dedicated Accounts. Except as permitted under Section 2.07(f), Seller or any
other Person shall have withdrawn any amounts on deposit in the Dedicated
Accounts without the consent of Buyer other than funds that do not constitute
collections or recoveries of Receivables and funds deposited or withdrawn in
error;

 

(s) Reserved.

 

(t) Trigger Event. A Trigger Event shall have occurred and Seller shall have
failed to repay the Purchase Price on account of all Repledge Portfolio Excess
Spread that constitutes Repurchase Assets within three (3) Business Days
thereof.

 

(u) Underlying Spread Documents. (i) Any material provision of any Underlying
Spread Document shall at any time for any reason cease to be valid and binding
or in full force and effect; or (ii) Underlying Spread Counterparty shall deny
that it has any or further liability or obligation under any material provision
of any Underlying Spread Document; or (iii) Seller or Underlying Spread
Counterparty shall fail to perform or observe any material covenant, term,
obligation or agreement contained in any Underlying Spread Document or defaults
in the performance or observance of any of its material obligations under any
Underlying Spread Document and such default shall continue after the earlier of
(x) the expiration of the grace period applicable thereto under such Underlying
Spread Document and (y) two (2) Business Days; or (iv) the validity or
enforceability of any material provision of any Underlying Spread Document shall
be contested by any party thereto; or (v) any representation or warranty set
forth on Schedule 1-C shall be untrue in any material respect; unless in each
case of clauses (i) through (v), the related Repledge Portfolio Excess Spread
subject to the Underlying Spread Document is repurchased by Underlying Spread
Counterparty within two (2) Business Days following notice or knowledge thereof.

 

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Section 7.02  No Waiver. An Event of Default shall be deemed to be continuing
unless expressly waived by Buyer 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, Buyer may, 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, the applicable Margin in respect of the Pricing Rate shall be
increased, to the extent permitted by law, as set forth in clauses (iii)(A) and
(iii)(B), as applicable, of the definition of “Margin”.

 

ARTICLE VIII

ENTIRE AGREEMENT; AMENDMENTS
AND WAIVERS; SEPARATE ACTIONS BY LENDER

 

Section 8.01  Entire Agreement. 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.

 

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.

 

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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.

 

Section 9.02  Participations and Transfers. (a)  Buyer may in accordance with
applicable law at any time sell to one or more banks or other entities
(“Participants”) participating interests in 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 sale; provided, however, Seller’s consent
shall not be required in the event that (A) such Participant is an Affiliate of
Buyer or (B) an Event of Default has occurred and (ii) each such sale shall
represent an interest in a Transaction in a Purchase Price of $1,000,000 or
more. In the event of any such sale by Buyer of participating interests to a
Participant, Buyer shall remain a party to the Transaction for all purposes
under this Agreement and Seller shall continue to deal solely and directly with
Buyer in connection with Buyer’s rights and obligations under this Agreement.

 

(b) Buyer may in accordance with applicable law at any time assign, pledge,
hypothecate, or otherwise transfer to one or more banks, financial institutions,
investment 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 Buyer or (B) an Event of Default has
occurred; (ii) absent an Event of Default, Buyer shall give at least ten 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 10.05 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.

 

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(c) All actions taken by Buyer pursuant to this Section 9.02 shall be at the
expense of Buyer. 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. Any assignment or transfer by Buyer of rights or
obligations under this Agreement that does not comply with this Section 9.03
shall be treated for purposes of this Agreement as a sale by such Buyer of a
participation in such rights and obligations in accordance with Section 9.02.

 

(b) Seller or an agent of Seller shall maintain a register (the “Register”) on
which it will record the Transactions entered into hereunder, and each
assignment and acceptance and participation. The 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.

 

Section 10.02  Indemnification. Seller shall, and hereby agrees to, indemnify,
defend and hold harmless Buyer, any Affiliate of Buyer and their respective
directors, officers, agents, employees and counsel from and against any and all
losses, claims, damages, liabilities, deficiencies, judgments or expenses
incurred by any of them (except to the extent that it is finally judicially
determined to have resulted from their own gross negligence or willful
misconduct) as a consequence of, or arising out of or by reason of any
litigation, investigations, claims or proceedings which arise out of or are in
any way related to, (i) this Agreement or any other Program Agreement or any
Servicing Contract, or the transactions contemplated hereby or thereby,
(ii) Seller’s servicing practices or procedures; (iii) any actual or proposed
use by Seller of the proceeds of the Purchase Price, and (iv) any Default, Event
of Default or any other breach by Seller of any of the provisions of this
Agreement or any other Program Agreement, including, without limitation, amounts
paid in settlement, court costs and reasonable fees and disbursements of counsel
incurred in connection with any such litigation, investigation, claim or
proceeding or any advice rendered in connection with any of the foregoing. If
and to the extent that any Obligations are unenforceable for any reason, Seller
hereby agrees to make the maximum contribution to the payment and satisfaction
of such Obligations which is permissible under applicable law. Seller’s
obligations set forth in this Section 10.02 shall survive any termination of
this Agreement and each other Program Agreement and the payment in full of the
Obligations, and are in addition to, and not in substitution of, any other of
its obligations set forth in this Agreement or otherwise. In addition, Seller
shall, upon demand, pay to Buyer all costs and Expenses (including the
reasonable fees and disbursements of counsel) paid or incurred by Buyer in
(i) enforcing or defending its rights under or in respect of this Agreement or
any other Program Agreement, (ii) collecting the Purchase Price outstanding,
(iii) foreclosing or otherwise collecting upon any Repurchase Assets and
(iv) obtaining any legal, accounting or other advice in connection with any of
the foregoing. For the avoidance of doubt, the foregoing indemnity includes,
without limitation, any claims arising from or relating to the Portfolio Excess
Spread or the Master Spread Acquisition Agreement.

