Exhibit 10.1

EXECUTION

 

THIRD AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

 

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as administrative agent
(“Administrative Agent”),  
CREDIT SUISSE AG, a company incorporated in Switzerland, acting through its
CAYMAN
ISLANDS BRANCH, as buyer (“Buyer”), ALPINE SECURITIZATION LTD, as buyer and
other Buyers from time to time (“Buyers”),

 

 

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

 

 

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

 

 

Dated April 28, 2017

 

 

 

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TABLE OF CONTENTS

 

 

 

 

 

 

Page

1.

Applicability

1

 

 

 

2.

Definitions

2

 

 

 

3.

Program; Initiation of Transactions

25

 

 

 

4.

Repurchase

27

 

 

 

5.

Price Differential.

28

 

 

 

6.

Margin Maintenance

28

 

 

 

7.

Income Payments

29

 

 

 

8.

Security Interest

30

 

 

 

9.

Payment and Transfer

32

 

 

 

10.

Conditions Precedent

32

 

 

 

11.

Program; Costs

36

 

 

 

12.

Servicing

39

 

 

 

13.

Representations and Warranties

40

 

 

 

14.

Covenants

46

 

 

 

15.

Events of Default

54

 

 

 

16.

Remedies Upon Default

56

 

 

 

17.

Reports

59

 

 

 

18.

Repurchase Transactions

64

 

 

 

19.

Single Agreement

64

 

 

 

20.

Notices and Other Communications

65

 

 

 

21.

Entire Agreement; Severability

66

 

 

 

22.

Non Assignability

66

 

 

 

23.

Set-off

68

 

 

 

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24.

Binding Effect; Governing Law; Jurisdiction

68

 

 

 

25.

No Waivers, Etc.

68

 

 

 

26.

Intent

69

 

 

 

27.

Disclosure Relating to Certain Federal Protections

70

 

 

 

28.

Power of Attorney

70

 

 

 

29.

Buyers May Act Through Administrative Agent

71

 

 

 

30.

Indemnification; Obligations

71

 

 

 

31.

Counterparts

72

 

 

 

32.

Confidentiality

72

 

 

 

33.

Recording of Communications

73

 

 

 

34.

Commitment Fee

73

 

 

 

35.

Periodic Due Diligence Review

74

 

 

 

36.

Authorizations

74

 

 

 

37.

Acknowledgment of Assignment and Administration of Repurchase Agreement

75

 

 

 

38.

Acknowledgement of Anti-Predatory Lending Policies

75

 

 

 

39.

Documents Mutually Drafted

75

 

 

 

40.

General Interpretive Principles

75

 

 

 

41.

Conflicts

76

 

 

 

42.

Bankruptcy Non-Petition

76

 

 

 

43.

Limited Recourse

76

 

 

 

44.

Amendment and Restatement

77

 

 

 

45.

Reaffirmation of Guaranty.

77

 

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SCHEDULES

 

Schedule 1-A – Representations and Warranties with Respect to Purchased Mortgage
Loans

 

Schedule 1-B – Representations and Warranties with Respect to Servicer Advances

 

Schedule 2 – Authorized Representatives 

 

Schedule 3 – Responsible Officers of Seller and Guarantor 

 

EXHIBITS

 

Exhibit A – Form of Transaction Request

 

Exhibit B – Reserved

 

Exhibit C – Form of Mortgage Loan Schedule

 

Exhibit D – Reserved 

 

Exhibit E – Form of Power of Attorney

 

Exhibit F – Underwriting Guidelines

 

Exhibit G – Reserved 

 

Exhibit H – Seller’s and Guarantor’s Tax Identification Number

 

Exhibit I – Existing Indebtedness 

 

Exhibit J – Form of Escrow Instruction Letter

 

Exhibit K – Custodial and Securities Intermediary Fee Schedule

 

Exhibit L – Form of Trade Assignment

 

 

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This is a THIRD AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT, dated as of
April 28, 2017, by and among CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (
“Administrative Agent”) on behalf of Buyers, including but not limited to Credit
Suisse AG, a company incorporated in Switzerland, acting through its Cayman
Islands Branch (“CS Cayman” and a “Committed Buyer”) and Alpine Securitization
LTD (“Alpine” and a “Buyer”), PENNYMAC LOAN SERVICES, LLC., as seller
(“Seller”), and PRIVATE NATIONAL MORTGAGE ACCEPTANCE COMPANY, LLC, as guarantor
(“Guarantor”).

 

The Administrative Agent, the Guarantor and the Seller previously entered into a
Second Amended and Restated Master Repurchase Agreement, dated as of March  31,
2016 (the “Existing Master Repurchase Agreement”), which amended and restated
that certain Amended and Restated Master Repurchase Agreement, dated as of May
3, 2013, which amended and restated that certain Master Repurchase Agreement,
dated as of August 14, 2009;

 

Pursuant to that certain Assignment, Assumption and Appointment Agreement, dated
as of June 16, 2016 by and among Administrative Agent, CS Cayman, as a buyer,
and certain Buyers identified therein (as amended, restated, supplemented or
otherwise modified from time to time, the “Assignment, Assumption and
Appointment Agreement”), Administrative Agent sold and assigned its right, title
and interest in the Transactions and the related Purchased Mortgage Loans and
Repurchase Assets hereunder to such Buyers and was retained as Administrative
Agent hereunder;

 

The parties hereto have requested that the Existing Master Repurchase Agreement
be amended and restated, in its entirety, on the terms and subject to the
conditions set forth herein;

 

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

 

1.         Applicability

 

From time to time the parties hereto may enter into transactions in which Seller
agrees to transfer to Administrative Agent on behalf of Buyers Mortgage Loans
(as hereinafter defined) on a servicing released basis and GNMA Advances that
are Eligible Servicer Advances against the transfer of funds by Administrative
Agent, with a simultaneous agreement by Administrative Agent on behalf of Buyers
to transfer to Seller such Mortgage Loans, including GNMA Advances, on a
servicing released basis at a date certain or on demand, against the transfer of
funds by Seller.  This Agreement is a commitment by Administrative Agent on
behalf of Committed Buyers to engage in the Transactions as set forth herein up
to the Maximum Regular Way Committed Purchase Price;  provided, that
Administrative Agent on behalf of Buyers shall have no commitment to enter into
any Transaction requested that would result in the aggregate Purchase Price of
then-outstanding Transactions to exceed the Maximum Regular Way Committed
Purchase Price. The aggregate Purchase Price of Purchased Mortgage Loans subject
to outstanding Transactions shall not exceed the Maximum Regular Way Purchase
Price. Each such transaction shall be referred to herein as a “Transaction” and,
unless otherwise agreed in writing, shall be

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governed by this Agreement, including any supplemental terms or conditions
contained in any annexes identified herein, as applicable hereunder. For the
avoidance of doubt, and for administrative and tracking purposes, the purchase
and sale of each Purchased Mortgage Loan shall be deemed a separate Transaction.

 

2.         Definitions

 

Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:

 

“Acceptable State” means any state acceptable pursuant to the Underwriting
Guidelines.

 

“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.

 

“Act” has the meaning set forth in Section 32.b hereof.

 

“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.

 

“Additional Buyers”  has the meaning set forth in Section 37 hereof.

 

“Adjusted Tangible Net Worth”  has the meaning assigned to such term in the
Pricing Side Letter. 

 

“Administrative Agent” means CSFBMC or any successor thereto under this
Agreement.

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“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, which shall also include, for the avoidance
of doubt, with respect to Administrative Agent only, any CP Conduit. 

 

“Aged 180 Day Non-Agency QM Mortgage Loan” means a Non-Agency QM Mortgage Loan
which has been subject to a Transaction hereunder for a period of greater than
one hundred eighty (180) days but not greater than three hundred sixty four
(364) days.

 

“Aged 364 Day Non-Agency QM Mortgage Loan” means a Non-Agency QM Mortgage Loan
which has been subject to a Transaction hereunder for a period of greater than
three hundred sixty four (364) days.

 

“Aged Loan”  means an Aged 180 Day Non-Agency QM Mortgage Loan or an Aged 364
Day Non-Agency QM Mortgage Loan.

 

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

 

“Agency Mortgage Loan”  means, collectively, Conforming Mortgage Loans, FHA
Loans, VA Loans, Conforming High CLTV Loans, FHA 203(k) Loans, Freddie Mac SBL
Loans and USDA Loans.

 

“Agency Security” means a mortgage-backed security issued by an Agency.

 

“Agent”  means DLJ Mortgage Capital, Inc.  

 

“Aging Limit” means the aging limit listed opposite the type of Mortgage Loan in
the table below:

 

 

 

Type of Mortgage Loan

Aging Limit

Purchased Mortgage Loans that are
Agency Mortgage Loans

90 days

 

“Agreement” means this Third Amended and Restated Master Repurchase Agreement,
as it may be amended, supplemented or otherwise modified from time to time.

 

“Amendment Effective Date” means a date when all conditions precedent set forth
in Section 10(a) are satisfied.

 

“Appraised Value” means the value set forth in an appraisal made in connection
with the origination of the related Mortgage Loan as the value of the Mortgaged
Property or the most recently delivered BPO Value, to the extent one has been
delivered.

 

“Asset Confirm” means, with respect to any Transaction as of any date, a
confirmation in the form attached as an exhibit to the Custodial Agreement.

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“Asset Tape” means a remittance report on a monthly basis or requested by
Administrative Agent pursuant to Section 17.d hereof containing servicing
information, including, without limitation, those fields reasonably requested by
Administrative Agent from time to time, on a loan-by-loan basis and in the
aggregate, with respect to the Purchased Mortgage Loans serviced by Seller or
any Servicer for the month (or any portion thereof) prior to the Reporting Date.

 

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

 

“Assignment and Acceptance” has the meaning set forth in Section 22 hereof.

 

 “Assignment of Mortgage” means an assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage.

 

“Assignment of Proprietary Lease” means the specific agreement creating a first
lien on and pledge of the Co-op Shares and the appurtenant Proprietary Lease
securing a Co-op Loan.

 

“Attorney Bailee Letter” means a bailee letter substantially in the form
approved in writing by Administrative Agent.  

 

“Bailee Letter” has the meaning assigned to such term in the Custodial
Agreement.

 

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

 

“Base Rate”  has the meaning assigned to such term in the Pricing Side Letter.  

 

“BPO” means an opinion of the fair market value of a Mortgaged Property given by
a licensed real estate agent or broker which generally includes three comparable
sales and three comparable listings.

 

“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;
 provided, that no BPO shall be valid if it is dated earlier than one hundred
and eighty (180) days prior to the date of determination.

 

“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 CS Cayman, Alpine and each Buyer identified by the Administrative
Agent from time to time and their successors in interest and assigns pursuant to
Section 22 and, with respect to Section 11, its participants.

 

“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)

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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 ninety (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 ninety (90) days or less from the
date of acquisition and overnight bank deposits of Administrative Agent or its
Affiliate or of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of Administrative Agent or its
Affiliate or of any commercial bank satisfying the requirements of clause (b) of
this definition, having a term of not more than seven (7) 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 ninety (90) days after the day of acquisition,
(e) securities with maturities of ninety (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 ninety (90) days or
less from the date of acquisition backed by standby letters of credit issued by
Administrative Agent or its Affiliate 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.

 

“Change in Control” means any of the following except to the extent contemplated
by PennyMac Financial Services, Inc.’s Registration Statement on Form S-1, filed
on February 7, 2013:

 

(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.

 

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

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“Collection Policy” means Seller’s policies regarding Collections and remittance
in accordance with the provisions of this Agreement and the Servicing Contracts
and shall include the application of reimbursements of Servicer Advances 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.

 

“Collections” means, with respect to any GNMA EBO 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 GNMA EBO on or before such date, including, without
limitation, all amounts received on account of such GNMA EBO, and (b) cash
Proceeds with respect to such GNMA EBO.  

 

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

 

“Committed Buyer” means CS Cayman or any successor thereto.

 

“Committed Mortgage Loan” means a Mortgage Loan which is the subject of a
Take-out Commitment with a Take-out Investor.

 

“Conforming High CLTV Loan” shall have the meaning given to such term in the
Pricing Side Letter.

 

“Conforming Mortgage Loan” means a first lien Mortgage Loan originated in
accordance with the criteria of an Agency for purchase of Mortgage Loans,
including, without limitation, conventional Mortgage Loans, FHA Loans and VA
Loans, as determined by Administrative Agent in its sole discretion.

 

“Co-op” means a private, cooperative housing corporation, having only one class
of stock outstanding, which owns or leases land and all or part of a building or
buildings, including apartments, spaces used for commercial purposes and common
areas therein and whose board of directors authorizes the sale of stock and the
issuance of a Proprietary Lease.

 

“Co-op Corporation” means, with respect to any Co-op Loan, the cooperative
apartment corporation that holds legal title to the related Co-op Project and
grants occupancy rights to units therein to stockholders through Proprietary
Leases or similar arrangements.

 

“Co-op Lien Search” means a search for (a) federal tax liens, mechanics’ liens,
lis pendens, judgments of record or otherwise against (i) the Co-op Corporation
and (ii) seller of the Co-op Unit, (b) filings Uniform Commercial Code financing
statements and (c) the deed of the Co-op Project into the Co-op Corporation.

 

“Co-op Loan” means a Mortgage Loan secured by the pledge of stock allocated to a
dwelling unit in a residential cooperative housing corporation and collateral
assignment of the related Proprietary Lease.

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“Co-op Project” means, with respect to any Co-op Loan, all real property and
improvements thereto and rights therein and thereto owned by a Co-op Corporation
including without limitation the land, separate dwelling units and all common
elements.

 

“Co-op Shares” means, with respect to any Co-op Loan, the shares of stock issued
by a Co-op Corporation and allocated to a Co-op Unit and represented by a Stock
certificates.

 

“Co-op Unit” means, with respect to any Co-op Loan, a specific unit in a Co-op
Project.

 

“Correspondent Loan” means a Mortgage Loan which is (i) originated by a
Correspondent Seller and underwritten in accordance with the Underwriting
Guidelines and (ii) acquired by the Seller from PennyMac Corp. or a
Correspondent Seller in the ordinary course of business, for sale to the Buyers
 pursuant to this Agreement. 

 

“Correspondent Seller” means a mortgage loan originator that sells Mortgage
Loans originated by it to Seller as a “correspondent” client.  

 

“Correspondent Release” means, with respect to any Correspondent Loan, a release
by any third party lender that has a secured interest in the Correspondent Loan
of all right, title and interest, including any such security interest, in such
Correspondent Loan.  The form of such Correspondent Release shall be mutually
acceptable to the Administrative Agent and Seller.

 

“CP Conduit” means a commercial paper conduit, including but not limited to
Alpine Securitization LTD, administered, managed or supported by CSFBMC or an
Affiliate of CSFBMC.

 

“CSFBMC” means Credit Suisse First Boston Mortgage Capital LLC, or any
successors or assigns.

 

“Custodial Agreement” means the amended and restated custodial agreement dated
as of April 28, 2017, among Seller, Administrative Agent, Buyers and Custodian,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.

 

“Custodial Mortgage Loan Schedule” has the meaning assigned to such term in the
Custodial Agreement.

 

“Custodian” means Deutsche Bank National Trust Company or such other party
specified by Administrative Agent and agreed to by Seller, which approval shall
not be unreasonably withheld.

 

“DE Compare Ratio” means the Two Year FHA Direct Endorsement Lender Compare
Ratio, excluding streamline FHA refinancings, as made publicly available by HUD.

 

“Debtor Relief Law” means any law, administration, or regulation relating to
reorganization, winding up, administration, composition or adjustment of debts
or otherwise relating to bankruptcy or insolvency.

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“Default” means an Event of Default or an event that with notice or lapse of
time or both would become an Event of Default.

 

“Delinquency Advance”  means any advance made by Seller with respect to GNMA
EBO’s while still in a GNMA Security, to cover due, but uncollected or
unavailable as a result of funds not yet being cleared, principal and interest
payments on the GNMA EBO’s.

 

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

 

“Due Date” means the day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.

 

“Due Diligence Cap”  has the meaning assigned to such term in the Pricing Side
Letter.

 

“Due Diligence Costs” has the meaning set forth in Section 35 hereof.

 

“Early Buyout” means the purchase of a modified or defaulted Mortgage Loan by
Seller from a GNMA Security.

 

“Effective Date” means the date upon which the conditions precedent set forth in
Section 10 shall have been satisfied.

 

“Electronic Tracking Agreement” means that certain Amended and
Restated Electronic Tracking Agreement among Administrative Agent, Seller, MERS
and MERSCORP Holdings, Inc., dated April 28, 2017 to the extent applicable as
the same may be amended,  restated, supplemented or otherwise modified from time
to time.

 

“Eligible Servicer Advances” means any GNMA Advance:

 

(a)     which complies with all applicable Requirements of Law and other legal
requirements, whether federal, state or local;

 

(b)     in respect of which Seller has no knowledge of any fact that has led it
to expect that such Servicer Advance will not be fully recoverable;

 

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

 

(d)     which is owned solely by Seller free and clear of all Liens other than
Liens in favor of Administrative Agent on behalf of Buyers and has not been
sold, conveyed, pledged or assigned to any other lender, purchaser or Person;

 

(e)     in respect of which no payments have been received relating to such
Servicer Advance which have not been attributed to such Servicer Advance;

 

(f)     for which there exists no dispute regarding the Servicer Advance that
results in the Servicer Advance being invalid or otherwise not recoverable or
payable; and in

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respect of which Servicer Advance Seller has complied in all material respects
with the Collection Policy and the related Servicing Contract;

 

(g)     which complies with the representations and warranties set forth on
Schedule 1-B, hereto; and

 

(h)     which is a GNMA 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;  

 

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

 

“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.

 

“EO 13224” has the meaning set forth in Section 13.a(27) hereof.

 

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

 

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

 

“Escrow Instruction Letter” means the Escrow Instruction Letter from Seller to
the Settlement Agent, in the form of Exhibit J hereto, as the same may be
modified, supplemented and in effect from time to time.

 

“Escrow Payments” means, with respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.

 

“Event of Default” has the meaning specified in Section 15 hereof.

 

“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

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not by regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within thirty (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.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Buyer or other recipient of any payment hereunder or required to be withheld
or deducted from a payment to such Buyer or such other recipient: (a) Taxes
based on (or measured by) net income or net profits, franchise Taxes and branch
profits Taxes that are imposed on a Buyer or other recipient of any payment
hereunder as a result of (i) being organized under the laws of, or having its
principal office or its applicable lending office located in the jurisdiction
imposing such Tax (or any political subdivision thereof), or (ii) a present or
former connection between such Buyer or other recipient and the jurisdiction of
the Governmental Authority imposing such Tax or any political subdivision or
Taxing authority thereof (other than connections arising from such Buyer or
other recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced under
this Agreement or any Program Agreement, or sold or assigned an interest in any
Purchased Mortgage Loan); (b) any Tax imposed on a Buyer or other recipient of a
payment hereunder that is attributable to such Buyer’s or other recipient’s
failure to comply with relevant requirements set forth in Section 11(e)(ii); (c)
any withholding Tax that is imposed on amounts payable to or for the account of
such Buyer or other recipient of a payment hereunder pursuant to a law in effect
on the date such person becomes a party to or under this Agreement, or such
person changes its lending office, except in each case to the extent that
amounts with respect to Taxes were payable either to such person’s assignor
immediately before such person became a party hereto or to such person
immediately before it changed its lending office;  and (d) any U.S. federal
withholding Taxes imposed under FATCA.

 

“Existing Indebtedness” has the meaning specified in Section 13(a)(23) hereof.

 

“Fannie Mae” means Fannie Mae, the government sponsored enterprise formerly
known as the Federal National Mortgage Association or any successor thereto.

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“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.

 

“FDIA” has the meaning set forth in Section 26.c hereof.

 

“FDICIA” has the meaning set forth in Section 26.d hereof.

 

“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 203(k) Loan” means an FHA Loan that is eligible for FHA’s 203(k) loan
program.

 

“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 Insured Non-Performing Loan”  means a FHA Loan which is a Non-Performing
Mortgage Loan.

 

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

 

“FHA Mortgage Insurance” means, mortgage insurance authorized under the National
Housing Act, as amended from time to time, and provided by the FHA.

 

“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 HUD 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.

 

“FICO” means Fair Isaac & Co., or any successor thereto.

 

“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.

 

“Foreclosed Loan” means a Mortgage Loan, the property securing which has been
foreclosed upon by Seller.

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

 

“Freddie Mac Guide” means any and all rules, regulations, requirements and
guidelines of Freddie Mac applicable to Freddie Mac SBL Loans, as the same may
be amended from time to time, including without limitation the Freddie Mac
Multifamily Seller/Servicer Guide.

 

“Freddie Mac SBL Loan” means a small balance Mortgage Loan providing financing
for the acquisition or refinance of conventional multifamily housing with five
residential units or more and eligible for delivery to Freddie Mac under the
terms of the Freddie Mac Guide.

 

“GAAP” means generally accepted accounting principles in effect from time to
time in the United States of America and applied on a consistent basis.

 

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

 

“GNMA Account”  means the account as designated in writing by Administrative
Agent, in each case, as contemplated by Section 14.ff hereof.

 

“GNMA Advance” means a Servicer Advance made by Seller in connection with
servicing the GNMA EBOs.  

 

“GNMA EBO” means a FHA Loan, VA Loan or USDA Loan which is subject to an Early
Buyout or an FHA Insured Non-Performing Loan, VA Guaranteed Non-Performing Loan
or USDA Guaranteed Non-Performing Loan that was never pooled in a GNMA
Security. 

 

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

 

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

 

“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,
Administrative Agent or any Buyer, as applicable.

 

“Gross Margin” means, with respect to each adjustable rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note.

 

“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

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ordinary course of business, or (ii) obligations to make servicing  advances for
delinquent taxes and insurance or other obligations in respect of a Mortgaged
Property, to the extent required by Administrative Agent.  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 amended and restated guaranty of Private National Mortgage
Acceptance Company, LLC dated as of April 28, 2017, in favor of the
Administrative Agent for the benefit of Buyers, as the same may be amended from
time to time, pursuant to which Guarantor fully and unconditionally guarantees
the obligations of Seller hereunder as it may be amended, supplemented or
otherwise modified from time to time.

 

“High Cost Mortgage Loan” means a Mortgage Loan classified as (a) a “high cost”
loan under the Home Ownership and Equity Protection Act of 1994 or (b) a “high
cost,” “threshold,” “covered,” or “predatory” loan under any other applicable
state, federal or local law (or a similarly classified loan using different
terminology under a law, regulation or ordinance imposing heightened regulatory
scrutiny or additional legal liability for residential mortgage loans having
high interest rates, points and/or fees).

 

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

 

“Income” means with respect to any Purchased Mortgage Loan at any time until
repurchased by Seller, any principal received thereon or in respect thereof and
all interest, dividends or other distributions thereon.

 

“Indebtedness” means, for any Person at any time, and only to the extent
outstanding at such time: (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 after 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

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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.

 

“Indemnified Party” has the meaning set forth in Section 30 hereof.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Seller hereunder or under any Program Agreement and (b) Other Taxes.

 

 “Index” means, with respect to any adjustable rate Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating the applicable Mortgage Interest Rate.

 

“Interest Only Adjustment Date” means, with respect to each Interest Only Loan,
the date, specified in the related Mortgage Note on which the Monthly Payment
will be adjusted to include principal as well as interest.

 

“Interest Only Loan” means a Mortgage Loan which only requires payments of
interest for a period of time specified in the related Mortgage Note.

 

“Interest Rate Adjustment Date” means the date on which an adjustment to the
Mortgage Interest Rate with respect to each Mortgage Loan becomes effective.

 

“Interest Rate Protection Agreement” means, with respect to any or all of the
Purchased Mortgage Loans, any short sale of a U.S. Treasury Security, or futures
contract, or mortgage related security, or Eurodollar futures contract, or
options related contract, or interest rate swap, cap or collar agreement or
Take-out Commitment, or similar arrangement providing for protection against
fluctuations in interest rates or the exchange of nominal interest obligations,
either generally or under specific contingencies, entered into by Seller and an
Affiliate of Administrative Agent or such other party acceptable to
Administrative Agent in its sole discretion, which agreement is acceptable to
Administrative Agent in its sole discretion.

 

“Irrevocable Instruction Letter” shall have the meaning assigned to such term in
Section 8(c) hereof.

