Exhibit 10.4

 

EXECUTION VERSION

 

 

GUARANTY

 

by

 

PRIVATE NATIONAL MORTGAGE

ACCEPTANCE COMPANY, LLC, as guarantor

 

Dated as of December 19, 2016

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.

Defined Terms

1

 

 

 

2.

Guaranty

2

 

 

 

3.

Right of Set-off

2

 

 

 

4.

Subrogation

3

 

 

 

5.

Amendments, etc. with Respect to the Obligations

3

 

 

 

6.

Guaranty Absolute and Unconditional

3

 

 

 

7.

Reinstatement

5

 

 

 

8.

Payments

5

 

 

 

9.

Event of Default

5

 

 

 

10.

Severability

5

 

 

 

11.

Headings

5

 

 

 

12.

No Waiver; Cumulative Remedies

5

 

 

 

13.

Waivers and Amendments; Successors and Assigns; Governing Law

6

 

 

 

14.

Notices

6

 

 

 

15.

Jurisdiction

6

 

 

 

16.

Integration

7

 

 

 

17.

Acknowledgments

7

 

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GUARANTY

 

This GUARANTY, dated as of December 19, 2016 (as may be amended, restated,
supplemented or otherwise modified from time to time, this “Guaranty”), is made
by Private National Mortgage Acceptance Company, LLC, a Delaware limited
liability company (“Guarantor”), in favor of PNMAC GMSR ISSUER TRUST, a
statutory trust organized under the laws of Delaware (the “Buyer”).

 

RECITALS

 

WHEREAS, pursuant to the Master Repurchase Agreement, dated as of December 19,
2016 (as may be amended, restated, supplemented or otherwise modified from time
to time, the “PC Repurchase Agreement”), among PennyMac Loan Services, LLC (the
“Seller”), Guarantor and Buyer, dated as of December 19, 2016, Buyer has agreed
from time to time to enter into Transactions with Seller.  It is a condition
precedent to the obligation of Buyer to enter into Transactions with Seller
under the PC Repurchase Agreement that Guarantor shall have executed and
delivered this Guaranty to Buyer;

 

WHEREAS, as a condition precedent to entering into the PC Repurchase Agreement,
the Guarantor is required to execute and deliver this Guaranty;

 

WHEREAS, the Guarantor will receive a benefit, either directly or indirectly
from the Seller for entering into this Guaranty; and

 

WHEREAS, pursuant to the Base Indenture, dated as of December 19, 2016, among
the Buyer, as issuer, the Seller, as servicer and as administrator, Citibank,
N.A., as indenture trustee (in such capacity, the “Indenture Trustee”),
calculation agent, paying agent and securities intermediary, Credit Suisse First
Boston Mortgage Capital LLC, as an administrative agent, and Pentalpha
Surveillance LLC, as credit manager (together with all schedules and exhibits
thereto, as may be amended, restated, supplemented or otherwise modified from
time to time, the “Base Indenture,” and collectively with each supplement to the
Base Indenture executed and delivered in conjunction with the issuance of the
related Series of Notes, including the schedules and exhibits thereto, the
“Indenture”), Buyer will grant to the Indenture Trustee for the benefit and
security of the holders of the notes issued under the Indenture (the
“Noteholders”) and the Indenture Trustee, in its individual capacity (the
Noteholder and the Indenture Trustee, together, the “Secured Parties”), a
security interest in all its right, title and interest in and to the PC
Repurchase Agreement and this Guaranty.

 

NOW, THEREFORE, in consideration of the foregoing premises, to induce Buyer to
enter into the PC Repurchase Agreement and to enter into Transactions
thereunder, Guarantor hereby agrees with Buyer, as follows:

 

1.                                      Defined Terms.  (a) Unless otherwise
defined herein, terms which are defined in the PC Repurchase Agreement and used
herein are so used as so defined.

 

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(b)                                 For purposes of this Guaranty, “Obligations”
shall mean all obligations and liabilities of Seller to Buyer, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, or out of or in connection with the
PC Repurchase Agreement and any other Program Agreements and any other document
made, delivered or given in connection therewith or herewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees and disbursements of counsel
to Buyer that are required to be paid by Seller pursuant to the terms of the
Program Agreements and costs of enforcement of this Guaranty reasonably
incurred) or otherwise.

 

2.                                      Guaranty.  (a) Guarantor hereby
unconditionally and irrevocably guarantees to Buyer the prompt and complete
payment and performance by Seller when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.