 

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Section 10.03  Nonliability of Buyer. 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. Buyer shall not have any fiduciary responsibilities to Seller.
Seller (i) agrees that Buyer shall not 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 Buyer (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 Buyer constituting gross negligence or willful
misconduct and (ii) waives, releases and agrees not to sue upon any claim
against Buyer (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, Buyer shall not 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 Buyer, as
applicable, constituting willful misconduct or gross negligence.

 

Section 10.04  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. 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.

 

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(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 registered or certified mail, postage prepaid, to Seller at the
address set forth in Section 10.05 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 10.05  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
6101 Condor Drive
Moorpark, CA 93021
Attention: Pamela Marsh/Kevin Chamberlain
Phone Number: (805) 330-6059/ (818) 746-2877
E-mail: pamela.marsh@pnmac.com;

kevin.chamberlain@pnmac.com

 

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with a copy to:

PennyMac Loan Services, LLC
6101 Condor Drive
Moorpark, CA 93021
Attention: Jeff Grogin
Phone Number: (818) 224-7050
E-mail: jeff.grogin@pnmac.com

 

If to Buyer:

 

For Transaction Notice:

CSFBMC LLC
c/o Credit Suisse Securities (USA) LLC
One Madison Avenue, 2nd floor
New York, New York 10010
Attention: Christopher Bergs, Resi Mortgage Warehouse Ops
Phone: 212-538-5087
E-mail: christopher.bergs@credit-suisse.com

 

with a copy to:

Credit Suisse First Boston Mortgage Capital LLC
c/o Credit Suisse Securities (USA) LLC
Eleven Madison Avenue, 4th Floor
New York, NY 10010
Attention: Margaret Dellafera
Phone Number: 212-325-6471
Fax Number: 212-743-4810

E-mail: margaret.dellafera@credit-suisse.com

 

For all other Notices:

Credit Suisse First Boston Mortgage Capital LLC
c/o Credit Suisse Securities (USA) LLC
Eleven Madison Avenue, 4th Floor
Attention: Margaret Dellafera
Phone Number: 212-325-6471
Fax Number: 212-743-4810
E-mail: margaret.dellafera@credit-suisse.com

 

Section 10.06  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.

 

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Section 10.07  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 10.08  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.

 

Section 10.09  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 10.10  Hypothecation or Pledge of Repurchase Assets. Subject to the
relevant Acknowledgment Agreement with any Agency, 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 10.11  Non-Confidentiality of Tax Treatment. (a) This Agreement and its
terms, provisions, supplements and amendments, and notices hereunder, are
proprietary to Buyer and Agent 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, 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, or (ii) 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 terms (including, without
limitation, the Pricing Rate, Purchase Price Percentage, Purchase Price and
Commitment Fee) 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.

 

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(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 “Act”), and
Seller agrees to maintain such nonpublic personal information that it receives
hereunder in accordance with the 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 Act) of Buyer or any Affiliate of Buyer 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 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
immediately following discovery of any breach or compromise of the security,
confidentiality, or integrity of nonpublic personal information of the customers
and consumers of Buyer or any Affiliate of Buyer provided directly to Seller by
Buyer or such Affiliate. 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 10.12  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
or any of its Affiliates 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 or any
Affiliate thereof 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.

 

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Section 10.13  Intent.

 

(a) The parties recognize that each Transaction is a “repurchase 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 Sections 555 and 559 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 (“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 “repurchase agreement” and a “securities
contract,” within the meaning of Section 555 and Section 559 under the
Bankruptcy Code.

 

Section 10.14  Amendment and Restatement. The terms and provisions of the
Existing Agreement shall be amended and restated in their entirety by the terms
and provisions of this Agreement. 

 

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

 

 

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as Buyer

 

By:/s/ Adam Loskove
Name: Adam Loskove
Title: Vice President

 

 

PENNYMAC LOAN SERVICES, LLC, as Seller

 

By: /s/ Pamela Marsh
Name: Pamela Marsh
Title: Executive Vice President, Treasurer

 

 

PRIVATE NATIONAL MORTGAGE ACCEPTANCE COMPANY, LLC, as Guarantor

 

By:/s/ Pamela Marsh
Name: Pamela Marsh
Title: Executive Vice President, Treasurer

 

 

 

 

 

 

 

 

 

Signature Page to Master Repurchase Agreement

   

 

 

SCHEDULE 1-A

 

REPRESENTATIONS AND WARRANTIES REGARDING THE ASSETS

 

The Seller makes the following representations and warranties to the Buyer, with
respect to Servicing Contracts subject to each Transaction, as of the date of
this Agreement, the date of any Transaction, and while the Program Agreements
are in full force and effect. The representations and warranties shall be
limited to Servicing Contracts that are acquired on or after the date of this
Agreement. For purposes of this Schedule 1 and the representations and
warranties set forth herein, a breach of a representation or warranty shall be
deemed to have been cured with respect to the Servicing Contracts if and when
the Seller has taken or caused to be taken action such that the event,
circumstance or condition that gave rise to such breach no longer adversely
affects such Servicing Contracts.

 

(a) Asset Schedule. The Asset Schedule most recently submitted to Buyer is a
true and complete list of the Assets pledged hereunder as of the date of
submission.

 

(b) Servicing Contracts. All of the Servicing Contracts with respect to such
Assets are in full force and effect and have not been modified and Seller as
servicer has not been terminated thereunder.

 

(c) Assignment. Pursuant to this Agreement, Seller grants to the Buyer a valid
security interest in all the right, title and interest of such Seller in and to
the Repurchase Assets and the other Related Security, which security interest is
perfected and of first priority, enforceable against, and creating an interest
prior in right to, all creditors of and purchasers from Seller.