 

“Lien” means any mortgage, lien, pledge, charge, security interest or similar
encumbrance.

 

“Loan to Value Ratio” or “LTV” means with respect to any Mortgage Loan, the
ratio of the original outstanding principal amount of such Mortgage Loan to the
lesser of (a) (x) with respect to a Mortgage Loan other than a GNMA EBO, the
Appraised Value of the Mortgaged Property at origination or (y) with respect to
a GNMA EBO,  the BPO Value or such other valuation acceptable to Administrative
Agent in its sole discretionv or (b) if the Mortgaged Property was purchased
within 12 months of the origination of such Mortgage Loan, the purchase price of
the Mortgaged Property.

 

“Low Percentage Margin Call” has the meaning specified in Section 6(b) hereof.

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“Margin Call” has the meaning specified in Section 6(a) hereof.

 

“Margin Deadline” has the meaning specified in Section 6(b) hereof.

 

“Margin Deficit” has the meaning specified in Section 6(a) hereof.

 

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

 

“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; or (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, in each case as
determined by the Administrative Agent in its sole discretion.

 

 “Maximum Regular Way Committed Purchase Price”  has the meaning set forth in
the Pricing Side Letter.

 

“Maximum Regular Way Purchase Price” has the meaning set forth in the Pricing
Side Letter.

 

“MERS” means Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.

 

“MERS System” means the system of recording transfers of mortgages
electronically maintained by MERS.

 

“Monthly Payment” means the scheduled monthly payment of principal and/or
interest on a Mortgage Loan.

 

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

 

“More Favorable Agreement” has the meaning set forth in Section 14.dd hereof.

 

“Mortgage”  means each mortgage, deed of trust, deed to secure debt or similar
instrument creating and evidencing a lien on real property and other property
and rights incidental thereto, unless such Mortgage is granted in connection
with a Co-op Loan, in which case the first lien position is in the stock of the
subject cooperative association and in the tenant’s rights in the cooperative
lease relating to such stock.

 

“Mortgage File” means, with respect to a Mortgage Loan, the documents and
instruments relating to such Mortgage Loan and set forth in Exhibit F-1 to the
Custodial Agreement.

 

“Mortgage Interest Rate” means the rate of interest borne on a Mortgage Loan
from time to time in accordance with the terms of the related Mortgage Note.

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“Mortgage Interest Rate Cap” means, with respect to an adjustable rate Mortgage
Loan, the limit on each Mortgage Interest Rate adjustment as set forth in the
related Mortgage Note.

 

“Mortgage Loan”  means any Agency Mortgage Loan, Non-Agency QM Mortgage Loan,
Scratch and Dent Mortgage Loan, GNMA EBO or Pooled Mortgage Loan which is a
fixed or floating rate, one to four family residential mortgage loan evidenced
by a promissory note and secured by a mortgage, which satisfies the requirements
set forth in the Underwriting Guidelines and Section 13(b) hereof; provided,
 however, that, Mortgage Loans shall not include any High Cost Mortgage Loans.

 

“Mortgage Loan Documents” means the documents in the related Mortgage File to be
delivered to Custodian.

 

“Mortgage Loan Schedule” means with respect to any Transaction as of any date, a
mortgage loan schedule in the form of either (a) Exhibit C attached hereto or
(b) a computer tape or other electronic medium generated by Seller or Guarantor,
and delivered to Administrative Agent and Custodian, which provides
information required by Administrative Agent to enter into Transactions
(including, without limitation, the information set forth on Exhibit C attached
hereto) relating to the Purchased Mortgage Loans in a format acceptable to
Administrative Agent.

 

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

 

“Mortgaged Property” means the real property or other Co-op Loan collateral
securing repayment of the debt evidenced by a Mortgage Note.

 

“Mortgagor” means the obligor or obligors on a Mortgage Note, including any
person who has assumed or guaranteed the obligations of the obligor thereunder.

 

“MSR Valuation” means 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, (ii)
the Administrative Agent’s valuation of such mortgage servicing rights as
determined by the Administrative Agent or (iii) a Third Party Evaluator’s
valuation of such mortgage servicing rights as determined by such Third Party
Evaluator. 

 

“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).

 

“Net Worth Amount” means, $5 million.

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“1934 Act” means the Securities Exchange Act of 1934, as amended from time to
time.

 

“Non-Agency QM Mortgage Loan”  means a Mortgage Loan that (a)  meets all
applicable criteria as set forth in the Underwriting Guidelines, but  (b) has an
original principal balance in an amount in excess of the then applicable
conventional conforming limits, including general limits and high-cost area
limits, for Mortgaged Properties securing Mortgage Loans in such county or local
area; provided,  however, that Non-Agency QM Mortgage Loans shall not include
any Mortgage Loan with an original principal balance in excess of $2,000,000,
and (c)  is otherwise acceptable to Administrative Agent in its sole discretion.

 

“Non-Performing Mortgage Loan” means (i) any Mortgage Loan for which any payment
of principal or interest is more than thirty (30) days past due, (ii) any
Mortgage Loan with respect to which the related mortgagor is in bankruptcy or
(iii) any Mortgage Loan with respect to which the related mortgaged property is
in foreclosure.

 

“Non-Recourse Debt” shall mean Indebtedness payable solely from the assets sold
or pledged to secure such Indebtedness and under which Indebtedness no party has
recourse to Seller, Guarantor or any of their Affiliates if such assets are
inadequate or unavailable to pay off such Indebtedness, and neither Seller,
Guarantor nor any of their Affiliates effectively has any obligation to directly
or indirectly pay any such deficiency.

 

“Notice Date” has the meaning given to it in Section 3(b) hereof.

 

 “Obligations”  means (a) all of Seller’s indebtedness, obligations to pay the
Repurchase Price on the Repurchase Date, the Price Differential on each Price
Differential Payment Date, and other obligations and liabilities, to
Administrative Agent and Buyers, its Affiliates or Custodian arising under, or
in connection with, the Program Agreements, whether now existing or hereafter
arising; (b) any and all sums paid by Administrative Agent, Buyers or
Administrative Agent on behalf of Buyers in order to preserve any Purchased
Mortgage Loan 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 clause (a), the reasonable expenses of retaking,
holding, collecting, preparing for sale, selling or otherwise disposing of or
realizing on any Purchased Mortgage Loan, or of any exercise by Administrative
Agent or Buyers of their rights under the Program Agreements, including, without
limitation, attorneys’ fees and disbursements and court costs; (d) all of
Seller’s indemnity obligations to Administrative Agent, Buyers and Custodian or
both pursuant to the Program Agreements; (e) all of Seller’s obligations under
the VFN Facility Documents.

 

“OFAC” has the meaning set forth in Section 13(a)(27) hereof.

 

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

 

“Other Taxes” means any and all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes or any excise, sales, goods and
services or transfer taxes, charges or similar levies arising from any payment
made hereunder or from the execution,

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delivery, performance, enforcement or registration of, from the receipt or
perfection of a security interest under, or otherwise with respect to, any
Program Agreement.

 

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

 

“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.

 

“Pooled Mortgage Loan” means any Purchased Mortgage Loan that is subject to a
Transaction hereunder and is part of a pool of Purchased Mortgage Loans
certified by Custodian to an Agency to be either (a) purchased by such Agency or
(b) swapped for an Agency Security backed by such pool, in each case, in
accordance with the terms of the guidelines issued by the applicable Agency.  

 

 “Post-Default Rate” has the meaning assigned to such term in the Pricing Side
Letter.

 

“Power of Attorney” has the meaning specified in Section 28 hereto.

 

“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 period
commencing on (and including) the Purchase Date for such Transaction and ending
on (but excluding) the Repurchase Date.

 

“Price Differential Payment Date” means, the 5th day of the month following the
related Purchase Date and each succeeding 5th day of the month thereafter;
provided, that, with respect to such Purchased Mortgage Loan, the final Price
Differential Payment Date shall be the related Repurchase Date; and provided,
 further,  that if any such day is not a Business Day, the Price Differential
Payment Date shall be the next succeeding Business Day.

 

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

 

“Pricing Side Letter” means the second amended and restated letter agreement
dated as of the date hereof, among Administrative Agent for the benefit of
Buyers, Seller and Guarantor as the same may be amended, restated, supplemented
or otherwise modified from time to time.

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

 

“Program Agreements” means, collectively, this Agreement, the Custodial
Agreement, the Pricing Side Letter, the Electronic Tracking Agreement, if
entered into, the Guaranty, the Securities Account Control Agreement and the
Power of Attorney.

 

“Prohibited Person” has the meaning set forth in Section 13(a)(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.

 

“Proprietary Lease” means the lease on a Co-op Unit evidencing the possessory
interest of the owner in the Co-op Shares in such Co-op Unit.

 

“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 Sellers in connection with any Purchased Mortgage Loans.

 

“Purchase Date” means the date on which Purchased Mortgage Loans or Servicer
Advances are to be transferred by Seller to Administrative Agent for the benefit
of Buyers or on which Servicer Advances are funded by the Administrative Agent.

 

“Purchase Price” means the price at which each Purchased Mortgage Loan or
Servicer Advance is transferred by Seller to Administrative Agent for the
benefit of Buyers, which shall equal:

 

(i) on the Purchase Date, in the case of all Purchased Mortgage Loans and
Servicer Advances, the applicable Asset Value; or

 

(ii) on any day after the Purchase Date, except where Administrative Agent and
Seller agree otherwise, the amount determined under the immediately preceding
clauses (i) or (ii) decreased by the amount of any cash transferred by Seller to
Administrative Agent for the benefit of Buyers pursuant to Section 4(c) hereof
or applied to reduce Seller’s obligations under clause (ii) of Section 4(b)
hereof or under Section 6 hereof.

 

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

 

“Purchased Mortgage Loans” means the collective reference to Mortgage Loans
together with Servicer Advances and the Repurchase Assets related to such
Mortgage Loans transferred by Seller to Administrative Agent for the benefit of
Buyers in a Transaction hereunder, listed on the related Mortgage Loan Schedule
attached to the related Transaction Request, which such Mortgage Loans Custodian
has been instructed to hold for the benefit of Administrative Agent pursuant to
the Custodial Agreement.

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 “Qualified Insurer” means an insurance company duly authorized and licensed
where required by law to transact insurance business and approved as an insurer
by Fannie Mae or Freddie Mac.

 

“Qualified Originator” means an originator of Mortgage Loans which is acceptable
under the Underwriting Guidelines.

 

“Recognition Agreement” means, an agreement among a Co-op Corporation, a lender
and a Mortgagor with respect to a Co-op Loan whereby such parties (i)
acknowledge that such lender may make, or intends to make, such Co-op Loan, and
(ii) make certain agreements with respect to such Co-op Loan.

 

“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, Servicer or any other person or entity with respect to a
Purchased Mortgage Loan or Servicer Advance.  Records shall include the Mortgage
Notes, any Mortgages, the Mortgage Files, the credit files related to the
Purchased Mortgage Loan and Servicer Advance and any other instruments necessary
to document or service a Mortgage Loan. 

 

“Register” has the meaning set forth in Section 22 hereof.

 

“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.

 

“Reporting Date” means the 5th day of each month or, if such day is not a
Business Day, the next succeeding Business Day.

 

“Repledge Transaction” has the meaning set forth in Section 18 hereof.

 

“Repledgee” means each Repledgee identified by the Administrative Agent from
time to time.

 

“Repurchase Assets” has the meaning assigned thereto in Section 8 hereof.

 

“Repurchase Date” means the earliest of (i) the Termination Date, (ii) the date
determined by application of Section 16 hereof, (iii) the date identified to the
Administrative Agent by Seller as the date that the related Mortgage Loan is to
be sold pursuant to a Take-out Commitment or (iv) 30 days following the Purchase
Date.

 

“Repurchase Price” means the price at which Purchased Mortgage Loans are to be
transferred from the Administrative Agent for the benefit of Buyers to Seller
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.

 

“Request for Certification” means a notice sent to Custodian reflecting the sale
of one or more Purchased Mortgage Loans to Administrative Agent for the benefit
of Buyers hereunder.

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“Requirement of Law”  means, as to any Person, any law, treaty, rule,
regulation, procedure or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject, and includes all federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions of Governmental Authorities, whether now or hereafter
enacted and in force, and all permits, licenses and authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, either of record or known to Seller,
at any time in force affecting Seller, Mortgage Loan or REO Property or any part
thereof. 

 

“Responsible Officer” means as to any Person, the chief executive officer or,
with respect to financial matters, the chief financial officer of such Person;
provided, however, that the Responsible Officers of Seller and Guarantor as of
the date hereof are listed on Schedule 3 hereto.

 

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

 

“Scratch and Dent Mortgage Loan” means a first lien Mortgage Loan (i) originated
by Seller in accordance with the criteria of an Agency Mortgage Loan or
Non-Agency QM Mortgage Loan, as applicable, except such Mortgage Loan is not
eligible for sale to the original Take-out Investor or has been subsequently
repurchased from such original Take-out Investor, in each case, for reasons
other than delinquent payment under such Mortgage Loan and (ii) is acceptable to
Buyers or Administrative Agent in their sole discretion.

 

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

 

“Securities Account” means the account established pursuant to the Securities
Account Control Agreement, into which all collections and proceeds on or in
respect of the Mortgage Loans shall be deposited by Servicer.

 

“Securities Account Control Agreement”  means that certain Amended and Restated
Securities Account Control Agreement dated as of October 31, 2014, among
Administrative Agent,  Administrative Agent in its capacity as lender under the
Servicing Facility Agreement, Seller, Seller in its capacity as borrower under
the Servicing Facility Agreement, Seller in its capacity as servicer under the
Agreement, and Securities Intermediary and other parties as joined thereto from
time to time, as may be amended, supplemented or replaced from time to time.

 

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

 

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

 

“Servicer” means any servicer approved by Administrative Agent in its sole
discretion, which may be Seller or its permitted successors and assigns.

 

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

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“Servicing Agreement” means any servicing agreement entered into between Seller
and a third party Servicer as the same may be amended from time to time.

 

“Servicing Contracts” means, with respect to GNMA Advances, this Agreement to
the extent of the servicing requirements set forth herein, pursuant to which
Seller will service the related GNMA EBOs. 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 Servicer Advances. 

 

“Servicing Rights” means rights of any Person to administer, service or
subservice, the Purchased Mortgage Loans or to possess related Records.

 

“Settlement Agent” means, with respect to any Transaction the subject of which
is a Wet-Ink Mortgage Loan, the entity approved by Administrative Agent, in its
sole good-faith discretion, which may be a title company, escrow company or
attorney in accordance with local law and practice in the jurisdiction where the
related Wet-Ink Mortgage Loan is being originated.  A Settlement Agent is deemed
approved unless Administrative Agent notifies Seller otherwise at any time
electronically or in writing.

 

“SIPA” means the Securities Investor Protection Act of 1970, as amended from
time to time.

 

“Statement Date” has the meaning set forth in Section 13.a(5)(a) hereof.

 

“Stock Certificate” means, with respect to a Co-op Loan, the certificates
evidencing ownership of the Co-op Shares issued by the Co-op Corporation.

 

“Stock Power” means, with respect to a Co-op Loan, an assignment of the Stock
Certificate or an assignment of the Co-op Shares issued by the Co-op
Corporation.

 

“Streamlined Mortgage Loan”  means an FHA Loan originated in accordance with
FHA’s streamlined mortgage loan refinance program as set forth in FHA’s
Underwriting Guidelines.

 

“Subordinated Debt” means, Indebtedness of Seller which is (i) unsecured, (ii)
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) the payment of the principal of and interest on such Indebtedness and
other obligations of Seller in respect of such Indebtedness are subordinated to
the prior payment in full of the principal of and interest (including
post-petition obligations) on the Transactions and all other obligations and
liabilities of Seller to Administrative Agent and Buyers hereunder on terms and
conditions approved in writing by Administrative Agent and all other terms and
conditions of which are satisfactory in form and substance to Administrative
Agent.

 

“Subsidiary”  means, with respect to any Person, any corporation, limited
liability company, partnership, trust 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

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board of directors or other persons performing similar functions of such
corporation, limited liability company, partnership, trust 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, limited liability
company, partnership, trust 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.

 

“Take-out Commitment” means a commitment of Seller to either (a) sell one or
more identified Mortgage Loans to a Take-out Investor or (b) (i) swap one or
more identified Mortgage Loans with a Take-out Investor that is an Agency for an
Agency Security, and (ii) sell the related Agency Security to a Take-out
Investor, and in each case, the corresponding Take-out Investor’s commitment
back to Seller to effectuate any of the foregoing, as applicable. With respect
to any Take-out Commitment with an Agency, the applicable agency documents list
Administrative Agent as sole subscriber.

 

“Take-out Investor” means (i) an Agency or (ii) other institution which has made
a Take-out Commitment and has been approved by Administrative Agent for the
benefit of Buyers.  

 

“Taxes” means any and all present or future taxes (including social security
contributions and value added taxes), levies, imposts, duties (including stamp
duties), deductions, charges (including ad valorem charges), withholdings
(including backup withholding), assessments, fees or other charges of any nature
whatsoever imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

 

“Termination Date”  means the earlier of (a) April 27, 2018, and (b) the date of
the occurrence of an Event of Default. 

 

“Test Period”  means any one fiscal quarter.

 

“Third Party Evaluator”  means an appraiser approved by Administrative Agent in
its sole good faith discretion. 

 

“TILA-RESPA Integrated Disclosure Rule” means the Truth-in-Lending Act and Real
Estate Settlement Procedures Act Integrated Disclosure Rule, adopted by the
Consumer Finance Protection Bureau, which is effective for residential mortgage
loan applications received on or after October 3, 2015.

 

“Trade Assignment” means an assignment to the Administrative Agent of a forward
trade between a Takeout Investor and Seller with respect to one or more
Purchased Mortgage Loans that are Pooled Mortgage Loans substantially in the
form of Exhibit L hereto.

 

“Transaction” has the meaning set forth in Section 1 hereof.

 

“Transaction Request” means a request via email from Seller to Administrative
Agent, in the form attached as Exhibit A hereto,  notifying Administrative Agent
that Seller wishes to enter into a Transaction hereunder that indicates that it
is a Transaction Request under this

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Agreement. For the avoidance of doubt, a Transaction Request may refer to
multiple Mortgage Loans; provided, that each Mortgage Loan shall be deemed to be
subject to its own Transaction.

 

“Underwriting Guidelines” means the standards, procedures and guidelines of
Seller for underwriting Mortgage Loans, which are set forth in the written
policies and procedures of Seller, the Fannie Mae Single-Family Selling and
Servicing Guide, the Freddie Mac Single-Family Seller/Servicer Guide, the
Freddie Mac Multifamily Seller/Servicer Guide, FHA Underwriting Guidelines or VA
Underwriting Guidelines, a copy of which is attached hereto as Exhibit F and
such other guidelines as are identified and approved in writing by
Administrative Agent. 

 

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

 

“Uniform Commercial Code” means the Uniform Commercial Code as in effect on the
date hereof in the State of New York or the Uniform Commercial Code as in effect
in the applicable jurisdiction.

 

“USDA Guaranteed Non-Performing Loan” means a USDA Loan which is a
Non-Performing Mortgage Loan.

 

“USDA Loan” means a first lien Mortgage Loan originated in accordance with the
criteria established by and guaranteed by the United States Department of
Agriculture.

 

“U.S. Tax Compliance Certificate” has the meaning set forth in Section
11(e)(ii)(B) hereof.

 

“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 Guaranteed Non-Performing Loan” means a VA Loan which is a Non-Performing
Mortgage Loan.

 

“VA Loan” means a Mortgage Loan which is the 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.

 

“VFN Facility Documents” means the VFN Repurchase Agreement and the other
“Program Agreements” as defined in the VFN Repurchase Agreement.

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“VFN Irrevocable Instruction Letter” has the meaning set forth in Section 8(b)
hereof.

 

“VFN Repurchase Agreement” means that certain Amended and Restated Master
Repurchase Agreement (PNMAC GMSR Issuer Trust MSR Collateralized Notes, Series
2016-MSRVF1), dated as of December 19, 2016, among the Buyer, Credit Suisse AG,
a company incorporated in Switzerland, acting through its Cayman Islands Branch,
and the Seller, as amended, restated, supplemented or otherwise modified from
time to time.

 

“Wet-Ink Documents” means, with respect to any Wet-Ink Mortgage Loan, the (a)
Transaction Request and (b) the Mortgage Loan Schedule.

 

“Wet-Ink Mortgage Loan”  means a Mortgage Loan which Seller is selling to Buyer
simultaneously with the origination thereof or in the case of a GNMA EBO, Seller
is selling to Buyer simultaneously with the purchase of such Mortgage Loan from
a GMNA Security.  

 

3.         Program; Initiation of Transactions

 

a.     From time to time, Administrative Agent (for the benefit of Buyers) will
purchase by Buyers from Seller certain Mortgage Loans that have either been
originated by Seller or purchased by Seller from a Correspondent Seller and
certain Eligible Servicer Advances.  This Agreement is a commitment by
Administrative Agent on behalf of the Committed Buyers to enter into
Transactions with respect to Mortgage Loans with Seller for an aggregate amount
equal to the Maximum Regular Way Committed Purchase Price.  This Agreement is
not a commitment by Administrative Agent on behalf of Buyers to enter into
Transactions with respect to Mortgage Loans with Seller for amounts exceeding
the Maximum Regular Way Committed Purchase Price, but rather, sets forth the
procedures to be used in connection with periodic requests for Administrative
Agent on behalf of Buyers to enter into Transactions with Seller.  Seller hereby
acknowledges that, beyond the Maximum Regular Way Committed Purchase Price,
 Administrative Agent on behalf of Buyers is under no obligation to agree to
enter into, or to enter into, any Transaction with respect to Mortgage Loans
pursuant to this Agreement.  All Purchased Mortgage Loans shall exceed or meet
the Underwriting Guidelines, and shall be serviced by Servicer.  The aggregate
Purchase Price of Purchased Mortgage Loans subject to outstanding Transactions
shall not exceed the Maximum Regular Way Purchase Price. 

 

b.     With respect to each Transaction involving Mortgage Loans which are not
Wet-Ink Mortgage Loans, Seller shall give Administrative Agent and Custodian
prior notice of any proposed Purchase Date on or prior to 11:00 a.m. (New York
City time) two (2) Business Days’ prior to the Purchase Date (the date on which
such notice is given, the “Notice Date”); provided, that if Seller is delivering
251 or more Mortgage Loans, which are not Wet-Ink Mortgage Loans, on a Purchase
Date, Seller shall give Administrative Agent and Custodian prior notice of any
proposed Purchase Date on or prior to 11:30 a.m. (New York City time) three (3)
Business

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Days’ prior to the Purchase Date.  With respect to Wet-Ink Mortgage Loans,
Seller shall deliver notice of any proposed purchase on or before 11:30 a.m.
(New York City time) on the Purchase Date.  On the Notice Date, Seller shall
(i) request that Buyers enter into a Transaction by furnishing to Administrative
Agent a Transaction Request, (ii) deliver to Administrative Agent and Custodian
a Mortgage Loan Schedule and (iii) deliver to Custodian, or Administrative
Agent, with respect to each Wet-Ink Mortgage Loan, either a Request for
Certification and each Mortgage File or Wet-Ink Documents for each Wet-Ink
Mortgage Loan, as applicable, in accordance with Section 10(b)(3) hereof. With
respect to requested Transactions that would cause the aggregate outstanding
Purchase Price for all outstanding Transactions to exceed the Maximum Regular
Way Committed Purchase Price,  Administrative Agent may enter into such
requested Transaction or may notify Seller of its intention not to enter into
such Transaction. In the event the Mortgage Loan Schedule provided by Seller
contains erroneous computer data, is not formatted properly or the computer
fields are otherwise improperly aligned, Administrative Agent shall provide
written or electronic notice to Seller describing such error and Seller may
either (a) give Administrative Agent written or electronic authority to correct
the computer data, reformat the Mortgage Loans or properly align the computer
fields or (b) correct the computer data, reformat or properly align the computer
fields itself and resubmit the Mortgage Loan Schedule as required herein. In the
event that Seller gives Administrative Agent authority to correct the computer
data, reformat the Mortgage Loan Schedule or properly align the computer fields,
Seller shall hold Administrative Agent harmless for such correction,
reformatting or realigning, as applicable, except as otherwise expressly
provided herein. 

 

c.     Reserved.  

 

d.     Reserved.