 

(b)                                 Guarantor further agrees to pay any and all
expenses (including, without limitation, all fees and disbursements of counsel)
which may be paid or incurred by Buyer in enforcing, or obtaining advice of
counsel in respect of, any rights with respect to, or collecting, any or all of
the Obligations and/or enforcing any rights with respect to, or collecting
against, Guarantor under this Guaranty.  This Guaranty shall remain in full
force and effect until the later of (i) the termination of the PC Repurchase
Agreement and (ii) the Obligations are paid in full, notwithstanding that from
time to time prior thereto Seller may be free from any Obligations.

 

(c)                                  No payment or payments made by Seller or
any other Person or received or collected by Buyer from Seller or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application, at any time or from time to time, in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of Guarantor hereunder which shall, notwithstanding any such
payment or payments, remain liable for the amount of the outstanding Obligations
until the outstanding Obligations are paid in full.

 

(d)                                 Guarantor agrees that whenever, at any time,
or from time to time, Guarantor shall make any payment to Buyer on account of
Guarantor’s liability hereunder, Guarantor will notify Buyer in writing that
such payment is made under this Guaranty for such purpose.

 

3.                                      Right of Set-off.  Buyer is hereby
irrevocably authorized at any time and from time to time without notice to
Guarantor, any such notice being hereby waived by Guarantor, to set-off and
appropriate and apply any and all monies and other property of Guarantor,
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by Buyer of any Affiliate thereof to or for
the credit or the account of Guarantor, or any part thereof in such amounts as
Buyer may elect, on account of the Obligations and liabilities of Guarantor
hereunder and claims of every nature and description of Buyer against Guarantor,
in any currency, whether arising hereunder, under the PC Repurchase Agreement or
otherwise, as Buyer may elect, whether or not Buyer has made any demand for
payment and although such Obligations and liabilities and claims may be
contingent or unmatured.  Buyer shall notify Guarantor promptly of any such
set-off and the application made by Buyer, provided that the failure to give
such notice shall not affect the validity of such set-off and application.  The
rights of Buyer under this paragraph are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which Buyer
may have.

 

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4.                                      Subrogation.  Notwithstanding any
payment or payments made by Guarantor hereunder or any set-off or application of
funds of Guarantor by Buyer, Guarantor shall not be entitled to be subrogated to
any of the rights of Buyer against Seller or any other guarantor or any
collateral security or guarantee or right of offset held by Buyer for the
payment of the Obligations, nor shall Guarantor seek or be entitled to seek any
contribution or reimbursement from Seller or any other guarantor in respect of
payments made by Guarantor hereunder, until all amounts owing to Buyer by Seller
on account of the Obligations are paid in full and the PC Repurchase Agreement
is terminated.  If any amount shall be paid to Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amounts shall be held by Guarantor for the benefit of Buyer,
segregated from other funds of Guarantor, and shall, forthwith upon receipt by
Guarantor, be turned over to Buyer in the exact form received by Guarantor (duly
indorsed by Guarantor to Buyer, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as Buyer may determine.

 

5.                                      Amendments, etc. with Respect to the
Obligations.  Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against Guarantor, and without notice to or
further assent by Guarantor, any demand for payment of any of the Obligations
made by Buyer may be rescinded by Buyer, and any of the Obligations continued,
and the Obligations, or the liability of any other party upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by Buyer, and the PC Repurchase Agreement, and the other Program
Agreements and any other document in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, pursuant to its terms
and as Buyer may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by Buyer for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released.  Buyer
shall have no obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Obligations or for this Guaranty or any
property subject thereto.  When making any demand hereunder against Guarantor,
Buyer may, but shall be under no obligation to, make a similar demand on Seller
and any failure by Buyer to make any such demand or to collect any payments from
Seller or any release of Seller shall not relieve Guarantor of its obligations
or liabilities hereunder, and shall not impair or affect the rights and
remedies, express or implied, or as a matter of law, of Buyer against
Guarantor.  For the purposes hereof “demand” shall include, but is not limited
to, the commencement and continuance of any legal proceedings.

 

6.                                      Guaranty Absolute and Unconditional. 
(a) Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by Buyer
upon this Guaranty or acceptance of this Guaranty; the Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived in reliance upon this Guaranty; and all
dealings between Seller or Guarantor, on the one hand, and Buyer, on the other,
shall likewise be conclusively

 