 

(d) No Liens. Each Purchased Asset conveyed and pledged on such Purchase Date is
owned by the related Seller free and clear of any Lien, except as provided
herein, and is not subject to any dispute or other Adverse Claim, except as
provided herein. The Buyer’s security interest in such Purchased Assets, the
Related Security and the Collections with respect thereto, is free and clear of
any Lien, except as provided herein. The Seller has not and will not prior to
the time of the pledge of any such interest to the Buyer have sold, pledged,
assigned, transferred or subjected and will not thereafter sell, pledge, assign,
transfer or subject to a Lien any of such Purchased Assets, the Related Security
or the Collections other than in accordance with the terms of this Agreement.

 

(e) Filings. On or prior to each Purchase Date, all financing statements and
other documents required to be recorded or filed in order to perfect the Buyer’s
security interest in, and protect the 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.

 

(f) Collection Policy. Seller has complied in all material respects with the
Collection Policy in regard to each Asset and related Servicing Contract. Seller
has not extended or modified the terms of any Asset or the related Servicing
Contract except in accordance with the Collection Policy.

 

 Schedule 1-A-1 

 

 

(g) Bona Fide Asset. Each Purchased Asset being sold and/or pledged on an
Purchase Date is an obligation arising out of the making of a Servicer Advance
by the related Seller or a predecessor servicer, in its capacity as a servicer
or subservicer of a portfolio of mortgage loans, pursuant to a Servicing
Contract. The Seller has no knowledge of any fact that should have led it to
expect at the time of the creation of each Purchased Asset that such Purchased
Asset would not be paid in full when due. As of the Purchase Date, the Seller
has not received any Collections or other payments in respect of the Purchased
Assets, and each Purchased Asset is an Eligible Asset.

 

(h) Servicer Advances Reimbursable. The terms of the Servicing Contracts provide
that each Servicer Advance is reimbursable to the Seller from collections on the
related mortgage loan, or collections on other mortgage loans serviced or
subserviced by the Seller pursuant to the related Servicing Contract.

 

(i) Compliance with Servicing Contract. Each Servicer Advance has been made in
accordance with the terms of the related Servicing Contract.

 

(j) Adverse Selection. Seller has not selected the Purchased Assets in a manner
that will adversely affect Buyer’s interests.

 

(k) No Subservicing. Except as otherwise disclosed to Buyer, all of the
Purchased Assets constituting Servicing Rights hereunder constitute direct
servicing rights (and not subservicing rights.)

 

(l) Good Title. Seller has good title to all of the Repurchase Assets other than
the Portfolio Excess Spread, free and clear of all mortgages, security
interests, restrictions, Liens and encumbrances of any kind other than the Liens
created by the Program Agreements. The Underlying Spread Counterparty has good
title to the Repledge Portfolio Excess Spread, subject to the Lien created
hereby and further perfected pursuant to the Security Agreement, but otherwise,
free and clear of all mortgages, security interests, restrictions, Liens and
encumbrances of any kind.

 

(m) No Defenses. 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 and 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 and no obligor has any defense, set off,
claim or counterclaim against Seller that can be asserted against Buyer, whether
in any proceeding to enforce the Buyer’s rights in the related Mortgage Loan or
otherwise.

 

(n) Amount Outstanding. The amount represented by Seller to Buyer as owing by an
obligor under each Mortgage Loan being serviced under a Servicing Contract is
the correct amount actually owing by that obligor.

 

(o) Servicing Compliance with Applicable Laws. Seller has complied with the
terms of the Servicing Contract and applicable laws in all material respects.

 

 Schedule 1-A-2 

 

 

SCHEDULE 1-B

 

REPRESENTATIONS AND WARRANTIES RE: ASSETS CONSISTING OF PARTICIPATION
CERTIFICATES

 

The Seller makes the following representations and warranties to the Buyer, with
respect to Participation Certificates related to Servicing Rights subject to
each Transaction, as of the date of this Agreement, the date of any Transaction,
and while the Program Agreements are in full force and effect. The
representations and warranties shall be limited to Participation Certificates
related to Servicing Rights that are acquired on or after the date of this
Agreement. For purposes of this Schedule 1 and the representations and
warranties set forth herein, a breach of a representation or warranty shall be
deemed to have been cured with respect to the Participation Certificates related
to Servicing Rights if and when the Seller has taken or caused to be taken
action such that the event, circumstance or condition that gave rise to such
breach no longer adversely affects such Participation Certificates related to
Servicing Rights.

 

(a) The representations and warranties with respect to the related Servicing
Contract set forth on Schedule 1-A are true and correct in all material
respects.

 

(b) The Participation Certificate is a participation interest in the Portfolio
Excess Spread evidenced by such Participation Certificate.

 

(c) Seller has good and marketable title to, and is the sole owner and holder
of, such Participation Certificate, Seller is transferring such Participation
Certificate free and clear of any and all liens, pledges, encumbrances, charges,
security interests or any other ownership interests of any nature encumbering
such Participation Certificate, other than the first priority security interest
of Buyer granted pursuant to this Agreement, and no Participation Certificate
document is subject to any assignment, participation, or pledge.

 

(d) No (i) monetary default, breach or violation exists with respect to any
agreement or other document governing or pertaining to such Participation
Certificate, the related Portfolio Excess Spread, (ii) material non-monetary
default, breach or violation exists with respect to such Participation
Certificate, the related Portfolio Excess Spread, or (iii) event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration.

 

(e) None of the Participation Certificates (i) is dealt in or traded on a
securities exchange or in a securities market, (ii) by its terms expressly
provides that it is a Security governed by Article 8 of the UCC, (iii) is
Investment Property or (iv) is held in a Deposit Account. For purposes of this
paragraph (e), capitalized terms undefined in this Agreement have the meaning
given to such term in the Uniform Commercial Code.

 

(f) The Participation Certificate constitutes all the issued and outstanding
participation interests of all classes issued pursuant to the Participation
Agreement and is certificated.

