Exhibit 10.1

 

 

 

 

MASTER REPURCHASE AGREEMENT

among

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as administrative agent

(“Administrative Agent”)

and

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as buyer (“Buyer”)

and

PENNYMAC CORP., as seller (“Repo Seller”) and as servicer (“Servicer”)

Dated as of August 7, 2020

 

 

 

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TABLE OF CONTENTS

 

             Page  

ARTICLE I

  DEFINITIONS      1  

Section 1.01

    Certain Defined Terms      1  

Section 1.02

    Other Defined Terms and Rules of Construction      27  

ARTICLE II

 

GENERAL TERMS

     28  

Section 2.01

    Transactions      28  

Section 2.02

    Procedure for Entering into Transactions      28  

Section 2.03

    Repurchase; Payment of Repurchase Price; Price Differential      29  

Section 2.04

    Margin Maintenance      30  

Section 2.05

    Payment Procedure      30  

Section 2.06

    Application of Payments      30  

Section 2.07

    Use of Purchase Price      31  

Section 2.08

    Recourse      31  

Section 2.09

    Requirements of Law      31  

Section 2.10

    Taxes      33  

Section 2.11

    Indemnity      36  

Section 2.12

    [Reserved]      36  

Section 2.13

    Structuring Fee      36  

Section 2.14

    Termination      36  

Section 2.15

    Additional Participation Agreements and Participation Certificates      37  

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

     37  

Section 3.01

    Repo Seller Existence      37  

Section 3.02

    Licenses      37  

Section 3.03

    Power      37  

Section 3.04

    Due Authorization      38  

Section 3.05

    Financial Statements      38  

Section 3.06

    No Early Amortization Event or Event of Default      39  

Section 3.07

    Solvency      39  

Section 3.08

    No Conflicts      39  

Section 3.09

    True and Complete Disclosure      39  

Section 3.10

    Approvals      39  

Section 3.11

    Litigation      40  

 

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Section 3.12

    Material Adverse Change      40  

Section 3.13

    Ownership      40  

Section 3.14

    The Servicing Contracts and Participation Agreements      41  

Section 3.15

    Taxes      41  

Section 3.16

    Investment Company      41  

Section 3.17

    Chief Executive Office; Jurisdiction of Organization      41  

Section 3.18

    Location of Books and Records      42  

Section 3.19

    ERISA      42  

Section 3.20

    Servicing Facilities; Agency Approvals      42  

Section 3.21

    Other Indebtedness      42  

Section 3.22

    Agreements      42  

Section 3.23

    No Reliance      43  

Section 3.24

    Plan Assets      43  

Section 3.25

    No Prohibited Persons      43  

Section 3.26

    Compliance with 1933 Act      43  

Section 3.27

    Eligible Assets      43  

Section 3.28

    Adherence to Accepted Servicing Practices      44  

Section 3.29

    Reimbursement of Escrow, Corporate Advance, and Delinquency Advances      44
 

Section 3.30

    Reimbursement of Advances upon Transfer of Servicing      44  

Section 3.31

    Eligible Advance Reimbursement Rights      44  

ARTICLE IV

 

CONVEYANCE; REPURCHASE ASSETS; SECURITY INTEREST

     44  

Section 4.01

    Ownership      44  

Section 4.02

    Security Interest      44  

Section 4.03

    Further Documentation      46  

Section 4.04

    [Reserved]      46  

Section 4.05

    Changes in Locations, Name, etc      46  

Section 4.06

    The Buyer’s Appointment as Attorney-in-Fact      47  

Section 4.07

    Performance by the Buyer of the Repo Seller’s Obligations      48  

Section 4.08

    Proceeds      48  

Section 4.09

    Remedies      49  

Section 4.10

    Limitation on Duties Regarding Preservation of Repurchase Assets      50  

Section 4.11

    Powers Coupled with an Interest      50  

Section 4.12

    Release of Security Interest      50  

Section 4.13

    Reinstatement      50  

 

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Section 4.14

    Subordination      51  

ARTICLE V

 

CONDITIONS PRECEDENT

     51  

Section 5.01

    Initial Transaction      51  

Section 5.02

    All Transactions      52  

Section 5.03

    Closing Subject to Conditions Precedent      53  

ARTICLE VI

 

COVENANTS

     55  

Section 6.01

    Litigation      55  

Section 6.02

    Prohibition of Fundamental Changes      55  

Section 6.03

    [Reserved]      55  

Section 6.04

    Asset Schedule      55  

Section 6.05

    No Adverse Claims      56  

Section 6.06

    Assignment      56  

Section 6.07

    Security Interest      56  

Section 6.08

    Records      56  

Section 6.09

    Books      57  

Section 6.10

    Approvals      57  

Section 6.11

    Material Change in Business      57  

Section 6.12

    Distributions      57  

Section 6.13

    Collections on Assets and the Dedicated Account      57  

Section 6.14

    Applicable Law      58  

Section 6.15

    Existence      58  

Section 6.16

    Chief Executive Office; Jurisdiction of Organization      58  

Section 6.17

    Taxes      58  

Section 6.18

    Transactions with Affiliates      58  

Section 6.19

    True and Correct Information      59  

Section 6.20

    Servicing with respect to Advances      59  

Section 6.21

    No Pledge      59  

Section 6.22

    Plan Assets      59  

Section 6.23

    Sharing of Information      59  

Section 6.24

    Termination of Servicing Notice      60  

Section 6.25

    Advance Reporting Requirements      60  

Section 6.26

    [Reserved]      60  

Section 6.27

    Financial Covenants      60  

Section 6.28

    No Prohibited Persons      60  

 

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Section 6.29

    Investment Company      61  

Section 6.30

    Modification of the Servicing Contracts or Participation Agreements      61
 

Section 6.31

    Insurance      61  

Section 6.32

    Guarantees      61  

Section 6.33

    Indebtedness      61  

Section 6.34

    Requests for Information      61  

Section 6.35

    Changes in the Servicing Contracts      62  

Section 6.36

    Reporting Requirements      62  

Section 6.37

    Liens on Substantially All Assets      64  

Section 6.38

    Litigation Summary      64  

Section 6.39

    Most Favored Status      64  

Section 6.40

    No Subservicing      65  

Section 6.41

    Servicer Administration      65  

ARTICLE VII

 

DEFAULTS/RIGHTS AND REMEDIES OF BUYER UPON DEFAULT

     65  

Section 7.01

    Events of Default      65  

Section 7.02

    No Waiver      69  

Section 7.03

    Due and Payable      69  

Section 7.04

    Fees      69  

Section 7.05

    Default Rate      69  

ARTICLE VIII

 

ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; SEPARATE ACTIONS BY BUYER

     70  

Section 8.01

    Entire Agreement      70  

Section 8.02

    Waivers, Separate Actions by the Buyer      70  

ARTICLE IX

 

SUCCESSORS AND ASSIGNS

     70  

Section 9.01

    Successors and Assigns      70  

Section 9.02

    Participations and Transfers      70  

Section 9.03

    Buyer and Participant Register      71  

Section 9.04

    Administrative Transactions      72  

Section 9.05

    Participation Certificate Transfers      72  

ARTICLE X

 

MISCELLANEOUS

     72  

Section 10.01

    Survival      72  

Section 10.02

    Indemnification      73  

Section 10.03

    Nonliability of the Buyer      73  

Section 10.04

    Governing Law; Submission to Jurisdiction; Waivers      74  

 

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Section 10.05

    Notices      75  

Section 10.06

    Severability      76  

Section 10.07

    Section Headings      77  

Section 10.08

    Counterparts      77  

Section 10.09

    Periodic Due Diligence Review      77  

Section 10.10

    Hypothecation or Pledge of Repurchase Assets      77  

Section 10.11

    Non-Confidentiality of Tax Treatment      78  

Section 10.12

    Set-off      79  

Section 10.13

    Intent      80  

Section 10.14

    Electronic Signatures and Transmission      81  

Section 10.15

    Rights and Remedies of Freddie Mac      82  

 

Schedule 1    –      Designated Pool Schedule Schedule 2    –      Form of Asset
Schedule Schedule 3    –      Responsible Officers of the Repo Seller Schedule
3.21    –    Existing Indebtedness Schedule 4    –    Buyer Account Schedule 5
   –    Competitors Exhibit A    –      Form of Transaction Notice Exhibit B   
–      Form of Officer’s Compliance Certificate Exhibit C-1    –      Form of
U.S. Tax Compliance Certificate Exhibit C-2    –      Form of U.S. Tax
Compliance Certificate Exhibit C-3    –      Form of U.S. Tax Compliance
Certificate Exhibit C-4    –      Form of U.S. Tax Compliance Certificate

 

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MASTER REPURCHASE AGREEMENT

This Master Repurchase Agreement (as amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”) is made as of August 7,
2020, among CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (“CSFB”), as
administrative agent (the “Administrative Agent”), CREDIT SUISSE AG, CAYMAN
ISLANDS BRANCH (“CSCIB”), as buyer (the “Buyer”), PENNYMAC CORP. (“PMC”), as
seller (the “Repo Seller”) and as servicer (the “Servicer”).

W I T N E S S E T H:

WHEREAS, PMC intends to create two Participation Certificates (one related to
its Fannie Mae Pool which shall be a Designated Pool and one related to its
Freddie Mac Pool which shall be a Designated Pool) pursuant to the related
Participation Agreement, each of which Participation Certificate evidences a
Participation Interest in Advance Reimbursement Rights with respect to the
related Designated Pool, that are the subject of this Agreement;

WHEREAS, the parties hereto intend to enter into a transaction in which the Repo
Seller agrees to transfer to the Buyer a Participation Certificate related to
the Fannie Mae Pool;

WHEREAS, the parties hereto intend to enter into a transaction in which the Repo
Seller agrees to transfer to the Buyer a Participation Certificate related to
the Freddie Mac Pool; and

WHEREAS, Administrative Agent, the Buyer and the Repo Seller desire to enter
into this Agreement to allow for financing of the Participation Interests in
certain Advance Reimbursement Rights relating to Delinquency Advances, Escrow
Advances and Corporate Advances, which Participation Interests are represented
by the Participation Certificates.

NOW, THEREFORE, in consideration of the mutual agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Buyer, the Administrative Agent, and the Repo Seller
hereby agree as follows.

ARTICLE I

DEFINITIONS

Section 1.01 Certain Defined Terms. Capitalized terms defined in (or by
reference in) the applicable Participation Agreement and used but not defined in
this Agreement shall have the meanings given to them in (or by reference in) the
applicable Participation Agreement. The following terms shall have the indicated
meanings set forth below:

“1933 Act” means the Securities Act of 1933, as amended from time to time.

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

 

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“Accepted Servicing Practices” means the following standards with which the
Servicer shall comply at all times:

(i) the Servicer shall continue to make Advances and seek reimbursement of
Advances as soon as practicable in accordance with the terms of the related
Servicing Contract, the applicable Agency Guide, and Freddie Mac Purchase
Documents, as applicable;

(ii) the Servicer shall apply all Advance Reimbursement Amounts as promptly as
practicable and agrees to use commercially reasonable efforts to reimburse the
Advances of a particular type that were disbursed first in time prior to the
Advances of the same type with respect to that Mortgage Loan that were disbursed
later in time;

(iii) the Servicer shall identify on its systems and in its records that the
Buyer is the owner of each Participation Certificate representing the Advance
Reimbursement Rights by, (A) in the case of Freddie Mac Mortgage Loans, using a
unique the Seller/Servicer number with respect to the related Mortgage Loans;
and (B) in the case of Fannie Mae Mortgage Loans, using a unique investor ID
number with respect to the related Mortgage Loans;

(iv) the Servicer shall maintain systems and operating procedures necessary to
comply with all of the terms of the Program Agreements;

(v) the Servicer shall cooperate with the Buyer, the Administrative Agent, and
the Advance Verification Agent in each of its respective duties set forth in the
Program Agreements; and

(vi) the Servicer shall make all Delinquency Advances, Escrow Advances and
Corporate Advances within the time period required under the related Servicing
Contract, unless such failure to make any Advances results from inadvertence and
is remedied on or prior to the related distribution date for the related
Designated Pool.

“Account Control Agreement” means any Springing Account Control Agreement among
the Administrative Agent, the Repo Seller, and the Account Control Bank,
executed in connection herewith.

“Account Control Bank” means Bank of America, N.A.

“Acknowledgment Agreement” has the meaning set forth in the Participation
Agreement (Fannie Mae).

“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

 

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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.

“Administrative Agent” has the meaning given to such term in the preamble to
this Agreement.

“Administrative Transaction” has the meaning set forth in Section 9.04.

“Advance” or “Advances” means, collectively, each Delinquency Advance, Corporate
Advance, and Escrow Advance.

“Advance Reimbursement Amount” or “Advance Reimbursement Amounts” means any
amount which the Servicer, or any Person on its behalf, (i) collects on a
Mortgage Loan, (ii) withdraws from a Principal and Interest Custodial Account or
an Escrow Custodial Account, or (iii) receives from Freddie Mac, Fannie Mae or
any successor servicer, to reimburse an Advance made by the Servicer or any
Person on its behalf with respect to a Designated Pool pursuant to the related
Servicing Contract.

“Advance Reimbursement Right Balance” has the meaning assigned to such term in
the Pricing Side Letter.

“Advance Reimbursement Rights” means each and every right of the Servicer to be
reimbursed for the Advances made by, or on behalf of, the Servicer related to
the applicable Servicing Contract, whether now existing or hereafter arising.

“Advance Verification Agent” means an independent third party accounting firm
acceptable to the Administrative Agent, or any successor third party advance
verification agent appointed by PMC in accordance with this Agreement.

“Advance Verification Agent Agreement” means the advance verification agent
letter agreement, dated as of July 14, 2020, between the Advance Verification
Agent and PMC.

“Advance Verification Report” has the meaning set forth in Section 6.25(b).

“Advances Monthly Report” has the meaning set forth in Section 6.25(a).

“Adverse Claim” means a lien, security interest, mortgage interest, restriction
charge, encumbrance or other right or claim of any Person (other than (A) the
liens created in favor of the Buyer or assigned to the Buyer by (i) this
Agreement or (ii) any other Program Agreement and (B) the liens, claims,
interests, encumbrances and all other rights created in favor of each Agency by
the related Servicing Contract, Agency Agreement, Agency Guide, the Freddie Mac
Purchase Documents, or the Fannie Mae Requirements).

 

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“Affiliate” means, with respect to any specified Person, any other Person
directly or indirectly Controlling or Controlled by or under direct or indirect
common Control with such specified Person; provided, however, that in respect of
the Repo Seller or the Repo Guarantor, the term “Affiliate” shall include only
the Repo Guarantor and its wholly owned subsidiaries, and in respect of PLS, the
term “Affiliate” shall include only Private National Mortgage Acceptance
Company, LLC and its wholly owned subsidiaries.

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

“Agency Agreement” or “Agency Agreements” shall mean, individually and
collectively, the Freddie Mac Agency Agreement and the Acknowledgment Agreement,
as applicable.

“Agency Approvals” shall have the meaning set forth in Section 6.10.

“Agency Guide” means with respect to (i) Fannie Mae, the Fannie Mae Guide, and
(ii) Freddie Mac, the Freddie Mac Guide, and in all cases, any other applicable
guides published by the applicable Agency and any related announcements,
directives and correspondence issued by such Agency.