 

e.     Upon the satisfaction of the applicable conditions precedent set forth in
Section 10 hereof, all of Seller’s interest in the Repurchase Assets shall pass
to Administrative Agent on behalf of Buyers on the Purchase Date, against the
transfer of the Purchase Price to Seller.  Upon transfer of the Mortgage Loans
to Administrative Agent on behalf of Buyers as set forth in this Section and
until termination of any related Transactions as set forth in Sections 4 or 16
of this Agreement, beneficial ownership of each Mortgage Loan, including each
document in the related Mortgage File and Records, is vested in Administrative
Agent on behalf of Buyers;  provided that, prior to the recordation by Custodian
as provided for in the Custodial Agreement record title in the name of Seller to
each Mortgage shall be retained by Seller for the benefit of Administrative
Agent, for the sole purpose of facilitating the servicing and the supervision of
the servicing of the Mortgage Loans. For the avoidance of doubt, the parties
acknowledge and agree that the Purchased Mortgage Loans shall be held by the
Administrative Agent for the benefit of Buyers.

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f.     With respect to each Wet-Ink Mortgage Loan, by no later than 12:00 noon,
(New York City time) on the seventh Business Day following the applicable
Purchase Date, Seller shall cause the related Settlement Agent to deliver to
Custodian the remaining documents in the Mortgage File.

 

g.     Administrative Agent shall act as agent solely with respect to
performance of the following duties, in each case, on behalf of Buyers to the
extent contemplated by Section 14.ii: (i) receiving from HUD and VA all amounts
with respect to all Purchased Mortgage Loans that are GNMA EBO’s, (ii)
maintaining the GNMA Account, (iii) taking such actions as Agent deems
appropriate to administer the GNMA Account, and (iv) acting as mortgagee of
record with respect to the GNMA EBO’s pursuant to Section 14.ii hereof.  The
Agent shall have no duties or responsibilities except those expressly set forth
in this Section 3.g.

 

4.         Repurchase

 

a.     Seller shall repurchase the related Purchased Mortgage Loans from
Administrative Agent for the benefit of Buyers on each related Repurchase Date.
Such obligation to repurchase exists without regard to any prior or intervening
liquidation or foreclosure with respect to any Purchased Mortgage Loan (but
liquidation or foreclosure proceeds received by Administrative Agent shall be
applied to reduce the Repurchase Price for such Purchased Mortgage Loan on each
Price Differential Payment Date except as otherwise provided herein).  Seller is
obligated to repurchase and take physical possession of the Purchased Mortgage
Loans from Administrative Agent or its designee (including the Custodian) at
Seller’s expense on the related Repurchase Date. To the extent that (i) the
Repurchase Date shall have occurred, (ii) there exists no Default, (iii) Seller
wishes to enter into a new Transaction with respect to the related Mortgage
Loans, (iv) such Mortgage Loans have a Market Value in excess of zero and (v)
the Purchase Price shall not cause the aggregate Purchase Price of all
Transactions to exceed the Maximum Regular Way Committed Purchase Price nor
cause a Margin Deficit, then Seller may request a new Transaction in accordance
with the provisions of Section 3 hereof and Administrative Agent shall enter the
same.

 

b.     Provided that no Default shall have occurred and is continuing, and
Administrative Agent has received the related Repurchase Price (excluding
accrued and unpaid Price Differential, which, for the avoidance of doubt, shall
be paid on the next succeeding Price Differential Payment Date) upon repurchase
of the Purchased Mortgage Loans, Administrative Agent and Buyers will each be
deemed to have released their respective interests hereunder in the Purchased
Mortgage Loans (including, the Repurchase Assets related thereto) at the request
of Seller.  With respect to payments in full by the related Mortgagor of a
Purchased Mortgage Loan, Seller agrees to (i) provide Administrative Agent with
a copy of a report from the related Servicer indicating that such Purchased
Mortgage Loan has been paid in full, (ii) remit to Administrative Agent for the
benefit of Buyers, within two Business Days, the Repurchase Price with respect
to such Purchased Mortgage Loans and (iii)  provide Administrative Agent a
notice specifying each Purchased

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Mortgage Loan that has been prepaid in full.  Administrative Agent and Buyers
agree to release their respective interests in Purchased Mortgage Loans which
have been prepaid in full after receipt of evidence of compliance with clauses
(i) through (iii) of the immediately preceding sentence.

 

5.         Price Differential.

 

a.     On each Business Day that a Transaction is outstanding, the Pricing Rate
shall be reset and, unless otherwise agreed, the accrued and unpaid Price
Differential shall be settled in cash on each related Price Differential Payment
Date.  Two Business Days prior to the Price Differential Payment Date,
Administrative Agent shall give Seller written or electronic notice of the
amount of the Price Differential due on such Price Differential Payment
Date.  On the Price Differential Payment Date, Seller shall pay to
Administrative Agent the Price Differential for the benefit of Buyers for such
Price Differential Payment Date (along with any other amounts to be paid
pursuant to Sections 7 and 35 hereof), by wire transfer in immediately available
funds.

 

b.     If Seller fails to pay all or part of the Price Differential by 3:00 p.m.
(New York City time) on the related Price Differential Payment Date, with
respect to any Purchased Mortgage Loan, Seller shall be obligated to pay to
Administrative Agent for the benefit of Buyers (in addition to, and together
with, the amount of such Price Differential) interest on the unpaid Repurchase
Price at a rate per annum equal to the Post-Default Rate until the Price
Differential is received in full by Administrative Agent for the benefit of
Buyers.

 

6.         Margin Maintenance

 

a.     If at any time the outstanding Purchase Price of any Purchased Mortgage
Loan subject to a Transaction is greater than the Asset Value of such Purchased
Mortgage Loan subject to a Transaction (a “Margin Deficit”), then Administrative
Agent may by notice to Seller require Seller to transfer to Administrative
Agent for the benefit of Buyers cash in an amount at least equal to the Margin
Deficit (such requirement, a “Margin Call”). 

 

b.     Notice delivered pursuant to Section 6(a) may be given by any written or
electronic means.  With respect to a Margin Call in the amount of less than 5%
of  the Purchase Price for all Transactions (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 1:00 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 such Business Day;
notice given after 1:00 p.m.

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(New York City time) on a Business Day shall be met, and the related Margin Call
satisfied, no later than 1:00 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 Administrative
Agent, 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 Administrative Agent to do so at a later date.  Seller and
Administrative Agent each agree that a failure or delay by Administrative Agent
to exercise its rights hereunder shall not limit or waive Administrative Agent’s
or Buyers’ rights under this Agreement or otherwise existing by law or in any
way create additional rights for Seller.

 

c.     In the event that a Margin Deficit exists, Administrative Agent may
retain any funds received by it to which Seller would otherwise be entitled
hereunder, which funds (i) shall be held by Administrative Agent against the
related Margin Deficit and (ii) may be applied by Administrative Agent against
the Repurchase Price of any Purchased Mortgage Loan for which the related Margin
Deficit remains otherwise unsatisfied.  Notwithstanding the foregoing, the
Administrative Agent retains the right, in its sole discretion, to make a Margin
Call in accordance with the provisions of this Section 6.

 

7.         Income Payments

 

a.     The Securities Account is established by Servicer in accordance with the
Securities Account Control Agreement.  Administrative Agent on behalf of Buyers
shall have sole dominion and control over the Securities Account.  If Income is
paid in respect of any Purchased Mortgage Loan during the term of a Transaction,
such Income shall be the property of Administrative Agent for the benefit of
Buyers and shall be deposited in the Securities Account on a daily
basis.  Notwithstanding the foregoing, and provided no Event of Default has
occurred and is continuing, Administrative Agent agrees that if a third-party
Servicer is in place for any Purchased Mortgage Loans, such Servicer shall
deposit such Income to the Securities Account.  Seller shall deposit all Income
received in its capacity as Servicer of any Purchased Mortgage Loans to the
Securities Account in accordance with Section 12(c) hereof.

 

b.     Provided that no Event of Default has occurred and is continuing, funds
deposited in the Securities Account and GNMA Account, as applicable, shall be
held therein until the next Price Differential Payment Date.  Subject to the
terms of the Securities Account Control Agreement, Seller shall withdraw any
funds on deposit in the Securities Account and Buyer shall withdraw from the
GNMA Account and distribute, respectively, such funds as follows:

 

(1)  first, to Administrative Agent for the benefit of Buyers in payment of any
accrued and unpaid Price Differential, to the extent not paid by Seller to
Administrative Agent pursuant to Section 5;

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(2)  second, without limiting the rights of Administrative Agent or Buyers under
Section 6 of this Agreement, to Administrative Agent for the benefit of Buyers,
in the amount of any unpaid Margin Deficit;

 

(3)  third, to Administrative Agent for the benefit of Buyers in reduction of
the Repurchase Price of the Purchased Mortgage Loans, an amount equal to the
full or partial prepayments of principal received on or with respect to such
Purchased Mortgage Loans and, in the event that a Servicer Advance is paid in
full, to the payment of the Purchase Price therefor;

 

(4)  fourth, to the payment of all other costs and fees payable to
Administrative Agent or Buyers pursuant to this Agreement; and

 

(5)  fifth, to Seller, any remaining amounts.

 

c.     In the event that an Event of Default has occurred and is continuing,
notwithstanding any provision set forth herein, Seller shall (A) remit all
Income received with respect to each Purchased Mortgage Loan into the Securities
Account or such other account and on such other date or dates as Administrative
Agent notifies Seller in writing and (B) may apply all funds in the GNMA Account
as Administrative Agent determines.

 

d.     Notwithstanding any provision to the contrary in this Section 7, within
two (2) Business Days of receipt by Seller of any prepayment of principal in
full, with respect to a Purchased Mortgage Loan, Seller shall remit such amount
to Administrative Agent for the benefit of Buyers and Administrative Agent shall
immediately apply any such amount received by Administrative Agent to reduce the
amount of the Repurchase Price due upon termination of the related Transaction.

 

8.         Security Interest

 

a.     On each Purchase Date, Seller hereby sells, assigns and conveys all
rights and interests in the Purchased Mortgage Loans identified on the related
Mortgage Loan Schedule and, the Repurchase Assets to Administrative Agent for
the benefit of Buyers and Repledgees. Although the parties intend that all
Transactions hereunder be sales and purchases and not loans, in the event any
such Transactions are deemed to be loans, and in any event, Seller hereby
pledges to Administrative Agent as security for the performance by Seller of its
Obligations and hereby grants, assigns and pledges to Administrative Agent a
fully perfected first priority security interest in the Purchased Mortgage
Loans, Servicer Advances, the Records, and all related Servicing Rights, with
respect to GNMA EBO’s, all Servicer Advances payable by HUD and/or VA and all
debenture interest payable by HUD on account of such Mortgage Loans, the Program
Agreements (to the extent such Program Agreements and Seller’s right thereunder
relate to the Purchased Mortgage Loans), any related Take-out Commitments, any
Property relating to the Purchased Mortgage Loans, all insurance policies and
insurance proceeds relating to any Purchased Mortgage

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Loan or the related Mortgaged Property, including, but not limited to, any
payments or proceeds under any related primary insurance, hazard insurance and
FHA Mortgage Insurance Contracts and VA Loan Guaranty Agreements (if any),
Income, the Securities Account and any account to which such amount is
deposited, Interest Rate Protection Agreements, accounts (including any interest
of Seller in escrow accounts) and any other contract rights, instruments,
accounts, payments, rights to payment (including payments of interest or finance
charges) general intangibles and other assets relating to the Purchased Mortgage
Loans (including, without limitation, any other accounts) or any interest in the
Purchased Mortgage Loans, and any proceeds (including the related securitization
proceeds) and distributions with respect to any of the foregoing and any other
property, rights, title or interests as are specified on a Transaction Request
and/or Asset Confirm, in all instances, whether now owned or hereafter acquired,
now existing or hereafter created (collectively, the “Repurchase Assets”).

 

b.     Administrative Agent and Seller hereby agree that in order to further
secure Seller’s Obligations hereunder, Seller hereby grants to Administrative
Agent, for the benefit of Buyers, a security interest in (i) Seller’s rights
under the VFN Facility 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, and (ii) all
collateral however defined or described under the VFN Facility Documents to the
extent not otherwise included under the definition of Repurchase Assets therein.
 Seller shall deliver an irrevocable instruction (the “VFN Irrevocable
Instruction Letter”) to the buyer under the VFN Facility Documents that upon
receipt of a notice of an Event of Default under this Agreement, the buyer
thereunder is authorized and instructed to remit to Administrative Agent for the
benefit of Buyers hereunder directly any amounts otherwise payable to Seller and
to deliver to Administrative Agent for the benefit of Buyers all collateral
otherwise deliverable to Seller. In furtherance of foregoing, the VFN
Irrevocable Instruction Letter shall also require, upon repayment of the entire
Obligations (as defined in the VFN Facility Documents) under the VFN Repurchase
Agreement and the termination of all obligations of the buyer thereunder or
other termination of the VFN Facility Documents following the repayment of all
obligations thereunder that the buyer thereunder deliver to Administrative Agent
for the benefit of Buyers hereunder any collateral then in its possession or
control.

 

The foregoing provision (a) is intended to constitute a security agreement or
other arrangement or other credit enhancement related to the Agreement
and  Transactions hereunder as defined under Sections 101(47)(v) and 741(7)(x)
of the Bankruptcy Code.

 

c.     Reserved.

 

d.     Seller agrees to execute, deliver and/or file such documents and perform
such acts as may be reasonably necessary to fully perfect Administrative Agent’s
security interest created hereby.  Furthermore, Seller hereby authorizes
Administrative Agent to file financing statements relating to the Repurchase

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Assets, as Administrative Agent, at its option, may deem appropriate. Seller
shall pay the filing costs for any financing statement or statements prepared
pursuant to this Section 8.  

 

9.         Payment and Transfer

 

Unless otherwise mutually agreed in writing, all transfers of funds to be made
by Seller hereunder shall be made in Dollars, in immediately available funds,
without deduction, set-off or counterclaim, to Administrative Agent at the
following account maintained by Administrative Agent: Account No. ********, for
the account of CSFB Administrative Agent/PennyMac Loan Services, LLC
Seller-Inbound Account, Citibank, ABA No. *** *** *** or such other account as
Administrative Agent shall specify to Seller in writing.  Seller acknowledges
that it has no rights of withdrawal from the foregoing account.  All Purchased
Mortgage Loans transferred by one party hereto to the other party shall be in
the case of a purchase by a  Buyer in suitable form for transfer or shall be
accompanied by duly executed instruments of transfer or assignment in blank and
such other documentation as Administrative Agent may reasonably request.  All
Purchased Mortgage Loans shall be evidenced by an Asset Confirm.  Any Repurchase
Price received by the Administrative Agent after 2:00 p.m. (New York City time)
shall be deemed received on the next succeeding Business Day.

 

10.       Conditions Precedent

 

a.     Effective Date.  As conditions precedent to the Effective Date,
Administrative Agent shall have received on or before the day of entering into
additional Transactions the following, in form and substance satisfactory to
Administrative Agent and duly executed by Seller, Guarantor and each other party
thereto: 

 

(1)  Program Agreements.  The Program Agreements (including, without limitation,
the Guaranty and a Custodial Agreement in a form acceptable to Administrative
Agent) duly executed and delivered by the parties thereto and being in full
force and effect, free of any modification, breach or waiver.

 

(2)  Security Interest.  Evidence that all other actions necessary or, in the
opinion of Administrative Agent, desirable to perfect and protect Administrative
Agent’s and Buyers’ interest in the Purchased Mortgage Loans and Servicer
Advances and other Repurchase Assets have been taken, including, without
limitation, duly authorized and filed Uniform Commercial Code financing
statements on Form UCC‑1 and Form UCC-3.

 

(3)  Organizational Documents.  A certificate of the corporate secretary of each
of Seller and Guarantor, 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.

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(4)  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 ten (10) Business Days prior to the date hereof. 

 

(5)  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.

 

(6)  Opinion of Counsel.  An opinion of Seller’s and Guarantor’s counsel, in
form and substance acceptable to Administrative Agent in its sole discretion.

 

(7)  Underwriting Guidelines.  A true and correct copy of the Underwriting
Guidelines certified by an officer of Seller.

 

(8)  Irrevocable Instruction Letter.  The Irrevocable Instruction Letter duly
executed and delivered by Seller and being in full force and effect, free of any
modification or waiver.

 

(9)  Amended and Restated Power of Attorney. The Amended and Restated Power of
Attorney duly executed by Seller.

 

(10)     Fees.  Payment of any fees due to Administrative Agent and Buyers
hereunder.

 

(11)     Insurance.  Evidence that Seller has added Administrative Agent as an
additional loss payee under the Seller’s Fidelity Insurance.

 

b.     All Transactions.  The obligation of the Administrative Agent for the
benefit of Buyers to enter into each Transaction pursuant to this Agreement is
subject to the following conditions precedent:

 

(1)  Due Diligence Review.  Without limiting the generality of Section 35
hereof, Administrative Agent and Buyers shall have completed, to their
satisfaction, its due diligence review of the related Mortgage Loans, Servicer
Advances and Seller, Guarantor and the Servicer. 

 

(2)  Required Documents.

 

(a)     With respect to each Purchased Mortgage Loan which is not a Wet‑Ink
Mortgage Loan, the Mortgage File has been delivered to the Custodian in
accordance with the Custodial Agreement.

 

(b)     With respect to each Wet‑Ink Mortgage Loan, the Wet‑Ink Documents have
been delivered to Administrative Agent or Custodian, as the case may be, in
accordance with the Custodial Agreement.

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(c)     With respect to each Correspondent Loan in which a third party lender
has a secured interest, Administrative Agent shall have received a Correspondent
Release for such Purchased Mortgage Loan that is duly executed and delivered by
such third party lender on or prior to the Purchase Date. 

 

(d)     With respect to each Correspondent Loan, the related Correspondent
Seller shall either be identified on Schedule 6 to the most recent Officer’s
Certificate or otherwise approved by Administrative Agent on or prior to the
Purchase Date, and in either case Seller shall not have received notice from
Administrative Agent that such Correspondent Seller is no longer approved. 

 

(3)  Transaction Documents.  Administrative Agent or its designee shall have
received on or before the day of such Transaction (unless otherwise specified in
this Agreement) the following, in form and substance satisfactory to
Administrative Agent and (if applicable) duly executed:

 

(a)     A Transaction Request delivered pursuant to Section 3(c) hereof. 

 

(b)     The Request for Certification and the related Custodial Mortgage Loan
Schedule and the Asset Confirm.

 

(c)     Such certificates, opinions of counsel or other documents as
Administrative Agent may reasonably request.

 

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

 

(5)  Requirements of Law.  Neither Administrative Agent nor Buyers shall 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
Administrative Agent or any Buyer has made it unlawful, and no Governmental
Authority shall have asserted that it is unlawful, for Administrative Agent or
any Buyer to enter into Transactions with a Pricing Rate based on the Base Rate.

 

(6)  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).

 

(7)  Electronic Tracking Agreement. To the extent Seller is selling Mortgage
Loans which are registered on the MERS® System, an Electronic

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Tracking Agreement entered into, duly executed and delivered by the parties
thereto and being in full force and effect, free of any modification, breach or
waiver; provided that, executed signature pages by MERS and MERSCORP Holdings,
Inc. may be provided following the date hereof.

 

(8)  Account Agreements. A Securities Account Control Agreement satisfactory to
the Administrative Agent, entered into, duly executed and delivered by
Administrative Agent, Seller and Securities Intermediary.

 

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

 

(a)  Credit Suisse AG, New York Branch’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 a
 Buyer resulting in the effective absence of a “repo market” or comparable
“lending market” for financing debt obligations secured by mortgage loans or
securities or an event or events shall have occurred resulting in such Buyer not
being able to finance Purchased Mortgage Loans through the “repo market” or
“lending market” with traditional counterparties at rates which would have been
reasonable prior to the occurrence of such event or events; or

 

(c)  an event or events shall have occurred resulting in the effective absence
of a “securities market” for securities backed by mortgage loans or an event or
events shall have occurred resulting in such Buyer not being able to sell
securities backed by mortgage loans at prices which would have been reasonable
prior to such event or events; or

 

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

 

(10)     Pooled Mortgage Loans.  Solely with respect to Transactions the subject
of which are Pooled Mortgage Loans, the Administrative Agent shall have received
the related Trade Assignment on or prior to the Purchase Date with respect
thereto. 

 

(11)     Ineligible Loans.  With respect to any Transaction, the Administrative
Agent shall have determined in the course of its due diligence that the greater
(by count) of 5% or twenty (20) of the Mortgage Loans are ineligible for sale to
Administrative Agent in accordance with the terms of this Agreement.

 

(12)     DE Compare Ratio.  Seller’s DE Compare Ratio is less than 250%; and

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(13)     No HUD Suspension.  HUD has not suspended Seller’s ability to originate
FHA Loans in any jurisdiction.

 

(14)     With respect to each GNMA EBO, Seller shall have delivered to
Administrative Agent a BPO valuation, or such other valuation acceptable to
Administrative Agent in its sole discretion, and valuation date.

 

(15)     Servicer Advances. 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.

 

11.       Program; Costs

 

a.     Seller shall pay the fees and expenses of Administrative Agent’s and
Buyers’ counsel in connection with the original preparation and execution of the
Program Agreements. Seller shall reimburse Administrative Agent and Buyers for
any of Administrative Agent’s and Buyers’ reasonable out‑of‑pocket costs,
including due diligence review costs and reasonable attorney’s fees as further
described below and in Section 35, incurred by Administrative Agent and Buyers
in determining the acceptability to Administrative Agent and Buyers of any
Mortgage Loans.  Seller shall also pay, or reimburse Administrative Agent and
Buyers if Administrative Agent or Buyers shall pay, any termination fee, which
may be due any servicer.  Legal fees for any subsequent amendments to this
Agreement or related documents shall be borne by Seller. Seller shall pay
reasonable and customary ongoing custodial and securities intermediary fees and
expenses as set forth on Exhibit K hereto, and any other reasonable and
customary ongoing fees and expenses under any other Program Agreement.

 

b.     If any Buyer determines that, due to the introduction of, any change in,
or the compliance by such Buyer with (i) any eurocurrency reserve requirement or
(ii) the interpretation of any law, regulation or any guideline or request from
any central bank or other Governmental Authority (whether or not having the
force of law), there shall be an increase in the cost to such Buyer in engaging
in the present or any future Transactions, then Seller agrees to pay to such
Buyer, from time to time, upon demand by such Buyer (with a copy to Custodian)
the actual cost of additional amounts as specified by such Buyer to compensate
such Buyer for such increased costs; provided that this Section 11(b) shall only
apply to the extent that such increased costs are not reflected
in Administrative Agent’s calculation of the Base Rate.

 

c.     With respect to any Transaction, Administrative Agent and Buyers may
conclusively rely upon, and shall incur no liability to Seller in acting upon,
any request or other communication that Administrative Agent and Buyers
reasonably believe to have been given or made by a person authorized to enter
into a

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Transaction on Seller’s behalf.  In each such case, Seller hereby waives the
right to dispute Administrative Agent’s or Buyers’ record of the terms of the
request or other communication.

 

d.     Notwithstanding the assignment of the Program Agreements with respect to
each Purchased Mortgage Loan to Administrative Agent for the benefit of Buyers,
Seller agrees and covenants with Administrative Agent and Buyers to enforce
diligently Seller’s rights and remedies set forth in the Program Agreements.

 

e.     (i)  Any payments made by Seller or Guarantor to Administrative Agent or
a Buyer or a Buyer assignee or participant hereunder or any Program Agreement
shall be made free and clear of and without deduction or withholding for any
Taxes, except as required by applicable law. If Seller or Guarantor shall be
required by applicable law (as determined in the good faith discretion of the
applicable withholding agent) to deduct or withhold any Tax from any sums
payable to Administrative Agent or a Buyer or Buyer assignee or participant,
then (i) the Seller or Guarantor shall make such deductions or withholdings and
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law; (ii) to the extent the withheld or deducted Tax
is an Indemnified Tax or Other Tax, the sum payable shall be increased as
necessary so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums payable
under this Section 11(e)) Administrative Agent receives an amount equal to the
sum it would have received had no such deductions or withholdings been made; and
(iii) the Seller shall notify the Administrative Agent of the amount paid and
shall provide the original or a certified copy of a receipt issued by the
relevant Governmental Authority evidencing such payment within ten (10) days
thereafter. Seller or Guarantor shall otherwise indemnify Administrative Agent
and such Buyer, within ten (10) days after demand therefor, for any Indemnified
Taxes or Other Taxes imposed on Administrative Agent or such Buyer (including
Indemnified Taxes and Other Taxes imposed or asserted on or attributable to
amounts payable under this Section 11(e)) and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally asserted by the relevant Governmental
Authority.    