 

(g) The Participation Certificate has been duly and validly issued.

 

 Schedule 1-B-1 

 

 

(h) All consents of any Person required for the grant of the security interests
in the Participation Certificates to Buyer provided for herein have been
obtained and are in full force and effect.

 

(i) Upon delivery to the Buyer of the Participation Certificates (and assuming
the continuing possession by the Buyer of such certificate in accordance with
the requirements of applicable law) and the filing of a financing statement
covering the Participation Certificate in the State of Delaware and naming the
Seller as debtor and the Buyer as secured party, Seller has pledged to Buyer all
of its right, title and interest to the Participation Certificates to Buyer. The
Lien granted hereunder is a first priority Lien in the Participation
Certificate.

 

(j) The Seller has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Participation Agreement without the
consent of Buyer.

 

(k) Participation Agreement.

 

(i) Each Participation Agreement with respect to such Assets is in full force
and effect and, except to the extent approved in writing by Buyer, the terms of
the Participation Agreement have not been impaired, altered or modified in any
respect.

 

(ii) A true and correct copy of the Participation Agreement has been delivered
to Buyer.

 

(iii) Seller has complied with all terms of each Participation Agreement subject
to a Transaction hereunder and has fulfilled all obligations with respect
thereto.

 

(iv) Except to the extent approved in writing by Buyer, there is no material
default, breach, violation or event of acceleration existing under the
Participation Agreement and no event has occurred which, with the passage of
time or giving of notice or both and the expiration of any grace or cure period,
would constitute a material default, breach, violation or event of termination
thereunder, and Seller has not waived any such default, breach, violation or
event of termination.

 

(v) The Participation Agreement is genuine, and is the legal, valid and binding
obligation of the Seller enforceable in accordance with its terms, except as
such enforcement may be affected by bankruptcy, by other insolvency laws or by
general principles of equity. Seller had legal capacity to enter into the
Participation Agreement, and the Participation Agreement has been duly and
properly executed by Seller and Servicer.

 

(vi) Pursuant to the Participation Agreement, to the extent the sale would be
re-characterized, Seller grants to the holder a valid security interest in all
the right, title and interest of Seller in and to the Portfolio Excess Spread,
which security interest is perfected and of first priority, enforceable against,
creating an interest prior in right to, all creditors of Seller.

 

 Schedule 1-B-2 

 

 

SCHEDULE 1-C

 

REPRESENTATIONS AND WARRANTIES RE:
UNDERLYING SPREAD TRANSACTIONS

 

The Seller makes the following representations and warranties to the Buyer, with
respect to Underlying Spread Transactions, as of the date of this Agreement, the
date of the Underlying Spread Transactions, and as of each date the Program
Agreements are in full force and effect. For purposes of this Schedule 1-C and
the representations and warranties set forth herein, a breach of a
representation or warranty shall be deemed to have been cured with respect to
the Underlying Spread Transactions if and when the Seller has taken or caused to
be taken action such that the event, circumstance or condition that gave rise to
such breach no longer adversely affects such Underlying Spread Transaction.

 

(a) Validity of Underlying Spread Documents. The Underlying Spread Documents and
any other agreement executed and delivered by Underlying Spread Counterparty or
guarantor thereto, as applicable, in connection with an Underlying Spread
Transaction are genuine, and each is the legal, valid and binding obligation of
the maker thereof enforceable in accordance with its terms, except as such
enforcement may be affected by bankruptcy, by other insolvency laws or by
general principles of equity. Underlying Spread Counterparty and Seller had
legal capacity to enter into the Underlying Spread Transaction and Underlying
Spread Counterparty had the legal capacity to execute and deliver the Underlying
Spread Documents and any such agreement, and the Underlying Spread Documents and
any such other related agreement to which Underlying Spread Counterparty or
Seller are parties have been duly and properly executed by Underlying Spread
Counterparty and Seller, as applicable. The Underlying Spread Documents to which
Underlying Spread Counterparty is a party constitute legal, valid, binding and
enforceable obligations of Underlying Spread Counterparty. The Underlying Spread
Transaction and the Underlying Spread Documents are in full force and effect,
and the enforceability of the Underlying Spread Documents has not been contested
by Underlying Spread Counterparty.

 

(b) Original Terms Unmodified. Except to the extent approved in writing by
Buyer, neither the terms of the Underlying Spread Documents nor the terms of the
Underlying Spread Transactions have been (i) materially amended, modified,
supplemented or restated or (ii) amended, modified, supplemented or restated in
any manner that would affect the Buyer’s rights hereunder or under any other
Program Agreement (including without limitation Buyer’s rights to the Repledge
Portfolio Excess Spread).

 

(c) No Defenses. The Underlying Spread Transaction is not subject to any right
of rescission, set-off, counterclaim or defense, including without limitation
the defense of usury, nor will the operation of any of the terms of any
Underlying Spread Documents, or the exercise of any right thereunder, render any
Underlying Spread Document unenforceable in whole or in part and no such right
of rescission, set-off, counterclaim or defense has been asserted with respect
thereto.

 

(d) No Bankruptcy. Underlying Spread Counterparty is not a debtor in any state
or federal bankruptcy or insolvency proceeding. Underlying Spread Counterparty
has not threatened and is not contemplating either the filing of a petition by
it under any state or federal bankruptcy or insolvency laws or the liquidation
of all or a major portion of Underlying Spread Counterparty’s assets or any of
the Repledge Portfolio Excess Spread.

 

 Schedule 1-C-1 

 

 

(e) Compliance with Applicable Laws; Consents. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws and unfair and deceptive practices
laws applicable to the Underlying Spread Transaction have been complied with,
and the consummation of the transactions contemplated hereby will not involve
the violation of any such laws or regulations. All consents of and all filings
with any federal or state Governmental Authority necessary in connection with
the execution, delivery or performance of the Underlying Spread Transaction have
been obtained or made and are in full force and effect.