“Agency MAE Event” means, with respect to any Agency, any event which would have
a material adverse effect upon (i) the business, financial condition,
operations, or prospects of such Agency, (ii) the ability of such Agency to
timely perform its obligations under the applicable Agency Agreement, (iii) with
respect to Advance Reimbursement Rights originated (A) with respect to a Fannie
Mae Mortgage Pool, the ability of Fannie Mae (1) under its Preferred Stock
Purchase Agreement with the United States Treasury, to draw at least an amount
sufficient to meet its obligations or (2) to access another source of credit
support that is acceptable to the Administrative Agent, in its sole discretion,
to fund Fannie Mae’s advance reimbursement obligations, or (B) with respect to a
Freddie Mac Mortgage Pool, the ability of Freddie Mac (1) under its Preferred
Stock Purchase Agreement with the United States Treasury, to draw at least an
amount sufficient to support its obligations or (2) to access another source of
credit support that is acceptable to the Administrative Agent on behalf of the
Buyer, in its sole discretion, to fund Freddie Mac’s reimbursement obligations,
or (iv) or any materially adverse change to the reimbursement process for
Advances relating to the related Servicing Contract, the applicable Agency
Guide, or the Freddie Mac Purchase Documents, as applicable, in each case, as
determined by the Administrative Agent in its sole discretion.

“Agreement” shall have the meaning set forth in the preamble.

“Applicable Law” means all laws, rules, regulations and executive orders in
effect from time to time applicable to banking institutions, including those
relating to the funding of terrorist activities and money laundering.

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

 

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“Asset” or “Assets” means the Participation Certificates and a Participation
Interest in the Advance Reimbursement Rights represented thereby sold to secure
the Obligations hereunder.

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

“Asset Schedule” means a schedule, in the form attached hereto as Schedule 2,
listing as of the date of such schedule (i) each Participation Certificate
subject to a Transaction hereto, each Participation Agreement subject to a
Transaction hereto, and the Market Value of the components thereof, and (ii) the
current Advances Monthly Report, as such schedule shall be updated from time to
time in accordance with Section 2.02 or Section 6.04 hereof.

“Backup Subservicer” means, with respect to a Servicing Contract, a backup
subservicer engaged by the Servicer to backup subservice, pursuant to an
Eligible Subservicing Agreement, the Mortgage Loans relating to such Servicing
Contract so long as such backup subservicing arrangement relating to such
Servicing Contract has been approved by the Administrative Agent, in its sole
discretion, which shall not be unreasonably withheld.

“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.

“Business Day” any day other than (i) a Saturday or Sunday or (ii) any other day
on which (x) national banking associations or state banking institutions in New
York, New York, the State of California, the State of Texas or the city and
state where the Corporate Trust Office is located or (y) the Federal Reserve
Bank of New York are authorized or obligated by law, executive order or
governmental decree to be closed.

“Buyer” means CSCIB, together with its successors, and any assignee of and
Participant or Transferee in the Transaction.

“Buyer Account” means the account identified on Schedule 4 hereto.

“Capital Lease Obligations” means, for any Person, all obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of the this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.

“Change in Control” means:

(a) any transaction or event as a result of which the Repo Guarantor ceases to
own, beneficially or of record, through one of its wholly-owned Subsidiaries,
more than 50% of the stock of the Repo Seller, except with respect to an initial
public offering of the Repo Seller’s common stock on a U.S. national securities
exchange;

 

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(b) the sale, transfer, or other disposition of all or substantially all of the
Repo Seller’s assets (excluding any such action taken in connection with any
securitization transaction); or

(c) the consummation of a merger or consolidation of the Repo Seller 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 the Repo Seller
immediately prior to such merger, consolidation or other reorganization.

“Closing Date” means August 7, 2020.

“Code” means the Internal Revenue Code of 1986.

“Collection Policy” means the Servicer’s policies regarding collections and
remittances in accordance with the provisions of this Agreement and the related
Servicing Contract and shall include the charging and collection of fees for
servicing functions, including, without limitation, the charging of late fees,
assumption fees, modification fees and other clerical or administrative fees and
the making and reimbursement of principal and interest advances, escrow
advances, and corporate advances in the ordinary course of servicing.

“Competitor” has the meaning set forth in Section 9.01.

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

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by Net Income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consent Withdrawal Date” means, with respect to the related Agency Agreement,
the effective date of any withdrawal of consent under such Agency Agreement,
including the expiration of the term of such consent and non-renewal of the term
thereof.

“Consent Withdrawal Pool” has the meaning set forth in the definition of
Eligible Pool.

“Control”, “Controlling” or “Controlled” means possession of the power to direct
or cause the direction of the management or policies of a Person through the
right to exercise voting power or by contract, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.

“Corporate Advance” means a Freddie Mac Corporate Advance or a Fannie Mae
Corporate Advance and collectively the “Corporate Advances”, as defined in the
applicable Participation Agreement.

 

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“Credit Advance Funding” means, to the extent of Delinquency Advances that
Freddie Mac reimburses by a credit, the Advance Reimbursement Amount for such
Delinquency Advances, which shall be deemed to have been reimbursed and
immediately redeployed to make a new Delinquency Advance.

“CSCIB” has the meaning given to such term in the preamble to this Agreement.

“CSFB” has the meaning given to such term in the preamble to this Agreement.

“Dedicated Account” means, individually and collectively, each of (i) the
Dedicated Account (Fannie Mae) and (ii) the Dedicated Account (Freddie Mac), in
each case as applicable as the context may require.

“Dedicated Account (Fannie Mae)” means each of (i) the demand deposit account
named, “PennyMac Loan Services, LLC as subservicer for PennyMac Corp. –
Dedicated Account for Fannie MSR Servicer Advance Reimbursements” with an
account number of 1291775189 and (ii) the demand deposit account “PennyMac Loan
Services, LLC as subservicer for PennyMac Corp. – Dedicated Account for Fannie
P&I Advance Reimbursements” with an account number of 1291775202, which accounts
have been established by the Repo Seller, the Administrative Agent, as secured
party, and the Account Control Bank with respect to the Fannie Mae Pool for the
benefit of the Buyer at the Account Control Bank and which accounts shall be
subject to the terms of the Account Control Agreement.

“Dedicated Account (Freddie Mac)” means each of (i) the demand deposit account
in connection with the Advance Reimbursement Amounts relating to Freddie Mac
Corporate Advances and Freddie Mac Escrow Advances, and (ii) the demand deposit
account in connection with the Advance Reimbursement Amounts relating to Freddie
Mac Delinquency Advances, which accounts have been established (or will be
established) by the Repo Seller, the Administrative Agent, as secured party, and
the Account Control Bank with respect to the Freddie Mac Pool for the benefit of
the Buyer at the Account Control Bank and which accounts shall be subject to the
terms of the Account Control Agreement.

“Default” means an event, condition or default that, with the giving of notice,
the passage of time, or both, would constitute an Event of Default.

“Delinquency Advance” means a Freddie Mac Delinquency Advance or a Fannie Mae
Delinquency Advance and collectively the “Delinquency Advances”, as defined in
the applicable Participation Agreement.

“Designated Pool” means, as of any date, any Eligible Pool made subject to a
Transaction in accordance with the terms of this Agreement and that is subject
to a Servicing Contract, the applicable Agency Agreement, and the applicable
Participation Agreement and is identified and included on the Designated Pool
Schedule on such date.

“Designated Pool Schedule” means, as of any date, the list attached hereto as
Schedule 1, which shall include the related Servicing Contract and the
applicable the Repo Seller/Servicer Number for each Eligible Pool listed thereon
or, in the case of Fannie Mae Mortgage Loans, the unique loan numbers with
respect to the related Mortgage Loans, as such

 

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schedule may be amended from time to time in accordance with the Program
Agreements, the applicable Agency Agreement, and the applicable Participation
Agreement. As additional Eligible Pools are added as Designated Pools, and as
Eligible Pools are removed as Designated Pools, the Repo Seller shall update and
furnish the Designated Pool Schedule to the Administrative Agent on behalf of
the Buyer, and the most recently furnished schedule shall be maintained by the
Administrative Agent as the definitive Designated Pool Schedule.

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

“Early Amortization Amount” means, as of any date of determination, an amount
equal to the sum of the Repurchase Price and all outstanding Obligations.

“Early Amortization Event” means the occurrence, as determined by the
Administrative Agent, in its sole discretion, of (i) any Agency MAE Event, or
(ii) any Servicing MAE Event.

“Early Amortization Period” means the period that begins upon the occurrence of
an Early Amortization Event or the termination of the Revolving Period and ends
upon the earlier of (i) ninety (90) days following the commencement of the Early
Amortization Period, and (ii) the date on which the Repo Seller’s Obligations
hereunder are satisfied and paid in full.

“Electronic Transmission” means any form of communication not directly involving
the physical transmission of paper, including the use of, or participation in,
one (1) or more electronic networks or databases (including one (1) or more
distributed electronic networks or databases), that creates a record that may be
retained, retrieved and reviewed by a recipient thereof and that may be directly
reproduced in paper form by such a recipient through an automated process.

“Eligible Advance Reimbursement Rights” means an Advance Reimbursement Right
that satisfies all of the following criteria:

(a) constitutes a “general intangible” or “payment intangible” within the
meaning of Section 9-102(a)(42) or Section 9-102(a)(61) (or the corresponding
provision in effect in a particular jurisdiction) of the UCC as in effect in all
applicable jurisdictions;

(b) relates to a Fannie Mae Advance or a Freddie Mac Advance (i) that is
included in a Designated Pool, (ii) that at the time it was made, such Freddie
Mac Advance or Fannie Mae Advance was authorized pursuant to, and determined by
the Servicer or Subservicer, as applicable, in good faith to comply with the
related Servicing Contract, the Freddie Mac Guide and the Freddie Mac Purchase
Documents, as applicable (iii) as to which the Servicer has complied with all of
the requirements for reimbursement relating to the applicable Servicing
Contract, the Freddie Mac Guide and the Freddie Mac Purchase Documents, as
applicable and (iv) which remains eligible for reimbursement pursuant to the
related Servicing Contract, the Freddie Mac Guide and the Freddie Mac Purchase
Documents, as applicable;

 

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(c) with respect to which no representation or warranty made by the Repo Seller
and the Servicer in relation thereto has been breached (and not waived in
writing by the Administrative Agent and the applicable Agency, as necessary);

(d) with respect to which, the Repo Seller and the Servicer has (i) not taken
any action that would impair the right, title and interest of the Buyer therein,
or (ii) failed to take any action that was necessary to avoid impairing the
Buyer’s right, title or interest therein;

(e) the Advance related to which either (i) has been fully funded by the
Servicer (or any predecessor servicer) using its own funds and/or collections
(as appropriate) as provided in the related Servicing Contract, the Freddie Mac
Guide or the Freddie Mac Purchase Documents, as applicable or (ii) in the case
of Delinquency Advances, will be funded with Purchase Price proceeds hereunder
on the related Purchase Date;

(f) relates to a Mortgage Loan (i) that is secured by a first lien on the
underlying Mortgaged Property and (ii) the terms of which have not been modified
after the creation of such Advance Reimbursement Right unless the Servicer has
submitted a claim for reimbursement thereof to Freddie Mac or Fannie Mae, as
applicable, and no more than ninety (90) days have passed since the date of the
modification, but in no event past the timelines for reimbursement by Freddie
Mac or Fannie Mae, as applicable;

(g) in the case of any Freddie Mac Advance, Freddie Mac has the responsibility
to reimburse the related Advance, and in the case of any Fannie Mae Advance,
Fannie Mae has the responsibility to reimburse the related Advance;

(h) the Advance related to which has been made or will be made in connection
with a Mortgage Loan that has an “active” status in the related MBS, and such
Mortgage Loan has not been liquidated, paid in full, repurchased or otherwise
charged off;

(i) complies, in all material respects, with all Applicable Laws and other legal
requirements, whether federal, state or local;

(j) provides for payment in Dollars;

(k) was not subject to the Laws of a jurisdiction whose Laws would make such
Advance Reimbursement Right, or the financing thereof contemplated hereby,
unlawful, invalid or unenforceable and is not subject to any legal limitation on
transfer (other than set forth in the relevant Servicing Contract);

(l) is owned solely by the Servicer subject to the relevant Servicing Contract,
the Freddie Mac Guide or the Freddie Mac Purchase Documents, as applicable, free
and clear of all Adverse Claims and has not been sold, conveyed, pledged or
assigned to any lender, purchaser, investor or other Person;

(m) is not an obligation of the United States of America, any State or any
agency or instrumentality or political subdivision thereof (other than FHA, HUD,
VA, or USDA);

 

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(n) in respect of which the Servicer has obtained from each Person that may have
an interest in such Advance Reimbursement Right all acknowledgments or
approvals, if any, that are necessary to pledge such Advance Reimbursement
Right, as contemplated by this Agreement;

(o) in respect of which the Servicer has complied in all material respects with
the Collection Policy, the relevant Servicing Contract, the Freddie Mac Guide or
the Freddie Mac Purchase Documents, as applicable;

(p) in respect of which the information set forth in the Asset Schedule and the
relevant Servicing Contract and furnished by the Servicer is true and correct in
all material respects;

(q) in respect of which the related Servicing Contract is (1) governed by the
laws of the United States or a state within the United States, (2) in full force
and effect, and (3) subject to, or incorporates by reference, the Freddie Mac
Guide, the Freddie Mac Purchase Documents or the Fannie Mae Guide and provides
(directly or indirectly by incorporating the Freddie Mac Guide, the Freddie Mac
Purchase Documents or the Fannie Mae Guide, as applicable) that:

(i) any Corporate Advance is validly reimbursable to the Servicer (A) if a
Freddie Mac Corporate Advance, by Freddie Mac pursuant to Chapter 9701 of the
Freddie Mac Guide and the Topics, or (B) if a Fannie Mae Advance, from the
Mortgage Loan obligor or out of related Mortgage Loan insurance proceeds, claims
settlements or other available sources, or, if not recoverable from those
sources, by Fannie Mae, pursuant to Part A, Subpart A2, Chapter
A2-1-01-Servicing Advances, Part E, Chapter E-5 (Requesting Reimbursement for
Expenses Associated with Default Related Legal Matters), and Part F, Chapter
F-1-05 (Expense Reimbursement) of the Fannie Mae Guide;

(ii) any Escrow Advance is (A) if a Freddie Mac Escrow Advance, reimbursable out
of (1) any Escrow Funds for the Mortgage Loan for which the Servicer made the
related Escrow Advance pursuant to Topic 8301.19 of the Freddie Mac Guide, and
(2) if not reimbursable out of such amounts, then reimbursable by Freddie Mac
pursuant to Chapter 9701 of the Freddie Mac Guide and the Topics; or (B) if a
Fannie Mae Advance, reimbursable from the Mortgage Loan obligor or out of
related Mortgage Loan insurance proceeds, claims settlements or other available
sources, or, if not recoverable from those sources, by Fannie Mae, pursuant to
Part A, Subpart A2, Chapter A2-1-01-Servicing Advances, Chapter E-5 (Requesting
Reimbursement for Expenses Associated with Default Related Legal Matters) and
Chapter F-1-05 (Expense Reimbursement) of the Fannie Mae Guide;