 

(ii)  Administrative Agent shall cause each Buyer and Buyer assignee and
participant to deliver to each of the Seller or Guarantor, at the time or times
reasonably requested by the Seller or Guarantor, such properly completed and
executed documentation reasonably requested by the Seller or Guarantor as will
permit payments made hereunder to be made without withholding or at a reduced
rate of withholding. In addition, Administrative Agent shall cause each Buyer
and Buyer assignee and participant, if reasonably requested by Seller or
Guarantor, to deliver such other documentation prescribed by applicable law or
reasonably requested by the Seller or Guarantor as will enable the Seller or
Guarantor to determine whether or not such Buyer or Buyer assignee or
participant is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in this Section 11, the
completion, execution and submission of such documentation (other than such
documentation in Section 11(e)((ii)(A),  (B) and (C) below) shall not be
required if in the Buyer’s or any Buyer’s assignee’s or participant’s judgment
such completion, execution or submission would subject such

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Buyer or Buyer assignee or participant to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Buyer or Buyer assignee or participant. Without limiting the generality of the
foregoing, Administrative Agent shall cause a Buyer or Buyer assignee or
participant to deliver to each of the Seller or Guarantor, to the extent legally
entitled to do so:

 

(A) in the case of a Buyer or Buyer assignee or participant which is a “U.S.
Person” as defined in section 7701(a)(30) of the Code, a properly completed and
executed Internal Revenue Service (“IRS”)  Form W-9 certifying that it is not
subject to U.S. federal backup withholding tax; 

 

(B) in the case of a Buyer or Buyer assignee or participant which is not a “U.S.
Person” as defined in Code section 7701(a)(30): (I) a properly completed and
executed IRS Form W-8BEN, W-8BENE-E or W-8ECI, as appropriate, evidencing
entitlement to a zero percent or reduced rate of U.S. federal income tax
withholding on any payments made hereunder, (II) in the case of such non-U.S.
Person claiming exemption from the withholding of U.S. federal income tax under
Code sections 871(h) or 881(c) with respect to payments of “portfolio interest,”
a duly executed certificate (a “U.S. Tax Compliance Certificate”) to the effect
that such non-U.S. Person is not (x) a “bank” within the meaning of Code section
881(c)(3)(A), (y) a “10 percent shareholder” of Seller, Guarantor or affiliate
thereof, within the meaning of Code section 881(c)(3)(B), or (z) a “controlled
foreign corporation” described in Code section 881(c)(3)(C), (III) to the extent
such non-U.S. person is not the beneficial owner, executed originals of IRS Form
W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a
U.S. Tax Compliance Certificate, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if
such  non-U.S. person is a partnership and one or more direct or indirect
partners of such non-U.S. person are claiming the portfolio interest exemption,
such non-U.S. person may provide a U.S. Tax Compliance Certificate on behalf of
each such direct and indirect partner, and (IV) executed originals of any other
form or supplementary documentation prescribed by law as a basis for claiming
exemption from or a reduction in United States federal withholding tax together
with such supplementary documentation as may be prescribed by law to permit
Seller or Guarantor to determine the withholding or deduction required to be
made.

 

(C) if a payment made to a Buyer or Buyer assignee or participant under this
Agreement would be subject to U.S. federal withholding tax imposed by FATCA if
such Buyer or assignee or participant were to fail to comply with the applicable
reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), Administrative Agent on behalf of such
Buyer or assignee or participant shall deliver to the Seller or Guarantor at the
time or times prescribed by law and at such time or times reasonably requested
by the Seller such documentation prescribed by applicable law (including as
prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by the Seller as may be necessary for the
Seller to comply with their obligations under FATCA or to determine the amount
to deduct and withhold from

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such payment. Solely for purposes of this Section 11(e), “FATCA” shall include
any amendments made to FATCA after the date of this Agreement. 

 

The applicable IRS forms referred to above shall be delivered by Administrative
Agent on behalf of each applicable Buyer or Buyer assignee or participant on or
prior to the date on which such person becomes a Buyer or Buyer assignee or
participant under this Agreement, as the case may be, and upon the obsolescence
or invalidity of any IRS form previously delivered by it hereunder

 

f.     Any indemnification payable by Seller or Guarantor to Administrative
Agent or a Buyer or Buyer assignee or participant for Indemnified Taxes or Other
Taxes that are imposed on such Buyer or Buyer assignee or participant, as
described in Section 11(e)(i) hereof, shall be paid by Seller or Guarantor
within ten (10) days after demand therefor from Administrative Agent.  A
certificate as to the amount of such payment or liability delivered to the
Seller or Guarantor by the Administrative Agent on behalf of a Buyer or Buyer
assignee or participant shall be conclusive absent manifest error. 

 

g.     Each party’s obligations under this Section 11 shall survive any
assignment of rights by, or the replacement of, a Buyer or a Buyer assignee or
participant, and the repayment, satisfaction or discharge of all obligations
under any Program Agreement.

 

h.     Each party to this Agreement acknowledges that it is its intent for
purposes of U.S. federal, state and local income and franchise taxes to treat
each Transaction as indebtedness of Seller that is secured by the Purchased
Mortgage Loans, and the Purchased Mortgage Loans as owned by Seller in the
absence of an Event of Default by Seller. Administrative Agent on behalf of
Buyers and Seller agree that they will treat and report for all tax purposes the
Transactions entered into hereunder as one or more loans from a Buyer to Seller
secured by the Purchased Mortgage Loans, unless otherwise prohibited by law or
upon a final determination by any taxing authority that the Transactions are not
loans for tax purposes.

 

12.       Servicing

 

a.     Seller, on Administrative Agent’s and Buyers’ behalf, shall service the
Mortgage Loans consistent with the degree of skill and care that Seller
customarily requires with respect to similar Mortgage Loans owned or managed by
it and in accordance with Accepted Servicing Practices and Agency, GNMA, HUD,
FHA and VA guidelines, as applicable.  The Servicer shall (i) comply with all
applicable federal, state and local laws and regulations, (ii) maintain all
state and federal licenses necessary for it to perform its servicing
responsibilities hereunder and (iii) not impair the rights of Administrative
Agent or Buyers in any Mortgage Loans or any payment thereunder.  Administrative
Agent may terminate the servicing of any Mortgage Loan with the then existing
Servicer in accordance with Section 12(d) hereof. 

 

b.     Seller shall hold or cause to be held all escrow funds collected by
Seller as Servicer with respect to any Purchased Mortgage Loans in trust
accounts and shall apply the same for the purposes for which such funds were
collected.

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c.     Seller shall deposit all collections received by Seller and Servicer on
the Purchased Mortgage Loans in the Securities Account on a daily basis within
one (1) Business Day following receipt; provided, however, that any amounts
required to be remitted to Administrative Agent shall be deposited in the
Securities Account on or prior to the day on which such remittance is to occur.

 

d.     Upon the occurrence and continuance of an Event of Default hereunder,
Administrative Agent shall have the right to immediately terminate Seller’s
right to service the Purchased Mortgage Loans without payment of any penalty or
termination fee. Seller shall cooperate in transferring the servicing of the
Purchased Mortgage Loans to a successor servicer appointed by Administrative
Agent on behalf of Buyers in its sole discretion. For the avoidance of doubt any
termination of the Servicer’s rights to service by the Administrative Agent as a
result of an Event of Default shall be deemed part of an exercise of the
Administrative Agent’s rights to cause the liquidation, termination or
acceleration of this Agreement.

 

e.     If Seller should discover that, for any reason whatsoever, Seller or any
entity responsible to Seller for managing or servicing any such Purchased
Mortgage Loan has failed to perform fully Seller’s obligations under the Program
Agreements or any of the obligations of such entities with respect to the
Purchased Mortgage Loans, Seller shall promptly notify Administrative Agent.

 

f.     Reserved.

 

g.     For the avoidance of doubt, Seller retains no economic rights to the
servicing of the Purchased Mortgage Loans. As such, Seller expressly
acknowledges that the Purchased Mortgage Loans are sold to Administrative Agent
for the benefit of Buyers on a “servicing-released” basis with such servicing
retained by Seller.

 

13.     Representations and Warranties

 

a.     Each of Seller and Guarantor represents and warrants to Administrative
Agent and Buyers as of the date hereof and as of each Purchase Date for any
Transaction that:

 

(1)  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. 

 

(2)  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 and necessary licenses (including from VA and FHA,
if applicable) to originate and purchase Mortgage Loans (as applicable) and to
own, sell and grant a lien on all of

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its right, title and interest in and to the Mortgage Loans.  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 Request.  Seller is an FHA Approved Mortgagee.

 

(3)  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.

 

(4)  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 Request and the Program Agreements
have been (or, in the case of Program Agreements and any Transaction Request 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.

 

(5)  Financial Statements.

 

a.     Guarantor has heretofore furnished to Administrative Agent a copy of its
consolidated balance sheet and the consolidated balance sheets of its
consolidated Subsidiaries for the fiscal year of Guarantor ended December 31,
2016 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.  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.  Since December 31, 2016, 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 (the “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 Administrative Agent in writing.

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b.     Seller has heretofore furnished to Administrative Agent a copy of its
balance sheet for the fiscal year of Seller ended December 31, 2016 and the
related statements of income for Seller for such fiscal year, with the opinion
thereon of Deloitte & Touche LLP.  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, 2016, 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 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 Administrative Agent in writing.

 

(6)  Event of Default.  There exists no Event of Default under Section 15(b)
hereof, which default gives rise to a right to accelerate indebtedness as
referenced in Section 15(b) 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.

 

(7)  Solvency.  Each of Seller and Guarantor is solvent and will not be rendered
insolvent by any Transaction 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.  The amount of consideration being received by Seller upon the sale of
the Purchased Mortgage Loans to Administrative Agent for the benefit of Buyers
constitutes reasonably equivalent value and fair consideration for such
Purchased Mortgage Loans.  Seller is not transferring any Purchased Mortgage
Loans with any intent to hinder, delay or defraud any of its creditors.

 

(8)  No Conflicts.  The execution, delivery and performance by each of Seller
and Guarantor of this Agreement or any Transaction Request 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 or obligation to which Seller or Guarantor is a party.

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(9)  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
Administrative Agent or Buyers 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 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.

 

(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
Request and the Program Agreements.

 

(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 Request or any
Program Agreement, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement, any Transaction Request or any
Program Agreement, (C) making 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 Mortgage
Loans or the performance by it of its obligations under, or the validity or
enforceability of, this Agreement, any Transaction Request or any Program
Agreement.

 

(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 Administrative Agent as determined by
Administrative Agent in its sole good faith discretion.

 

(13)     Ownership.  Upon payment of the Purchase Price and the filing of the
financing statement and delivery of the Mortgage Files to the Custodian and
Custodian’s receipt of the related Request for Certification, the Administrative
Agent shall become the sole owner of the Purchased Mortgage Loans and related
Repurchase Assets for the benefit of Buyers and Repledgees, free and clear of
all liens and encumbrances.

 

(14)     Underwriting Guidelines. The Underwriting Guidelines provided to
Administrative Agent are the true and correct Underwriting Guidelines of Seller.

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(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.

 

(16)     Investment Company.  Neither Seller nor any of its Subsidiaries is
required to register as 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 13(a)(16).

 

(17)     Chief Executive Office; Jurisdiction of Organization.  On the Effective
Date, Seller’s chief executive office, is, and has been, located at 3043
Townsgate Road, Westlake Village, CA 91361.  On the Effective Date, Seller’s
jurisdiction of organization is the State of Delaware.  Seller shall provide
Administrative Agent 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. 

 

(18)     Location of Books and Records.  The location where Seller keeps its
books and records, including all computer tapes and records relating to the
Purchased Mortgage Loans and the related Repurchase Assets is its chief
executive office.

 

(19)     Adjusted Tangible Net Worth.  On the Amendment Effective Date,
Seller’s Adjusted Tangible Net Worth shall comply with the requirements set
forth in Section 14bb(1) hereof.   

 

(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.

 

(21)     Adverse Selection.  Seller has not selected the Purchased Mortgage
Loans in a manner so as to adversely affect Buyers’ interests.

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(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 13(a)(5)
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.

 

(23)     Other Indebtedness.  All Indebtedness (other than Indebtedness
evidenced by this Agreement) of Seller existing on the date hereof is listed on
Exhibit I hereto (the “Existing Indebtedness”).

 

(24)     Agency Approvals.  With respect to each Agency Security and to the
extent necessary, Seller is an FHA Approved Mortgagee. Seller is also  approved
by Fannie Mae as an approved seller/servicer 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 prior to the issuance of the Agency Security or the consummation of
the Take-out Commitment, as the case may be, including, without limitation, 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, only to the extent that Seller is a VA Approved
Lender as of the relevant Purchase Date, 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 (only to
the extent that Seller is a VA Approved Lender as of the relevant Purchase
Date), be required, Seller shall so notify Administrative Agent immediately in
writing.  Servicer 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. 

 

(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 Administrative Agent or Buyers as to
any aspect of the Transactions, including without limitation, the legal,
accounting or tax treatment of such Transactions.

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(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 Mortgage Loans 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.

 

(27)     No Prohibited Persons. Neither Seller nor any of its Affiliates,
officers, directors, partners or members, is an entity or person (or
to  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”).

 

b.     Each of Seller and Guarantor jointly and severally represents and
warrants to Administrative Agent and Buyers as of the applicable Purchase Date
for any Transaction and each date thereafter that (i) with respect to every
Purchased Mortgage Loan other than a Freddie SBL Loan, each representation and
warranty set forth on Schedule 1 is true and correct; and (ii) with respect to
every Purchased Mortgage Loan that is a Freddie SBL Loan, each such Freddie SBL
Loan complies with each requirement set forth in the Freddie Mac Guide.  

 

c.     The representations and warranties set forth in this Agreement shall
survive transfer of the Purchased Mortgage Loans to Administrative Agent for the
benefit of Buyers and to each Buyer and shall continue for so long as the
Purchased Mortgage Loans are subject to this Agreement.  Upon discovery by
Seller, Servicer or Administrative Agent of any breach of any of the
representations or warranties set forth in this Agreement, the party discovering
such breach shall promptly give notice of such discovery to the others.

 

14.       Covenants 

 

Each of Seller and Guarantor covenants with Administrative Agent and Buyers
that, during the term of this facility:

 

a.     Reserved.

 

b.     Reserved.

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c.     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 Administrative Agent 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 each Reporting Date, Seller and Guarantor, as
applicable, will provide to Administrative Agent 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. 

 

d.     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.

 

e.     Reserved. 

 

f.     Servicer; Asset Tape.  Upon the occurrence of any of the following (a)
the occurrence and continuation of an Event of Default, (b) within two (2)
Business Days following any Purchased Mortgage Loan becoming an Aged Loan, (c)
the fifth (5th) Business Day of each month, or (d) within two (2) Business Days
following the request of Administrative Agent, Seller shall cause Servicer to
provide to Administrative Agent, electronically, in a format mutually acceptable
to Administrative Agent and Seller, an Asset Tape.  Seller shall not cause the
Mortgage Loans to be serviced by any servicer other than a servicer expressly
approved in writing by Administrative Agent on behalf of Buyers, which approval
shall be deemed granted by Administrative Agent on behalf of Buyers with respect
to Seller with the execution of this Agreement.

 

g.     Insurance.  Seller or Guarantor shall continue to maintain, for Seller,
Servicer and their Subsidiaries, Fidelity Insurance in an aggregate amount at
least equal to $1,400,000.  Seller or Guarantor shall maintain, for Seller,
Servicer and their Subsidiaries, Fidelity Insurance in respect of its officers,
employees and agents,

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with respect to any claims made in connection with all or any portion of the
Repurchase Assets.  Seller or Guarantor shall notify the Administrative Agent of
any material change in the terms of any such Fidelity Insurance.

 

h.     No Adverse Claims.  Seller warrants and will defend, and shall cause any
Servicer to defend, the right, title and interest of Administrative Agent and
Buyers in and to all Purchased Mortgage Loans and the related Repurchase Assets
against all adverse claims and demands.

 

i.     Assignment.  Except as permitted herein, neither Seller nor any Servicer
shall 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 Mortgage Loans or any interest therein, provided that this Section
shall not prevent any transfer of Purchased Mortgage Loans in accordance with
the Program Agreements.

 

j.     Security Interest.  Seller shall do all things necessary to preserve the
Purchased Mortgage Loans 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 Mortgage Loans 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 Mortgage Loans 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 Mortgage Loans or the
related Repurchase Assets and any Program Agreement.

 

k.     Records.

 

(1)  Seller shall collect and maintain or cause to be collected and maintained
all Records relating to the Purchased Mortgage Loans in accordance with industry
custom and practice for assets similar to the Purchased Mortgage Loans, and all
such Records shall be in Custodian’s possession unless Administrative Agent
otherwise approves.  Seller will not allow any such papers, records or files
that are an original or an only copy to leave Custodian’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 or
the Servicer of the Purchased Mortgage Loans will maintain all such Records not
in the possession of Custodian in good and complete condition in accordance with
industry practices for assets similar to the Purchased Mortgage Loans and
preserve them against loss.

 

(2)  For so long as Administrative Agent has an interest in or lien on any
Purchased Mortgage Loan, Seller will hold or cause to be held all related

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Records in trust for Administrative Agent.  Seller shall notify, or cause to be
notified, every other party holding any such Records of the interests and liens
in favor of Administrative Agent granted hereby.

 

(3)     Upon reasonable advance notice from Custodian or Administrative Agent,
Seller shall (x) make any and all such Records available to
Custodian, Administrative Agent or a 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 Administrative Agent or a
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.

 

l.     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 Mortgage Loans to Administrative Agent for the
benefit of Buyers.

 

m.     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
in all material respects in accordance with applicable law.

 

n.     Material Change in Business.  Neither Seller nor Guarantor shall make any
material change in the nature of its business as carried on at the date hereof.

 

o.     Underwriting Guidelines.  Without the prior written consent of
Administrative Agent, Seller shall not amend or otherwise modify the
Underwriting Guidelines in any material respect.  Without limiting the
foregoing, in the event that Seller makes any amendment or modification to the
Underwriting Guidelines, Seller shall promptly deliver to Administrative Agent a
complete copy of the amended or modified Underwriting Guidelines, specifying in
detail the amendments and modifications set forth therein from the previous copy
delivered.

 

p.     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.

 

q.     Applicable Law.  Seller and Guarantor shall comply in all material
respects with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority.

 

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

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s.     Chief Executive Office; Jurisdiction of Organization.  Seller shall not
move its chief executive office from the address referred to in Section
13(a)(17) or change its jurisdiction of organization from the jurisdiction
referred to in Section 13(a)(17) unless it shall have provided Administrative
Agent thirty (30) days’ prior written notice of such change.

 

t.     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.

 

u.     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 is (a) otherwise permitted under the Program Agreements, (b) in
the ordinary course of Seller’s business and (c) 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 to any Affiliate.

 

v.     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.

 

w.     Indebtedness. Seller shall not incur any additional material Indebtedness
(other than (i) the Existing Indebtedness in amounts not to exceed the amounts
specified on Exhibit I hereto, (ii) except for Indebtedness incurred with
Administrative Agent or its Affiliates, (iii) Indebtedness required to be
obtained pursuant to the Program Agreements and (iv) usual and customary
accounts payable for a mortgage company) without the prior written consent of
Administrative Agent.

 

x.     Hedging. Seller has entered into Interest Rate Protection Agreements with
respect to the Conforming Mortgage Loans, having terms with respect to
protection against fluctuations in interest rates acceptable to Administrative
Agent in its sole discretion.  In the event that Seller intends to make any
change to its policy regarding Interest Rate Protection Agreements, Seller shall
notify Administrative Agent in writing thirty (30) days prior to implementing
any such change. 

 

y.     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 Administrative Agent
and/or Buyers hereunder and during Administrative Agent’s and/or Buyers’
diligence of Seller and Guarantor are and will be true and complete and do not
omit to disclose any material facts

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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
Administrative Agent and/or Buyers pursuant to this Agreement shall be prepared
in accordance with U.S. GAAP, or, if applicable, to SEC filings, the appropriate
SEC accounting regulations.

 

z.     Agency Approvals; Servicing.  Seller shall maintain its status with
Fannie Mae as an approved lender and Freddie Mac as an approved seller/servicer,
in each case in good standing (“Agency Approvals”).  Servicer shall service all
Purchased Mortgage Loans which are Committed Mortgage Loans in accordance with
the applicable agency guide.  Should Servicer, 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 be
required, such Seller shall so notify Administrative Agent immediately in
writing.  Notwithstanding the preceding sentence, Servicer shall take all
necessary action to maintain all of their applicable Agency Approvals at all
times during the term of this Agreement and each outstanding Transaction.
Servicer 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.

 

aa.   Take-out Payments. With respect to each Committed Mortgage Loan, Seller
shall arrange that all payments under the related Take-out Commitment shall be
paid directly to Administrative Agent at the account set forth in Section 9
hereof, or to an account approved by Administrative Agent in writing prior to
such payment. With respect to any Agency Take-out Commitment, if applicable, (1)
with respect to the wire transfer instructions as set forth in Freddie Mac Form
987 (Wire Transfer Authorization for a Cash Warehouse Delivery) such wire
transfer instructions are identical to Administrative Agent’s wire instructions
or Administrative Agent has approved such wire transfer instructions in writing
in its sole discretion, or (2) the Payee Number set forth on Fannie Mae Form
1068 (Fixed-Rate, Graduated-Payment, or Growing-Equity Mortgage Loan Schedule)
or Fannie Mae Form 1069 (Adjustable-Rate Mortgage Loan Schedule), as applicable,
is identical to the Payee Number that has been identified by Administrative
Agent in writing as Administrative Agent’s Payee Number or Administrative Agent
has previously approved the related Payee Number in writing in its sole
discretion; with respect to any Take-out Commitment with an Agency, the
applicable agency documents shall list Administrative Agent as sole subscriber,
unless otherwise agreed to in writing by Administrative Agent, in Administrative
Agent’s sole discretion.

 

bb.   No Pledge.  Neither Seller nor Guarantor shall pledge, transfer or convey
any security interest in the Securities Account to any Person without the
express written consent of Administrative Agent.

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cc.   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 by 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.

 

dd.   Financial Covenants.  Seller shall at all times comply with any and all
financial covenants and/or financial ratios set forth below:

 

(1)     Adjusted Tangible Net Worth. Seller shall maintain an Adjusted Tangible
Net Worth of at least equal to $500,000,000.

 

(2)     Indebtedness to Adjusted Tangible Net Worth Ratio. Seller’s ratio of
Indebtedness (excluding (A) Non-Recourse Debt, including any securitization
debt, and (B) any intercompany debt eliminated in consolidation) to Adjusted
Tangible Net Worth shall not exceed 10:1.

 

(3)     Maintenance of Liquidity.  The Seller shall ensure that, at all times,
it has cash (other than Restricted Cash) and Cash Equivalents in an amount not
less than $40,000,000.

 

(4)     Maintenance of Profitability.  Seller shall maintain profitability of at
least $1.00 in Net Income for at least one of the two prior Test Periods.

 

(5)     Additional Warehouse Line.  The Seller shall maintain one or more
additional warehouse or repurchase facilities in order to finance mortgage loans
in an aggregate amount at least equal to 55% of the Maximum Regular Way
Committed Purchase Price. 

 

ee.   Sharing of Information.  Seller shall allow the Administrative Agent and
Buyers to exchange information related to Seller and the Transactions hereunder
with third party lenders and Seller shall permit each third party lender to
share such information with the Administrative Agent and Buyers.

 

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

 

(1)  more favorable terms with respect to any guaranties or financial covenants,
including without limitation covenants covering the same or similar subject
matter referred to in Sections 14.n and 14.bb hereof;

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

 

(3)  a requirement that Seller has added or will add any Person other than
Administrative Agent or an Affiliate of Administrative Agent 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 the Administrative Agent or an
Affiliate of the Administrative Agent; provided, that in the event that such
More Favorable Agreement is terminated, upon notice by Seller to Administrative
Agent of such termination, the original terms of this Agreement shall be deemed
to be automatically reinstated.  Seller, Guarantor and Administrative Agent
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
Administrative Agent, Seller or Guarantor, as applicable, shall deliver to
Administrative Agent a true, correct and complete copy of such repurchase
agreement, loan agreement, guaranty or other financing documentation.