 

(f) No Waiver. Except to the extent approved in writing by Buyer, Seller has not
waived the performance by Underlying Spread Counterparty of any action under the
Underlying Spread Documents, if Underlying Spread Counterparty’s failure to
perform such action would cause the Underlying Spread Transaction to be in
default in any material respect nor, except to the extent approved in writing by
Buyer, has Seller waived any such default resulting from any action or inaction
by Underlying Spread Counterparty.

 

(g) No Defaults. There is no material default, breach, violation or event which
would permit acceleration existing under the Underlying Spread Documents and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a material default, breach, violation or
event which would permit acceleration, and neither Seller nor any of its
affiliates nor any of their respective predecessors, have waived any default,
breach, violation or event which would permit acceleration; and all maintenance
charges and assessments (including assessments payable in the future
installments, which previously became due and owing) have been paid.

 

(h) Delivery of Underlying Spread Documents. True and correct copies of the
Underlying Spread Documents have been delivered to Buyer.

 

(i) Organization. Underlying Spread Counterparty has been duly organized and is
validly existing and in good standing under the laws of the jurisdiction of its
formation. Underlying Spread Counterparty has requisite power and authority to
(i) own its properties, (ii) transact the business in which it is now engaged,
(iii) execute and deliver the Underlying Spread Documents and (iv) consummate
the transactions contemplated thereby. Underlying Spread Counterparty is duly
qualified to do business and is in good standing in the jurisdictions where it
is required to be so qualified in connection with the ownership, maintenance,
management and operation of its business. Underlying Spread Counterparty
possesses all material rights, licenses, permits and authorizations,
governmental or otherwise, necessary to entitle it to own its properties and to
transact the businesses in which it is now engaged.

 

(j) No Conflicts. The execution, delivery and performance of the Underlying
Spread Documents by Underlying Spread Counterparty do not conflict with or
constitute a default under, or result in the creation or imposition of any lien
(other than pursuant to the Underlying Spread Documents) under, any material
servicing agreement, participation agreement, agreement, partnership agreement,
or other agreement or instrument to which Underlying Spread Counterparty is a
party or to which any of its property is subject, nor will such action result in
any violation of the provisions of any statute of any Governmental Authority
having jurisdiction over Underlying Spread Counterparty, and any qualification
of or with any governmental authority required for the execution, delivery, and
performance by Underlying Spread Counterparty of the Underlying Spread Documents
has been obtained and is in full force and effect.

 

 Schedule 1-C-2 

 

 

(k) Compliance. Underlying Spread Counterparty is in compliance in all material
respects with all applicable legal requirements. Underlying Spread Counterparty
is not in default or violation of any order, writ, injunction, decree or demand
of any Governmental Authority, the violation of which might adversely affect the
condition (financial or otherwise) or business of Underlying Spread
Counterparty.

 

(l) Underlying Spread Documents Not Assigned. No Underlying Spread Document is
assigned to any third party other than the Buyer. The Underlying Spread
Documents permit Seller to assign, pledge, transfer or rehypothecate the
Repledge Portfolio Excess Spread and all other collateral pledged to Seller
pursuant to the Underlying Spread Documents. The Underlying Spread Documents
expressly provide that the Underlying Spread Counterparty’s rights to redemption
are solely with respect to Seller, but to the extent that a court of competent
jurisdiction determines that a right of redemption exists with respect to the
Buyer hereunder, such redemption may only be for the full amount of the Purchase
Price then outstanding hereunder.

 

(m) Solvency. The pledge of the Repledge Portfolio Excess Spread subject to the
Underlying Spread Documents is not undertaken with the intent to hinder, delay
or defraud any of Underlying Spread Counterparty’s creditors. Underlying Spread
Counterparty is not insolvent within the meaning of 11 U.S.C. Section 101(32)
and the transfer and pledge of the Repledge Portfolio Excess Spread pursuant to
the Underlying Spread Documents (i) will not cause Underlying Spread
Counterparty to become insolvent, (ii) will not result in any property remaining
with Underlying Spread Counterparty to be unreasonably small capital, and (iii)
will not result in debts that would be beyond Underlying Spread Counterparty’s
ability to pay as same mature. Underlying Spread Counterparty receives
reasonably equivalent value in exchange for the transfer and pledge of the
Repledge Portfolio Excess Spread in accordance with the Underlying Spread
Documents.

 

(n) Ownership. Seller has the right to pledge the Repledge Portfolio Excess
Spread. The Repledge Portfolio Excess Spread has not been assigned or pledged by
Seller other than pursuant to this Agreement and the Security Agreement.
Underlying Spread Counterparty has good, indefeasible and marketable title to
the Repledge Portfolio Excess Spread, and has full right to pledge and assign
the Repledge Portfolio Excess Spread to Buyer under the Security Agreement free
and clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest, and has full right and authority subject to
no interest or participation of, or agreement with, any other party, to assign
and pledge the Repledge Portfolio Excess Spread pursuant to the Security
Agreement.

 

 Schedule 1-C-3 

 

 

(o) Reserved.

 

(p) No Plan Assets. Underlying Spread Counterparty is not an “employee benefit
plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and
none of the assets of the Mortgagor constitutes or will constitute “plan assets”
of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101.

 

(q) No Prohibited Persons. Neither Underlying Spread Counterparty nor any of its
Affiliates, officers, directors, partners or members, is an entity or person or
owned or controlled by an entity or person: (i) that is listed in the Annex to,
or is otherwise subject to the provisions of EO13224; (ii) whose name appears on
the United States Treasury Department’s 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; or (iv) who is
otherwise affiliated with any entity or person listed above.