(iii) any Delinquency Advance is (A) if a Freddie Mac Advance, an “advance of
Principal and Interest Payments” reimbursable to the Servicer (1) out of any
Principal and Interest Payments on any Freddie Mac Mortgage Loans in any Freddie
Mac Pool that are subject to such Servicing Contract that are subsequently
deposited pursuant to Topic 8301.19 of the Freddie Mac Guide, or (2) if not
reimbursable out of any such Principal and Interest Payments received, by
Freddie Mac pursuant to (I) its Disaster-

 

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Related Forbearance policy eligible for early selling representation and
warranty relief subject to timely submission of data to Freddie Mac in
accordance with Topic 1301.1 of the Freddie Mac Guide, or (II) a COVID19-related
forbearance policy communicated through Freddie Mac Bulletins and FAQ documents
after the date of this Agreement (and subject to separate mutually agreed
Advance Rate Percentages depending on the timing and form of such relief); or
(B) if a Fannie Mae Advance, a “delinquency advance” as defined the Fannie Mae
Guide and, subject to the Fannie Mae Requirements, is reimbursable to the
Servicer out of any Principal and Interest Payments on any Fannie Mae Mortgage
Loans in such Designated Pool pursuant to Part A, Subpart A2, Chapter
A2-1-01-Delinquency Advances of the Fannie Mae Guide;

(iv) any Delinquency Advance that is a Freddie Mac Advance outstanding and
unreimbursed to the Servicer at the time of any transfer of servicing to any
successor servicer is reimbursable to the Servicer, (x) in respect of interest
amounts, no later than the date the funds are due to Freddie Mac pursuant to
Section 7101.10(c) of the Freddie Mac Guide, and (y) in respect of principal
amounts, no later than the Effective Date of Transfer (as defined in the Freddie
Mac Guide) pursuant to Section 7101.10(d) of the Freddie Mac Guide; and

(v) any Delinquency Advance that is a Fannie Mae Advance outstanding and
unreimbursed to the Servicer at the time of any transfer of servicing to any
successor servicer is reimbursable to the Servicer at the time the successor
servicer receives from the Servicer a final accounting of all monies pursuant to
Part F, Chapter F-1-11 (Post-Delivery Servicing Transfers) of the Fannie Mae
Guide; and

(r) to the extent the Servicer engages a Subservicer in connection with the
related Servicing Contract to subservice a Freddie Mac Mortgage Loan or Fannie
Mae Mortgage Loan related to such Advance Reimbursement Right, (i) the Servicer
(x) continues to be obligated to fund the Advances relating to the Servicing
Contract, the Freddie Mac Guide or the Freddie Mac Purchase Documents, as
applicable and (y) continues to possess such Advance Reimbursement Right for any
Advances relating to such Servicing Contract, the Freddie Mac Guide or the
Freddie Mac Purchase Documents, as applicable (ii) the Subservicer does not
possess such Advance Reimbursement Right and the Repo Seller shall cause the
Subservicer to remit the related Advance Reimbursement Amount to the applicable
Dedicated Account within two (2) Business Days of such Subservicer’s receipt
thereof, and (iii) the Administrative Agent, in its sole discretion. approves
the Subservicer;

provided that the Market Value for an Advance Reimbursement Right shall be zero
if on any date of determination the Advance Reimbursement Right is not an
Eligible Advance Reimbursement Right.

“Eligible Asset” or “Eligible Assets” means with respect to any Asset that is a
Participation Certificate, an Asset that satisfies all of the following
criteria:

(a) evidences a Participation Interest in the Advance Reimbursement Rights;

 

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(b) constitutes a “security” and is not (i) dealt in or traded on a “securities
exchange” or in a “securities market,” (ii) “investment property” or (iii) held
in a “deposit account” (such terms having the meanings given to such terms in
the Uniform Commercial Code);

(c) constitutes all the issued and outstanding Participation Interests issued
with respect to such Participation Certificate under the Participation Agreement
and is certificated;

(d) has been duly and validly issued pursuant to the Participation Agreement,
which is in full force and effect and, except to the extent approved in writing
by the Administrative Agent, on behalf of the Buyer, the terms of such
Participation Agreement have not been impaired, altered or modified in any
respect;

(e) in respect of which the Repo Seller has complied in all material respects
with the Participation Agreement;

(f) in respect of which the information set forth in the Participation Agreement
is true and correct in all material respects; and

(g) in respect of which the Repo Seller has delivered to Administrative Agent a
duly executed and authorized Agency Agreement for the related Designated Pool.

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

“Eligible Pool” means any pool of Mortgage Loans serviced under a Servicing
Contract, which pool is identified with the same the Repo Seller/Servicer Number
and with respect to which, as of the date of the related Transaction and as of
each day that any Asset shall be subject to a Transaction hereunder (unless
expressly agreed upon in writing by the Buyer, in its sole discretion, to the
contrary), satisfies the following criteria:

(a) pursuant to the applicable Agency Agreement, Freddie Mac or Fannie Mae, as
the case may be, has consented to the assignment by the Servicer of its Advance
Reimbursement Rights with respect to such Freddie Mac Pool or Fannie Mae Pool,
as applicable, and has agreed that the rights of Servicer, the Buyer, and
Administrative Agent on behalf of the Buyer to Advance Reimbursement Amounts in
respect of such pool of Mortgage Loans are not subject to any right of set-off
or other claim of Freddie Mac or Fannie Mae, as the case may be, except as
otherwise provided in the applicable Agency Agreement (subject, however, solely
to the limited payment subordination in the Freddie Mac Agency Agreement, as
applicable), until all Obligations of the Repo Seller under this Agreement shall
have been paid and satisfied in full and such Agency Agreement remains in effect
for the entire Freddie Mac Pool or Fannie Mae Pool, as applicable, and has not
been terminated as to any of the related Advance Reimbursement Rights; provided,
that if an Agency Agreement is no longer in effect for a Freddie Mac Pool or
Fannie Mae Pool solely due to a Consent Withdrawal Date, (i) such Freddie Mac
Pool or Fannie Mae Pool, as applicable, shall continue to be an Eligible Pool
with respect to the Advance Reimbursement Rights related thereto which were
created prior to such Consent Withdrawal Date to the extent such Agency
Agreement shall apply to such Advance Reimbursement Rights and (ii) the
withdrawal only applies to the Advance Reimbursement Rights created after the
Consent Withdrawal Date and any related Freddie Mac Pool or Fannie Mae Pool, as
applicable, shall be identified as a “Consent Withdrawal Pool” on the Designated
Pool Schedule attached hereto;

 

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(b) all Advance Reimbursement Rights arising under such pool of Mortgage Loans
are free and clear of any Adverse Claim in favor of any Person;

(c) the Servicer has not voluntarily elected to change the reimbursement
mechanics of Advances in such pool of Mortgage Loans from a pool-level
reimbursement mechanic to a loan-level reimbursement mechanic or from a
loan-level reimbursement mechanic to a pool-level reimbursement mechanic without
the consent of the Administrative Agent; and

(d) is a Designated Pool.

“Eligible Subservicing Agreement” means a subservicing agreement that has
(i) been approved by the Administrative Agent in its sole discretion by signed
instrument and (ii) not been assigned or amended in any material respect with
respect to the Advance Reimbursement Rights without the Administrative Agent’s
written consent; provided that as of the Closing Date the Administrative Agent
hereby acknowledges and agrees that the PLS Subservicing Agreement constitutes
an Eligible Subservicing Agreement.

“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
the Repo Seller or the Repo 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 a single employer described in
Section 414 of the Code.

“ERISA Event of Termination” means with respect to the Repo Seller or Repo
Guarantor (i) with respect to any Plan, a reportable event, as defined in
Section 4043 of ERISA, as to which the PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified with thirty
(30) days of the occurrence of such event, or (ii) the withdrawal of the Repo
Seller, Repo 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 the Repo Seller, Repo 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 the Repo Seller, Repo 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 the Repo Seller, Repo 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)

 

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any event or circumstance exists which may reasonably be expected to constitute
grounds for the Repo Seller, the 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.

“Escrow Advance” means a Freddie Mac Escrow Advance or a Fannie Mae Escrow
Advance and collectively the “Escrow Advances”, as defined in the applicable
Participation Agreement.

“Escrow Custodial Account” has the meaning assigned to such term in the Freddie
Mac Guide or the Fannie Mae Guide, as applicable.

“Escrow Funds” has the meaning assigned to such term in the Freddie Mac Guide or
the Fannie Mae Guide, as applicable.

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

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Buyer or other recipient or required to be withheld or deducted from a payment
to such the Buyer or such other recipient: (a) Taxes imposed on (or measured by)
Net Income or net profits (however denominated), franchise Taxes and branch
profits Taxes, in each case, (i) imposed on a Buyer or other recipient as a
result of such the Buyer or such other recipient 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) that are Other Connection Taxes; (b) any Tax imposed on a Buyer or other
recipient of a payment hereunder that is attributable to such the Buyer’s or
other recipient’s failure to comply with relevant requirements set forth in
Section 2.10 (c) any withholding Tax that is imposed on amounts payable to or
for the account of such the Buyer or other recipient of a payment hereunder
pursuant to a law in effect on the date such the Buyer or such other recipient
becomes a party to or under this Agreement, or such person changes its lending
office, except in each case to the extent that, pursuant to Section 2.10,
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.

“Expenses” means all present and future expenses reasonably incurred by or on
behalf of the Buyer in connection with the negotiation, execution, enforcement
or the ongoing operations relating to this Agreement, any of the other Program
Agreements, the Agency Agreements, and any amendment, supplement or other
modification or waiver related hereto or thereto, whether incurred heretofore or
hereafter, which expenses shall include any service provider fees,
indemnification payments, the documented cost of title, lien, judgment and other
record searches; reasonable and documented attorneys’ fees, any ongoing audits
or due diligence costs in connection with valuation, entering into Transactions
or determining whether a Margin Deficit may exist; and costs of preparing and
recording any UCC financing statements or other filings necessary to perfect the
security interest created hereby.

“Fannie Mae” means Federal National Mortgage Association (commonly known as
Fannie Mae), and any successor thereto.

 

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“Fannie Mae Advance” means any Advance with respect to a Fannie Mae Mortgage
Loan.

“Fannie Mae Guide” means, collectively, the Fannie Mae Servicing Guide and the
Fannie Mae Selling Guide, in each case, as amended, modified or supplemented
from time to time. References to chapters, sections and definitions in the
Fannie Mae Guide refer to the chapters, sections and definition references that
exist in the Fannie Mae Guide as of the Closing Date, but to the extent that the
chapters, sections and definition references change in subsequent amendments to
the Fannie Mae Guide, references to the Fannie Mae Guide shall also include any
successor or replacement chapter, section and definition references.

“Fannie Mae Lender Contract” means collectively, the Mortgage Selling and
Servicing Contract and all applicable Pool Purchase Contracts between Fannie Mae
and the Servicer, the Fannie Mae Selling Guide, the Fannie Mae Servicing Guide
and all supplemental servicing instructions or directives provided by Fannie
Mae, all applicable master agreements, recourse agreements, repurchase
agreements, indemnification agreements, loss-sharing agreements, and any other
agreements between Fannie Mae and the Servicer, and all as amended, restated or
supplemented from time to time.

“Fannie Mae Mortgage Loan” means any Mortgage Loan, which includes the Mortgage
Loan Documents (as defined in the Participation Agreement (Fannie Mae)), the
Mortgage File (as defined in the Participation Agreement (Fannie Mae)), the
monthly payments, any principal payments or prepayments, any related escrow
accounts, the Servicing Rights (as defined in the Participation Agreement
(Fannie Mae)) and all other rights, benefits, proceeds and obligations arising
from or in connection with such Mortgage Loan, and is included in a Fannie Mae
Pool.

“Fannie Mae Requirements” means the Acknowledgment Agreement, the Mortgage
Selling and Servicing Contract, the Fannie Mae Guide and the contracts
(including any related guaranty agreement, master servicing agreement, master
agreement for servicer’s principal and interest custodial account, master
agreement for servicer’s escrow custodial account, master custodial agreement,
schedule of subscribers and any other agreement or arrangement) and all
applicable rules, regulations, communications, memoranda and other written
directives, procedures, manuals, guidelines, including Fannie Mae servicer
eligibility requirements, and any other information or material incorporated
therein, defining the rights and obligations of Fannie Mae and Servicer, with
respect to the Fannie Mae Mortgage Loans.

“Fannie Mae Selling Guide” means the Fannie Mae Single Family Selling Guide.

“Fannie Mae Servicing Guide” means the Fannie Mae Single Family Servicing Guide.

“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, any agreement entered into
pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental
agreement, treaty or convention among Governmental Authorities and implementing
such sections of the Code.

 

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“FDIA” has the meaning set forth in Section 10.13(c).

“FDICIA” has the meaning set forth in Section 10.13(d).

“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 that is satisfactory to the applicable Agency.

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

“Freddie Mac” means The Federal Home Loan Mortgage Corporation (commonly known
as Freddie Mac), and any successor thereto.

“Freddie Mac Advance” means any Advance with respect to a Freddie Mac Mortgage
Loan and made pursuant to the Freddie Mac Designated Servicing Contract, the
Freddie Mac Guide and/or the Freddie Mac Purchase Documents, as applicable.

“Freddie Mac Effective Date” means on or after (i) the effective date of the
Freddie Mac Agency Agreement (as defined in the Participation Agreement (Freddie
Mac)), and (ii) the date on which the Buyer and the Repo Seller enter into a
Transaction with respect to the Participation Certificate (Freddie Mac) in
accordance with Sections 2.01, 2.02, and 2.15.

“Freddie Mac Excluded Assets” has the meaning set forth in Section 4.02(a).

“Freddie Mac Mortgage Loan” means a Mortgage Loan, which loan has been
transferred and assigned to Freddie Mac and in a Freddie Mac Pool and serviced
for Freddie Mac pursuant to a Freddie Mac Designated Servicing Contract, and its
related Freddie Mac Designated Servicing Contract.

“GAAP” means U.S. generally accepted accounting principles that are
(i) consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its successors, as in effect from time to time,
and (ii) applied consistently with principles applied to past financial
statements of the Repo Seller and its subsidiaries; provided, that a certified
public accountant would, insofar as the use of such accounting principles is
pertinent, be in a position to deliver an unqualified opinion (other than a
qualification regarding changes in generally accepted accounting principles)
that such principles have been properly applied in preparing such financial
statements.

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

 

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“Governmental Actions” means any and all consents, approvals, permits, orders,
authorizations, waivers, exceptions, variances, exemptions or licenses of, or
registrations, declarations or filings with, any Governmental Authority required
under any Governmental Rules.

“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 the Repo Seller, the Repo
Guarantor, Administrative Agent or any Buyer, as applicable.

“Governmental Rules” means any and all laws, statutes, codes, rules,
regulations, ordinances, orders, writs, decrees and injunctions, of any
Governmental Authority and any and all legally binding conditions, standards,
prohibitions, requirements and judgments of any Governmental Authority.

“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 (a) endorsements for collection or deposit in the
ordinary course of business, or (b) obligations to make servicing advances for
delinquent taxes and insurance or other obligations in respect of a mortgage
loan or mortgaged property or (c) any bad-boy guarantees for which liability is
not stated or determinable. 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.

