Exhibit 10.32

 

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

 

CITIGROUP GLOBAL MARKETS REALTY CORP
390 Greenwich Street 5th Floor
New York, NY 10013

 

 

As of July 12, 2011

 

TO:

PennyMac Corp. (“PMC” or “Purchaser”)

 

 

FROM:

Citigroup Global Markets Realty Corp. (“Citigroup” or “Seller”)

 

 

RE:

Sale of Assets to PMC

 

This letter agreement will serve as the commitment by Seller to sell and by
Purchaser to purchase, on a mandatory delivery basis, without recourse, certain
first lien, fixed-rate and adjustable-rate, conventional, residential mortgage
loans (the “Mortgage Loans”) and certain residential real property including
land and improvements, together with all buildings, fixtures and attachments
thereto (the “REO Properties”, and together with the Mortgage Loans, the
“Assets”) set forth on Schedule 1 attached hereto under the terms set forth
below.  Purchaser will purchase all of Seller’s right, title and interest in the
Assets.  The terms and provisions of this transaction, including the purchase
price for the Assets, are described below.  Capitalized terms used herein and
not defined shall have the meanings assigned thereto in the Agreement.

 

1.

 

Closing Date:

 

The Purchaser may purchase any Asset on any date following the date hereof,
which date shall be deemed a “Closing Date.” Any such Assets purchased on any
Closing Date shall be mutually agreed upon in writing by the parties hereto. Any
such Closing Date shall be agreed upon between the parties hereto in writing,
but in no event shall any Closing Date be later than December 26, 2011 (the “End
Date”); provided, however, that in the event that aggregate Original Purchase
Price for all the Assets has decreased by thirty-five percent (35%) or more due
solely to the receipt of any principal and interest collections on such Asset
(collectively, “Proceeds”) and/or liquidation proceeds by the Seller or sales to
the Purchaser hereunder, the “End Date” for purposes of this letter agreement
shall be June 22, 2012.

 

 

 

 

 

2.

 

Transfer Date:

 

August 4, 2011, or such other date as may be mutually agreed upon by Citigroup
and the Initial Seller under the Interim Servicing Agreement, dated as of
June 29, 2011 (“Interim Servicing Agreement”), by and among such Initial Seller,
as servicer thereunder, Citigroup and PMC, as successor servicer thereunder.

 

The “Initial Seller” shall mean the large money center bank from which Citigroup
purchased the Assets.

 

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

 

3.

 

Aggregate Delivery Balance:

 

$347,692,993.00 (less any amounts attributable to Mortgage Loans that are
repurchased by Initial Seller pursuant to the terms and provisions of the
Purchase Agreement).

 

 

 

 

 

4.

 

Purchase Price Percentage:

 

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

 

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

 

 

 

 

 

5.

 

Purchase Price:

 

The purchase price for each Asset purchased on any related Closing Date (the
“Purchase Price”) shall be equal to (a) (i) the unpaid principal balance of such
Asset as of June 27, 2011 (the “Original Cut-off Date”), multiplied by (ii) the
related Purchase Price Percentage less (b) any Proceeds received following ***,
2011 (the “Original Closing Date”). In connection with the payment of the
Purchase Price, Purchaser shall pay any and all Reimbursement Amounts to Seller.
If the amount in clause (b) above exceeds the amount in clause (a) above (net of
any related Reimbursement Amounts), Seller shall remit such excess amount to
Purchaser.

 

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

 

 

 

 

 

6.

 

Reimbursement Amounts

 

With respect to each Asset, the sum of (a) any and all out-of-pocket costs and
expenses incurred by Citigroup with respect to such Asset arising out of or
relating to this letter agreement, the Servicing Agreement, the Purchase
Agreement or the Interim Servicing Agreement, including, but not limited to,
servicing, corporate and escrow advances, servicing reimbursement made by
Citigroup, any servicing fees paid by Citigroup, any costs and expenses incurred
by Citigroup in

 

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

 

 

 

 

 

connection with its due diligence review of the Assets (allocated based upon the
number of Assets) and any other amounts paid to Initial Seller under the
Purchase Agreement or the Interim Servicing Agreement (other than the Original
Purchase Price for the Assets) or to PMC under the Servicing Agreement that did
not arise from ***thereunder and (b) Citigroup’s Cost of Carry for such Asset.