 

gg.     Liens on Substantially All Assets.  Seller shall not grant a security
interest to any Person other than Administrative Agent or an Affiliate of
Administrative Agent in substantially all assets of Seller unless Seller has
entered into an amendment to this Agreement that grants to Administrative Agent
for the benefit of Buyers a pari passu security interest on such assets.

 

hh.     GNMA EBO.

 

(1)  With respect to all claims submitted to HUD on or prior to June 6, 2014,
Seller shall remain, on the FHA Connect system, the mortgagee of record with
respect to each GNMA EBO.  Upon receipt of any proceeds from HUD with respect to
any Purchased Mortgage Loan that is a GNMA EBO, Seller shall remit such amounts
within four (4) Business Days to the GNMA Account pursuant to the definition of
“GNMA Account”.  To the extent HUD deducts any amounts owing by Seller to HUD,
Seller shall deposit, within four (4) Business Days following notice or
knowledge of such deduction by HUD, such deducted amounts into the applicable
GNMA Account.  On each Price Differential Payment Date, Seller shall instruct
Securities Intermediary to remit all amounts on deposit in any GNMA Account to
the Securities Account for distribution in accordance with the Securities
Account Control Agreement.  With respect to any Purchased Mortgage Loan that is
a GNMA EBO, Seller shall transfer the mortgagee of record on the FHA Connect
system to Administrative Agent.

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(2)  With respect to each GNMA EBO, to the extent the FHA Connect system permits
Administrative Agent to designate a GNMA Account linked to Administrative Agent
as mortgagee of record, Seller shall cause Administrative Agent to be designated
as mortgagee of record on the FHA Connect system under mortgagee number 34522,
and shall submit all claims to HUD under such applicable number for remittance
of amounts to the GNMA Account pursuant to the definition of “GNMA Account”.  On
each Price Differential Payment Date, Seller shall instruct Securities
Intermediary to remit all amounts on deposit in any GNMA Account to the
Securities Account for distribution in accordance with the Securities Account
Control Agreement. On each Purchase Date with respect to a Mortgage Loan that is
a GNMA EBO, Seller shall transfer the mortgagee of record on the FHA Connect
system to Administrative Agent.  

 

(3)  Seller shall cooperate and do all things deemed necessary or appropriate by
Administrative Agent to effectuate the steps as contemplated in this Section
14.ii.

 

15.       Events of Default

 

Each of the following shall constitute an “Event of Default” hereunder:

 

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
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 evidencing or securing
Indebtedness of Seller to Administrative Agent or Buyers or to any Affiliate of
Administrative Agent or Buyers, or (ii) cure any Margin Deficit when due
pursuant to Section 6 hereof.

 

b.     Cross Default.  Seller, Guarantor or Affiliates thereof shall be in
default under (i) the VFN Facility Documents, (ii) any Indebtedness, in the
aggregate, in excess of $1 million of Seller, Guarantor or any Affiliate
thereof, including amounts owed under the VFN Facility Documents, 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 Administrative Agent, or the granting by Seller of any
security interest, lien or other encumbrances on any Purchased Mortgage Loans or
Servicer Advances to any person other than Administrative Agent.

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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 Administrative Agent in
its sole good faith discretion, or any other condition shall exist which, in
Administrative Agent’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.     Breach of Financial Representation or Covenant or Obligation. A breach by
Seller or Guarantor of any of the representations, warranties or covenants or
obligations set forth in (i) Sections 13(a)(1)(Seller and Guarantor Existence),
13(a)(7)(Solvency), 13(a)(12)(Material Adverse Change), 13(a)(19)(Adjusted
Tangible Net Worth),  14d(Prohibition of Fundamental Changes),  14p
 (Distributions),  14r(Existence), 14v(Guarantees),  or 14cc(Plan Assets) of
this Agreement or (ii) Sections 13(a)(23)(Other Indebtedness),
 14w(Indebtedness),  14dd(Financial Covenants) or 14gg(Most Favored Status) of
this Agreement and such breach identified in this clause (ii) shall remain
unremedied for one (1) Business Day.

 

g.     Breach of Non-Financial Representation or Covenant.  A breach by Seller
or Guarantor of any other representation, warranty or covenant set forth in this
Agreement in any material respect (and not otherwise specified in Section 15(f)
above), if such breach is not cured within five (5) Business Days (other than
the representations and warranties set forth in Schedule 1, which shall be
considered solely for the purpose of determining the Market Value, the existence
of a Margin Deficit and the obligation to repurchase such Mortgage Loan or
Servicer Advances unless (i) such party shall have made any such representations
and warranties with knowledge that they were materially false or misleading at
the time made, (ii) any such representations and warranties have been determined
by Administrative Agent in its sole discretion to be materially false or
misleading on a regular basis, or (iii) Administrative Agent, in its sole
discretion, determines that such breach of a material representation, warranty
or covenant materially and adversely affects (A) the condition (financial or
otherwise) of such party, its Subsidiaries or Affiliates; or (B) Administrative
Agent’s determination to enter into this Agreement or Transactions with such
party, then such breach shall constitute an immediate Event of Default and
neither Seller nor Guarantor shall have any cure right hereunder).

 

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.

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j.     Failure to Transfer.  Seller fails to transfer the Purchased Mortgage
Loans and/or Servicer Advances to Administrative Agent for the benefit of the
applicable Buyer on the applicable Purchase Date (provided the Administrative
Agent, on behalf of the applicable 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 thirty (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 thirty (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 Purchased
Mortgage Loans, Servicer Advances or other 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.

 

An Event of Default shall be deemed to be continuing unless expressly waived by
Administrative Agent in writing.

 

16.       Remedies Upon Default

 

In the event that an Event of Default shall have occurred:

 

a.     Administrative Agent may, at its option (which option shall be deemed to
have been exercised immediately upon the occurrence of an Act of Insolvency of
Seller or any Affiliate of Seller), declare an Event of Default to have occurred
hereunder

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and, upon the exercise or deemed exercise of such option, the Repurchase Date
for each Transaction hereunder shall, if it has not already occurred, be deemed
immediately to occur (except that, in the event that the Purchase Date for any
Transaction has not yet occurred as of the date of such exercise or deemed
exercise, such Transaction shall be deemed immediately canceled). 
Administrative Agent shall (except upon the occurrence of an Act of Insolvency
of Seller or any Affiliate of Seller) give notice to Seller and Guarantor of the
exercise of such option as promptly as practicable.

 

b.     If Administrative Agent exercises or is deemed to have exercised the
option referred to in subparagraph (a) of this Section, (i) Seller’s obligations
in such Transactions to repurchase all Purchased Mortgage Loan, including
Servicer Advances, at the Repurchase Price therefor on the Repurchase Date
determined in accordance with subparagraph (a) of this Section, shall thereupon
become immediately due and payable, (ii) all Income paid after such exercise or
deemed exercise shall be retained by Administrative Agent and applied, in
Administrative Agent’s sole discretion, to the aggregate unpaid Repurchase
Prices for all outstanding Transactions and any other amounts owing by Seller,
and (iii) Seller shall immediately deliver to Administrative Agent the Mortgage
Files relating to any Purchased Mortgage Loans and Servicer Advances subject to
such Transactions then in Seller’s possession or control.

 

c.     Administrative Agent also shall have the right to obtain physical
possession, and to commence an action to obtain physical possession, of all
Records and files of Seller relating to the Purchased Mortgage Loans, Servicer
Advances and all documents relating to the Purchased Mortgage Loans and Servicer
Advances (including, without limitation, any legal, credit or servicing files
with respect to the Purchased Mortgage Loans and Servicer Advances) which are
then or may thereafter come in to the possession of Seller or any third party
acting for Seller.  To obtain physical possession of any Purchased Mortgage
Loans held by Custodian, Administrative Agent shall present to Custodian an
Asset Confirm.  Without limiting the rights of Administrative Agent hereto to
pursue all other legal and equitable rights available to Administrative Agent
for Seller’s failure to perform its obligations under this Agreement, Seller
acknowledges and agrees that the remedy at law for any failure to perform
obligations hereunder would be inadequate and Administrative Agent shall be
entitled to specific performance, injunctive relief, or other equitable remedies
in the event of any such failure. The availability of these remedies shall not
prohibit Administrative Agent from pursuing any other remedies for such breach,
including the recovery of monetary damages.

 

d.     Administrative Agent shall have the right to direct all servicers then
servicing any Purchased Mortgage Loans to remit all collections thereon to
Administrative Agent, and if any such payments are received by Seller, Seller
shall not commingle the amounts received with other funds of Seller and shall
promptly pay them over to Administrative Agent.  Administrative Agent shall also
have the right to terminate any one or all of the servicers then servicing any
Purchased Mortgage

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Loans with or without cause.  In addition, Administrative Agent shall have the
right to immediately sell the Purchased Mortgage Loans and Servicer Advances and
liquidate all Repurchase Assets.  Such disposition of Purchased Mortgage Loans
and Servicer Advances may be, at Administrative Agent’s option, on either a
servicing‑released or a servicing‑retained basis.  Administrative Agent shall
not be required to give any warranties as to the Purchased Mortgage Loans and
Servicer Advances with respect to any such disposition thereof.  Administrative
Agent may specifically disclaim or modify any warranties of title or the like
relating to the Purchased Mortgage Loans or Servicer Advances.  The foregoing
procedure for disposition of the Purchased Mortgage Loans and Servicer Advances
and liquidation of the Repurchase Assets shall not be considered to adversely
affect the commercial reasonableness of any sale thereof.  Seller agrees that it
would not be commercially unreasonable for Administrative Agent to dispose of
the Purchased Mortgage Loan, Servicer Advances or the Repurchase Assets or any
portion thereof by using Internet sites that provide for the auction of assets
similar to the Purchased Mortgage Loans or the Repurchase Assets, or that have
the reasonable capability of doing so, or that match buyers and sellers of
assets.  Administrative Agent shall be entitled to place the Purchased Mortgage
Loans and Servicer Advances in a pool for issuance of mortgage‑backed securities
at the then‑prevailing price for such securities and to sell such securities for
such prevailing price in the open market.  Administrative Agent shall also be
entitled to sell any or all of such Mortgage Loans and Servicer Advances
individually for the prevailing price. Administrative Agent shall also be
entitled, in its sole discretion to elect, in lieu of selling all or a portion
of such Purchased Mortgage Loans and Servicer Advances, to give Seller credit
for such Purchased Mortgage Loans, Servicer Advances and the Repurchase Assets
in an amount equal to the Market Value of the Purchased Mortgage Loans and
Servicer Advances against the aggregate unpaid Repurchase Price and any other
amounts owing by Seller hereunder.

 

e.     Upon the happening of one or more Events of Default, Administrative Agent
may apply any proceeds from the liquidation of the Purchased Mortgage
Loans, Servicer Advances and Repurchase Assets to the Repurchase Prices
hereunder and all other Obligations in the manner Administrative Agent deems
appropriate in its sole discretion.

 

f.     Seller shall be liable to Administrative Agent and each Buyer for (i) the
amount of all reasonable legal or other expenses (including, without limitation,
all costs and expenses of Administrative Agent and each Buyer in connection with
the enforcement of this Agreement or any other agreement evidencing a
Transaction, whether in action, suit or litigation or bankruptcy, insolvency or
other similar proceeding affecting  creditors’ rights generally, further
including, without limitation, the reasonable fees and expenses of counsel
(including the costs of internal counsel of Administrative Agent and Buyers)
incurred in connection with or as a result of an Event of Default, (ii) damages
in an amount equal to the cost (including all fees, expenses and commissions) of
entering into replacement transactions and entering into or terminating hedge
transactions in connection with or as a result of an Event of Default, and
(iii) any other loss, damage, cost or

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expense directly arising or resulting from the occurrence of an Event of Default
in respect of a Transaction.

 

g.     To the extent permitted by applicable law, Seller shall be liable to
Administrative Agent and each Buyer for interest on any amounts owing by Seller
hereunder, from the date Seller becomes liable for such amounts hereunder until
such amounts are (i) paid in full by Seller or (ii) satisfied in full by the
exercise of Administrative Agent’s and Buyers’ rights hereunder.  Interest on
any sum payable by Seller under this Section 16(g) shall be at a rate equal to
the Post-Default Rate.

 

h.     Administrative Agent shall have, in addition to its rights hereunder, any
rights otherwise available to it under any other agreement or applicable law.

 

i.     Administrative Agent may exercise one or more of the remedies available
to Administrative Agent immediately upon the occurrence of an Event of Default
and, except to the extent provided in subsections (a) and (d) of this Section,
at any time thereafter without notice to Seller.  All rights and remedies
arising under this Agreement as amended from time to time hereunder are
cumulative and not exclusive of any other rights or remedies which
Administrative Agent may have.

 

j.     Administrative Agent may enforce its rights and remedies hereunder
without prior judicial process or hearing, and Seller hereby expressly waives
any defenses Seller might otherwise have to require Administrative Agent to
enforce its rights by judicial process.  Seller also waives any defense (other
than a defense of payment or performance) Seller might otherwise have arising
from the use of nonjudicial process, enforcement and sale of all or any portion
of the Repurchase Assets, or from any other election of remedies.  Seller
recognizes that nonjudicial remedies are consistent with the usages of the
trade, are responsive to commercial necessity and are the result of a bargain at
arm’s length.

 

k.     Administrative Agent shall have the right to perform reasonable due
diligence with respect to Seller, the Mortgage Loans and Servicer Advances,
which review shall be at the expense of Seller.

 

17.       Reports

 

a.     Notices.  Seller or Guarantor shall furnish to Administrative Agent
(x) 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, (y) immediately, notice of the occurrence of any Event of Default
hereunder or default or breach by Seller, Guarantor or Servicer of any
obligation under any Program Agreement or any material contract or agreement of
Seller, Guarantor or Servicer or 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

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Adverse Effect or an Event of Default or such a default or breach by such party
and (z) the following:

 

(1)  as soon as available and in any event within forty-five (45) 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-five (45) 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
Administrative Agent 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 Administrative Agent 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 Administrative Agent and
Credit Suisse First Boston Corporation 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, VA, 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 Administrative Agent 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 Event of Termination, stating the particulars of such 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, Servicer or any other
Person pursuant to any Program Agreement, with a copy of evidence of same
attached;

 

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

 

(c)  any material change in accounting policies or financial reporting practices
of Seller or Servicer;

 

(d)  with respect to any Purchased Mortgage Loan, immediately upon receipt of
notice or knowledge thereof, that the underlying Mortgaged Property has been
damaged by waste, fire, earthquake or earth movement, windstorm, flood,

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tornado or other casualty, or otherwise damaged so as to affect adversely the
value of such Mortgage Loan;

 

(e)  any material issues raised upon examination of Seller or Seller’s
facilities by any Governmental Authority;

 

(f)  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;

 

(g)  promptly upon receipt of notice or knowledge of (i) any default related to
any Repurchase Asset, (ii) 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 Mortgage Loans or Servicer Advances;

 

(h)  a summary of the portfolio performance on a rolling monthly period,
commencing on the calendar quarter following the date hereof, stratified by
percentage repurchase demands for: representation breaches, missing document
breaches, repurchases due to fraud, early payment default requests, summarized
on the basis of (a) pending repurchase demands (including weighted average
duration of outstanding request), (b) satisfied repurchase demands, (c) total
repurchase demands;

 

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

 

(j)  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 Administrative Agent, at
the time Seller furnishes each set of financial statements pursuant to Section
17(a)(1),  (2) and (3) above, a certificate of a Responsible Officer of Seller
in the form of Exhibit A to the Pricing Side Letter.

 

c.     Mortgage Loan Reports.  Within 10 days of the end of each calendar month,
Seller will furnish to Administrative Agent monthly electronic Mortgage Loan
performance data, including, without limitation, delinquency reports and volume
information and responses thereto, broken down by product (i.e., delinquency,
foreclosure and net charge-off reports).

 

d.     Asset Tape.  Seller shall provide to Administrative Agent,
electronically, in a format mutually acceptable to Administrative Agent and
Seller, an Asset Tape by no later than the Reporting Date.

 

e.     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.

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f.     MSR Reports.  Seller shall provide the market value analysis for the MSR
Valuation as determined (i) internally for each monthly fiscal period and (ii)
by a Third Party Evaluator for each quarterly fiscal period to the extent
received, in all instances as set forth in the Officer’s Compliance Certificate
delivered pursuant to Section 17.b. herein.

 

g.     Other Reports. Seller shall deliver to Administrative Agent any other
reports or information reasonably requested by Administrative Agent or as
otherwise required pursuant to this Agreement.

 

h.     Portfolio Performance Data.  At the time Seller furnishes each set of
financial statements pursuant to Section 17(a)(1),  (2) and (3) above, Seller
will furnish to Administrative Agent (i) in the event the Mortgage Loans are
serviced on a “retained” basis, an electronic Mortgage Loan performance data,
including, without limitation, delinquency reports and volume information,
broken down by product (i.e., delinquency, foreclosure and net charge‑off
reports) and (ii) electronically, in a format mutually acceptable to
Administrative Agent and Seller, servicing information, including, without
limitation, those fields reasonably requested by Administrative Agent 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 calendar month corresponding to the
financial statements being delivered including, with respect to a GNMA EBO, the
current BPO and the current BPO date.

 

i.     Monthly Reporting. Seller shall at all times maintain a current list
(which may be stored in electronic form) of all Servicer Advances.  Seller shall
deliver to Buyer on the fifth Business Day of each calendar month a cumulative
Mortgage Loan Schedule, each of which, when so delivered, shall replace the
current Mortgage Loan Schedule and which may be delivered in electronic form
acceptable to Buyer.  Each such updated Mortgage Loan Schedule shall indicate
the Outstanding Balance of each Servicer Advance as of the close of the
preceding calendar month. 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 calendar month, Seller hereby
certifies, represents and warrants to Buyer that (A) each such updated Mortgage
Loan Schedule is true, complete and correct in all material respects and
(B) except as set forth in the report, as of such 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.

 

j.     DE Compare Ratio and HUD Reports. Seller shall furnish to Administrative
Agent the following notices:

 

1.     In the event Seller’s DE Compare Ratio equals or exceeds 200%, Seller
shall provide Administrative Agent with written notice of such

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occurrence within five (5) Business Days, which notice shall include a written
summary of actions Seller is taking to correct its DE Compare Ratio.

 

2.     In the event Seller receives any inquiry or notice from HUD regarding its
DE Compare Ratio, Seller shall provide Administrative Agent with written notice
of such inquiry or notice within five (5) Business Days, regardless of Seller’s
current DE Compare Ratio. 

 

3.     In the event any action plan with respect to Seller’s DE Compare Ratio is
agreed to between Seller and HUD or imposed upon Seller by HUD, Seller shall
provide Administrative Agent with a written summary of such agreement or
imposition, as applicable, within five (5) Business Days.

 

18.       Repurchase Transactions

 

A Buyer may, in its sole election, engage in repurchase transactions (as
“seller” thereunder) with any or all of the Purchased Mortgage Loans and/or
Repurchase Assets or pledge, hypothecate, assign, transfer or otherwise convey
any or all of the Purchased Mortgage Loans and/or Repurchase Assets with a
counterparty of Buyer’s choice (such transaction, a “Repledge
Transaction”).  Any Repledge Transaction shall be effected by notice to the
Administrative Agent, and shall be reflected on the books and records of the
Administrative Agent.  No such Repledge Transaction shall relieve such Buyer of
its obligations to transfer Purchased Mortgage Loans and Repurchase Assets to
Seller (and not substitutions thereof) pursuant to the terms hereof.  In
furtherance, and not by limitation of, the foregoing, it is acknowledged that
each counterparty under a Repledge Transaction (a “Repledgee”), is a repledgee
as contemplated by Sections 9-207 and 9-623 of the UCC (and the relevant
Official Comments thereunder).  Administrative Agent and Buyers are each hereby
authorized to share any information delivered hereunder with the
Repledgee; provided,  that, Administrative Agent or such Buyer will cause such
Repledgee to execute and deliver a non-disclosure agreement agreeing to keep
such information delivered by Administrative Agent or any Buyer to such
Repledgee confidential, on substantially similar terms as set forth in Section
32 of this Agreement.

 

19.       Single Agreement 

 

Administrative Agent, Buyers and Seller acknowledge they have entered hereunto,
and will enter into each Transaction hereunder, in consideration of and in
reliance upon the fact that, all Transactions hereunder constitute a single
business and contractual relationship and have been made in consideration of
each other.  Accordingly, each of Administrative Agent, Buyers and Seller agrees
(i) to perform all of its obligations in respect of each Transaction hereunder,
and that a default in the performance of any such obligations shall constitute a
default by it in respect of all Transactions hereunder, and (ii)  that payments,
deliveries and other transfers made by either of them in respect of any
Transaction shall be deemed to have been made in consideration of payments,
deliveries and other transfers in respect of any other Transactions hereunder,
and the obligations to make any such payments, deliveries and other transfers
may be applied against each other and netted. 

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20.       Notices and Other Communications

 

Any and all notices (with the exception of Transaction Requests, which shall be
delivered via electronic mail or other electronic medium agreed to by the
Administrative Agent and the Seller), 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. In all cases, to the
extent that the related individual set forth in the respective “Attention” line
is no longer employed by the respective Person, such notice may be given to the
attention of a Responsible Officer of the respective Person or to the attention
of such individual or individuals as subsequently notified in writing by a
Responsible Officer of the respective Person.

 

If to Seller or Guarantor:

 

PennyMac Loan Services, LLC

3043 Townsgate Road

Westlake Village, California 91361

Attention: Pamela Marsh/Kevin Chamberlain

Phone Number: (805) 330-6059/(818) 746-2877

E-mail: pamela.marsh@pnmac.com ; kevin.chamberlain@pnmac.com

 

with a copy to:

 

PennyMac Loan Services, LLC

3043 Townsgate Road

Westlake Village, California 91361

Attention: Jeff Grogin

Phone Number: (818) 224-7050

E-mail: jeff.grogin@pnmac.com

 

If to Administrative Agent:

For Transaction Requests:

 

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

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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, New York  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

New York, New York  10010

Attention:  Margaret Dellafera

Phone Number: 212‑325‑6471

Fax Number:  212‑743‑4810

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

 

with a copy to:

 

Credit Suisse First Boston Mortgage Capital LLC

c/o Credit Suisse Securities (USA) LLC

One Madison Avenue, 9th Floor

New York, NY  10010

Attention: Legal Department—RMBS Warehouse Lending

Fax Number: (212) 322‑2376

 

21.       Entire Agreement; Severability

 

This Agreement shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions.  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.

 

22.       Non Assignability

 

a.     Assignments.  The Program Agreements are not assignable by Seller or
Guarantor. Subject to Section 37 (Acknowledgment of Assignment and
Administration of Repurchase Agreement) hereof, the Administrative Agent and
Buyers may from time to time assign all or a portion of their rights and
obligations under this Agreement and the Program Agreements; provided,  that,
unless an Event

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of Default has occurred, (i) an assignment by a Committed Buyer or (ii) an
assignment to a non-Affiliate of Administrative Agent or Buyers, shall, in each
case, require Seller’s prior consent, such consent not to be unreasonably
withheld; provided,  further, that Administrative Agent shall maintain, solely
for this purpose as a non-fiduciary agent of Seller, for review by Seller upon
written request, a register of assignees or participants (the “Register”) and a
copy of an executed assignment and acceptance by Administrative Agent and
assignee (“Assignment and Acceptance”), specifying the percentage or portion of
such rights and obligations assigned.    The entries in the Register shall be
conclusive absent manifest error, and the Seller, Guarantor, Administrative
Agent and Buyers shall treat each Person whose name is recorded in the Register
pursuant to the preceding sentence as a Buyer hereunder. Upon such assignment
and recordation in the Register, (a) such assignee shall be a party hereto and
to each Program Agreement to the extent of the percentage or portion set forth
in the Assignment and Acceptance, and shall succeed to the applicable rights and
obligations of Administrative Agent and Buyers hereunder, as applicable, and
(b) Administrative Agent and Buyers shall, to the extent that such rights and
obligations have been so assigned by them pursuant to this Section, be released
from its obligations hereunder and under the Program Agreements.  Any assignment
hereunder shall be deemed a joinder of such assignee as a Buyer hereto. Unless
otherwise stated in the Assignment and Acceptance, Seller shall continue to take
directions solely from Administrative Agent unless otherwise notified by
Administrative Agent in writing.  Administrative Agent and Buyers may distribute
to any prospective or actual assignee this Agreement, the other Program
Agreements, any document or other information delivered to Administrative Agent
and/or Buyers by Seller.