“Indebtedness” means, for any Person: (a) obligations created, issued or
incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of Property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such Property
from such Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business, so long as such trade accounts payable are payable
within ninety (90) days of the date the respective goods are delivered or the
respective services are rendered; (c) Indebtedness (as defined in clauses (a) or
(b)) 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 (as defined in clauses
(a) or (b)) of others Guaranteed by such Person; (h) all obligations of such
Person incurred in connection with the acquisition or carrying of fixed assets
by such Person; (i) Indebtedness (as defined in clauses (a) or (b)) 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.

 

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“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 Repo
Seller under any Program Agreement and (b) to the extent not otherwise described
in clause (a) of this definition, Other Taxes.

“Investment Company Act” means the Investment Company Act of 1940, as amended.

“IRS” means the United States Internal Revenue Service.

“Laws” means any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, order, injunction, writ, decree or award of any
Governmental Authority.

“License” means any license, permit, approval, right, privilege, quota,
concession, or franchise issued, granted, conferred or otherwise created by a
Governmental Authority.

“Lien” means, with respect to any property or asset of any Person (a) any
mortgage, lien, pledge, charge or other security interest or encumbrance of any
kind in respect of such property or asset or (b) the interest of a vendor or
lessor arising out of the acquisition of or agreement to acquire such property
or asset under any conditional sale agreement, lease purchase agreement or other
title retention agreement.

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

“Margin Call” has the meaning set forth in Section 2.04(a).

“Margin Deadlines” has the meaning set forth in Section 2.04(b).

“Margin Deficit” has the meaning set forth in Section 2.04(a).

“Market Value” means, as of any date of determination, and without duplication,
the fair market value of the Eligible Assets as determined on such date by
Administrative Agent (or an Affiliate thereof) in its sole discretion.

“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 the Repo Seller, the Repo Guarantor or any
Affiliate thereof that is a party to any Program Agreement taken as a whole;
(b) a material impairment of the ability of the Repo Seller, the Repo Guarantor
or any Affiliate thereof that is a party to any Program Agreement to perform
under any Program Agreement and to avoid any Event of Default; (c) a material
adverse effect upon the legality, validity, binding effect or enforceability of
any Program Agreement against the Repo Seller, the Repo Guarantor or any
Affiliate thereof that is a party to any Program Agreement or any Agency
Agreement, in each case as determined by the Administrative Agent in its sole
discretion.

 

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

“Monthly Reimbursement Rate” means, as of any date of determination, the
arithmetic average of the fractions (expressed as percentages), determined for
each of the three (3) most recently concluded calendar months, obtained by
dividing (i) the aggregate Advance Reimbursement Amounts collected by the
Servicer and deposited into the applicable Dedicated Account during such month
(which shall include, for purposes of this definition, amounts deemed received
on account of Credit Advance Funding, if any, during such calendar month, but
only if no Delinquency Advances were deemed reimbursed by Credit Advance Funding
amounts for the preceding Price Differential Period) by (ii) the sum, for each
Freddie Mac Pool or Fannie Mae Pool, of the highest Advance Reimbursement Right
Balance of the related Advance Reimbursement Rights during such calendar month
relating to Advances funded by the Servicer in respect of such Freddie Mac Pool
or Fannie Mae Pool; provided however that for purposes of calculating the
Monthly Reimbursement Rate for the first two (2) months after the Closing Date
the result for May (as of April 30) 2020 shall equal 30% and the result for June
(as of May 31) 2020 shall equal 27%.

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

“Mortgage” means, with respect to a Mortgage Loan, a mortgage, deed of trust or
other similar security instrument encumbering a fee simple interest in real
property securing a Mortgage Note.

“Mortgage Loan” means a one-to-four family residential loan that is secured by a
mortgage, deed of trust or other similar security instrument on real property
(including REO Property resulting from the foreclosure of the real property that
had secured such loan), which loan is either (i) a Freddie Mac Mortgage Loan
contained in a Freddie Mac Pool, or (ii) a Fannie Mae Mortgage Loan and in a
Fannie Mae Pool and serviced for Fannie Mae pursuant to a Servicing Contract and
the Fannie Mae Guide.

“Mortgage Note” means the note or other evidence of the indebtedness of a
mortgagor secured by a Mortgage under a Mortgage Loan and all amendments,
modifications and attachments thereto.

“Mortgage Selling and Servicing Contract” means the Mortgage Selling and
Servicing Contract, dated as of October 15, 2010, as amended and supplemented
from time to time, between the Servicer and Fannie Mae, pursuant to which the
Servicer is selling mortgage loans to Fannie Mae or servicing Mortgage Loans on
Fannie Mae’s behalf, and any related addenda.

“Mortgaged Property” means the interest in real property securing a Mortgage
Loan as evidenced by the related Mortgage, together with improvements thereto
securing a Mortgage Loan.

“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 the Repo
Seller or any ERISA Affiliate and that is covered by Title IV of ERISA.

 

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“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 Proceeds Coverage Percentage” means, for any Price Differential Payment
Date, the percentage equivalent of a fraction, (i) the numerator of which equals
the total amount of the Advance Reimbursement Amount deposited into the
Dedicated Accounts during the related Price Differential Period (which shall
include, for purposes of this definition, amounts deemed received on account of
Credit Advance Funding, if any, during such Price Differential Period, but only
if no Delinquency Advances were deemed reimbursed by Credit Advance Funding
amounts for the preceding Price Differential Period) and (ii) the denominator of
which equals the aggregate average outstanding amount of the Purchase Price of
the Participation Certificates then subject to all Transactions during the
related Price Differential Period; provided however that for purposes of
calculating such amount for the first two (2) months after the Closing Date the
value for May (as of April 30) shall equal 30% and the value for June (as of May
31) 2020 shall equal 27%.

“Nonpublic Personal Information” means any consumer’s nonpublic personal
information as defined in the Gramm-Leach-Bliley Act.

“Non-Recourse Debt” means liabilities for which the assets securing such
obligations are the only source of repayment.

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

“Obligations” means (a) all of the Repo Seller’s indebtedness, obligations to
pay the outstanding principal balance of the Purchase Price, together with
interest thereon on the Termination Date, outstanding interest due on each Price
Differential Payment Date, and other obligations and liabilities, to the Buyer
or its Affiliates arising under, or in connection with, the Program Agreements,
whether now existing or hereafter arising; (b) any and all sums reasonably
incurred and paid by the Buyer or on behalf of the Buyer in order to preserve
any Repurchase Asset or its interest therein; (c) in the event of any proceeding
for the collection or enforcement of any of the Repo Seller’s indebtedness,
obligations or liabilities referred to in this definition, the reasonable
expenses of retaking, holding, collecting, preparing for sale, selling or
otherwise disposing of or realizing on any Repurchase Asset, or of any exercise
by the Buyer of its rights under the Program Agreements or the Agency
Agreements, including reasonable attorneys’ fees and disbursements and court
costs; and (d) all of the Repo Seller’s indemnity obligations to the Buyer
pursuant to the Program Agreements.

“OFAC” means United States Treasury Department’s Office of Foreign Assets
Control.

“Officer’s Compliance Certificate” means a certificate in the form of Exhibit B
attached hereto.

 

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“Other Connection Taxes” means, with respect to the Buyer or other recipient,
Taxes imposed as a result of a present or former connection between the Buyer or
such other recipient and the jurisdiction imposing such Tax (other than
connections arising from the Buyer or such 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).

“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, delivery, performance, enforcement or
registration of, from the receipt or perfection of a security interest under, or
otherwise with respect to, any Program Agreement or the Agency Agreements,
except any such Taxes that are Other Connection Taxes imposed with respect to an
assignment (other than an assignment made at the request of the Repo Seller
pursuant to this Agreement).

“Participants” has the meaning set forth in Section 9.02(a).

“Participation Agreement” means, individually and collectively, each of (i) the
Participation Agreement (Fannie Mae) and (ii) the Participation Agreement
(Freddie Mac), in each case as applicable as the context may require.

“Participation Agreement (Fannie Mae)” means the Participation Agreement with
respect to any Fannie Mae Pools, between the Servicer and the Initial
Participant (as defined in the Participation Agreement (Fannie Mae)), as such
agreement may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

“Participation Agreement (Freddie Mac)” means the Participation Agreement with
respect to the Freddie Mac Pool, between the Servicer and the Initial
Participant (as defined in the Participation Agreement (Freddie Mac)) as such
agreement may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

“Participation Certificate” or “Participation Certificates” means, individually
or collectively as applicable, the original participation certificates issued
and delivered in connection with the related Participation Agreement.

“Participation Interest” means each participating beneficial ownership interest
(of the type and nature contemplated by 11 U.S.C. § 541(d) of the Bankruptcy
Code) in the Advance Reimbursement Rights relating to Advances, and proceeds
thereof together with the other rights and privileges specified in the
Participation Agreement as evidenced by the issuance of the Participation
Certificates.

“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, as amended
from time to time.

“Permitted Use” has the meaning set forth in Section 6.13(b).

 

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“Person” means any individual, corporation, estate, partnership, limited
liability company, limited liability partnership, joint venture, association,
joint-stock company, business trust, trust, unincorporated organization,
government or any agency or political subdivision thereof, or other entity of a
similar nature.

“Plan” means an employee benefit or other plan established or maintained by the
Repo Seller or any ERISA Affiliate and covered by Title IV of ERISA, other than
a Multiemployer Plan.

“Plan Assets” has the meaning set forth in United States Department of Labor
regulations at 29 C. F. R, section 2510.3-101 as modified by Section 3(42) of
ERISA.

“PLS” means PennyMac Loan Services, LLC, a limited liability company organized
under the laws of the State of Delaware, or its permitted successors and
assigns.

“PLS Subservicing Agreement” means the Third Amended and Restated Flow Servicing
Agreement, dated as of September 12, 2016, between PennyMac Operating
Partnership, L.P., as owner, and PLS, as servicer.

“PMC” has the meaning assigned to such term in the preamble to this Agreement
and includes PMC’s permitted successors and assigns.

“PMT” means PennyMac Mortgage Investment Trust, a real estate investment trust
organized under the laws of the State of Maryland, or its permitted successors
and assigns.

“Pool Purchase Contract” means an agreement between Fannie Mae and the Servicer
to buy and sell mortgage loans or Participation Interests for inclusion in a
Fannie Mae Pool.

“Price Differential” means with respect to any Transaction as of any date of
determination, an amount equal to the product of (i) the Pricing Rate for such
Transaction, (ii) the Purchase Price for such Transaction and (iii) a fraction,
the numerator of which is the number of days elapsed during the Price
Differential Period (from and including the preceding Price Differential Payment
Date to and excluding such date of determination) and the denominator of which
equals 360.

“Price Differential Payment Date” means, for as long as any Obligations shall
remain owing by the Repo Seller to the Buyer, the fifth (5th) Business Day of
each calendar month.

“Price Differential Period” means, for any Price Differential Payment Date, the
preceding calendar month (or with respect with the first Price Differential
Payment Date, the period from the Closing Date to the last day of the preceding
calendar month).

“Price Differential Statement Date” has the meaning set forth in
Section 2.03(c).

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

 

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“Pricing Side Letter” means the letter agreement dated as of the Closing Date,
among the Buyer, Administrative Agent, and the Repo Seller, as amended,
restated, supplemented or otherwise modified from time to time.

“Principal and Interest Custodial Account” with respect to Freddie Mac Advances
has the meaning as defined in the Freddie Mac Guide and with respect to Fannie
Mae Advances means the custodial account into which the Servicer is required to
remit principal and interest collections on Fannie Mae Mortgage Loans in the
related Designated Pool.

“Principal and Interest Payments” with respect to Freddie Mac Advances, has the
meaning defined in the Freddie Mac Guide, and with respect to Fannie Mae
Advances, means collections of or in respect of principal and interest on Fannie
Mae Mortgage Loans in the related Designated Pool.

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

“Program Agreements” means this Agreement, the Pricing Side Letter, the Repo
Guaranty, each Participation Agreement, the Subservicer Side Letter Agreement,
and the Account Control Agreement.

“Property” means any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible.

“Purchase Date” means, subject to the satisfaction of the conditions precedent
set forth in Article V, each date on which a Transaction is entered into by the
Buyer pursuant to Section 2.02 or such other mutually agreed upon date as more
particularly set forth in the related Transaction Notice.

“Purchase Price” means the price at which each Purchased Asset (or portion
thereof) is transferred by the Repo Seller to the Buyer, which shall equal
(a) on each Purchase Date, the current Asset Base, taking into account any
additions or removals of Designated Pools, or (b) on any day after the related
Purchase Date, except where the Buyer and the Repo Seller agree otherwise, the
aggregate “Purchase Price” for such date shall refer to the aggregate Purchase
Price for the Purchased Assets (as determined on the related Purchase Dates
under the subclause (a)) decreased by the amount of any cash transferred by the
Repo Seller to the Buyer pursuant to Sections 2.03(b) and 2.05 hereof prior to
such date.

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

“Purchased Asset” or “Purchased Assets” means the collective reference to the
Participation Certificates together with the Repurchase Assets related to such
Participation Certificates transferred by the Repo Seller to the Buyer in a
Transaction hereunder, as listed on the related Asset Schedule attached to the
related Transaction Notice until such Participation Certificate together with
the Repurchase Assets related to such Participation Certificates has been
repurchased by the Repo Seller in accordance with the terms of this Agreement.

 

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“Records” means all instruments, agreements and other books, records, and
reports and data generated by other media for the storage of information
maintained by the Repo Seller, or any other person or entity with respect to the
Purchased Assets or any other Repurchase Assets.

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

“REO Property” means a Mortgaged Property for which Freddie Mac or Fannie Mae or
another Person on Freddie Mac’s or Fannie Mae’s behalf, as applicable, has
acquired title to such Mortgaged Property through foreclosure or by deed in lieu
of foreclosure.

“Repo Guarantor” means PMT, in its capacity as guarantor under the Repo
Guaranty.

“Repo Guaranty” means the guaranty by the Repo Guarantor, dated as of the
Closing Date, as amended, restated, supplemented or otherwise modified from time
to time, pursuant to which the Repo Guarantor fully and unconditionally
guarantees the obligations of the Repo Seller hereunder.

“Repo Seller” has the meaning assigned to such term in the preamble to this
Agreement and includes its permitted successors and assigns.

“Repo Seller Termination Option” means the option of the Repo Seller to
terminate this Agreement and repurchase all Purchased Assets upon: (a) the
Administrative Agent’s determination, in its sole discretion, that the Buyer has
incurred or shall incur costs in connection with those matters set forth in
Sections 2.09 or 2.10 and (b) the Buyer’s request that the Repo Seller pay to
the Buyer those costs in connection therewith.

“Repurchase Assets” has the meaning set forth in Section 4.02(c).

“Repurchase Date” means the earlier of (i) the Termination Date or (ii) the date
requested by the Repo Seller on which the Repurchase Price is paid pursuant to
Section 2.03.

“Repurchase Price” means the price at which Purchased Assets are to be
transferred from the Buyer to the Repo 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 for such Purchased Assets and the
accrued but unpaid Price Differential as of the date of such determination.