 

(r) Financial Information. Based upon Underlying Spread Counterparty’s
representations and warranties, all financial data, including, without
limitation the statements of cash flow and income and operating expense, that
have been delivered to Seller (i) are true, complete, and correct in all
material respects, and (ii) accurately represent the financial condition of
Underlying Spread Counterparty as of the date of such reports.

 

(s) Repledge Portfolio Excess Spread Assignable; Buyer’s Security Interest. (i)
The Underlying Spread Documents have been delivered to Buyer and (ii) the UCC-1
Financing Statement naming Underlying Spread Counterparty as debtor and Seller
as secured party identifying the Repledge Portfolio Excess Spread as collateral
has been filed in the applicable filing office.

 

(t) Reserved.

 

(u) Seller Diligence. Seller has delivered to Buyer all information regarding
Underlying Spread Counterparty as Buyer has requested and such information is
satisfactory to Buyer in all material respects.

 

(v) Underlying Spread Documents.

 

(i) The Underlying Spread Loan Agreement contains broad repledge, assignment and
rehypothecation provisions in favor of Seller permitting Seller to pledge and
assign to Buyer hereunder, without restriction or rights to consent by
Underlying Spread Counterparty or any other Person, all of Seller’s right, title
and interest in the Repledge Portfolio Excess Spread pledged by Underlying
Spread Counterparty thereunder;

 

(ii) The Underlying Spread Loan Agreement contains a grant of security interest
in the Repledge Portfolio Excess Spread subject to an Underlying Spread
Transaction to Seller, similar in form and substance to the security interest
granted to Buyer in Section 4.01 of the Agreement;

 

(iii) The Underlying Spread Loan Agreement contains a broad grant of a power of
attorney to Seller and Seller’s attorneys-in-fact, including Buyer; and

 

(iv) The Underlying Spread Loan Agreement requires that all cash proceeds with
respect to the Repledge Portfolio Excess Spread to be promptly remitted to the
Servicing Rights Dedicated Account.

 

 Schedule 1-C-4 

 

 

SCHEDULE 2

ELIGIBLE SECURITIZATION TRANSACTIONS, SERVICING CONTRACTS AND PARTICIPATION
AGREEMENTS

 

Description of Eligible Securitization Transaction   Related Servicing Cut-off
Date   Related Purchase Date           Ginnie Mae I MBS and Ginnie Mae II MBS,
in either case issued by Seller and guaranteed by Ginnie Mae upon Seller's
securitization of a pool of Ginnie Mae eligible mortgage loans insured or
guaranteed by the FHA or VA, as applicable.  Seller's issuance of the related
MBS and its servicing of the underlying mortgage loans are governed in all
respects by Ginnie Mae's 5500.3 REV-1: Mortgage-Backed Securities Guide, as the
same may be amended from time to time.   The first Business Day of the calendar
month.   The 15th calendar day of the month (or, if the 15th calendar day is not
a Business Day, the first Business Day thereafter)

 

Participation Agreements

 

Amended and Restated Master Spread Acquisition and MSR Servicing Agreement,
dated as of April 30, 2015, between PennyMac Holdings, LLC and PennyMac Loan
Services, LLC, as amended, restated or modified from time to time

 

Master Spread Participation Agreement, dated March 27, 2015, by and among
PennyMac Loan Services, LLC and PennyMac Loan Services, LLC, as initial
participant, as amended, restated or modified from time to time

 

 Schedule 2-1 

 

 

SCHEDULE 3

RESPONSIBLE OFFICERS – SELLER

 

SELLER AUTHORIZATIONS

 

Any of the persons whose signatures and titles appear below are authorized,
acting singly, to act for Seller under this Agreement:

 

Responsible Officers for execution of Program Agreements and amendments

 

Name   Title   Signature

 

 

 

 

 

Responsible Officers for execution of Transaction Notices and day-to-day
operational functions

 

Name   Title   Signature

 

 

 

 

 

 

 

 Schedule 3-1 

 

 

RESPONSIBLE OFFICERS - GUARANTOR

 

Name   Title   Signature

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Schedule 3-2 

 

 

EXHIBIT A

 

RESERVED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Exhibit A-1 

 

 

EXHIBIT B-1

 

FORM OF POWER OF ATTORNEY

 

Reference is made to the Master Repurchase Agreement, dated as of November 10,
2015 (as amended from time to time, the “Agreement”) among PennyMac Loan
Services, LLC (the “Seller”), Private National Mortgage Acceptance Company, LLC
(the “Guarantor”) and Credit Suisse First Boston Mortgage Capital LLC (the
“Buyer”).

 

KNOW ALL MEN BY THESE PRESENTS, 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, in accordance with
the terms of the Agreement, for the purpose of carrying out the terms of the
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 the Agreement, and, without limiting the generality of the
foregoing, Seller hereby gives Buyer the power and right, on behalf of Seller,
without assent by, but with notice to, Seller, if permitted under the terms of
the Agreement, 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 (i) all receivables
arising under or related to any servicing contract described in the Agreement;
(ii) all servicing rights arising under or related to any servicing contract
described in the Agreement; (iii) all rights to reimbursement of assets under
related servicing contracts described in the Agreement; (iv) any accounts
described in the Agreement; (v) all records, instruments or other documentation
evidencing any of the foregoing; (vi) 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 any related servicing contracts
described in the Agreement); and (vii) any and all replacements, substitutions,
distributions on or proceeds of any and all of the foregoing (any and all
property listed in clauses (i) through (vii), collectively, the “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 applicable Servicing Contracts
and the Acknowledgement Agreements, request that Fannie Mae Servicing Rights,
Freddie Mac Servicing Rights, Ginnie Mae Servicing Rights and Servicing Rights
in respect of Mortgage Loans owned by any other investor or guarantor be
transferred to Buyer or to another servicer approved by Fannie Mae, Freddie Mac,
Ginnie Mae or such other investor or guarantor (as the case may be) 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 Servicing
Rights Asset;