 

b.     Participations.  Any Buyer may sell participations to one or more Persons
in or to all or a portion of its rights and obligations under this Agreement and
under the Program Agreements; provided,  however, that (i) such Buyer’s
obligations under this Agreement and the other Program Agreements shall remain
unchanged, (ii) such Buyer shall remain solely responsible to the other parties
hereto for the performance of such obligations; and (iii) Seller shall continue
to deal solely and directly with Administrative Agent and/or Buyers in
connection with such Buyer’s rights and obligations under this Agreement and the
other Program Agreements except as provided in Section 7.  Administrative Agent
and Buyers may distribute to any prospective or actual participant this
Agreement, the other Program Agreements any document or other information
delivered to Administrative Agent and/or Buyers by Seller; provided,  that,
 Administrative Agent or Buyers, as applicable, will cause such party to execute
and deliver a non-disclosure agreement whereby such prospective or actual
participant agrees to  keep such information delivered by Administrative Agent
or any Buyer to such party confidential, on substantially similar terms as set
forth in Section 32 of this Agreement.

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23.       Set-off

 

In addition to any rights and remedies of the Administrative Agent and Buyers
hereunder and by law, the Administrative Agent and Buyers 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 a  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 excess margin), 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 a Buyer or any Affiliate thereof to or for the credit or
the account of Seller, Guarantor or any Affiliate thereof. Administrative Agent
agrees promptly to notify the Seller or Guarantor after any such set off and
application made by a Buyer; provided that the failure to give such notice shall
not affect the validity of such set off and application. 

 

24.       Binding Effect; Governing Law; Jurisdiction

 

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 Administrative Agent and Buyers hereunder
or otherwise are not the subject of any guaranty by, or recourse to, any direct
or indirect parent or other Affiliate of Administrative Agent and Buyers.  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 (EXCEPT FOR SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).

 

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 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.

 

25.       No Waivers, Etc.

 

No express or implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any remedy
hereunder by any party shall constitute a waiver of its right to exercise any
other remedy hereunder.  No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom

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shall be effective unless and until such shall be in writing and duly executed
by both of the parties hereto.  Without limitation on any of the foregoing, the
failure to give a notice pursuant to Section 6(a),  16(a) or otherwise, will not
constitute a waiver of any right to do so at a later date.

 

26.       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, a “securities contract” as that term is defined in Section 741 of
Title 11 of the United States Code, as amended, and a “master netting agreement”
as that term is defined in Section 101(38A)(A) of the Bankruptcy Code, that all
payments hereunder are deemed “margin payments” or “settlement payments” as
defined in Title 11 of the United States Code, and that the pledge of the
Repurchase Assets constitutes “a security agreement or other arrangement or
other credit enhancement” that is “related to” the Agreement and Transactions
hereunder within the meaning of Sections 101(38A)(A), 101(47)(A)(v) and
741(7)(A)(xi) of the Bankruptcy Code. Each of Seller, Guarantor, Administrative
Agent and Buyers further recognize and intend that this Agreement is an
agreement to provide financial accommodations and is not subject to assumption
pursuant to Bankruptcy Code Section 365(a). 

 

b.     Administrative Agent’s or a Buyer’s right to liquidate the Purchased
Assets, Repurchase Assets and Mortgage Loans delivered to it in connection with
the Transactions hereunder or to accelerate or terminate this Agreement or
otherwise exercise any other remedies pursuant to Section 16 hereof is a
contractual right to liquidate, accelerate or terminate such Transaction as
described in Bankruptcy Code Sections 555, 559 and 561; any payments or
transfers of property made with respect to this Agreement or any Transaction to
satisfy a Margin Deficit shall be considered a “margin payment” as such term is
defined in Bankruptcy Code Section 741(5).

 

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).

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e.     This Agreement is intended to be a “repurchase agreement” and a
“securities contract,” within the meaning of Section 101(47), Section 555,
Section 559 and Section 741 under the Bankruptcy Code.

 

f.     Each party agrees that this Agreement is intended to create mutuality of
obligations among the parties, and as such, the Agreement constitutes a contract
which (i) is between all of the parties and (ii) places each party in the same
right and capacity.

 

g.     For U.S. federal tax purposes, the Seller, the Guarantor, the
Administrative Agent, each Administrative Agent assignee, the Buyers, and each
Buyer assignee by acquiring an interest in any Transaction agree to treat and
report each Transaction as indebtedness issued by the Seller or the Guarantor as
the case may be, which indebtedness, in the case of each obligor, shall have but
a single maturity for purposes of Code section 7701(i)(2)(A)(ii) and U.S.
Treasury Regulation section 301.7701(i)-1(e).

 

27.       Disclosure Relating to Certain Federal Protections

 

The parties acknowledge that they have been advised that:

 

a.     in the case of Transactions in which one of the parties is a broker or
dealer registered with the SEC under Section 15 of the 1934 Act, the Securities
Investor Protection Corporation has taken the position that the provisions of
the SIPA do not protect the other party with respect to any Transaction
hereunder;

 

b.     in the case of Transactions in which one of the parties is a government
securities broker or a government securities dealer registered with the SEC
under Section 15C of the 1934 Act, SIPA will not provide protection to the other
party with respect to any Transaction hereunder; and

 

c.     in the case of Transactions in which one of the parties is a financial
institution, funds held by the financial institution pursuant to a Transaction
hereunder are not a deposit and therefore are not insured by the Federal Deposit
Insurance Corporation or the National Credit Union Share Insurance Fund, as
applicable.

 

28.       Power of Attorney

 

Seller hereby authorizes Administrative Agent to file such financing statement
or statements relating to the Repurchase Assets as Administrative Agent, at its
option, may deem appropriate.  Seller hereby appoints Administrative Agent as
Seller’s agent and attorney‑in‑fact to execute any such financing statement or
statements in Seller’s name and to perform all other acts which Administrative
Agent deems appropriate to perfect and continue its ownership interest in and/or
the security interest granted hereby, if applicable, and to protect, preserve
and realize upon the Repurchase Assets, including, but not limited to, the right
to endorse notes, complete blanks in documents, transfer servicing, and sign
assignments on behalf of Seller as its agent and attorney‑in‑fact.  This agency
and power of attorney is coupled with an interest and is irrevocable without
Administrative Agent’s consent.  Notwithstanding the foregoing, the power of
attorney

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hereby granted may be exercised only during the occurrence and continuance of
any Default hereunder. Seller shall pay the filing costs for any financing
statement or statements prepared pursuant to this Section 28.  In addition the
foregoing, Seller agrees to execute an amended and restated power of attorney in
the form of Exhibit E hereto (the “Power of Attorney”), to be delivered on the
date hereof.

 

29.       Buyers May Act Through Administrative Agent

 

Each Buyer has designated the Administrative Agent for the purpose of performing
any action hereunder.

 

30.       Indemnification; Obligations

 

a.     Each of Seller and Guarantor agrees to hold Administrative Agent, Buyers
and each of their respective Affiliates and their officers, directors,
employees, agents and advisors (each, an “Indemnified Party”) harmless from and
indemnify each Indemnified Party (and will reimburse each Indemnified Party as
the same is incurred) against all liabilities, losses, damages, judgments, costs
and expenses (including, without limitation, reasonable fees and expenses of
counsel) of any kind which may be imposed on, incurred by, or asserted against
any Indemnified Party relating to or arising out of this Agreement, any
Transaction Request, any Program Agreement or any transaction contemplated
hereby or thereby resulting from anything other than the Indemnified Party’s
gross negligence or willful misconduct.  Each of Seller and Guarantor also
agrees to reimburse each Indemnified Party for all reasonable expenses in
connection with the enforcement of this Agreement and the exercise of any right
or remedy provided for herein, any Transaction Request and any Program
Agreement, including, without limitation, the reasonable fees and disbursements
of counsel.  Seller’s and Guarantor’s agreements in this Section 30 shall
survive the payment in full of the Repurchase Price and the expiration or
termination of this Agreement.  Each of Seller and Guarantor hereby acknowledges
that its obligations hereunder are recourse obligations of Seller and Guarantor
and are not limited to recoveries each Indemnified Party may have with respect
to the Purchased Mortgage Loans.  Each of Seller and Guarantor also agrees not
to assert any claim against Administrative Agent or any of its Affiliates, or
any of their respective officers, directors, employees, attorneys and agents, on
any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the facility established
hereunder, the actual or proposed use of the proceeds of the Transactions, this
Agreement or any of the transactions contemplated thereby.  THE FOREGOING
INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT
LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT)
OF THE INDEMNIFIED PARTIES.

 

b.     Without limitation to the provisions of Section 4, if any payment of the
Repurchase Price of any Transaction is made by Seller other than on the then
scheduled Repurchase Date thereto as a result of an acceleration of the
Repurchase Date pursuant to Section 16 or for any other reason, Seller shall,
upon demand by

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Administrative Agent, pay to Administrative Agent on behalf of Buyers an amount
sufficient to compensate Buyers for any losses, costs or expenses that it may
reasonably incur as of a result of such payment.

 

c.     Without limiting the provisions of Section 30(a) hereof, if Seller fails
to pay when due any costs, expenses or other amounts payable by it under this
Agreement, including, without limitation, fees and expenses of counsel and
indemnities, such amount may be paid on behalf of Seller by Administrative Agent
(subject to reimbursement by Seller), in its sole discretion.

 

31.       Counterparts

 

This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original, and all such counterparts shall together constitute
one and the same instrument. Delivery of an executed counterpart of a signature
page of this Agreement in a Portable Document Format (PDF) or by facsimile shall
be effective as delivery of a manually executed original counterpart of this
Agreement.

 

32.       Confidentiality 

 

a.     This Agreement and its terms, provisions, supplements and amendments, and
notices hereunder, are proprietary to Administrative Agent, Buyers 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 Administrative Agent, Seller or Guarantor, as
applicable, except for (i) disclosure to the disclosing party’s direct and
indirect Affiliates and Subsidiaries, attorneys, accountants, but only to the
extent such disclosure is necessary and such parties agree to hold all
information in strict confidence, (ii)  disclosure required by law, rule,
regulation or order of a court or other regulatory body (“Governmental Order”)
or rating agency in connection with any securities issued by Buyer or an
Affiliate of a Buyer, (iii) disclosure as Administrative Agent and Buyers deem
appropriate in connection with the enforcement of Administrative Agent’s or
Buyers’ rights hereunder or under any Transaction or in connection with working
with Administrative Agent’s and Buyer’s affiliates, Subsidiaries and
representatives in connection with the management and/or review of the
Transactions, (iv) disclosure of any confidential terms that are in the public
domain other than due to a breach of this covenant, and (v) disclosure made to
an assignee, participant, repledgee or any of their direct and indirect
affiliates and Subsidiaries, representatives, attorneys or accountants, but only
to the extent such disclosure is necessary in connection with the transactions
or performing rights or obligations hereunder. Notwithstanding the foregoing or
anything to the contrary contained herein or in any other Program Agreement, 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 Administrative
Agent and Buyers or Agent or any pricing terms (including, without limitation,
the Pricing Rate, Commitment Fee, Purchase Price Percentage and Purchase Price)
or other nonpublic business or financial information (including any sublimits
and financial covenants) that is unrelated to the

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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 the Administrative Agent.

 

b.     Notwithstanding anything in this Agreement to the contrary, Seller shall
comply with all applicable local, state and federal laws, including, without
limitation, all privacy and data protection law, rules and regulations that are
applicable to the Purchased Mortgage Loans 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 Administrative Agent and Buyers or any
Affiliate of Administrative Agent or Buyers 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 Administrative Agent and/or Buyers to confirm that the
providing party has satisfied its obligations as required under this
Section.  Without limitation, this may include Administrative Agent’s or Buyers’
review of audits, summaries of test results, and other equivalent evaluations of
Seller.  Seller shall notify the Administrative Agent immediately following
discovery of any breach or compromise of the security, confidentiality, or
integrity of nonpublic personal information of the customers and consumers of
Administrative Agent, Buyers or any Affiliate of Buyers provided directly to
Seller by Administrative Agent, Buyers or such Affiliate.  Seller shall provide
such notice to Administrative Agent by personal delivery, by facsimile with
confirmation of receipt, or by overnight courier with confirmation of receipt to
the applicable requesting individual.

 

33.       Recording of Communications

 

Administrative Agent, Buyers, Seller and Guarantor shall have the right (but not
the obligation) from time to time to make or cause to be made tape recordings of
communications between its employees and those of the other party with respect
to Transactions.  Administrative Agent, Buyers, Seller and Guarantor consent to
the admissibility of such tape recordings in any court, arbitration, or other
proceedings.  The parties agree that a duly authenticated transcript of such a
tape recording shall be deemed to be a writing conclusively evidencing the
parties’ agreement.

 

34.       Commitment Fee

 

No later than the date hereof, Seller shall pay to Administrative Agent for the
benefit of the Committed Buyers in immediately available funds a non-refundable
Commitment Fee. The Commitment Fee shall be paid in quarterly equal installments
which shall be paid on the date hereof and on the Price Differential Payment
Date every third (3rd) month hereafter.  All

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payments of the Commitment Fee shall be made in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, to Administrative
Agent for the benefit of Committed Buyers at such account designated by
Administrative Agent.  

 

35.       Periodic Due Diligence Review

 

Seller acknowledges that Administrative Agent and Buyers have the right to
perform continuing due diligence reviews with respect to Seller and the Mortgage
Loans, for purposes of verifying compliance with the representations, warranties
and specifications made hereunder, or otherwise, and Seller agrees that upon
reasonable (but no less than one (1) Business Day’s) prior notice unless an
Event of Default shall have occurred, in which case no notice is required, to
Seller, Administrative Agent, Buyers or their authorized representatives will be
permitted during normal business hours to examine, inspect, and make copies and
extracts of, the Mortgage Files and any and all documents, records, agreements,
instruments or information relating to such Mortgage Loans in the possession or
under the control of Seller and/or Custodian.  Seller also shall make available
to Administrative Agent and Buyers a knowledgeable financial or accounting
officer for the purpose of answering questions respecting the Mortgage Files and
the Mortgage Loans.  Without limiting the generality of the foregoing, Seller
acknowledges that Administrative Agent and Buyers may purchase Mortgage Loans
from Seller based solely upon the information provided by Seller to
Administrative Agent and Buyers in the Mortgage Loan Schedule and the
representations, warranties and covenants contained herein, and that
Administrative Agent or Buyers, at their option, have the right at any time to
conduct a partial or complete due diligence review on some or all of the
Mortgage Loans purchased in a Transaction, including, without limitation,
ordering BPOs, new credit reports and new appraisals on the related Mortgaged
Properties and otherwise re-generating the information used to originate such
Mortgage Loan. Administrative Agent or Buyers may underwrite such Mortgage Loans
itself or engage a mutually agreed upon third party underwriter to perform such
underwriting.  Seller agrees to cooperate with Administrative Agent, Buyers and
any third party underwriter in connection with such underwriting, including, but
not limited to, providing Administrative Agent, Buyers and any third party
underwriter with access to any and all documents, records, agreements,
instruments or information relating to such Mortgage Loans in the possession, or
under the control, of Seller.  Seller further agrees that Seller shall pay all
out-of-pocket costs and expenses incurred by Administrative Agent and Buyers in
connection with Administrative Agent’s and Buyers’ activities pursuant to this
Section 35 (“Due Diligence Costs”); provided, that such Due Diligence Costs
shall not exceed the Due Diligence Cap per calendar year unless a Default or
Event of Default shall have occurred, in which event Administrative Agent and
Buyers shall have the right to perform due diligence, at the sole expense of
Seller without regard to the dollar limitation set forth herein.

 

36.       Authorizations    

 

Any of the persons whose signatures and titles appear on Schedule 2 are
authorized, acting singly, to act for Seller or Administrative Agent to the
extent set forth therein, as the case may be, under this Agreement.  The Seller
may amend Schedule 2 from time to time by delivering a revised Schedule 2 to
Administrative Agent and expressly stating that such revised Schedule 2 shall
replace the existing Schedule 2. 

-  74  -

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37.       Acknowledgment of Assignment and Administration of Repurchase
Agreement

 

Pursuant to Section 22  (Non assignability) of this Agreement, Administrative
Agent may sell, transfer and convey or allocate certain Purchased Mortgage
Loans, Purchased Assets and the related Repurchase Assets and related
Transactions to certain affiliates of Administrative Agent and/or one or more CP
Conduits (the “Additional Buyers”).  Seller and Guarantor each hereby
acknowledges and agrees to the joinder of such Additional Buyers.  The
Administrative Agent shall administer the provisions of this Agreement.  For the
avoidance of doubt, all payments, notices, communications and agreements
pursuant to this Agreement shall be delivered to, and entered into by, the
Administrative Agent for the benefit of the Buyers and/or the Repledgees, as
applicable.  Furthermore, to the extent that the Administrative Agent exercises
remedies pursuant to this Agreement, any of the Administrative Agent and/or any
Buyer will have the right to bid on and/or purchase any of the Repurchase Assets
pursuant to Section 16  (Remedies Upon Default).  The benefit of all
representations, rights, remedies and covenants set forth in the Agreement shall
inure to the benefit of the Administrative Agent on behalf of each Buyer and
Repledgees, as applicable.  All provisions of the Agreement shall survive the
transfers contemplated herein (including any Repledge
Transactions).  Notwithstanding that multiple Buyers may purchase individual
Mortgage Loans subject to Transactions entered into under this Agreement, all
Transactions shall continue to be deemed a single Transaction and all of the
Repurchase Assets shall be security for all of the Obligations hereunder.

 

38.       Acknowledgement of Anti-Predatory Lending Policies

 

Administrative Agent has in place internal policies and procedures that
expressly prohibit its purchase of any High Cost Mortgage Loan.

 

39.       Documents Mutually Drafted

 

The Seller, the Guarantor, the Administrative Agent and the Buyers agree that
this Agreement and each other Program Agreement prepared in connection with the
Transactions set forth herein have been mutually drafted and negotiated by each
party, and consequently such documents shall not be construed against either
party as the drafter thereof.

 

40.       General Interpretive Principles

 

For purposes of this Agreement, except as otherwise expressly provided or unless
the context otherwise requires:

 

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

 

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

-  75  -

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

 

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

 

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

 

f.     the term “include” or “including” shall mean without limitation by reason
of enumeration;

 

g.     all times specified herein or in any other Program Agreement  (unless
expressly specified otherwise) are local times in New York, New York unless
otherwise stated; and

 

h.     all references herein or in any Program Agreement to "good faith" means
good faith as defined in Section 5-102(7) of the UCC as in effect in the State
of New York.

 

41.       Conflicts

 

In the event of any conflict between the terms of this Agreement and any other
Program Agreement, the documents shall control in the following order of
priority:  first, the terms of the Pricing Side Letter shall prevail, then the
terms of this Agreement shall prevail, and then the terms of the other Program
Agreements shall prevail.

 

42.       Bankruptcy Non-Petition

 

The parties hereby agree that they shall not institute against, or join any
other person in instituting against, any Buyer that is a CP Conduit any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any federal or state bankruptcy or similar law, for
one year and one day after the latest maturing commercial paper note issued by
the applicable CP Conduit is paid in full.

 

43.       Limited Recourse

 

The obligations of each Buyer under this Agreement or any other Program
Agreement are solely the corporate obligations of such Buyer. No recourse shall
be had for the payment of any amount owing by any Buyer under this Agreement, or
for the payment by any Buyer of any fee in respect hereof or any other
obligation or claim of or against such Buyer arising out of or based on this
Agreement, against any stockholder, partner, member, employee, officer, director
or incorporator or other authorized person of such Buyer. In addition,
notwithstanding any other provision of this Agreement, the Parties agree that
all payment obligations of any Buyer that is a CP Conduit under this Agreement
shall be limited recourse obligations of such Buyer, payable solely from the
funds of such Buyer available for such purpose in accordance with its commercial
paper program documents. Each party waives payment of any amount which such
Buyer does not

-  76  -

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pay pursuant to the operation of the preceding sentence until the day which is
at least one year and one day after the payment in full of the latest maturing
commercial paper note (and waives any "claim" against such Buyer within the
meaning of Section 101(5) of the Bankruptcy Code or any other Debtor Relief Law
for any such insufficiency until such date).

 

44.       Amendment and Restatement

 

Administrative Agent, Seller and Guarantor previously entered into the Existing
Master Repurchase Agreement.  Administrative Agent, Seller and Guarantor desire
to enter into this Agreement in order to amend and restate the Existing Master
Repurchase Agreement in its entirety.  The amendment and restatement of the
Existing Master Repurchase Agreement shall become effective on the date hereof,
and each of Administrative Agent, Seller and Guarantor shall hereafter be bound
by the terms and conditions of this Agreement and the other Program Agreements. 
This Agreement amends and restates the terms and conditions of the Existing
Master Repurchase Agreement, and is not a novation of any of the agreements or
obligations incurred pursuant to the terms of the Existing Master Repurchase
Agreement.  Accordingly, all of the agreements and obligations incurred pursuant
to the terms of the Existing Master Repurchase Agreement are hereby ratified and
affirmed by the parties hereto and remain in full force and effect.   For the
avoidance of doubt, it is the intent of the Administrative Agent, Seller and
Guarantor that the security interests and liens granted in the Purchased
Mortgage Loans pursuant to Section 8 of the Existing Master Repurchase Agreement
shall continue in full force and effect.  All references to the Existing Master
Repurchase Agreement in any Program Agreement or other document or instrument
delivered in connection therewith shall be deemed to refer to this Agreement and
the provisions hereof.

 

45.       Reaffirmation of Guaranty.

 

Guarantor hereby (i) agrees that the liability of Guarantor or rights of
Administrative Agent under the Guaranty shall not be affected as a result of
amending and restating this Agreement, (ii) ratifies and affirms all of the
terms, covenants, conditions and obligations of the Guaranty and (iii)
acknowledges and agrees that such Guaranty is and shall continue to be in full
force and effect.

 

[Signature Page Follows]

 

 

-  77  -

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the date first above written.

 

 

Credit Suisse First Boston

 

 

Mortgage Capital LLC, as

 

 

Administrative Agent

 

 

 

 

 

By:

/s/ Margaret Dellafera

 

 

Name: Margaret Dellafera

 

 

Title:    Vice President

 

 

 

CREDIT SUISSE AG, CAYMAN

 

ISLANDS BRANCH, as a Committed

 

Buyer and as a Buyer

 

 

 

 

 

By:

/s/ Chris Fera

 

 

Name: Chris Fera

 

 

Title:   Authorized Signatory

 

 

 

 

 

By:

/s/ Elie Chau

 

 

Name: Elie Chau

 

 

Title:    Authorized Signatory

 

 

 

ALPINE SECURITIZATION LTD, as a

 

Buyer, by Credit Suisse AG, New York

 

Branch as Attorney-in-Fact

 

 

 

By:

/s/ Chris Fera

 

 

Name: Chris Fera

 

 

Title:   Authorized Signatory

 

 

 

By:

/s/ Elie Chau

 

 

Name: Elie Chau

 

 

Title:    Authorized Signatory

Signature Page to Third Amended and Restated Master Repurchase Agreement

--------------------------------------------------------------------------------

 

 

 

 

PENNYMAC LOAN SERVICES, LLC, as

 

 

Seller

 

 

 

 

 

By:

/s/ Pamela Marsh

 

 

Name: Pamela Marsh

 

 

Title: Managing Director, Treasurer

 

 

 

 

 

PRIVATE NATIONAL MORTGAGE

 

 

ACCEPTANCE COMPANY, LLC, as

 

 

Guarantor

 

 

 

 

 

By:

/s/ Pamela Marsh

 

 

Name: Pamela Marsh

 

 

Title: Managing Director, Treasurer

 

 

 

Signature Page to Third Amended and Restated Master Repurchase Agreement

--------------------------------------------------------------------------------

 

 

SCHEDULE 1-A

 

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO PURCHASED

MORTGAGE LOANS

 

 

Seller makes the following representations and warranties to Administrative
Agent with respect to each Purchased Mortgage Loan that is at all times subject
to a Transaction hereunder and at all times while the Program Agreements and any
Transaction hereunder is in full force and effect.  With respect to those
representations and warranties which are made to the best of a Seller’s
knowledge, if it is discovered by such Seller or Administrative Agent that the
substance of such representation and warranty is inaccurate, notwithstanding
such Seller’s lack of knowledge with respect to the substance of such
representation and warranty, such inaccuracy shall be deemed a breach of the
applicable representation and warranty for purposes of determining Asset Value.