“Requirement of Law” means, with respect to any Person, any law, treaty, rule or
regulation or determination of an arbitrator, a court or other Governmental
Authority, applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.

“Required Amount” means, as of any date of determination, the amount necessary
to satisfy the Repo Seller’s Obligations on the next Price Differential Payment
Date from the applicable Dedicated Account relating to a Corporate Advance or
Escrow Advance in accordance with Section 2.06(a).

 

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“Responsible Officer” means as to any Person, the chief executive officer or,
with respect to financial matters, the chief financial officer or treasurer of
such Person, or with respect to the Repo Seller, the officers listed on
Schedule 3 hereto; provided, that in the event any such officer is unavailable
at any time he or she is required to take any action hereunder, “Responsible
Officer” shall mean any officer authorized to act on such officer’s behalf as
demonstrated by a corporate resolution.

“Revolving Period” means the period from and including the Closing Date to but
not including the earliest to occur of (a) the Termination Date, (b) an Early
Amortization Event, (c) an Event of Default, or (d) such earlier date on which
the obligations of the Buyer under this Agreement shall have terminated pursuant
to the terms of this Agreement.

“Roll-up Agreement” has the meaning assigned to such term in the Pricing Side
Letter.

“Sanctions” means any sanctions administered or enforced by OFAC, the U.S.
Department of State, the U.S. Department of Commerce, the United Nations
Security Council, the European Union or Her Majesty’s Treasury.

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

“Servicer” means PMC in all its capacities as (i) a Fannie Mae approved
seller/servicer under the Fannie Mae Lender Contract and as servicer under the
Fannie Mae Lender Contract of the related Mortgage Loans, and any successor
servicer approved by Fannie Mae under the Fannie Mae Lender Contract, and (ii) a
Freddie Mac approved seller/servicer under the Freddie Mac Guide of the related
Mortgage Loans and any successor servicer approved by Freddie Mac under the
Freddie Mac Guide.

“Servicing Contract” means, collectively, (a) with respect to Fannie Mae, the
Fannie Mae Designated Servicing Contract, as defined in the Participation
Agreement (Fannie Mae); and (b) with respect to Freddie Mac, the Freddie Mac
Designated Servicing Contract, as defined in the Participation Agreement
(Freddie Mac). Without limiting the generality of the foregoing, any reference
herein to a “Servicing Contract” shall be deemed to include the applicable
Agency Agreement.

“Servicing MAE Event” means any change to the related Servicing Contract (or any
and all instruments, agreements, invoices or other writings which give rise to
or otherwise evidence any of the Advance Reimbursement Rights) that would result
in a Material Adverse Effect on the Servicer.

“STE Measurement Period” has the meaning set forth in Section 7.01(y)(ii).

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

“Subject Mortgages” means all loans which are now being serviced or which may
later be serviced by the Servicer pursuant to the related Servicing Contract.

 

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“Subservicer” with respect to a Servicing Contract, any subservicer engaged by
the Servicer to subservice the Mortgage Loans relating to such Servicing
Contract so long as such subservicing arrangement relating to such Servicing
Contract is subject to an Eligible Subservicing Agreement and such subservicer
is acceptable to the Administrative Agent, in its sole discretion, which shall
not be unreasonably withheld; provided, each of (i) PLS in its capacity as
subservicer under the PLS Subservicing Agreement, and (ii) the Backup
Subservicer, so long as (A) no Material Adverse Event has occurred, as
determined by the Administrative Agent in its sole discretion and (B) an
Eligible Subservicing Agreement is executed and delivered to the Administrative
Agent, is so approved by the Administrative Agent as a Subservicer.

“Subservicer Side Letter Agreement” the Subservicer Acknowledgment Agreement,
dated as of August 7, 2020, among the Servicer, PLS and the Administrative
Agent.

“Subservicer Termination Event” occurs when:

(i) the Servicer has terminated the Person acting as Subservicer and has not
either (a) taken over the servicing of such Mortgage Loans itself or (b) (i)
identified a replacement within thirty (30) days that meets the criteria of a
Subservicer and (ii) replaced the Subservicer with such Subservicer within sixty
(60) days under an Eligible Subservicing Agreement; or

(ii) in the case of PLS, if (a) PLS ceases to be a seller/servicer approved by
Fannie Mae, Freddie Mac or a lender approved by HUD, (b) PLS has been suspended
or is no longer an approved seller/servicer by Fannie Mae, Freddie Mac, or HUD,
as applicable, on and after the date on which PLS first obtained such approval
from Fannie Mae, Freddie Mac or HUD, as applicable or (c) PLS is under review or
investigation outside of due course and has knowledge of imminent or future
investigation outside of due course, by Fannie Mae, Freddie Mac, or HUD on and
after the date on which PLS became a Fannie Mae, Freddie Mac or HUD approved
seller/servicer or lender, as the context may require, and the Servicer has not
either (x) taken over the servicing of such Mortgage Loans or (y) (i) identified
a replacement within thirty (30) days that meets the criteria of a Subservicer
and (ii) replaced PLS with such Subservicer within sixty (60) days under an
Eligible Subservicing Agreement.

“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.

“Taxes” 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.

 

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

“Transaction” means a transaction pursuant to which the Repo Seller transfers
each Participation Certificate to the Buyer, or provides the Buyer notice that
the Asset Base has increased, in each case, against the transfer of funds by the
Buyer, with a simultaneous agreement by the Buyer to transfer such Participation
Certificate back to the Repo Seller at a date certain or on demand, against the
transfer of funds by the Repo Seller.

“Transaction Notice” has the meaning assigned to such term in Section 2.02(a).

“Transaction Register” has the meaning assigned to such term in Section 9.03(b).

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

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

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

Section 1.02 Other Defined Terms and Rules of Construction. Any capitalized
terms used and not defined herein shall have the meaning set forth in the
Participation Agreement:

(i) reference to and the definition of any document (including this Agreement)
shall be deemed a reference to such document as it may be amended or modified
from time to time;

(ii) all references to an “Article,” “Section,” “Schedule” or “Exhibit” are to
an Article or Section hereof or to a Schedule or an Exhibit attached hereto;

(iii) defined terms in the singular shall include the plural and vice versa and
the masculine, feminine or neuter gender shall include all genders;

(iv) the words “hereof,” “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement;

(v) unless otherwise specified herein, the term “or” has the inclusive meaning
represented by the term “and/or” and the term “including” is not limiting;

(vi) in the computation of periods of time from a specified date to a later
specified date, unless otherwise specified herein, the words “commencing on”
mean “commencing on and including,” the word “from” means “from and including”
and the words “to” and “until” each means “to but excluding”;

 

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(vii) periods of days referred to in this Agreement shall be counted in calendar
days unless Business Days are expressly prescribed and references in this
Agreement to months and years shall be to calendar months and calendar years
unless otherwise specified;

(viii) accounting terms not otherwise defined herein and accounting terms partly
defined herein to the extent not defined, shall have the respective meanings
given to them under GAAP;

(ix) “including” and words of similar import will be deemed to be followed by
“without limitation”;

(x) references to any statute, law, rule or regulation shall be deemed a
reference to such statute, law, rule or regulation as it may be amended or
modified from time to time;

(xi) all references to payments or deliveries of “cash” shall be understood to
mean “immediately available funds” or “available funds held in a deposit
account,” as the context may require; and

(xii) the Repo Seller’s or Repo Guarantor’s obligation to deliver any report or
information under this Agreement or any Program Agreement shall be deemed to
have been satisfied if, and as of such date, such report or information is filed
with the SEC pursuant to the SEC’s Electronic Data Gathering & Analysis Recovery
system.

ARTICLE II

GENERAL TERMS

Section 2.01 Transactions. Subject to the terms and conditions hereof, the Buyer
may agree from time to time to enter into Transactions with the Repo Seller for
the applicable Purchase Price not to exceed the Maximum Purchase Price. The
Buyer shall have no commitment or obligation to enter into Transactions in
connection with any Participation Certificate. During the Revolving Period, the
Repo Seller may request Transactions, the Repo Seller may pay the Repurchase
Price in whole or in part at any time during such period without penalty, and
additional Transactions may be entered into in accordance with the terms and
conditions hereof.

Section 2.02 Procedure for Entering into Transactions.

(a) The Repo Seller may enter into Transactions with the Buyer under this
Agreement on any Purchase Date; provided, that the Repo Seller shall have given
the Buyer notice (each, a “Transaction Notice”), which notice (i) shall be
substantially in the form of Exhibit A, which form may be modified from time to
time by the Administrative Agent in its reasonable discretion; provided that the
Administrative Agent may modify such form any time as necessary in its sole
discretion (exercised in good faith) to comply with Applicable Law, (ii) shall
be signed

 

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by a Responsible Officer of the Repo Seller and be received by the Buyer prior
to 2:00 p.m. (New York time) two (2) Business Days prior to the related Purchase
Date, and (iii) shall specify the information required in Exhibit A and any
additional information requested by the Administrative Agent. Each Transaction
Notice on any Purchase Date shall be in an amount equal to at least $500,000.

(b) If the Repo Seller shall deliver to the Buyer a Transaction Notice that
satisfies the requirements of Section 2.02(a), the Buyer will notify the Repo
Seller of its intent to remit the requested Purchase Price one (1) Business Day
prior to the requested Purchase Date. If the Buyer has confirmed its intent to
remit the requested Purchase Price and all applicable conditions precedent set
forth in Article V have been satisfied on or prior to the Purchase Date, then
subject to the foregoing, on the Purchase Date, the Buyer shall remit the amount
of the requested Purchase Price in U.S. Dollars and in immediately available
funds to the account of the Repo Seller specified in the Transaction Notice.

(c) Upon entering into each Transaction hereunder, the Asset Schedule shall be
deemed automatically updated to include each of the Assets listed on the Asset
Schedule attached to the Transaction Notice.

Section 2.03 Repurchase; Payment of Repurchase Price; Price Differential.

(a) The Repo Seller hereby agrees to repurchase the Purchased Assets and pay the
Repurchase Price and all outstanding Obligations on the Termination Date.

(b) By notifying the Buyer in writing at least one (1) Business Day in advance,
the Repo Seller shall be permitted, at its option, to prepay, subject to
Section 2.12, the Purchase Price in whole or in part at any time, together with
accrued and unpaid Price Differential on the amount so prepaid. Any such
prepayment may be made from the Repo Seller’s own funds or through the
application of amounts on deposit in the applicable Dedicated Account, provided
that there is no existing Margin Deficit or the application of such amounts from
the applicable Dedicated Account would not otherwise result in a Margin Deficit.

(c) Within three (3) Business Days following the end of each Price Differential
Period (the “Price Differential Statement Date”), the Buyer will provide an
invoice of all accrued and unpaid Price Differential on the Transactions for the
related Price Differential Period, and the Repo Seller hereby agrees to pay to
the Buyer on each Price Differential Payment Date the amount of Price
Differential set forth on such statement.

If the Buyer fails to deliver such statement on the Price Differential Statement
Date, the Repo Seller shall pay the amount which the Repo Seller calculates as
the Price Differential due for the related Price Differential Period. Upon
delivery of the statement, the Repo Seller shall remit to the Buyer any
shortfall, or the Buyer shall refund to the Repo Seller any excess, in the Price
Differential paid. The Price Differential accrue each day on the Purchase Price
at a rate per annum.

(d) In addition to the payment of the Price Differential, on each Price
Differential Payment Date, the Repo Seller hereby promises to pay to the Buyer
all accrued and unpaid amounts representing Expenses, if any.

 

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Section 2.04 Margin Maintenance.

(a) If at any time the aggregate outstanding amount of the Purchase Price of the
Participation Certificates subject to all Transactions is greater than the sum
of (i) the Asset Base plus (ii) any collections relating to Advance
Reimbursement Amounts on deposit in the Dedicated Account, after taking into
account any Transaction being effected on such date (such excess, a “Margin
Deficit”), then the Buyer may, by notice to the Repo Seller, require the Repo
Seller to transfer to the Buyer cash in an amount at least equal to the Margin
Deficit (such requirement, a “Margin Call”).

(b) Notice delivered pursuant to Section 2.04(a) may be given by any written or
electronic means. With respect to a 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. With respect to a Margin Call, any notice given on or 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 (2nd)
Business Day following the date of such notice. The foregoing time requirements
for satisfaction of a Margin Call are referred to as the “Margin Deadlines.” The
failure of the Buyer, on any one or more occasions, to exercise its rights
hereunder, shall not change or alter the terms and conditions to which this
Agreement is subject or limit the right of the Buyer to do so at a later date.
The Repo Seller and the Buyer each agree that a failure or delay by the Buyer to
exercise its rights hereunder shall not limit or waive the Buyer’s rights under
this Agreement or otherwise existing by law or in any way create additional
rights for the Repo Seller.

(c) In the event that a Margin Deficit exists, the Buyer may retain any funds
received by it to which the Repo Seller would otherwise be entitled hereunder
and may, at the Buyer’s sole and exclusive election, apply such funds against
such Margin Deficit or against the Purchase Price. Notwithstanding the
foregoing, the Buyer retains the right, in its sole discretion, to make a Margin
Call in accordance with the provisions of this Section 2.04.

Section 2.05 Payment Procedure. The Repo Seller absolutely, unconditionally, and
irrevocably, shall make, or cause to be made, all payments required to be made
by the Repo Seller to the Buyer hereunder to the Buyer Account. The Repo Seller
shall deposit or cause to be deposited all amounts constituting collection,
payments and proceeds of each Participation Certificate (including all fees and
proceeds of sale to a third party) to the applicable Dedicated Account within
two (2) Business Days of receipt thereof.

Section 2.06 Application of Payments.

(a) On each Price Differential Payment Date prior to the occurrence of an Early
Amortization Event or an Event of Default, all amounts deposited into the
applicable Dedicated Account from and after the immediately preceding Price
Differential Payment Date shall be applied with respect to the related Purchased
Asset as follows:

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

 

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(ii) second, to the payment of Purchase Price outstanding to satisfy any Margin
Deficit owing;

(iii) third, to payment of all other costs, fees, and Expenses payable to the
Buyer pursuant to this Agreement; and

(iv) fourth, any remainder to the Repo Seller.

(b) Notwithstanding the preceding provisions, if an Early Amortization Event or
an Event of Default shall have occurred hereunder, all funds related to each
Participation Certificate shall be applied as follows:

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

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

(iii) third, to payment of all other costs, fees, Expenses and Obligations
payable to the Buyer pursuant to this Agreement; and

(iv) fourth, any remainder to the Repo Seller.

Section 2.07 Use of Purchase Price. The Purchase Price proceeds shall be used by
the Repo Seller (i) in the case of any Purchase Price paid in order to enable
the Repo Seller to disburse an Delinquency Advance, solely for the purpose of
disbursing such Delinquency Advance(s), all in accordance with the terms and
provisions of the applicable Agency Agreement, and (ii) otherwise to restore
liquidity to the Repo Seller for any Advances it has previously made.

Section 2.08 Recourse. Notwithstanding anything else to the contrary contained
or implied herein, in any other Program Agreement or any Agency Agreement, the
Buyer shall have full, unlimited recourse against the Repo Seller and its assets
in order to satisfy the Obligations.

Section 2.09 Requirements of Law.