 

For purposes of this letter agreement, the “Original Purchase Price” shall have
the meaning ascribed to the term “Purchase Price” in the Purchase Agreement.

 

 

 

 

 

7.

 

Cost of Carry:

 

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

 

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

 

 

 

 

 

8.

 

Liquidated Assets:

 

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

 

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

 

 

 

 

 

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

 

 

 

 

 

9.

 

Liquidation Percentage:

 

The positive difference between (i) the ***calculated as of the liquidation date
as if such Liquidated Asset was ***on such liquidation date and (ii) the ***in
respect of such Asset.

 

 

 

 

 

10.

 

Assignment Agreement:

 

The Assets will be sold pursuant to a separate assignment, assumption and
recognition agreement to be entered into among Seller, Purchaser and Initial
Sellers (the “Assignment Agreement”) pursuant to which Seller will assign its
rights and obligations with respect to the Assets under that certain Mortgage
Loan Purchase Agreement, dated as of June 29, 2011 (the “Purchase Agreement”),
among Citigroup, as purchaser thereunder and Initial Sellers, as sellers
thereunder. The Assignment Agreement shall include indemnification from PMC to
Citigroup identical to that contained in Section 2(l) in the Purchase Agreement.

 

 

 

 

 

11.

 

Servicing Agreement:

 

PMC and Citigroup will, prior to the Transfer Date, enter into a mutually
acceptable servicing agreement pursuant to which PMC will service or cause to be
serviced the Assets (the “Servicing Agreement”). PMC shall purchase the Mortgage
Servicing Rights (“MSRs”) relating to the Assets prior to the Transfer Date.
PennyMac Loan Services, LLC (“PLS”) shall sub-service the Assets for PMC in
accordance with standards set forth in the Servicing Agreement and shall be
entitled, on a monthly basis, to withdraw funds from the related collection
account established under the Servicing Agreement to pay itself any related
servicing fees and to reimburse itself for any permitted corporate, escrow or
servicing advances made pursuant to the Servicing Agreement prior to any other
withdrawal therefrom. In the event that, in any month, the funds in the
collection account are insufficient for the related servicer to pay itself such
servicing fees and to reimburse itself for such permitted corporate, escrow or
servicing advances, Citigroup shall remit to the servicer the amount of such
shortfall as set forth in the Servicing Agreement.

 

 

 

 

 

12.

 

Further Assurances:

 

Purchaser and Seller further agree that upon reasonable request they shall do
such other and further acts and deeds, and shall execute, acknowledge and
deliver and record such other documents and instruments as may be reasonably
necessary

 

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

 

 

 

 

 

from time to time to evidence, confirm or carry out the intent and purposes of
this letter agreement.

 

 

 

 

 

13.

 

Expenses:

 

Notwithstanding anything to the contrary contained herein, each party will bear
its own costs, fees and expenses (including the costs, fees and expenses of its
attorneys). Purchaser will bear the cost of the delivery of the collateral files
to the custodian; the costs of preparing and recording the assignments from
Seller to Purchaser (including intervening assignments necessary to perfect
title to Purchaser) and endorsing notes to Purchaser, as required; the costs of
notifying the mortgagors, hazard, flood and mortgage insurance companies, and
others, as necessary, and the costs of shipping all Asset records to Purchaser.

 

 

 

 

 

14.

 

Entire Agreement:

 

This letter agreement sets forth the entire understanding of the parties
relating to the subject matter hereof to date and supersedes and cancels any
prior communications, understandings and agreements between the parties. This
letter agreement may not be amended or modified except by the parties in
writing. This letter agreement may be simultaneously executed in several
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall together constitute but one and the same agreement.

 

 

 

 

 

15.

 

Liquidated Damages:

 

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

 

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

 

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

 

 

 

 

 

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

 

 

 

 

 

16.

 

Spread Percentage:

 

The positive difference between (i) the ***calculated as of the Break-up Date as
if such Asset was ***on the Break-up Date and (ii) the ***in respect of such
Asset.