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presumed to have been had or consummated in reliance upon this Guaranty. 
Guarantor waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon Seller or the Guaranty with respect to the
Obligations.  This Guaranty shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (i) the validity or
enforceability of the PC Repurchase Agreement, the other Program Agreements, any
of the Obligations or any collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by Buyer,
(ii) any defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by Seller
against Buyer, or (iii) any other circumstance whatsoever (with or without
notice to or knowledge of Seller or Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of Seller for the
Obligations, or of Guarantor under this Guaranty, in bankruptcy or in any other
instance.  When pursuing its rights and remedies hereunder against Guarantor,
Buyer may, but shall be under no obligation, to pursue such rights and remedies
that they may have against Seller or any other Person or against any collateral
security or guarantee for the Obligations or any right of offset with respect
thereto, and any failure by Buyer to pursue such other rights or remedies or to
collect any payments from Seller or any such other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of Seller or any such other Person or any such collateral
security, guarantee or right of offset, shall not relieve Guarantor of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of Buyer against
Guarantor.  This Guaranty shall remain in full force and effect and be binding
in accordance with and to the extent of its terms upon Guarantor and their
successors and assigns thereof, and shall inure to the benefit of Buyer, and
successors, indorsees, transferees and assigns, until all the Obligations and
the obligations of Guarantor under this Guaranty shall have been satisfied by
payment in full, notwithstanding that from time to time during the term of the
PC Repurchase Agreement Seller may be free from any Obligations.

 

(b)                                 Without limiting the generality of the
foregoing, Guarantor hereby agrees, acknowledges, and represents and warrants to
Buyer as follows:

 

(i)                               Guarantor hereby waives any defense arising by
reason of, and any and all right to assert against Buyer any claim or defense
based upon, an election of remedies by Buyer which in any manner impairs,
affects, reduces, releases, destroys and/or extinguishes Guarantor’s
(x) subrogation rights, (y) rights to proceed against Seller or any other
guarantor for reimbursement or contribution, and/or (z) any other rights of
Guarantor to proceed against Seller, against any other guarantor, or against any
other person or security.

 

(ii)                            Guarantor is presently informed of the financial
condition of Seller and of all other circumstances which diligent inquiry would
reveal and which bear upon the risk of nonpayment of the Obligations.  Guarantor
hereby covenants that it will make its own investigation and will continue to
keep itself informed of Seller’s financial condition, the status of other
guarantors, if any, of all other circumstances which bear upon the risk of
nonpayment and that it will continue to rely upon sources other than Buyer for
such information and will not rely upon Buyer for any such information.  Absent
a written request for such information by Guarantor to Buyer, Guarantor hereby
waives its right, if any, to require Buyer to disclose to Guarantor any
information which Buyer may now or hereafter acquire concerning such condition
or circumstances including, but not limited to, the release of or revocation by
any other guarantor.

 

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(iii)                         Guarantor has independently reviewed the PC
Repurchase Agreement and related agreements and has made an independent
determination as to the validity and enforceability thereof, and in executing
and delivering this Guaranty to Buyer, Guarantor is not in any manner relying
upon the validity, and/or enforceability, and/or attachment, and/or perfection
of any Liens or security interests of any kind or nature granted by Seller or
any other guarantor to Buyer, now or at any time and from time to time in the
future.

 

7.                                      Reinstatement.  This Guaranty shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Obligations is rescinded or must
otherwise be restored or returned by Buyer upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Seller or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, Seller or any substantial part of its property, or
otherwise, all as though such payments had not been made.

 

8.                                      Payments.  Guarantor hereby agrees that
the Obligations will be paid to Buyer without set-off or counterclaim in U.S.
Dollars.

 

9.                                      Event of Default.  If an Event of
Default under the PC Repurchase Agreement shall have occurred and be continuing,
Guarantor agrees that, as between Guarantor and the Buyer, the Obligations may
be declared to be due in accordance with the terms of the PC Repurchase
Agreement for purposes of this Guaranty notwithstanding any stay, injunction or
other prohibition which may prevent, delay or vitiate any such declaration as
against the Seller and that, in the event of any such declaration (or attempted
declaration), such Obligations shall forthwith become due by Guarantor for
purposes of this Guaranty.

 

10.                               Severability.  Any provision of this Guaranty
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

11.                               Headings.  The paragraph headings used in this
Guaranty are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

 

12.                               No Waiver; Cumulative Remedies.  Buyer shall
not by any act (except by a written instrument pursuant to Section 13 hereof),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and conditions hereof.  No failure to exercise,
nor any delay in exercising, on the part of Buyer, any right, power or privilege
hereunder shall operate as a waiver thereof.  No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.  A
waiver by Buyer of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which Buyer would otherwise have on
any future occasion.  The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.

 

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13.                               Waivers and Amendments; Successors and
Assigns; Governing Law.  None of the terms or provisions of this Guaranty may be
waived, amended, supplemented or otherwise modified except by a written
instrument executed by Guarantor and Buyer, provided that any provision of this
Guaranty may be waived by Buyer in a letter or agreement executed by Buyer or by
facsimile or electronic transmission from Buyer to the Guarantor.  This Guaranty
shall be binding upon the personal representatives, successors and assigns of
Guarantor and shall inure to the benefit of Buyer and its successors and
assigns.