(a) If any Requirement of Law or any change in the interpretation or application
thereof or compliance by the Buyer with any request or directive (whether or not
having the force of law) from any central bank or other Governmental Authority
made subsequent to the Closing Date:

(i) shall subject the Buyer to any Taxes (other than (A) Indemnified Taxes,
(B) Excluded Taxes and (C) Connection Income Taxes) on its loans, loan
principal, letters of credit, commitments or other obligations, or its deposits,
reserves, other liabilities or capital attributable thereto;

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

 

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(iii) shall impose on the Buyer any other condition (other than Taxes);

and the result of any of the foregoing is to increase the cost to the Buyer, by
an amount which the Administrative Agent deems to be material, of entering,
continuing or maintaining this Agreement, any other Program Agreement or the
Agency Agreements, the Transactions or to reduce any amount due or owing
hereunder in respect thereof, then, in any such case, the Repo Seller shall
promptly pay the Buyer such additional amount or amounts as calculated by
Administrative Agent in good faith as will compensate the Buyer for such
increased cost or reduced amount receivable; provided that (i) the Buyer shall
make such determinations hereunder consistent with its determinations with
respect to other repurchase facilities that are substantially similar with
similarly situated counterparties and with substantially similar assets subject
thereto which result in substantially similar increased costs to the Buyer and
(ii) the Repo Seller shall have the right to exercise the Repo Seller
Termination Option in its sole discretion if Administrative Agent determines and
notifies the Repo Seller of the existence of such increased cost to the Buyer.

(b) If Administrative Agent shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by the Buyer or any
corporation Controlling the Buyer with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the Closing Date shall have the effect of reducing
the rate of return on the Buyer’s or such corporation’s capital as a consequence
of its obligations hereunder to a level below that which the Buyer or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration the Buyer’s or such corporation’s policies with
respect to capital adequacy) by an amount deemed by Administrative Agent to be
material, then from time to time, the Repo Seller shall promptly pay to the
Buyer such additional amount or amounts as will compensate the Buyer for such
reduction; provided that (i) Administrative Agent shall make such determinations
hereunder consistent with its determinations with respect to other repurchase
facilities that are substantially similar with similarly situated counterparties
and with substantially similar assets subject thereto which result in
substantially similar increased costs to the Buyer and (ii) the Repo Seller
shall have the right to exercise the Repo Seller Termination Option in its sole
discretion if Administrative Agent determines and notifies the Repo Seller of
the existence of such an increased cost to the Buyer.

(c) If the Buyer becomes entitled to claim any additional amounts pursuant to
this Section 2.09, it shall promptly notify the Repo Seller of the event by
reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this Section 2.09 submitted by the Buyer to the Repo
Seller shall be conclusive in the absence of manifest error.

(d) Failure or delay on the part of the Buyer to demand compensation pursuant to
this Section 2.09 shall not constitute a waiver of the Buyer’s right to demand
such compensation; provided that the Repo Seller shall not be required to
compensate the Buyer pursuant to this Section 2.09 for any additional amounts
incurred or reductions suffered more than six (6) months prior to the date that
the Buyer notifies the Repo Seller of the change in any Requirement of Law
giving rise to such additional amounts or reductions, and of the Buyer’s
intention to claim compensation therefor (except that, if the change in any
Requirement of Law giving rise to such additional amounts or reductions is
retroactive, then the six (6)-month period referred to above shall be extended
to include the period of retroactive effect thereof).

 

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Section 2.10 Taxes.

(a) Any and all payments by or on behalf of the Repo Seller under or in respect
of this Agreement or any other Program Agreements to which the Repo Seller is a
party shall be made free and clear of, and without deduction or withholding for
or on account of any Taxes, except as required by any applicable Requirement of
Law. If the Repo Seller shall be required under any applicable Requirement of
Law (as determined in the good faith discretion of the Repo Seller or an
applicable withholding agent) to deduct or withhold any Taxes from or in respect
of any sum payable under or in respect of this Agreement or any of the other
Program Agreements to the Buyer, (i) the Repo Seller shall make all such
deductions and withholdings in respect of Taxes, (ii) the Repo Seller shall pay
the full amount deducted or withheld in respect of Taxes to the relevant
taxation authority or other Governmental Authority in accordance with any
applicable Requirement of Law, and (iii) to the extent the withheld or deducted
Tax is an Indemnified Tax, the sum payable by the Repo Seller shall be increased
as may be necessary so that after the Repo Seller has made all required
deductions and withholdings (including deductions and withholdings applicable to
additional amounts payable under this Section 2.10) the Buyer receives an amount
equal to the sum it would have received had no such deductions or withholdings
been made.

(b) The Repo Seller hereby agrees to pay to the relevant Governmental Authority
in accordance with Applicable Law, or at the option of the Buyer reimburse it
for the payment of, any Other Taxes.

(c) The Repo Seller hereby agrees to indemnify the Buyer for any Indemnified
Taxes (including Indemnified Taxes imposed or asserted on or attributable to
amounts payable under this Section 2.10) payable or paid by Administrative Agent
or the Buyer or required to be withheld or deducted from a payment to the Buyer
and any reasonable expenses arising therefrom or with respect thereto, whether
or not such Indemnified Taxes were correctly or legally imposed or asserted by
the relevant Governmental Authority. Amounts payable by the Repo Seller under
the indemnity set forth in this Section 2.10(c) shall be paid within ten (10)
days from the date on which the Buyer makes written demand therefor.

(d) Without prejudice to the survival of any other agreement of the Repo Seller
hereunder, each party’s obligations contained in this Section 2.10 shall survive
the termination of this Agreement and the other Program Agreements, any
assignment of rights by or the replacement of a Buyer, the resignation or
replacement of the Administrative Agent, and the satisfaction or discharge of
all obligations under any Program Agreement. Nothing contained in
Section 2.10(c) or this Section 2.10(d) shall require any Buyer to make
available any of its tax returns or any other information that it deems to be
confidential or proprietary.

(e) Administrative Agent shall and shall cause each Buyer to deliver to the Repo
Seller, at the time or times reasonably requested by the Repo Seller, such
properly completed and executed documentation reasonably requested by the Repo
Seller or the Administrative Agent as will permit payments to be made under this
Agreement and the other Program Agreements to

 

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be made without withholding or at a reduced rate of withholding. In addition,
the Administrative Agent shall and shall cause each Buyer, if reasonably
requested by the Repo Seller, to deliver such other documentation prescribed by
Applicable Law or reasonably requested by the Repo Seller as will enable the
Repo Seller to determine whether or not Administrative Agent or such Buyer is
subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 2.10(e)(A), (B) and (D) below) shall not be
required if in the Buyer’s reasonable judgment such completion, execution or
submission would subject such Buyer to any material unreimbursed cost or expense
or would materially prejudice the legal or commercial position of such Buyer.
Without limiting the generality of the foregoing, in the event that the Repo
Seller is a U.S. seller:

(A) in the case of a Buyer or Buyer assignee or participant which is a U.S.
Person, Administrative Agent shall and shall cause each Buyer, Buyer assignee or
participant to deliver to the Repo Seller an executed copy of IRS Form W-9
certifying that it is exempt from 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, Administrative Agent shall and shall cause each Buyer, Buyer assignee or
participant to deliver to the Repo Seller, to the extent the Buyer, the Buyer
assignee or participant is legally entitled to do so (in such number of copies
as shall be requested by the Repo Seller), whichever of the following is
applicable:

(I) in the case of a Buyer or Buyer assignee or participant claiming the
benefits of an income tax treaty to which the United States is a party (x) with
respect to payments of interest under this Agreement or any Program Agreement,
executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E establishing an
exemption from, or reduction of, U.S. federal withholding Tax pursuant to the
“interest” article of such tax treaty and (y) with respect to any other
applicable payments under this Agreement or any Program Agreement, IRS Form
W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “business profits” or “other
income” article of such tax treaty;

(II) executed copies of IRS Form W-8ECI;

(III) in the case of a Buyer or Buyer assignee or participant claiming the
benefits of the exemption for portfolio interest under section 881(c) of the
Code, (x) a certificate substantially in the form of Exhibit C-1 to the effect
that such the Buyer, Buyer assignee or participant is not a “bank” within the
meaning of section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the
Repo Seller within the meaning of section 871(h)(3)(B) of the Code, or a
“controlled foreign corporation” related to the Repo Seller as described in
section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and
(y) executed copies of IRS Form W-8BEN or IRS Form W 8BEN-E; or

 

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(IV) to the extent a Buyer, Buyer assignee or participant is not the beneficial
owner, executed copies 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 substantially
in the form of Exhibits D-2 or D-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the Buyer,
Buyer assignee or participant is a partnership and one or more direct or
indirect partners of such the Buyer, Buyer assignee or participant are claiming
the portfolio interest exemption, such the Buyer, Buyer assignee or participant
may provide a U.S. Tax Compliance Certificate substantially in the form of
Exhibit C-4 on behalf of each such direct and indirect partner;

(C) any Buyer, Buyer assignee or participant that is not a U.S. Person shall, to
the extent it is legally entitled to do so, deliver to the Repo Seller (in such
number of copies as shall be requested by the Repo Seller) on or about the date
on which such the Buyer, Buyer assignee or participant becomes a Buyer, Buyer
assignee or participant under this Agreement or any other Program Agreement (and
from time to time thereafter upon the reasonable request of the Repo Seller),
executed copies of any other form prescribed by Applicable Law as a basis for
claiming exemption from or a reduction in U.S. federal withholding tax, duly
completed, together with such supplementary documentation as may be prescribed
by Applicable Law to permit the Repo Seller to determine the withholding or
deduction required to be made; and

(D) if a payment made to a Buyer or the Buyer assignee or participant under this
Agreement or any other Program 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 Repo Seller at the time or times prescribed by law and at such
time or times reasonably requested by the Repo 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 Repo Seller as may be necessary for the Repo Seller to comply
with its obligations under FATCA and to determine the amount, if any, to deduct
and withhold from such payment. Solely for purposes of this Section 2.10(e)(D),
“FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

The applicable IRS forms referred to above in this Section 2.10(e) 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) If any party determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes as to which it has been indemnified
pursuant to this Section (including by the payment of additional amounts
pursuant to this Section), it shall pay to the indemnifying party an amount
equal to such refund (but only to the extent of indemnity payments made under
this Section with respect to the Taxes giving rise to such refund), net of all
out-of-

 

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pocket expenses (including Taxes) of such indemnified party and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund). Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid over
pursuant to this paragraph (f) (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event that such
indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this paragraph (f), in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this paragraph (f) the payment of which would
place the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts with respect to such Tax
had never been paid. This paragraph shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

Section 2.11 Indemnity. Without limiting, and in addition to, the provisions of
Section 10.02, the Repo Seller agrees to indemnify the Buyer and to hold the
Buyer harmless from any loss or expense that the Buyer may sustain or incur as a
consequence of (i) a default by the Repo Seller in payment when due of the
Repurchase Price or Price Differential or (ii) a default by the Repo Seller in
making any prepayment of Repurchase Price after the Repo Seller has given a
notice thereof in accordance with Section 2.03.

Section 2.12 [Reserved].

Section 2.13 Structuring Fee. The Repo Seller shall pay the Structuring Fee as
specified in the Pricing Side Letter. Such payment shall be made in Dollars, in
immediately available funds, without deduction, set off or counterclaim, to the
Buyer at such account designated in writing by the Buyer.

Section 2.14 Termination.

(a) Notwithstanding anything to the contrary set forth herein, if a Repo Seller
Termination Option occurs, the Repo Seller may, upon five (5) Business Days’
prior written notice of such event, terminate this Agreement and the Termination
Date shall be deemed to have occurred (upon the expiration of such five
(5) Business Day period).

(b) In the event that a Repo Seller Termination Option as described in clause
(a) of the definition thereof has occurred and the Repo Seller has notified the
Buyer in writing of its option to terminate this Agreement, the Buyer shall have
the right to withdraw such request for payment within three (3) Business Days of
the Repo Seller’s notice of its exercise of the Repo Seller Termination Option
and the Repo Seller shall no longer have the right to terminate this Agreement.

(c) Upon the occurrence of an Early Amortization Event, the Revolving Period
shall terminate and the Repo Seller shall pay to the Buyer on each Price
Differential Payment Date, beginning on the next Price Differential Payment Date
following such occurrence, during the Early Amortization Period, one-third (1/3)
of the Early Amortization Amount.

 

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(d) For the avoidance of doubt, the Repo Seller shall remain responsible for all
costs actually incurred by the Buyer pursuant to Sections 2.09 and 2.10.

Section 2.15 Additional Participation Agreements and Participation
Certificates.    In the event that the Repo Seller seeks to enter into a
Transaction with respect to a Participation Agreement or Participation
Certificate not listed on Schedule 2 hereto, the Repo Seller shall deliver a
written request to Administrative Agent on behalf of the Buyer, together with
the proposed Participation Agreement, Participation Certificate and applicable
Agency Agreement, each of which shall be subject to the approval of the
Administrative Agent in its sole discretion and the applicable Agency in
accordance with the terms and provisions of the applicable Agency Agreement. The
Buyer may, but shall have no commitment or obligation, to enter into a
Transaction with respect to any such Participation Agreement or Participation
Certificate. Prior to the Buyer entering into any such Transaction,
Administrative Agent shall have received the Repo Seller’s written request, the
fully executed applicable Agency Agreement, the Participation Agreement, the
Participation Certificate, and UCC3 amendment (which shall be filed in the
appropriate jurisdiction) each acceptable to the Administrative Agent in its
sole discretion. Upon consummation of such Transaction, the Asset Schedule and
Schedule 2 shall be updated to include each additional Participation Agreement
and Participation Certificate identified thereon.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

PMC, in its capacity as the Repo Seller and, with respect to each applicable
Agency Agreement, as the Servicer, represents and warrants to the Buyer as of
the Closing Date and as of each Purchase Date for any Transaction that:

Section 3.01 Repo Seller Existence. The Repo Seller has been duly organized and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its organization.

Section 3.02 Licenses. The Repo Seller 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. The Repo Seller has the requisite power and authority
and legal right to own, sell and grant a lien on all of its right, title and
interest in and to the Assets. The Repo Seller 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 the Program
Agreements and any Transaction Notice.

Section 3.03 Power. The Repo Seller 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.

 

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Section 3.04 Due Authorization. The Repo Seller 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. The Servicer
has all necessary corporate or other power, authority and legal right to
execute, deliver and perform its obligations under the Agency Agreements. This
Agreement, any Transaction Notice, the other Program Agreements and the Agency
Agreements have been (or, in the case of Program Agreements, any Transaction
Notice or the Agency Agreements not yet executed, will be) duly authorized,
executed and delivered by the Repo Seller or the Servicer, as applicable, all
requisite or other corporate action having been taken, and each is valid,
binding and enforceable against the Repo Seller or the Servicer, as applicable,
in accordance with its terms except as such enforcement may be affected by
bankruptcy, by other insolvency laws, or by general principles of equity.

Section 3.05 Financial Statements.