 

 

 

 

 

17.

 

Disposition of Assets:

 

Purchaser acknowledges and agrees that Seller shall, in its sole discretion, be
permitted to sell or dispose of any Asset (or otherwise obtain a third party
indicative bid for the Assets within a reasonable period of time following any
Break-up Date) at any price and at any time that it, in its sole discretion,
deems reasonable and Purchaser waives any right to object to or contest the
price obtained by Seller in the sale, disposition and/or third party indicative
bid of any Asset.

 

 

 

 

 

18.

 

Severability:

 

If any provision hereof is found by a court of competent jurisdiction to be
prohibited or unenforceable, such provision shall be ineffective only to the
extent of such prohibition or unenforceability, and such prohibition or
enforceability shall not invalidate the balance of such provision to the extent
it is not prohibited or unenforceable, nor invalidate the other provisions
hereof.

 

 

 

 

 

19.

 

Governing Law:

 

The parties agree that this letter agreement shall be construed in accordance
with and governed by the laws of the State of New York, excluding its rules of
conflicts of laws but including the New York General Obligations Law Sections
5-1401 and 5-1402. The parties consent to the exclusive jurisdiction of the
following courts in connection with any dispute between the Parties arising from
or in connection with this letter agreement (i) United States District Court for
the Southern District of New York; and (ii) Supreme Court, New York County, New
York. Purchaser hereby irrevocably waives any objection to venue of any action
between the parties in the courts described herein, whether pursuant to the
doctrine of forum non conveniens or otherwise. In the event Seller commences
legal proceedings against Purchaser in any of the courts set forth above,
Purchaser waives any objection to the selection of that court and shall not seek
to change venue to any other court.

 

 

 

 

 

20.

 

Arm’s Length Transaction:

 

Each party acknowledges that it has participated in the negotiation of this
letter agreement, and agrees that no provision of this letter agreement shall be
construed against or interpreted to the disadvantage of any party by any court
or

 

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

 

 

 

 

 

other governmental or judicial authority by reason of such party having or being
deemed to have structured, dictated or drafted such provision. All of the terms
of this letter agreement were negotiated at arm’s length, and were prepared and
executed without fraud, duress, undue influence or coercion of any kind exerted
by either party upon the other. The execution and delivery of this letter
agreement is the free and voluntary act of Seller and Purchaser.

 

 

 

 

 

21.

 

Confidentiality:

 

Each party agrees for itself and its respective directors, officers, employees,
agents, representatives, subsidiaries and affiliates, to keep the terms of this
letter agreement confidential and to not disclose any such terms to anyone
except: (a) in connection with the enforcement of this letter agreement, (b) to
the parties’ respective attorneys, accountants and/or regulators who have
specific need for the information; or (c) in response to or to otherwise comply
with appropriate legal process, law, regulation or governmental agency request.

 

 

 

 

 

22.

 

Miscellaneous:

 

The rights granted hereunder shall be cumulative with the rights provided under
the Assignment Agreement and shall inure to the benefit of Seller and its
successors and assigns. For the purpose of facilitating the execution of this
letter agreement, and for other purposes, this letter agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original, and all such counterparts shall constitute one and the same
instrument. The parties intend that faxed signatures and electronically imaged
signatures such as .pdf files shall constitute original signatures and are
binding on all parties. The original documents shall be promptly delivered, if
requested.

 

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

 

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

 

 

 

Very Truly Yours,

 

 

 

 

 

CITIGROUP GLOBAL MARKETS REALTY CORP.

 

 

 

 

 

BY:

/s/ Kira Granovskaya

 

 

 

 

 

NAME: Kira Granovskaya

 

 

 

 

 

TITLE: Vice President

 

 

 

 

 

 

CONFIRMED AND AGREED TO:

 

 

 

 

 

PENNYMAC CORP.

 

 

 

 

 

BY:

/s/ Vandad Fartaj

 

 

 

 

 

 

NAME:

Vandad Fartaj

 

 

 

 

 

 

TITLE:

Chief Investment Officer

 

 

 

Confirmation (July 2011)

 

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Schedule 1

 

Assets

 

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