 

(a)     Payments Current.  Except with respect to a Mortgage Loan that is a GNMA
EBO, all payments required to be made up to the Purchase Date for the Mortgage
Loan under the terms of the Mortgage Note have been made and credited.  Except
with respect to a Mortgage Loan that is a GNMA EBO, no payment required under
the Mortgage Loan is delinquent nor has any payment under the Mortgage Loan been
delinquent at any time since the origination of the Mortgage Loan and, if the
Mortgage Loan is a Co-op Loan, no foreclosure action or private or public sale
under the Uniform Commercial Code has ever to the knowledge of Seller, been
threatened or commenced with respect to the Co-op Loan.  The first Monthly
Payment shall be made, or shall have been made, with respect to the Mortgage
Loan on its Due Date or within the grace period, all in accordance with the
terms of the related Mortgage Note.  

 

(b)     No Outstanding Charges.  All taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and
payable.  Neither Seller nor the Qualified Originator from which Seller acquired
the Mortgage Loan has advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required under the Mortgage Loan,
except for interest accruing from the date of the Mortgage Note or date of
disbursement of the proceeds of the Mortgage Loan, whichever is earlier, to the
day which precedes by one month the Due Date of the first installment of
principal and/or interest thereunder.

 

(c)     Original Terms Unmodified.  The terms of the Mortgage Note (and the
Proprietary Lease, the Assignment of Proprietary Lease and Stock Power with
respect to each Co-op Loan) and Mortgage have not been impaired, waived, altered
or modified in any respect, from the date of origination; except (i) by a
written instrument which has been recorded, if necessary to protect the
interests of Buyers, and which has been delivered to Custodian and the terms of
which are reflected in the Custodial Mortgage Loan Schedule and (ii) with
respect to  a Mortgage Loan that is a GNMA EBO.  The substance of any such
waiver, alteration or modification has been approved by the title insurer, to
the extent required, and its terms are reflected on the Custodial

Schedule 1-A-1

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Mortgage Loan Schedule.  No Mortgagor in respect of the Mortgage Loan has been
released, in whole or in part, except in connection with an assumption agreement
approved by the title insurer, to the extent required by such policy, and which
assumption agreement is part of the Mortgage File delivered to Custodian and the
terms of which are reflected in the Custodial Mortgage Loan Schedule.   

 

(d)     No Defenses.  The Mortgage Loan (and the Assignment of Proprietary Lease
related to each Co-op Loan) 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 the Mortgage Note or the Mortgage,
or the exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto, and no
Mortgagor in respect of the Mortgage Loan was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated.  Seller has no knowledge nor has it received any notice that any
Mortgagor in respect of the Mortgage Loan is a debtor in any state or federal
bankruptcy or insolvency proceeding.

 

(e)     Hazard Insurance.  The Mortgaged Property is insured by a fire and
extended perils insurance policy, issued by a Qualified Insurer, and such other
hazards as are customary in the area where the Mortgaged Property is located,
and to the extent required by Seller as of the date of origination consistent
with the Underwriting Guidelines, against earthquake and other risks insured
against by Persons operating like properties in the locality of the Mortgaged
Property, in an amount not less than the greatest of (i) 100% of the replacement
cost of all improvements to the Mortgaged Property, (ii) the outstanding
principal balance of the Mortgage Loan, (iii) the amount necessary to avoid the
operation of any co-insurance provisions with respect to the Mortgaged Property,
or (iv) with respect to a GNMA EBO, the BPO Value, and consistent with the
amount that would have been required as of the date of origination in accordance
with the Underwriting Guidelines.  If any portion of the Mortgaged Property is
in an area identified by any federal Governmental Authority as having special
flood hazards, and flood insurance is available, a flood insurance policy
meeting the current guidelines of the Federal Emergency Management Agency is in
effect with a generally acceptable insurance carrier, in an amount representing
coverage not less than the least of (1) the outstanding principal balance of the
Mortgage Loan (2) the full insurable value of the Mortgaged Property, and
(3) the maximum amount of insurance available under the National Flood Insurance
Act of 1968, as amended by the Flood Disaster Protection Act of 1973.  All such
insurance policies (collectively, the “hazard insurance policy”) contain a
standard mortgagee clause naming Seller, its successors and assigns (including,
without limitation, subsequent owners of the Mortgage Loan), as mortgagee, and
may not be reduced, terminated or canceled without 30 days’ prior written notice
to the mortgagee.  No such notice has been received by Seller.  All premiums on
such insurance policy have been paid.  The related Mortgage obligates the
Mortgagor to maintain all such insurance and, at such Mortgagor’s failure to do
so, authorizes the mortgagee to maintain such insurance at the Mortgagor’s cost
and expense and to seek reimbursement therefor from such Mortgagor.  Where
required by state law or regulation, the Mortgagor has been given an opportunity
to choose the carrier of the required hazard insurance, provided the policy is
not a “master” or “blanket” hazard insurance policy covering a condominium, or
any hazard insurance policy covering the common facilities of a planned unit
development.  The hazard insurance policy is the valid and binding obligation of
the insurer and is in full force and effect.  Seller has not engaged in, and has
no knowledge of the

Schedule 1-A-2

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Mortgagor’s having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other Person, and no such unlawful items have been received,
retained or realized by Seller.

 

(f)     Compliance with Applicable Laws.  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 or disclosure laws applicable to the Mortgage Loan have
been complied with, the consummation of the transactions contemplated hereby
will not involve the violation of any such laws or regulations, and Seller shall
maintain or shall cause its agent to maintain in its possession, available for
the inspection of Administrative Agent, and shall deliver to Administrative
Agent, upon demand, evidence of compliance with all such requirements.

 

(g)     No Satisfaction of Mortgage.  The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would affect any such release,
cancellation, subordination or rescission.  Except with respect to a Mortgage
Loan that is a GNMA EBO, Seller has not waived the performance by the Mortgagor
of any action, if the Mortgagor’s failure to perform such action would cause the
Mortgage Loan to be in default, nor has Seller waived any default resulting from
any action or inaction by the Mortgagor. 

 

(h)     Location and Type of Mortgaged Property.  The Mortgaged Property is
located in an Acceptable State as identified in the Custodial Mortgage Loan
Schedule and, other than the Freddie Mac SBL Loans, consists of a single parcel
of real property with a detached single family residence erected thereon, or a
two- to four-family dwelling, or an individual condominium unit in a low‑rise
Co-op Project, or such other dwelling(s) conforming with the applicable Fannie
Mae and Freddie Mac requirements,  and, with respect to Freddie Mac SBL
Loans, consists of a single parcel of real property with a multi-family
residence erected thereon conforming with the Freddie Mac Guide, regarding such
dwellings or conforming to underwriting guidelines acceptable to Administrative
Agent in its sole discretion; provided that no residence or dwelling is a mobile
home.  No portion of the Mortgaged Property is used for commercial purposes;
provided, that, the Mortgaged Property may be a mixed use property if such
Mortgaged Property conforms to underwriting guidelines acceptable to
Administrative Agent in its sole discretion.

 

(i)     Valid First Lien.  The Mortgage is a valid, subsisting, enforceable and
perfected first priority lien and first priority security interest, in each
case, on the real property included in the Mortgaged Property, including all
buildings on the Mortgaged Property.  The appraisal of the Mortgaged Property
does not list any material repair or maintenance items.  The lien of the
Mortgage is subject only to:

 

a.     the lien of current real property taxes and assessments not yet due and
payable;

Schedule 1-A-3

--------------------------------------------------------------------------------

 

 

b.     covenants, conditions and restrictions, rights of way, easements and
other matters of the public record as of the date of recording acceptable to
prudent mortgage lending institutions generally and specifically referred to in
lender’s title insurance policy delivered to the originator of the Mortgage Loan
and (a) referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such appraisal; and

 

c.     other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property.

 

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable first lien and first priority security interest on
the property described therein and Seller has full right to pledge and assign
the same to Administrative Agent.  The Mortgaged Property was not, as of the
date of origination of the Mortgage Loan, subject to a mortgage, deed of trust,
deed to secure debt or other security instrument creating a lien subordinate to
the lien of the Mortgage.

 

(j)     Validity of Mortgage Documents.  The Mortgage Note and the Mortgage and
any other agreement executed and delivered by a Mortgagor or guarantor, if
applicable, in connection with a Mortgage Loan, and all signatures thereon, are
genuine, and each such document is the legal, valid and binding obligation of
the maker thereof enforceable in accordance with its terms.  All parties to the
Mortgage Note, the Mortgage and any other such related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note, the Mortgage and any such agreement, and the Mortgage Note, the Mortgage
and any other such related agreement have been duly and properly executed by
such related parties.  No fraud, error, omission, misrepresentation, negligence
or similar occurrence with respect to a Mortgage Loan has taken place on the
part of any Person, including, without limitation, the Mortgagor, any appraiser,
any builder or developer, or any other party involved in the origination of the
Mortgage Loan.  Seller has reviewed all of the documents constituting the
Mortgage File and has made such inquiries as it deems necessary to make and
confirm the accuracy of the representations set forth herein.  To the best of
Seller’s knowledge, except as disclosed to Administrative Agent in writing, all
tax identifications and property descriptions are legally sufficient; and tax
segregation, where required, has been completed.  Such Purchased Mortgage Loan
is a “closed” loan fully funded by Seller and held in Seller’s name.

 

(k)     Full Disbursement of Proceeds.  There is no further requirement for
future advances under the Mortgage Loan, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with.  All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage.

 

(l)     Ownership.  Seller has full right to sell the Mortgage Loan to Buyers
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 sell
each Mortgage Loan pursuant to this Agreement and following the

Schedule 1-A-4

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sale of each Mortgage Loan, Buyers will own such Mortgage Loan (and with respect
to any Co-op Loan, the sole owner of the related Assignment of Proprietary
Lease) free and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest except any such security interest
created pursuant to the terms of this Agreement.

 

(m)     Doing Business.  All parties which have had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) (i) in compliance
with any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located, and (ii) either (A) organized under
the laws of such state, (B) qualified to do business in such state, (C) a
federal savings and loan association, a savings bank or a national bank having a
principal office in such state, or (D) not doing business in such state.

 

(n)     Title Insurance.  The Mortgage Loan is covered by either (i) an
attorney’s opinion of title and abstract of title, the form and substance of
which is acceptable to prudent mortgage lending institutions making mortgage
loans in the area wherein the Mortgaged Property is located or (ii) an ALTA
lender’s title insurance policy or other generally acceptable form of policy or
insurance acceptable to Administrative Agent with respect to Non-Agency QM
Mortgage Loans and Fannie Mae or Freddie Mac with respect to Mortgage Loans,
other than Non-Agency QM Mortgage Loans and each such title insurance policy is
issued by a title insurer acceptable Administrative Agent with respect to
Non-Agency QM Mortgage Loans and Fannie Mae or Freddie Mac with respect to
Mortgage Loans, other than Non-Agency QM Mortgage Loans and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
Seller, its successors and assigns, as to the first priority lien of the
Mortgage, in the original principal amount of the Mortgage Loan, with respect to
a Mortgage Loan, subject only to the exceptions acceptable to Administrative
Agent with respect to Non-Agency QM Mortgage Loans and Fannie Mae or Freddie Mac
with respect to Mortgage Loans, other than Non-Agency QM Mortgage Loans. Seller,
its successors and assigns, are the sole insureds of such lender’s title
insurance policy, and such lender’s title insurance policy is valid and remains
in full force and effect and will be in force and effect upon the consummation
of the transactions contemplated by this Agreement. No claims have been made
under such lender’s title insurance policy, and no prior holder or servicer of
the related Mortgage, including Seller, has done, by act or omission, anything
which would impair the coverage of such lender’s title insurance policy,
including without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other Person, and no such unlawful
items have been received, retained or realized by Seller.

 

(o)     No Defaults.  Except with respect to a Mortgage Loan that is a GNMA EBO,
there is no default, breach, violation or event of acceleration existing under
the Mortgage or the Mortgage Note and no event has occurred 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, and
neither Seller nor its predecessors have waived any default, breach, violation
or event of acceleration; and with respect to each Co-op Loan, there is no
default in complying with the terms of the Mortgage Note, the Assignment of
Proprietary Lease and the Proprietary Lease and all maintenance charges and
assessments (including assessments payable in the future installments, which
previously became due and owing) have been paid, and Seller has the right

Schedule 1-A-5

--------------------------------------------------------------------------------

 

 

under the terms of the Mortgage Note, Assignment of Proprietary Lease and
Recognition Agreement to pay any maintenance charges or assessments owed by the
Mortgagor. 

 

(p)     No Mechanics’ Liens.  There are no mechanics’ or similar liens or claims
which have been filed for work, labor or material (and no rights are outstanding
that under the law could give rise to such liens) affecting the Mortgaged
Property which are or may be liens prior to, or equal or coordinate with, the
lien of the Mortgage.

 

(q)     Location of Improvements; No Encroachments.  All improvements which were
considered in determining the Appraised Value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property.  No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning and building law, ordinance or
regulation.

 

(r)     Origination; Payment Terms.  The Mortgage Loan was originated by or in
conjunction with a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or similar banking institution which is supervised and
examined by a federal or state authority.  Principal and/or interest payments on
the Mortgage Loan commenced no more than 60 days after funds were disbursed in
connection with the Mortgage Loan.  The Mortgagor contributed from their own
funds to the purchase price for the Mortgaged Property, as required by the
applicable Agency. With respect to adjustable rate Mortgage Loans, the Mortgage
Interest Rate is adjusted on each Interest Rate Adjustment Date to equal the
Index plus the Gross Margin (rounded up or down to the nearest .125%), subject
to the Mortgage Interest Rate Cap. The Mortgage Note is payable on the first day
of each month in equal monthly installments of principal and/or interest
(subject to an “interest-only” period in the case of Interest Only Loans), which
installments of interest (a) with respect to adjustable rate Mortgage Loans are
subject to change on the Interest Rate Adjustment Date due to adjustments to the
Mortgage Interest Rate on each Interest Rate Adjustment Date and (b) with
respect to Interest Only Loans are subject to change on the Interest Only
Adjustment Date due to adjustments to the Mortgage Interest Rate on each
Interest Only Adjustment Date, in both cases, with interest calculated and
payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated
maturity date, over an original term of not more than 30 years from commencement
of amortization.  The Due Date of the first payment under the Mortgage Note is
no more than 60 days from the date of the Mortgage Note.  

 

(s)     Customary Provisions.  The Mortgage Note has a stated maturity.  The
Mortgage contains customary and enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security provided thereby. There
is no homestead or other exemption or other right available to the Mortgagor or
any other person, or restriction on Seller or any other person, including
without limitation, any federal, state or local, law, ordinance, decree,
regulation, guidance, attorney general action, or other pronouncement, whether
temporary or permanent in nature, that would interfere with, restrict or delay,
either (y) the ability of Seller, Administrative Agent, a Buyer or any servicer
or any successor servicer to sell the related Mortgaged Property at a trustee's
sale or otherwise, or (z) the ability of Seller, Administrative Agent, a Buyer
or any servicer or any successor servicer

Schedule 1-A-6

--------------------------------------------------------------------------------

 

 

to foreclose on the related Mortgage. The Mortgage Note and Mortgage are on
forms acceptable to Freddie Mac or Fannie Mae.

 

(t)     Occupancy of the Mortgaged Property.  As of the Purchase Date the
Mortgaged Property is lawfully occupied under applicable law.  All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities.  Seller has not received notification from any
Governmental Authority that the Mortgaged Property is in material non-compliance
with such laws or regulations, is being used, operated or occupied unlawfully or
has failed to have or obtain such inspection, licenses or certificates, as the
case may be.  Seller has not received notice of any violation or failure to
conform with any such law, ordinance, regulation, standard, license or
certificate.  With respect to any Mortgage Loan originated with an
“owner-occupied” Mortgaged Property, the Mortgagor represented at the time of
origination of the Mortgage Loan that the Mortgagor would occupy the Mortgaged
Property as the Mortgagor’s primary residence.

 

(u)     No Additional Collateral.  The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding Mortgage and the
security interest of any applicable security agreement or chattel mortgage
referred to in clause (i) above.

 

(v)     Deeds of Trust.  In the event the Mortgage constitutes a deed of trust,
a trustee, authorized and duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by Custodian or
Administrative Agent to the trustee under the deed of trust, except in
connection with a trustee’s sale after default by the Mortgagor.

 

(w)     Transfer of Mortgage Loans.  Except with respect to Mortgage Loans
intended for purchase by GNMA and for Mortgage Loans registered with MERS, the
Assignment of Mortgage is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is located.

 

(x)     Due-On-Sale.  Except with respect to Mortgage Loans originated pursuant
to FHA Guidelines, the Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder.

 

(y)     No Buydown Provisions; No Graduated Payments or Contingent
Interests.  Except with respect to Agency Mortgage Loans, the Mortgage Loan does
not contain provisions pursuant to which Monthly Payments are paid or partially
paid with funds deposited in any separate account established by Seller, the
Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other
than the Mortgagor nor does it contain any other similar provisions which may
constitute a “buydown” provision.  The Mortgage Loan is not a graduated payment
mortgage loan and the Mortgage Loan does not have a shared appreciation or other
contingent interest feature.

 

(z)     Consolidation of Future Advances.  Any future advances made to the
Mortgagor prior to the Purchase Date have been consolidated with the outstanding
principal

Schedule 1-A-7

--------------------------------------------------------------------------------

 

 

amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term.  The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having first lien priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee’s consolidated interest or by other title evidence
acceptable to Fannie Mae and Freddie Mac.  The consolidated principal amount
does not exceed the original principal amount of the Mortgage Loan.

 

(aa)     No Condemnation Proceeding.  There have not been any condemnation
proceedings with respect to the Mortgaged Property and Seller has no knowledge
of any such proceedings.

 

(bb)     Origination; Collection Practices; Escrow Deposits; Interest Rate
Adjustments.  Each Mortgage Loan was originated by Seller or a Correspondent
Seller.  The origination and collection practices used by Seller or
Correspondent Seller as originator, each servicer of the Mortgage Loan and
Seller with respect to the Mortgage Loan have been in all respects in compliance
with Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper.  With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, Seller and there exist no deficiencies in connection therewith for
which customary arrangements for repayment thereof have not been made.  All
Escrow Payments have been collected in full compliance with state and federal
law.  An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains unpaid
and has been assessed but is not yet due and payable.  No escrow deposits or
Escrow Payments or other charges or payments due Seller or a Correspondent
Seller have been capitalized under the Mortgage or the Mortgage Note.  All
Mortgage Interest Rate adjustments have been made in strict compliance with
state and federal law and the terms of the related Mortgage Note.  Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited.

 

(cc)     Servicemembers Civil Relief Act.  The Mortgagor has not notified
Seller, and Seller has no knowledge, of any relief requested or allowed to the
Mortgagor under the Servicemembers Civil Relief Act of 2003.

 

(dd)     Appraisal.  The Mortgage File contains either (i) to the extent
permitted by the applicable Agency, a Property Inspection Waiver (as defined in
the applicable Agency guidelines) or (ii) an appraisal of the related Mortgaged
Property signed prior to the funding of the Mortgage Loan by a qualified
appraiser, duly appointed by Seller, who had no interest, direct or indirect in
the Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan, and the appraisal and appraiser both satisfy the requirements of Fannie
Mae or Freddie Mac and Title XI of the Federal Institutions Reform, Recovery,
and Enforcement Act of 1989 as amended and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated.

 

(ee)     Disclosure Materials.  The Mortgagor has executed a statement to the
effect that the Mortgagor has received all disclosure materials required by
applicable law with respect to the making of adjustable rate mortgage loans, and
Seller maintains such statement in the Mortgage File.

Schedule 1-A-8

--------------------------------------------------------------------------------

 

 

(ff)     Construction or Rehabilitation of Mortgaged Property.  No Mortgage Loan
was made in connection with the construction or rehabilitation of a Mortgaged
Property or facilitating the trade-in or exchange of a Mortgaged Property.

 

(gg)     Capitalization of Interest.  The Mortgage Note does not by its terms
provide for the capitalization or forbearance of interest.

 

(hh)     No Equity Participation.  No document relating to the Mortgage Loan
provides for any contingent or additional interest in the form of participation
in the cash flow of the Mortgaged Property or a sharing in the appreciation of
the value of the Mortgaged Property.  The indebtedness evidenced by the Mortgage
Note is not convertible to an ownership interest in the Mortgaged Property or
the Mortgagor and Seller has not financed nor does it own directly or
indirectly, any equity of any form in the Mortgaged Property or the Mortgagor.

 

(ii)     Proceeds of Mortgage Loan.  The proceeds of the Mortgage Loan have not
been and shall not be used to satisfy, in whole or in part, any debt owed or
owing by the Mortgagor to Seller or any Affiliate or correspondent of Seller,
except in connection with a refinanced Mortgage Loan.

 

(jj)     Origination Date. The Purchase Date for a Mortgage Loan other than a
Correspondent Loan, Scratch and Dent Mortgage Loan or a GNMA EBO is no more than
thirty (30) days following the origination date and the Purchase Date for a
Correspondent Loan is no more than one hundred eighty (180) days following the
origination date. 

 

(kk)     Mortgage Submitted for Recordation.  The Mortgage either has been or
will promptly be submitted for recordation in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is located.

 

(ll)     Other Encumbrances.  To the best of Seller’s knowledge, any property
subject to any security interest given in connection with such Purchased
Mortgage Loan is not subject to any other encumbrances other than a stated first
mortgage, if applicable, and encumbrances which may be allowed under the Fannie
Mae Single-Family Selling and Servicing Guide, the Freddie Mac Single-Family
Seller/Servicer Guide or the Freddie Mac Multifamily Seller/Servicer Guide.

 

(mm)     Description.  Each Purchased Mortgage Loan conforms to the description
thereof as set forth on the related Custodial Mortgage Loan Schedule delivered
to Custodian and Administrative Agent.

 

(nn)     Located in U.S.  No collateral (including, without limitation, the
related real property and the dwellings thereon and otherwise) relating to a
Purchased Mortgage Loan is located in any jurisdiction other than in one of the
fifty (50) states of the United States of America or the District of Columbia.

 

(oo)     Underwriting Guidelines.  Each Purchased Mortgage Loan has been
originated in accordance with the Underwriting Guidelines (including all
supplements or amendments thereto) previously provided to Administrative Agent.

Schedule 1-A-9

--------------------------------------------------------------------------------

 

 

(pp)     Committed Mortgage Loans.  Each Committed Mortgage Loan is covered by a
Take-out Commitment, does not exceed the availability under such Take-out
Commitment (taking into consideration mortgage loans which have been purchased
by the respective Take-out Investor under the Take-out Commitment and mortgage
loan which Seller has identified to Administrative Agent as covered by such
Take-out Commitment) and conforms to the requirements and the specifications set
forth in such Take-out Commitment and the related regulations, rules,
requirements and/or handbooks of the applicable Take-out Investor and is
eligible for sale to and insurance or guaranty by, respectively the applicable
Take-out Investor and applicable insurer.  Each Take-out Commitment is a legal,
valid and binding obligation of Seller enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

 

(qq)     Primary Mortgage Guaranty Insurance.  Each Mortgage Loan is insured as
to payment defaults by a policy of primary mortgage guaranty insurance in the
amount required where applicable, and by an insurer approved, by the applicable
Take-out Investor, if applicable, and all provisions of such primary mortgage
guaranty insurance have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid.  Each Mortgage
Loan which is represented to Administrative Agent to have, or to be eligible
for, FHA insurance is insured, or eligible to be insured, pursuant to the
National Housing Act.  Each Mortgage Loan which is represented by Seller to be
guaranteed, or to be eligible for guaranty, by the VA is guaranteed, or eligible
to be guaranteed, under the provisions of Chapter 37 of Title 38 of the United
States Code.  As to each FHA insurance certificate or each VA guaranty
certificate, Seller has complied with applicable provisions of the insurance for
guaranty contract and federal statutes and regulations, all premiums or other
charges due in connection with such insurance or guarantee have been paid, there
has been no act or omission which would or may invalidate any such insurance or
guaranty, and the insurance or guaranty is, or when issued, will be, in full
force and effect with respect to each Mortgage Loan.  There are no defenses,
counterclaims, or rights of setoff affecting the Mortgage Loans or affecting the
validity or enforceability of any private mortgage insurance or FHA insurance
applicable to the Mortgage Loans or any VA guaranty with respect to the Mortgage
Loans.