(a) The Repo Seller has heretofore furnished to Administrative Agent a copy of
(1) its balance sheet for the fiscal year of the Repo Seller ended December 31,
2019 and the related statements of income for such fiscal year, with the opinion
thereon of a nationally recognized public accounting firm and (2) its balance
sheet for the quarterly fiscal period of the Repo Seller ended March 31, 2020,
and the related statements of income for the Repo Seller for such quarterly
fiscal period. All such financial statements are accurate, complete and correct
and fairly present, in all material respects, the financial condition of the
Repo Seller (subject to normal year-end adjustments) 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, and to the best of the Repo Seller’s
knowledge, do not omit any material fact as of the date(s) thereof. Since
December 31, 2019, there has been no material adverse change in the consolidated
business, operations or financial condition of the Repo Seller from that set
forth in said financial statements nor is the Repo 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. the Repo Seller has 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 the Repo Seller except as
heretofore disclosed to the Buyer in writing.

(b) The Repo Seller has heretofore caused the Repo Guarantor to furnished to
Administrative Agent copy of (1) its balance sheet for the fiscal year of the
Repo Guarantor ended December 31, 2019 and the related statements of income for
the Repo Guarantor for such fiscal year, with the opinion thereon of a
nationally recognized public accounting firm and (b) its balance sheet for the
quarterly fiscal period of the Repo Guarantor ended March 31, 2020, and the
related statements of income for the Repo Guarantor for such quarterly fiscal
period. All such financial statements are accurate, complete and correct and
fairly present, in all material respects, the financial condition of the Repo
Guarantor (subject to normal year-end adjustments) 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, and to the best of the Repo Seller’s
knowledge, do not omit any material fact as of the date(s) thereof. Since
December 31, 2019, there has been no material adverse change in the consolidated
business, operations or financial condition of the Repo Guarantor from that set
forth in said financial statements nor is the Repo Seller aware of any state of
facts which (with

 

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notice or the lapse of time) would or could result in any such material adverse
change. The Repo Guarantor has 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 the Repo Guarantor except as heretofore
disclosed to the Buyer in writing.

Section 3.06 No Early Amortization Event or Event of Default. There exists no
(i) Early Amortization Event, or (ii) Event of Default under Section 7.01
hereof, which default gives rise to a right to accelerate indebtedness as
referenced in Section 7.03 hereof, under any mortgage, borrowing agreement or
other instrument or agreement pertaining to indebtedness for borrowed money or
to the repurchase of mortgage loans or securities.

Section 3.07 Solvency. The Repo Seller 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. The Repo Seller does not intend 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 Repo Seller is not selling and/or pledging any Repurchase Assets to
Administrative Agent with any intent to hinder, delay or defraud any of its
creditors.

Section 3.08 No Conflicts. The execution, delivery and performance by (i) the
Repo Seller of this Agreement, any Transaction Notice, and the other Program
Agreements, and (ii) the Servicer of the Agency Agreements, do not conflict with
any term or provision of the organizational documents of the Repo Seller or the
Servicer, as applicable, or any law, rule, regulation, order, judgment, writ,
injunction or decree applicable to the Repo Seller or the Servicer, as
applicable, of any court, regulatory body, administrative agency or governmental
body having jurisdiction over the Repo Seller or the Servicer, as applicable,
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 the
Repo Seller is a party or any Servicing Contract to which the Servicer is a
party.

Section 3.09 True and Complete Disclosure. All information, reports, exhibits,
schedules, financial statements or certificates of the Repo Seller, the
Servicer, or any Affiliate thereof or any of their officers furnished or to be
furnished to Administrative Agent or the Buyer in connection with the initial or
any ongoing due diligence related to this Agreement of the Repo Seller, the
Servicer, or any Affiliate or officer thereof, negotiation, preparation, or
delivery of the Program Agreements and the Agency Agreements are true and
complete in all material respects and do not omit to disclose any material facts
necessary to make the statements herein or therein, in light of the
circumstances in which they are made, not misleading. All financial statements
have been prepared in accordance with GAAP.

Section 3.10 Approvals. No consent, approval, authorization or order of,
registration or filing with, or notice to any Governmental Authority or court is
required under Applicable Law in connection with the execution, delivery and
performance by the Repo Seller of this Agreement, any Transaction Notice, and
other Program Agreements, except (with respect to the Servicer) for the Agency
Agreements and any filings and recordings in respect of the Liens created
pursuant to the Program Agreements.

 

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Section 3.11 Litigation. There is no action, proceeding or investigation pending
with respect to which the Repo Seller or the Servicer, as applicable (or to best
of the Repo Seller’s knowledge, the Repo Guarantor) has received service of
process or, to the best of the Repo Seller’s or the Servicer’s, as applicable
(or to best of the Repo Seller’s knowledge, the Repo Guarantor’s) knowledge
threatened against it before any court, administrative agency or other tribunal
(A) asserting the invalidity of this Agreement, any Transaction, Transaction
Notice, any Program Agreement, or any Agency Agreement (B) seeking to prevent
the consummation of any of the transactions contemplated by this Agreement, any
Transaction, any Transaction Notice, any Program Agreement, or any Agency
Agreement, (C) making a claim individually or in the aggregate in an amount
greater than five percent (5%) of (i) with respect to the Repo Seller, the Repo
Seller’s Net Worth, or (ii) with respect to the Repo Guarantor, the Repo
Guarantor’s Net Worth, (D) which requires filing with the SEC in accordance with
the 1934 Act or any rules thereunder, (E) which has resulted in the voluntary or
involuntary suspension of a license, a cease and desist order, or such other
action as could adversely impact the Repo Seller’s business, or (F) which might
materially and adversely affect the validity of the Purchased Assets or the
performance by it of its obligations under, or the validity or enforceability
of, this Agreement, any Transaction Notice, any Program Agreement, or any Agency
Agreement.

Section 3.12 Material Adverse Change. There has been no material adverse change
in the business, operations, financial condition, properties or prospects of the
Repo Seller or its Affiliates since the date set forth in the most recent
financial statements supplied to the Buyer that is reasonably likely to have a
Material Adverse Effect on the Repo Seller.Section 3.13 Ownership. In each case
subject to the priority interest of Freddie Mac or, in the case of Repurchase
Assets relating to Fannie Mae Mortgage Loans, the Fannie Mae Requirements, as
applicable:

(a) the Repo Seller or the Servicer, as applicable, has good title to all of the
Repurchase Assets, free and clear of all mortgages, security interests,
restrictions, Liens and encumbrances of any kind other than the Liens created
hereby or contemplated herein;

(b) each item of the Repurchase Assets was acquired by the Repo Seller in the
ordinary course of its business, in good faith, for value and without notice of
any defense against or claim to it on the part of any Person;

(c) there are no agreements or understandings between the Repo Seller and any
other party which would modify, release, terminate or delay the attachment of
the security interests granted to the Buyer under this Agreement;

(d) the provisions of this Agreement are effective to create in favor of the
Buyer a valid security interest in all right, title and interest of the Repo
Seller in, to and under the Repurchase Assets;

 

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(e) upon the filing of the financing statement on Form UCC1 naming
Administrative Agent on behalf of the Buyer as “Secured Party” and the Repo
Seller as “Debtor”, and describing the Repurchase Assets, in the recording
offices of the Secretary of State of Delaware, the security interests granted
hereunder in the Repurchase Assets will constitute fully perfected first
priority security interests under the Uniform Commercial Code in all right,
title and interest of the Repo Seller in, to and under such Repurchase Assets
which can be perfected by filing under the Uniform Commercial Code; and

(f) subject to the terms and provisions of the applicable Participation
Agreement, the Repo Seller has full right to sell each Participation Certificate
to the Buyer, free and clear of any Adverse Claim and has full right and
authority subject to not contest on participation of, or agreement of any other
party, to sell each Participation Certificate pursuant to this Agreement and
following the sale of each Participation Certificate, the Buyer will own such
Participation Certificate free and clear of any mortgages, security interest,
claim, equity, participation interest, restrictions, Liens and encumbrances of
any kind other than the Liens created hereby or contemplated herein.

Section 3.14 The Servicing Contracts and Participation Agreements. The Buyer has
received copies of each Servicing Contract and each Participation Agreement
(including all exhibits and schedules referred to therein or delivered pursuant
thereto), all amendments thereto, waivers relating thereto and other side
letters or agreements affecting the terms thereof and all agreements and other
material documents relating thereto, and the Repo Seller hereby certifies that
the copies delivered to the Buyer by the Repo Seller are true and complete. None
of such documents has been amended, supplemented or otherwise modified
(including waivers) since the respective dates thereof, except by amendments,
copies of which have been delivered to the Buyer. Each such document to which
the Repo Seller or the Servicer is a party has been duly executed and delivered
by the Repo Seller or the Servicer, as applicable, and is in full force and
effect, and no default or material breach has occurred and is continuing
thereunder.

Section 3.15 Taxes. The Repo Seller and its 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
the Repo Seller and its Subsidiaries in respect of taxes and other governmental
charges are, in the opinion of the Repo Seller, adequate.

Section 3.16 Investment Company. Neither the Repo Seller nor any of its
Subsidiaries is an “investment company”, or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act;
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 the Repo Seller shall not be deemed a “Subsidiary” for
the purposes of this Section 3.16.

Section 3.17 Chief Executive Office; Jurisdiction of Organization. On the
Closing Date, each of the Repo Seller’s and the Servicer’s chief executive
office is, and has been, located at 3043 Townsgate Road, Suite 300, Westlake
Village, CA 91361. On the date hereof, the Repo

 

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Seller’s jurisdiction of organization is the State of Delaware. The Repo Seller
shall provide the Administrative Agent with thirty (30) days’ advance notice of
any change in the Repo Seller’s principal office or place of business, legal
name or jurisdiction. The Repo Seller has no trade name. During the preceding
five (5) years, the Repo Seller has not been known by or done business under any
other name, corporate or fictitious, and has not filed or had filed against it
any bankruptcy receivership or similar petitions nor has it made any assignments
for the benefit of creditors.

Section 3.18 Location of Books and Records. The location where each of the Repo
Seller and the Servicer keeps its books and records, including all computer
tapes and records relating to the Repurchase Assets is its chief executive
office.

Section 3.19 ERISA. Each Plan to which the Repo Seller or its Subsidiaries make
direct contributions, and, to the knowledge of the Repo Seller, each other Plan
and each Multiemployer Plan, is in compliance in all material respects with, and
has been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Code and any other Federal or State law.

Section 3.20 Servicing Facilities; Agency Approvals. The 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 the Accepted
Servicing Practices. The Servicer is a Fannie Mae and Freddie Mac approved
seller/servicer. If and to the extent that any Mortgage Loan is a FHA Loan, USDA
Loan or VA Loan, the Servicer is an FHA Approved Mortgagee and a VA Approved
Lender. The Servicer is also approved, to the extent necessary, by the Secretary
of HUD pursuant to Sections 203 and 211 of the National Housing Act. In each
such case and to the extent applicable, the Servicer is in good standing with no
event having occurred or the Servicer having any reason whatsoever to believe or
suspect will occur, including a change in insurance coverage which would either
make the Servicer unable to comply with the eligibility requirements for
maintaining all such applicable approvals or require notification to Fannie Mae,
Freddie Mac or, if applicable, to HUD, FHA, VA or USDA. Should the Servicer for
any reason cease to possess all such applicable approvals, or should
notification to Fannie Mae, Freddie Mac or, if applicable, to HUD, FHA, VA or
USDA be required, the Repo Seller shall so notify the Buyer promptly in writing.

Section 3.21 Other Indebtedness. All Indebtedness (other than Indebtedness
evidenced by this Agreement) of the Repo Seller existing on the Closing Date is
listed on Schedule 3.21 hereto (the “Existing Indebtedness”).

Section 3.22 Agreements. Neither the Repo Seller nor any Subsidiary of the Repo
Seller is a party to any agreement, instrument, or indenture or subject to any
restriction materially and adversely affecting its business, operations, assets
or financial condition, except as disclosed in the financial statements
described in Section 3.05 hereof. Neither the Repo Seller nor any Subsidiary of
the Repo 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 the Repo Seller
as a whole. No holder of any indebtedness of the Repo Seller or of any of its
Subsidiaries has given notice of any asserted default thereunder.

 

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Section 3.23 No Reliance. Each of the Repo Seller and the Servicer, as
applicable, has made its own independent decisions to enter into the Program
Agreements, the Agency 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 legal counsel and accountants) as it
has deemed necessary. The Repo Seller is not relying upon any advice from the
Buyer as to any aspect of the Transactions, including the legal, accounting or
tax treatment of such Transactions.

Section 3.24 Plan Assets. The Repo Seller is not an employee benefit plan as
defined in Section 3(3) of Title I of ERISA that is subject to Title I of ERISA,
or a plan described in Section 4975(e)(1) of the Code that is subject to
Section 4975 of the Code or any entity that is deemed to hold Plan Assets, and
the Purchased Assets and Repurchase Assets are not Plan Assets. the Repo Seller
is 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 which would be violated by the Transactions contemplated
hereunder.

Section 3.25 No Prohibited Persons. Neither the Repo Seller nor any of its
Affiliates, officers, directors, partners or members, is an entity or person (or
to the Repo 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 OFAC’s most current list of “Specially Designated National and
Blocked Persons” (which list may be published from time to time in various
mediums including the OFAC website
http://www.treasury.gov/ofac/downloads/t11sdn.pdf); (iii) who commits, threatens
to commit or supports “terrorism”, as that term is defined in EO13224; or
(iv) that is (1) the subject of any Sanctions or (2) located, organized or
resident in a country or territory that is, or whose government is, the subject
of Sanctions; or (v) who is otherwise affiliated with any entity or person
listed above (any and all parties or persons described in clauses (i) through
(iv) above are herein referred to as a “Prohibited Person”).

Section 3.26 Compliance with 1933 Act. Neither the Repo Seller nor anyone acting
on its behalf has offered, transferred, pledged, sold or otherwise disposed of
any Participation Certificate, any interest in a Participation Certificate or
any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of any Participation Certificate, any
interest in a Participation Certificate or any other similar security from, or
otherwise approached or negotiated with respect to a Participation Certificate,
any interest in a Participation Certificate or any other similar security with,
any person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of such Participation Certificate under the 1933 Act
or which would render the disposition of such Participation Certificate a
violation of Section 5 of the 1933 Act or require registration pursuant thereto.

Section 3.27 Eligible Assets. All Assets that are subject to a Transaction under
this Agreement are Eligible Assets.

 

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Section 3.28 Adherence to Accepted Servicing Practices. The Repo Seller shall
(and shall cause the Servicer to) comply at all times with the Accepted
Servicing Practices.

Section 3.29 Reimbursement of Escrow, Corporate Advance, and Delinquency
Advances. The Repo Seller shall (or shall cause the Servicer to) withdraw
Advance Reimbursement Amounts from the appropriate Escrow Custodial Account or
Principal and Interest Custodial Account to reimburse any Escrow Advance,
Corporate Advance, or Delinquency Advance within two (2) Business Days after
receipt of amounts in such account that may be used to reimburse such Advances
pursuant to the Freddie Mac Guide and/or Freddie Mac Purchase Documents,
including but not limited to Section 8301.19 of the Freddie Mac Guide or Part A,
Subpart A2, Chapter A2-1-01 (General Servicer Duties and Responsibilities) of
the Fannie Mae Guide, or Chapter 2-04 of the Fannie Mae Investor Reporting
Manual, as applicable.