 

14.                               Notices.  Notices delivered in connection with
this Guaranty shall be given in accordance with Section 10.04 of the PC
Repurchase Agreement.

 

15.                               Governing Law; Jurisdiction; Waivers.

 

(a)                                 THIS GUARANTY AND ANY CLAIM, CONTROVERSY OR
DISPUTE ARISING UNDER OR RELATED TO OR IN CONNECTION WITH THIS GUARANTY, THE
RELATIONSHIP OF THE PARTIES HERETO, AND/OR THE INTERPRETATION AND ENFORCEMENT OF
THE RIGHTS AND DUTIES OF THE PARTIES HERETO WILL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE
CONFLICT OF LAW PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE
NEW YORK GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

(b)                                 THE GUARANTOR SUBMITS ITSELF AND ITS
PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY, OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF
MANHATTAN, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

 

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

 

(d)                                 THE GUARANTOR AGREES THAT SERVICE OF PROCESS
IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY
REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY

 

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SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH HEREIN OR AT
SUCH OTHER ADDRESS OF WHICH EACH OTHER PARTY HERETO SHALL HAVE BEEN NOTIFIED IN
WRITING, EXCEPT THAT WITH RESPECT TO THE INDENTURE TRUSTEE, CALCULATION AGENT,
PAYING AGENT AND SECURITIES INTERMEDIARY, SERVICE OF PROCESS MAY ONLY BE MADE AS
REQUIRED BY APPLICABLE LAW;

 

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

 

(f)                                   THE GUARANTOR WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

16.                               Integration; Counterparts.  This Guaranty
represents the agreement of Guarantor with respect to the subject matter hereof
and there are no promises or representations by Buyer relative to the subject
matter hereof not reflected herein.  This Guaranty may be executed in any number
of counterparts, each of which so executed will be deemed to be an original, but
all such counterparts will together constitute but one and the same instrument. 
Delivery of an executed counterpart of a signature page to this Guaranty by
facsimile or other electronic means shall be effective as delivery of a manually
executed counterpart of this Guaranty.

 

17.                               Third Party Beneficiaries.  Each of the
Secured Parties and the Administrative Agent shall be a third party beneficiary
of this Guaranty and shall be entitled to enforce the Guarantor’s Obligations
hereunder to the same extent as if it was a signatory hereto.

 

18.                               Acknowledgments.  Guarantor hereby
acknowledges that:

 

(a)                                 Guarantor has been advised by counsel in the
negotiation, execution and delivery of this Guaranty and the other Program
Agreements;

 

(b)                                 Buyer does not have any fiduciary
relationship to Guarantor, Guarantor does not have any fiduciary relationship to
Buyer and the relationship between Buyer and Guarantor is solely that of surety
and creditor;

 

(c)                                  no joint venture exists between Buyer and
Guarantor or among Buyer, Seller and Guarantor;

 

(d)                                 this Guaranty is “a security agreement or
arrangement or other credit enhancement” that is “related to” and provided “in
connection with” the PC Repurchase Agreement and each Transaction thereunder and
is within the meaning of Sections 101(38A)(A) and 741(7)(A)(xi) of the
Bankruptcy Reform Act of 1978, 11 U.S.C. §§ 101 et seq., as amended (the
“Bankruptcy Code”) and is, therefore to the extent of damages in connection with
the PC Repurchase Agreement, measured in accordance with Section 562 of the
Bankruptcy Code (i) a “securities contract” as that term is defined in
Section 741(7)(A)(xi) of the Bankruptcy Code and (ii) a “master netting
agreement” as that term is defined in Section 101(38A) of the Bankruptcy Code;
and

 

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(e)                                  Buyer’s right to cause the termination,
liquidation or acceleration of, or to offset or net termination values, payment
amounts or other transfer obligations arising under or in connection with the PC
Repurchase Agreement and this Guaranty is in each case a contractual right to
cause the termination, liquidation or acceleration of, or to offset or net
termination values, payment amounts or other transfer obligations arising under
or in connection with this Guaranty as described in Sections 362(b)(6),
362(b)(27), 555 and/or 561 of the Bankruptcy Code.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly executed
and delivered as of the date first above written.

 

 

PRIVATE NATIONAL MORTGAGE

ACCEPTANCE COMPANY, LLC, as Guarantor

 

 

 

 

 

 

 

By:

/s/ Pamela Marsh

 

 

Name:

Pamela Marsh

 

 

Title:

Managing Director, Treasurer

 

[Signature Page to Guaranty (PC Master Purchase Agreement)]

 

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