 

 Exhibit B-1-1 

 

 

(iv) request distribution to Buyer of sale proceeds or any applicable contract
termination fees arising from the sale or termination of such Servicing Rights
and remaining after satisfaction of Seller’s relevant obligations to Fannie Mae,
Freddie Mac, Ginnie Mae or such other investor or guarantor (as the case may
be), including costs and expenses related to any such sale or transfer of such
Servicing Rights and other amounts due for unmet obligations of Seller to Fannie
Mae, Freddie Mac, Ginnie Mae or such other investor or guarantor (as the case
may be) under applicable Fannie Mae Guides, Freddie Mac Guides, Ginnie Mae
Guides or such other investor’s or guarantor’s contract;

 

(v) deal with investors and any and all subservicers and master servicers in
respect of any of the servicing rights 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 Asset
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 Asset; (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 Asset or any portion thereof
and to enforce any other right in respect of any Repurchase Asset; (E) to defend
any suit, action or proceeding brought against Seller with respect to any
Repurchase Asset; (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 Asset 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 Repurchase Assets
and Buyer’s Liens thereon and to effect the intent of the Agreement, all as
fully and effectively as Seller might do.

 

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 the
Agreement is terminated.

 

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

 

 Exhibit B-1-2 

 

 

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, this power of attorney shall be subject to the Servicing Contracts
and Acknowledgement Agreements entered into with Ginnie Mae, Fannie Mae or
Freddie Mac, as applicable.

 

Any capitalized term used but not defined herein shall have the meaning assigned
to such term in the Agreement.

 

TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD
PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT
HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO
SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION
OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND BUYER ON ITS
OWN BEHALF AND ON BEHALF OF BUYER’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD
HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE
AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE
PROVISIONS OF THIS INSTRUMENT.

 

 Exhibit B-1-3 

 

 

IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed and
Seller’s seal to be affixed this day of ________, 2015.

 

PENNYMAC LOAN SERVICES, LLC

 

 

 

By:____________________________________
Name:
Title:

 

 

 

 

 

 

 

 

 Exhibit B-1-4 

 

 

STATE OF )   ) ss.: COUNTY OF )

 

On the ____________ day of _______, 2015 before me, a Notary Public in and for
said State, personally appeared , known to me to be
______________________________________________ of Seller, the institution that
executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

 

IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and year in this certificate first above written.

 

 

 

        Notary Public            

 

My Commission expires _______________________________

 

 Exhibit B-1-5 

 

 

EXHIBIT B-2

 

FORM OF POWER OF ATTORNEY

 

Reference is made to the Master Repurchase Agreement, dated as of November 10,
2015 (as amended from time to time, the “Agreement”) among PennyMac Loan
Services, LLC (the “Seller”), Private National Mortgage Acceptance Company, LLC
(the “Guarantor”) and Credit Suisse First Boston Mortgage Capital LLC (the
“Buyer”).

 

KNOW ALL MEN BY THESE PRESENTS, Seller hereby irrevocably constitutes and
appoints Select Portfolio Servicing, Inc. (“SPS”) 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 SPS’s discretion, in accordance with the terms of the Agreement, for the
purpose of carrying out the terms of the 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 the Agreement, and,
without limiting the generality of the foregoing, Seller hereby gives SPS the
power and right, on behalf of Seller, without assent by, but with notice to,
Seller, if permitted under the terms of the Agreement, 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 (i) all receivables
arising under or related to any servicing contract described in the Agreement;
(ii) all servicing rights arising under or related to any servicing contract
described in the Agreement; (iii) all rights to reimbursement of assets under
related servicing contracts described in the Agreement; (iv) any accounts
described in the Agreement; (v) all records, instruments or other documentation
evidencing any of the foregoing; (vi) 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 any related servicing contracts
described in the Agreement); and (vii) any and all replacements, substitutions,
distributions on or proceeds of any and all of the foregoing (any and all
property listed in clauses (i) through (vii), collectively, the “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 SPS for the purpose of
collecting any and all such moneys due with respect to any Repurchase Asset or
related Mortgage Loans 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 applicable Servicing Contracts
and the Acknowledgement Agreements, request that Fannie Mae Servicing Rights,
Freddie Mac Servicing Rights, Ginnie Mae Servicing Rights and Servicing Rights
in respect of Repurchase Assets or related Mortgage Loans owned by any other
investor or guarantor be transferred to SPS or to another servicer approved by
Fannie Mae, Freddie Mac, Ginnie Mae or such other investor or guarantor (as the
case may be) 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 Servicing Rights Asset;

 

 Exhibit B-2-1 

 

 

(iv) request distribution to SPS of sale proceeds or any applicable contract
termination fees arising from the sale or termination of such Servicing Rights
and remaining after satisfaction of Seller’s relevant obligations to Fannie Mae,
Freddie Mac, Ginnie Mae or such other investor or guarantor (as the case may
be), including costs and expenses related to any such sale or transfer of such
Servicing Rights and other amounts due for unmet obligations of Seller to Fannie
Mae, Freddie Mac, Ginnie Mae or such other investor or guarantor (as the case
may be) under applicable Fannie Mae Guides, Freddie Mac Guides, Ginnie Mae
Guides or such other investor’s or guarantor’s contract;

 

(v) deal with investors and any and all subservicers and master servicers in
respect of any Repurchase Asset, Servicing Contracts and related Mortgage Loans
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 Asset
or the related Mortgage Loans to make payment of any and all moneys due or to
become due thereunder directly to SPS or as SPS 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 or related Mortgage Loans; (C) to sign and
endorse any invoices, assignments, verifications, notices and other documents in
connection with any of the Repurchase Asset or related Mortgage Loans; (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 Asset or related
Mortgage Loans or any portion thereof and to enforce any other right in respect
of any Repurchase Asset; (E) to defend any suit, action or proceeding brought
against Seller with respect to any Repurchase Asset or related Mortgage Loans;
(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 SPS 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 Asset or related Mortgage Loans as fully and completely as though SPS
were the absolute owner thereof for all purposes, and to do, at SPS’s option and
Seller’s expense, at any time, and from time to time, all acts and things which
SPS deems necessary to protect, preserve or realize upon the Repurchase Asset or
related Mortgage Loans and SPS’s Liens thereon and to effect the intent of the
Agreement, all as fully and effectively as Seller might do.