 

(rr)     Predatory Lending Regulations; High Cost Loans.  None of the Mortgage
Loans are classified as High Cost Mortgage Loans.

 

(ss)     Wet-Ink Mortgage Loans.  With respect to each Mortgage Loan that is a
Wet-Ink Mortgage Loan, the Settlement Agent has been instructed in writing by
Seller to hold the related Mortgage Loan Documents as agent and bailee for
Administrative Agent or Administrative Agent agent and to promptly forward such
Mortgage Loan Documents in accordance with the provisions of the Custodial
Agreement and the Escrow Instruction Letter.

 

(tt)     FHA Mortgage Insurance; VA Loan Guaranty.  With respect to the FHA
Loans, the FHA Mortgage Insurance Contract is in full force and effect and there
exists no impairment to full recovery without indemnity to the Department of
Housing and Urban Development or the FHA under FHA Mortgage Insurance.  With
respect to the VA Loans, the VA Loan Guaranty Agreement is in full force and
effect to the maximum extent stated therein.  All

Schedule 1-A-10

--------------------------------------------------------------------------------

 

 

necessary steps have been taken to keep such guaranty or insurance valid,
binding and enforceable and each of such is the binding, valid and enforceable
obligation of the FHA and the VA, respectively, to the full extent thereof,
without surcharge, set-off or defense.  Each FHA Loan and VA Loan was originated
in accordance with the criteria of an Agency for purchase of such Mortgage
Loans.

 

(uu)     Negative Amortization.  None of the Mortgage Notes relating to any of
the Mortgage Loans provides for negative amortization.

 

(vv)     Second Lien; Non-Agency QM Mortgage Loans. None of the Mortgage Loans
is a second lien Mortgage Loan or, except with respect to a Non-Agency QM
Mortgage Loan, an “A” quality first lien Mortgage Loan that is not eligible for
sale to an Agency. 

 

(ww)     Co-op Loan: Valid First Lien.  With respect to each Co-op Loan, the
related Mortgage is a valid, enforceable and subsisting first security interest
on the related cooperative shares securing the related cooperative note and
lease, subject only to (a) liens of the cooperative for unpaid assessments
representing the Mortgagor’s pro rata share of the cooperative’s payments for
its blanket mortgage, current and future real property taxes, insurance
premiums, maintenance fees and other assessments to which like collateral is
commonly subject and (b) other matters to which like collateral is commonly
subject which do not materially interfere with the benefits of the security
intended to be provided by the security interest.  There are no liens against or
security interests in the cooperative shares relating to each Co-op Loan (except
for unpaid maintenance, assessments and other amounts owed to the related
cooperative which individually or in the aggregate will not have a material
adverse effect on such Co-op Loan), which have priority equal to or over
Seller’s security interest in such Co-op Shares.

 

(xx)     Co-op Loan: Compliance with Law.  With respect to each Co-op Loan, the
related cooperative corporation that owns title to the related cooperative
apartment building is a “cooperative housing corporation” within the meaning of
Section 216 of the Internal Revenue Code, and is in material compliance with
applicable federal, state and local laws which, if not complied with, could have
a material adverse effect on the Mortgaged Property.

 

(yy)     Co-op Loan: No Pledge.  With respect to each Co-op Loan, there is no
prohibition against pledging the shares of the cooperative corporation or
assigning the Proprietary Lease. With respect to each Co-op Loan, (i) the term
of the related Proprietary Lease is longer than the term of the Co-op Loan, (ii)
there is no provision in any Proprietary Lease which requires the Mortgagor to
offer for sale the Co-op Shares owned by such Mortgagor first to the Co-op
Corporation, (iii) there is no prohibition in any Proprietary Lease against
pledging the Co-op Shares or assigning the Proprietary Lease and (iv) the
Recognition Agreement is on a form of agreement published by Aztech Document
Systems, Inc. as of the date hereof or includes provisions which are no less
favorable to the lender than those contained in such agreement.

 

(zz)     Co-op Loan: Acceleration of Payment.  With respect to each Co-op Loan,
each Assignment of Proprietary Lease contains enforceable provisions such as to
render the rights and remedies of the holder thereof adequate for the
realization of the material benefits of the security provided thereby.  The
Assignment of Proprietary Lease contains an enforceable provision

Schedule 1-A-11

--------------------------------------------------------------------------------

 

 

for the acceleration of the payment of the unpaid principal balance of the
Mortgage Note in the event the Co-op Unit is transferred or sold without the
consent of the holder thereof.

 

(aaa)     Qualified Mortgage.  Notwithstanding anything to the contrary set
forth in this Agreement, on and after January 10, 2014 (or such later date as
set forth in the relevant regulations), (i) prior to the origination of each
Mortgage Loan, the originator made a reasonable and good faith determination
that the Mortgagor had a reasonable ability to repay the loan according to its
terms, in accordance with, at a minimum, the eight underwriting factors set
forth in 12 CFR 1026.43(c) and (ii) each Mortgage Loan, other than a Scratch and
Dent Mortgage Loan, is a “Qualified Mortgage” as defined in 12 CFR 1026.43(e);
provided that a modification subsequent to the date listed above shall not be
considered an “origination” of a Mortgage Loan or a “covered transaction” as
long as no new Mortgage Note is executed and delivered and the interest rate of
the related Mortgage Loan is not increased.

 

(bbb)     Aging.  Such Mortgage Loan has not been subject to a Transaction
hereunder for more than the applicable Aging Limit.

 

(ccc)     TRID Compliance.  With respect to each Mortgage Loan where the
Mortgagor’s loan application for the Mortgage Loan was taken on or after October
3, 2015, such Mortgage Loan was originated in compliance with the TILA-RESPA
Integrated Disclosure Rule.

 

(ddd)     Property Value.  With respect to a GNMA EBO, Seller has delivered to
Administrative Agent a BPO Value and valuation date given by a licensed real
estate agent or broker in conformity with customary and usual business
practices, which includes comparable sales and comparable listings and complies
with the criteria set forth in FIRREA for an “appraisal” or an “evaluation”, as
applicable, and such other information in further compliance with this
Agreement. The person performing any BPO received no benefit from, and such
person’s compensation or flow of business from the Seller were not affected by,
the acquisition of the Mortgage Loan by the Seller or any other applicable
transferee.

 

 

Schedule 1-A-12

--------------------------------------------------------------------------------

 

 

SCHEDULE 1-B

 

REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICER ADVANCES

 

The Seller makes the following representations and warranties to the
Administrative Agent, with respect to Servicer Advances 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.  For purposes of this
Schedule 1-B and the representations and warranties set forth herein, a breach
of a representation or warranty shall be deemed to have been cured 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 Servicer Advances.

 

(1)     No Liens.  Each Servicer Advances 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 Administrative Agent’s security interest in such
Servicer Advances 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 Administrative Agent have
sold, pledged, assigned, transferred or subjected and will not thereafter sell,
pledge, assign, transfer or subject to a Lien any of such Servicer Advances or
the Collections other than in accordance with the terms of this Agreement.

 

(2)     Collection Policy.  Seller has complied in all material respects with
the Collection Policy in regard to each Servicer Advances and related GNMA
guidelines.

 

(3)     Bona Fide Asset.  Each Servicer Advance being sold and/or pledged on a
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.  The Seller has no knowledge of
any fact that should have led it to expect at the time of the creation of each
Servicer Advances that such Servicer Advances 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 Servicer Advances, and each Servicer Advance is
an Eligible Servicer Advance.

 

(4)     Compliance with FHA and VA Requirements.  Each Servicer Advance has been
made in accordance with the terms of the related FHA requirements or VA
requirements, as applicable.

 

 

Schedule 1-B-1

--------------------------------------------------------------------------------

 

 

SCHEDULE 2

 

AUTHORIZED REPRESENTATIVES

 

 

SELLER AUTHORIZATIONS

 

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

 

Authorized Representatives for execution of Program Agreements and amendments

 

Name

  

Title

  

Authorized Signature

 

 

 

 

 

Pamela Marsh

 

Managing Director,

 

 

 

 

Treasurer

 

 

 

 

Authorized Representatives for execution of Transaction Requests and day-to-day
operational functions

 

Name

  

Title

  

Authorized Signature

 

 

 

 

 

Maurice Watkins

 

Managing Director, Capital

 

 

 

 

Markets

 

 

 

 

 

 

 

Thomas Rettinger

 

Managing Director, Portfolio

 

 

 

 

Risk Management

 

 

 

 

 

 

 

Kevin Chamberlain

 

Senior Vice President,

 

 

 

 

Treasury

 

 

 

 

 

 

 

Angela Everest

 

Authorized Representative

 

 

 

 

 

 

 

Adeshola Makinde

 

Authorized Representative

 

 

 

 

 

 

 

Richard Hetzel

 

Authorized Representative

 

 

Schedule 2-1

--------------------------------------------------------------------------------

 

 

ADMINISTRATIVE AGENT AND BUYER AUTHORIZATIONS

 

Any of the persons whose signatures and titles appear below, including any other
authorized officers, are authorized, acting singly, to act for Administrative
Agent and/or Buyers under this Agreement:

 

 

Name

  

Title

  

Signature

 

 

 

 

 

Margaret Dellafera

 

Vice President

 

 

 

 

 

 

 

Elie Chau

 

Vice President

 

 

 

 

 

 

 

Deirdre Harrington

 

Vice President

 

 

 

 

 

 

 

Robert Durden

 

Vice President

 

 

 

 

 

 

 

Ron Tarantino

 

Vice President

 

 

 

 

 

 

 

Michael Marra

 

Vice President

 

 

 

 

Schedule 2-2

--------------------------------------------------------------------------------

 

 

SCHEDULE 3

 

RESPONSIBLE OFFICERS OF SELLER

 

 

 

 

Name

Title

 

 

Andrew S. Chang

Senior Managing Director and

 

Chief Financial Officer

 

 

Jeffrey P. Grogin

Senior Managing Director and Chief

 

Administrative and Legal Officer

 

and Assistant Secretary

 

 

Pamela Marsh

Managing Director, Treasurer

 

 

Derek W. Stark

Managing Director, General Counsel

 

and Secretary

 

 

RESPONSIBLE OFFICERS OF GUARANTOR

 

 

 

 

Name

Title

 

 

Andrew S. Chang

Senior Managing Director and

 

Chief Financial Officer

 

 

Jeffrey P. Grogin

Senior Managing Director and Chief

 

Administrative and Legal Officer

 

and Assistant Secretary

 

 

Pamela Marsh

Managing Director, Treasurer

 

 

Derek W. Stark

Managing Director, General Counsel

 

and Secretary

 

 

Schedule 3-1

--------------------------------------------------------------------------------

 

 

EXHIBIT A

 

FORM OF TRANSACTION REQUEST

 

[Date]

 

 

Re:      Third Amended and Restated Master Repurchase Agreement dated as of
April 28, 2017 (as amended, restated, supplemented or otherwise modified from
time to time, the “Master Repurchase Agreement”) by and among PennyMac Loan
Services, LLC, Private National Mortgage Acceptance Company, LLC and Credit
Suisse First Boston Mortgage Capital LLC (“Administrative Agent”), on behalf of
Buyers.

 

PennyMac Loan Services, LLC hereby requests that Administrative Agent enter into
a Transaction with respect to the Mortgage Loans listed on the Custodial
Mortgage Loan Schedule attached hereto on Attachment 1 and as set forth below,
pursuant to the Master Repurchase Agreement.

 

TOTAL NUMBER OF MORTGAGE

___ Mortgage Loans – (See Custodial

LOANS

Mortgage Loan Schedule)

 

 

ORIGINAL PRINCIPAL AMOUNT OF

 

MORTGAGE LOANS:

$

 

 

CURRENT PRINCIPAL AMOUNT OF

 

MORTGAGE LOANS:

$

 

 

PROPOSED PURCHASE PRICE:

$

 

 

PURCHASE PRICE INCREASE:

$

 

 

AGGREGATE PURCHASE PRICE:

$

 

 

PROPOSED PURCHASE DATE:

 

 

The Master Repurchase Agreement is incorporated by reference into this
Transaction Request and is made a part hereof as if it were fully set forth
herein.  (All capitalized terms used herein but not defined herein shall have
the meanings specified in the Master Repurchase Agreement.)

 

PennyMac Loan Services, LLC

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

[wire instructions]

 

Exhibit A-1

--------------------------------------------------------------------------------

 

 

 

Exhibit A-2

--------------------------------------------------------------------------------

 

 

[Mortgage Loan Schedule]

 

 

Exhibit A-3

--------------------------------------------------------------------------------

 

 

EXHIBIT B

 

RESERVED

 

 

 

Exhibit B-1

--------------------------------------------------------------------------------

 

 

EXHIBIT C

 

MORTGAGE LOAN SCHEDULE

 

MORTGAGE LOAN CHARACTERISTICS

 

1.

Customer Name

2.

Collateral Number

3.

Primary Borrower Last Name

4.

Primary Borrower First Name

5.

Co-Borrower Last Name *

6.

Co-Borrower First Name *

7.

Property Address

8.

City

9.

State

10.

Zip Code

11.

County

12.

SS Number

13.

SS # Co-borrower *

14.

Product Type/Code

15.

Loan Amount

16.

Original monthly principal and interest

17.

Original interest rate

18.

Original date of Mortgage Note

19.

Closing Date

20.

First Payment Date

21.

Maturity Date

22.

Loan Type (adjustable, fixed, etc)

23.

Purchase Date

24.

Funding Method Code (wire disbursement, etc.)

25.

Closing Agent

26.

Address

27.

City

28.

State

29.

Zip Code

30.

Account Number

31.

ABA Number

32.

Closing Schedule

33.

Instructions

34.

Name of Bank

35.

Address of Bank

36.

City of Bank

37.

State of Bank

38.

Zip of Bank

39.

Other Account Bank *

40.

Further Instructions *

Exhibit C-1

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41.

Investor *

42.

Investor Commitment Number *

43.

Price *

44.

Commitment Date *

45.

Commitment Expiration Date *

46.

Property Type

47.

Lien Position

48.

LTV

49.

CLTV

50.

FICO

51.

Amortization Term

52.

Purpose

53.

No. of Units

54.

Original Appraised Value

55.

Name of appraiser

56.

Certificate Number for each loan with primary mortgage insurance*

57.

Margin*

58.

Life floor*

59.

Index type*

60.

Initial rate floor*

61.

Periodic rate cap*

62.

Life cap*

63.

First interest rate adjustment date*

64.

Protective Advances*

65.

Delinquent Advances*

--------------------------------------------------------------------------------

* If applicable.

 

 

Exhibit C-2

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EXHIBIT D

 

RESERVED

 

 

 

Exhibit D-1

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EXHIBIT E

 

FORM OF POWER OF ATTORNEY

 

Re:     Third Amended and Restated Master Repurchase Agreement, dated as of
April 28, 2017 (as amended, restated, supplemented or otherwise modified 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 “Administrative Agent”) on behalf
of Buyers.

 

KNOW ALL MEN BY THESE PRESENTS, that Seller hereby irrevocably constitutes and
appoints Administrative Agent 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 Administrative Agent’s discretion:

 

(a)     in the name of Seller, or in its own name, or otherwise, to take
possession of and endorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due with respect to any assets
purchased by Administrative Agent on behalf of certain Buyers and/or Repledgees
under the Third Amended and Restated Master Repurchase Agreement (as amended,
restated, supplemented or otherwise modified from time to time) dated April 28,
2017 (the “Assets”) including, without limitation, all Servicer Advances
 arising under or related to any Asset 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 Administrative Agent for the purpose of collecting any and all
such moneys due with respect to any other assets whenever payable;

 

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

 

(c)     (i) to direct any party liable for any payment under any Assets to make
payment of any and all moneys due or to become due thereunder directly to
Administrative Agent or as Administrative Agent shall direct; (ii) to ask or
demand for, collect, receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Assets; (iii) to sign and endorse any invoices, assignments,
verifications, notices and other documents in connection with any Assets;
(iv) to commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Assets or any
proceeds thereof and to enforce any other right in respect of any Assets; (v) to
defend any suit, action or proceeding brought against Seller with respect to any
Assets; (vi) to settle, compromise or adjust any suit, action or proceeding
described in clause (v) above and, in connection therewith, to give such
discharges or releases as Administrative Agent may deem appropriate; and
(vii) generally, to sell, transfer, pledge and make any agreement with respect
to or otherwise deal with any Assets as fully and completely as though
Administrative

Exhibit E-1

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Agent were the absolute owner thereof for all purposes, and to do, at
Administrative Agent’s option and Seller’s expense, at any time, and from time
to time, all acts and things which Administrative Agent deems necessary to
protect, preserve or realize upon the Assets and Administrative Agent’s Liens
thereon and to effect the intent of this Agreement, all as fully and effectively
as Seller might do;

 

(d)     for the purpose carrying out the transfer of servicing with respect to
the Mortgage Loans from Seller to a successor servicer appointed by
Administrative Agent in its sole discretion and to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish such transfer of servicing, and, without
limiting the generality of the foregoing, Seller hereby gives Administrative
Agent the power and right, on behalf of Seller, without assent by Seller, to, in
the name of Seller or its own name, or otherwise, prepare and send or cause to
be sent “good-bye” letters and Section 404 Notices to all mortgagors under the
Mortgage Loans, transferring the servicing of the Mortgage Loans to a successor
servicer appointed by Administrative Agent in its sole discretion.

 

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

 

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.

 

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

 

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

 

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 ADMINISTRATIVE
AGENT ON ITS OWN BEHALF AND ON BEHALF OF ADMINISTRATIVE AGENT’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.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK.  SIGNATURES FOLLOW.]

Exhibit E-2

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IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed and
Seller’s seal to be affixed this _____ day of __________, 201__.

 

 

 

PENNYMAC LOAN SERVICES, LLC

 

 

 

By:

 

 

 

Name:

 

 

Title:

Exhibit E-3

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

 

STATE OF CALIFORNIA

COUNTY OF ______________

 

On ______________________, 20__, before me, ____________________________, a
Notary Public, personally appeared ______________________________________, who
proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

 

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

 

 

WITNESS my hand and official seal.

 

 

 

Signature

 

 

 

 

(Seal)

 

 

 

Exhibit E-4

--------------------------------------------------------------------------------

 

 

EXHIBIT F

 

UNDERWRITING GUIDELINES

 

 

On file with Administrative Agent

 

 

Exhibit F-1

--------------------------------------------------------------------------------

 

 

EXHIBIT G

 

RESERVED

 

 

Exhibit G-1

--------------------------------------------------------------------------------

 

 

EXHIBIT H

 

SELLER’S AND GUARANTOR’S TAX IDENTIFICATION NUMBERS

 

 

 

 

Entity Name

Tax Identification Number

 

 

PennyMac Loan Services, LLC

26-2049351

 

 

Private National Mortgage Acceptance

26-1740587

Company, LLC

 

 

 

Exhibit H-1

--------------------------------------------------------------------------------

 

 

EXHIBIT I

 

EXISTING INDEBTEDNESS

 

See attached.

 

 

Exhibit I-1

--------------------------------------------------------------------------------

 

 

EXHIBIT J

 

 

form of ESCROW INSTRUCTION letter TO BE PROVIDED BY SELLER bEFORE CLOSING

 

 

The escrow instruction letter (the “Escrow Instruction Letter”) shall also
include the following instruction to the Settlement Agent (the “Escrow Agent”):

 

Credit Suisse First Boston Mortgage Capital LLC (the “Administrative Agent”) on
behalf of Buyers, has agreed to provide funds (“Escrow Funds”) to PennyMac Loan
Services, LLC to finance certain mortgage loans (the “Mortgage Loans”) for which
you are acting as Escrow Agent. 

 

You hereby agree that (a) you shall receive such Escrow Funds from
Administrative Agent to be disbursed in connection with this Escrow Instruction
Letter, (b) you will hold such Escrow Funds in trust, without deduction, set-off
or counterclaim for the sole and exclusive benefit of Administrative Agent until
such Escrow Funds are fully disbursed on behalf of Administrative Agent in
accordance with the instructions set forth herein, and (c) you will disburse
such Escrow Funds on the date specified for closing (the “Closing Date”) only
after you have followed the Escrow Instruction Letter’s requirements with
respect to the Mortgage Loans.  In the event that the Escrow Funds cannot be
disbursed on the Closing Date in accordance with the Escrow Instruction Letter,
you agree to promptly remit the Escrow Funds to Administrative Agent by
re-routing via wire transfer the Escrow Funds in immediately available funds,
without deduction, set-off or counterclaim, back to the account specified in
Administrative Agent’s incoming wire transfer.

 

You further agree that, upon disbursement of the Escrow Funds, you will hold all
Mortgage Loan Documents specified in the Escrow Instruction Letter in escrow as
agent and bailee for Administrative Agent, and will forward the Mortgage Loan
Documents and original Escrow Instruction Letter in connection with such
Mortgage Loans by overnight courier (y) to Custodian within seven (7) Business
Days following the date of origination.

 

You agree that all fees, charges and expenses regarding your services to be
performed pursuant to the Escrow Instruction Letter are to be paid by Seller or
its borrowers, and Administrative Agent shall have no liability with respect
thereto.

 

You represent, warrant and covenant that you are not an affiliate of or
otherwise controlled by Seller, and that you are acting as an independent
contractor and not as an agent of Seller.

 

The provisions of this Escrow Instruction Letter may not be modified, amended or
altered, except by written instrument, executed by the parties hereto and
Administrative Agent.  You understand that Administrative Agent shall act in
reliance upon the provisions set forth in this

Exhibit J-1

--------------------------------------------------------------------------------

 

 

Escrow Instruction Letter, and that Administrative Agent on behalf of Buyers is
an intended third party beneficiary hereof.

 

Whether or not an Escrow Instruction Letter executed by you is received by
Custodian, your acceptance of the Escrow Funds shall be deemed to constitute
your acceptance of the Escrow Instruction Letter.

 

 

Exhibit J-2

--------------------------------------------------------------------------------

 

 

Exhibit K

 

CUSTODIAL AND Securities Intermediary FEE SCHEDULE

 

 

On file with Administrative Agent

 

 

Exhibit K-1

--------------------------------------------------------------------------------

 

 

EXHIBIT L

 

FORM OF TRADE ASSIGNMENT

 

[NAME] (“Takeout Investor”)
[Address]

[Address]

Attention: [__]

 

[DATE]

 

Ladies and Gentlemen:

 

Attached hereto is a correct and complete copy of your confirmation of
commitment (the “Commitment”) for the following security (the “Security”):

 

Trade Date:

[__]

Settlement Date:

[__]

Security Description:

[__]

Coupon:

[__]

Price:

[__]

Par Amount:

[__]

Pool Number:

[__]

 

The undersigned customer (the “Customer”) has assigned the Security to Credit
Suisse First Boston Mortgage Capital LLC (“Credit Suisse”) as security for
Customer’s Obligations under the Master Repurchase Agreement, as amended (the
“Agreement”), by and between Customer and Credit Suisse.

 

This is to confirm that (i) Takeout Investor’s obligation to purchase the
Security on the above terms in accordance with the Commitment is in full force
and effect, (ii) Takeout Investor will accept delivery of the Security directly
from Credit Suisse, (iii) Takeout Investor will pay Credit Suisse for the
Security, (iv) Customer unconditionally guarantees payment to Credit Suisse of
all sums due under the Commitment, (v) Credit Suisse shall deliver the Security
to Takeout Investor on the above terms and in accordance with the
Commitment.  Payment will be made “delivery versus payment” to Takeout Investor
in immediately available funds. Capitalized terms used, but not otherwise
defined herein, shall have the respective meanings assigned to such terms in the
Agreement.

 

Very truly yours,

    

Agreed to, confirmed and accepted:

 

 

 

 

 

[TAKEOUT INVESTOR]

[CUSTOMER]

 

 

 

 

 

By:

 

 

By:

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

Exhibit L-1

--------------------------------------------------------------------------------