 

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 the
Agreement is terminated.

 

Seller also authorizes SPS, at any time and from time to time, to execute, in
connection with any sale provided for in the Agreement, any endorsements,
assignments or other instruments of conveyance or transfer with respect to the
Repurchase Assets.

 

 Exhibit B-2-2 

 

 

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

 

Notwithstanding anything to the contrary herein or any of the other Program
Agreements, this power of attorney shall be subject to the Servicing Contracts
and Acknowledgement Agreements entered into with Ginnie Mae, Fannie Mae or
Freddie Mac, as applicable.

 

Any capitalized term used but not defined herein shall have the meaning assigned
to such term in the Agreement.

 

TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD
PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT
HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO
SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION
OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND SPS ON ITS OWN
BEHALF AND ON BEHALF OF SPS’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD
HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE
AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE
PROVISIONS OF THIS INSTRUMENT.

 

 Exhibit B-2-3 

 

 

IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed and
Seller’s seal to be affixed this day of ______, 2015.

 

 

PENNYMAC LOAN SERVICES, LLC

 

 

By:____________________________________
Name:
Title:

 

 

 

 

 Exhibit B-2-4 

 

 

 

STATE OF [                           ] )   ) ss.: COUNTY OF [
                          ] )

 

 

On the ____________ day of ___________, 2015 before me, a Notary Public in and
for said State, personally appeared , known to me to be
______________________________________________ of Seller, the institution that
executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

 

IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and year in this certificate first above written.

 

 

 

 

        Notary Public            

 

My Commission expires _______________________________

 

 

 

 

 

 

 

 Exhibit B-2-5 

 

 

EXHIBIT C

 

FORM OF TRANSACTION NOTICE

 

Dated: [_________]

 

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
Eleven Madison Avenue
New York, NY 10010
Attention: [NAME]
Fax No.: [NUMBER]

 

TRANSACTION NOTICE

 

Ladies and Gentlemen:

 

We refer to the Master Repurchase Agreement, dated as of November 10, 2015 (the
“Agreement”), among 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:

 

Purchase Price of Transaction Amount of Asset Base Outstanding Purchase Price  
         

 

The requested Purchase Date is _______________.

 

Seller requests that the proceeds of the 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 complete
Asset Schedule, which includes the Assets to be subject to the requested
Transaction.

 

 

PENNYMAC LOAN SERVICES, LLC

 

 

 

By:____________________________________

 

 

 Exhibit C-1 

 

 

[Asset Schedule]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Exhibit C-2 

 

 

EXHIBIT D

 

EXISTING INDEBTEDNESS

 

As of November 4, 2015

 

LENDER FACILITY SIZE AMOUNT COMMITTED OUTSTANDING INDEBTEDNESS EXPIRATION DATE
Warehouse Facilities:         Bank of America, N.A. $500,000,000 $225,000,000
$268,254,021 01/29/16 Citibank, N.A. $150,000,000 $150,000,000 $54,393,586
10/20/16 Credit Suisse First Boston Mortgage Capital, LLC $500,000,000
$500,000,000 $333,650,144 12/15/15 Morgan Stanley $300,000,000 $125,000,000
$61,727,769 07/26/16 Total Warehouse $1,400,000,000 $900,000,000 $718,025,520  
Gestation Facility:         Bank of America- Gestation Repurchase Agreement
$250,000,000   $194,510,138 01/29/16 MSR Financing:         Credit Suisse AG,
New York Branch $407,000,000   $407,000,000 11/13/15 Total $2,057,000,000
$1,307,000,000 $1,534,527,201  

 

 Exhibit D-1 

 

 

EXHIBIT E

RESERVED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Exhibit E-1 

 

 

EXHIBIT F

FORM OF REQUEST FOR APPROVAL OF
ELIGIBLE SECURITIZATION, PARTICIPATION AGREEMENT OR

SERVICING CONTRACT

 

Dated: [_________]

 

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
Eleven Madison Avenue
New York, NY 10010
Attention: [NAME]
Fax No.: [NUMBER]

 

REQUEST FOR APPROVAL OF
ELIGIBLE SECURITIZATION, PARTICIPATION AGREEMENT
OR SERVICING CONTRACT

 

Ladies and Gentlemen:

 

We refer to the Master Repurchase Agreement, dated as of November 10, 2015 (the
“Agreement”), by and among 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 2.15 of the Agreement.

 

Seller hereby requests that the following Securitization Transaction(s),
Participation Agreement(s) or Servicing Contract(s) be approved as Eligible
Securitization Transaction(s), Participation Agreement(s) or additional
Servicing Contract(s), as applicable:

 

SERVICING CONTRACTS:

Description of Servicing Contract Related Servicing Cut-off Date    

 

 

 

PARTICIPATION AGREEMENTS:

Description of Participation Agreement Pool No. (or Freddie Mac Contract No.)
Participation Date      

 

 

 

 Exhibit F-1 

 

 

PennyMac Loan Services, LLC, as Seller

 

 

 

By:____________________________________

 

 

 

ACKNOWLEDGED AND AGREED:

 

Credit Suisse First Boston Mortgage Capital LLC, as Buyer

 

 

By:                                                             
       Name:
       Title:

 

 

 

 

 

 Exhibit F-2