Section 3.30 Reimbursement of Advances upon Transfer of Servicing. In connection
with any sale or transfer of servicing under any Servicing Contract or with
respect to any Designated Pool, the Servicer shall collect the total outstanding
Advance Reimbursement Amounts relating to the applicable Servicing Contract or
Designated Pool prior or contemporaneously with transferring servicing under the
applicable Servicing Contract or Designated Pool, except that, in the case of an
Advance Reimbursement Right related to a Delinquency Advance, a written
agreement of the transferee that it will remit reimbursement of such outstanding
Advance Reimbursement Amount for such Delinquency Advance by the next month’s
remittance date shall suffice subject in all respects to the applicable Agency
Agreement (including the limited payment subordination provided in the related
Agency Agreement).

Section 3.31 Eligible Advance Reimbursement Rights. Each Advance Reimbursement
Right is an Eligible Advance Reimbursement Right. Each Advance Reimbursement
Right arises from an Advance for which the Repo Seller is entitled to
reimbursement pursuant to the related Servicing Contract.

ARTICLE IV

CONVEYANCE; REPURCHASE ASSETS; SECURITY INTEREST

Section 4.01 Ownership. Upon payment of the Purchase Price and delivery of each
Participation Certificate to the Buyer, the Buyer shall become the sole owner of
the Purchased Assets and related Repurchase Assets, free and clear of any
Adverse Claim.

Section 4.02 Security Interest.

(a) Although the parties intend (other than for U.S. federal Tax purposes) 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, the Repo Seller
hereby grants and pledges to Administrative Agent on behalf of the Buyer as
security for the performance by the Repo Seller of its Obligations, a fully
perfected first priority security interest in all of the Repo Seller’s right,
title and interest in, to and under each of the following items of property,
whether now owned or hereafter acquired, now existing or hereafter created and
wherever located, (subject to the terms of the Agency Agreements), is
hereinafter referred to as the “Repurchase Assets”:

 

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(i) each Participation Certificate identified on the Asset Schedule;

(ii) all Advance Reimbursement Rights and rights to reimbursement or payment of
Assets and/or amounts due in respect thereof relating to Advances under the
Participation Agreement;

(iii) any rights in each Dedicated Account and to the amounts on deposit
therein;

(iv) all rights under the Participation Agreement;

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

(vi) all “general intangibles,” “accounts,” “chattel paper,” “securities
accounts,” “investment property,” “deposit accounts” and “money” as defined in
the Uniform Commercial Code relating to or constituting any and all of the
foregoing (including all of the Repo Seller’s rights, title and interest in and
under the Participation Agreement); and

(vii) any and all replacements, substitutions, distributions on or proceeds of
any and all of the foregoing.

Notwithstanding the foregoing, the following items of property shall not
constitute Repurchase Assets until the Freddie Mac Effective Date: the
Participation Agreement (Freddie Mac), including all rights thereunder, the
related Participation Certificate and any Advance Reimbursement Rights and
rights to reimbursement or payment of Assets and/or amounts due in respect
thereof relating to Advances under the Participation Agreement (Freddie Mac),
and each Dedicated Account (Freddie Mac), any and all replacements,
substitutions, distributions on or proceeds of any and all of the foregoing
(collectively, the “Freddie Mac Excluded Assets”).

Notwithstanding anything in this Agreement to the contrary or any other Program
Agreement, in no event shall any Servicing Contract, or the mortgage servicing
rights or servicing contract rights held by the Servicer pertaining to any
Servicing Contract comprise or be considered either directly or indirectly a
Repurchase Asset or an Asset. For the avoidance of doubt, the Servicer’s Advance
Reimbursement Rights under the applicable Agency Guide and/or the Freddie Mac
Purchase Documents, as applicable, are, under all circumstances, Repurchase
Assets and Assets under this Agreement.

(b) The Repo Seller agrees to mark its computer records, tapes and other
electronic medium to evidence the interests granted to the Administrative Agent
on behalf of the Buyer hereunder.

(c) [Reserved].

(d) [Reserved].

 

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(e) The foregoing provisions of this Section 4.02 are intended to constitute a
security agreement or other arrangement or other credit enhancement related to
this Agreement and the Transactions hereunder as defined under Sections
101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.

Section 4.03 Further Documentation. At any time and from time to time, upon the
reasonable written request of the Buyer or the Administrative Agent, and at the
sole expense of the Repo Seller, the Repo Seller will promptly and duly execute
and deliver, or will promptly cause to be executed and delivered, such further
instruments and documents and take such further action as the Buyer or the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including the filing of any financing or continuation statements
under the Uniform Commercial Code in effect in any applicable jurisdiction with
respect to the Liens created hereby. The Repo Seller also hereby authorizes the
Buyer and the Administrative Agent on behalf of the Buyer to file any such
financing or continuation statement to the extent permitted by Applicable Law.
Buyer acknowledges and agrees that the security interest created hereby is
subject to the following provision to be included in each financing statement
filed in respect hereof (defined terms used below shall have the meaning set
forth in the Acknowledgment Agreement):

The Security Interest described herein is subordinate to all rights of Fannie
Mae under (i) the terms of an Acknowledgment Agreement, with respect to the
Security Interest among Fannie Mae, PMC (the “Debtor”), Credit Suisse First
Boston Mortgage Capital LLC, PennyMac Mortgage Investment Trust and Credit
Suisse AG, Cayman Islands Branch (the “Acknowledgment Agreement”), and (ii) the
Mortgage Selling and Servicing Contract, the Fannie Mae Selling Guide, the
Fannie Mae Servicing Guide and all supplemental servicing instructions or
directives provided by Fannie Mae, all applicable master agreements, recourse
agreements, repurchase agreements, indemnification agreements, loss-sharing
agreements, and any other agreements between Fannie Mae and the Debtor, and all
as amended, restated or supplemented from time to time (collectively, the
“Fannie Mae Lender Contract”), which rights include the right of Fannie Mae to
terminate the Fannie Mae Lender Contract with or without cause and the right to
sell, or have transferred, the Servicing Rights.

Section 4.04 [Reserved].

Section 4.05 Changes in Locations, Name, etc. The Repo Seller shall not
(a) change the location of its chief executive office/chief place of business
from that specified in Section 3.17 or (b) change its jurisdiction of
organization from the jurisdiction referred to in Section 3.13(e), or (c) change
its name or identity, in each case unless it shall have given the Buyer and the
Administrative Agent prior written notice thereof and shall have delivered to
the Buyer and the Administrative Agent all Uniform Commercial Code financing
statements and amendments thereto as the Buyer or the Administrative Agent shall
request and taken all other actions deemed necessary by the Buyer or the
Administrative Agent on behalf of the Buyer to continue its perfected status in
the Repurchase Assets with the same or better priority.

 

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Section 4.06 The Buyer’s Appointment as Attorney-in-Fact.

(a) The Repo Seller hereby irrevocably constitutes and appoints the Buyer and
the Administrative Agent on behalf of the Buyer, and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Repo Seller and in the name of the Repo Seller or in its own name,
from time to time in the Buyer’s discretion if an Event of Default shall have
occurred and be continuing, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of the
foregoing, the Repo Seller hereby gives the Buyer and the Administrative Agent
the power and right, on behalf of the Repo Seller, without assent by, but with
notice to, the Repo Seller to do the following:

(i) in the name of the Repo Seller or its own name, or otherwise, to take
possession of and endorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due with respect to any Repurchase
Assets and to file any claim or to take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the Buyer (or the
Administrative Agent on behalf of the Buyer) for the purpose of collecting any
and all such moneys due with respect to any Repurchase Asset whenever payable;

(ii) to pay or discharge taxes and Liens levied or placed on or threatened
against the Repurchase Assets;

(iii) communicate with investors and master servicers in respect of any of the
Repurchase Assets in the same manner and with the same effect as if done by the
Repo Seller; and

(iv) (A) to direct any party liable for any payment under any Repurchase Assets
to make payment of any and all moneys due or to become due thereunder directly
to the Buyer or as the Buyer or the Administrative Agent shall direct; (B) to
ask or demand for, collect, receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in respect of
or arising out of any Repurchase Asset; (C) to sign and endorse any invoices,
assignments, verifications, notices and other documents in connection with any
of the Repurchase Assets; (D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Repurchase Assets or any portion thereof and to enforce any other
right in respect of any Repurchase Assets; (E) to defend any suit, action or
proceeding brought against the Repo Seller with respect to any Repurchase
Assets; (F) to settle, compromise or adjust any suit, action or proceeding
described in clause (E) above and, in connection therewith, to give such
discharges or releases as the Buyer may deem appropriate; and (G) generally, to
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Repurchase Assets as fully and completely as though the Buyer
were the absolute owner thereof for all purposes, and to do, at the Buyer’s (or
the Administrative Agent’s) option and the Repo Seller’s expense, at any time,
and from time to time, all acts and things which the Buyer or the Administrative
Agent deems necessary to protect, preserve or realize upon the Repurchase Assets
and the Buyer’s Liens thereon and to effect the intent of this Agreement, all as
fully and effectively as the Repo Seller might do.

 

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(b) The Repo Seller hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable until such time as all Obligations
have been paid in full and this Agreement is terminated.

(c) The Repo Seller also authorizes the Buyer and the Administrative Agent, at
any time and from time to time, to execute, in connection with any sale provided
for in Section 4.08 hereof, any endorsements, assignments or other instruments
of conveyance or transfer with respect to the Repurchase Assets.

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

Notwithstanding anything to the contrary herein or any of the other Program
Agreements, any appointment set forth in this Section 4.06, as well as the
Buyer’s right to exercise or the exercise (or purported exercise) of any right,
power or authority given by the Repo Seller hereunder, shall be subject in all
respects to the applicable Agency Guide, the related Servicing Contract, the
Freddie Mac Purchase Documents (as applicable) the Agency Agreements and any and
all instruments, agreements, invoices or other writings which give rise to or
otherwise evidence any of the Advance Reimbursement Rights, including, in the
case of Advance Reimbursement Rights relating to Fannie Mae Mortgage Loans, the
Fannie Mae Requirements.

Section 4.07 Performance by the Buyer of the Repo Seller’s Obligations. If the
Repo Seller fails to perform or comply with any of its agreements contained in
the Program Agreements or any Agency Agreement, and to the extent expressly
permitted pursuant to the applicable Agency Agreement, the Buyer (or the
Administrative Agent on behalf of the Buyer) may itself perform or comply, or
otherwise cause performance or compliance, with such agreement, the reasonable
(under the circumstances) documented out-of-pocket expenses of the Buyer and the
Administrative Agent actually incurred in connection with such performance or
compliance, together with interest thereon at a rate per annum equal to the
Pricing Rate shall be payable by the Repo Seller to the Buyer on demand and
shall constitute Obligations. Such interest shall be computed on the basis of
the actual number of days in each Price Differential Period and a 360-day year.
For the avoidance of doubt, in no event shall the Buyer be permitted to assume
the Freddie Mac Designated Servicing Contract.

Section 4.08 Proceeds. If an Event of Default shall occur and be continuing,
(a) all proceeds of Repurchase Assets received by the Repo Seller consisting of
cash, checks and other liquid assets readily convertible to cash items shall be
held by the Repo Seller in trust for the Buyer, segregated from other funds of
the Repo Seller, and shall forthwith upon receipt by the Repo Seller

 

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be turned over to the Buyer or the Administrative Agent in the exact form
received by the Repo Seller (duly endorsed by the Repo Seller to the Buyer or
the Administrative Agent, if required) and (b) any and all such proceeds
received by the Buyer or the Administrative Agent (whether from the Repo Seller
or otherwise) may, in the sole discretion of the Buyer or the Administrative
Agent, be held by the Buyer as collateral security for, and/or then or at any
time thereafter may be applied by the Buyer against, the Obligations (whether
matured or unmatured), such application to be in such order as the Buyer or the
Administrative Agent shall elect. Any balance of such proceeds remaining after
the Obligations shall have been paid in full and this Agreement shall have been
terminated shall be paid over to the Repo Seller or to whomsoever may be
lawfully entitled to receive the same. Notwithstanding anything to the contrary
herein or in any of the other Program Agreements, the provisions of this
Section 4.08 shall be subject to the applicable Servicing Contract, the
applicable Agency Agreement, in the case of Repurchase Assets relating to Fannie
Mae Mortgage Loans, the Fannie Mae Requirements, the Freddie Mac Purchase
Documents and the Freddie Mac Guide each to the extent applicable.

Section 4.09 Remedies. If an Event of Default shall occur and be continuing, the
Buyer or the Administrative Agent may exercise, in addition to all other rights
and remedies granted to it in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights and
remedies of a secured party under the Uniform Commercial Code (including the
Buyer’s rights to a strict foreclosure under Section 9-620 of the Uniform
Commercial Code). Without limiting the generality of the foregoing, the Buyer or
the Administrative Agent may seek the appointment of a receiver, liquidator,
conservator, trustee, or similar official in respect of the Repo Seller or any
of the Repo Seller’s property. Without limiting the generality of the foregoing,
the Buyer may terminate the Participation Interest in accordance with the
Participation Agreement. The Buyer or the Administrative Agent without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required under this Agreement or by law referred to
below) to or upon the Repo Seller or any other Person (each and all of which
demands, presentments, protests, advertisements and notices are hereby waived),
may in such circumstances forthwith collect, receive, appropriate and realize
upon the Repurchase Assets, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Repurchase Assets or any part thereof (or contract to do any of the
foregoing), in one or more parcels or as an entirety at public or private sale
or sales, at any exchange, broker’s board or office of the Buyer, the
Administrative Agent, or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Buyer or the
Administrative Agent shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Repurchase Assets so sold, free of any
right or equity of redemption in the Repo Seller, which right or equity is
hereby waived or released. The Repo Seller further agrees, at the Buyer’s or the
Administrative Agent’s request, to assemble the Repurchase Assets and make them
available to the Buyer or the Administrative Agent at places which the Buyer or
the Administrative Agent shall reasonably select, whether at the Repo Seller’s
premises or elsewhere. The Buyer or the Administrative Agent shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale, after deducting all reasonable (under the circumstances) documented
out-of-pocket costs and expenses of every kind actually incurred therein or
incidental to the care or safekeeping of any of the Repurchase Assets or in any
way relating to the Repurchase Assets or the rights of the Buyer hereunder,
including reasonable

 

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and documented attorneys’ fees and disbursements, to the payment in whole or in
part of the Obligations, in such order as the Buyer or the Administrative Agent
may elect, and only after such application and after the payment by the Buyer or
the Administrative Agent of any other amount required or permitted by any
provision of law, including Section 9-615 of the Uniform Commercial Code, need
the Buyer or the Administrative Agent account for the surplus, if any, to the
Repo Seller. To the extent permitted by Applicable Law, the Repo Seller waives
all claims, damages and demands it may acquire against the Buyer or the
Administrative Agent arising out of the exercise by the Buyer or the
Administrative Agent of any of its rights hereunder, other than those claims,
damages and demands arising from the gross negligence or willful misconduct of
the Buyer or the Administrative Agent. If any notice of a proposed sale or other
disposition of Repurchase Assets shall be required by law, such notice shall be
deemed reasonable and proper if given at least ten (10) days before such sale or
other disposition. The Repo Seller shall remain liable for any deficiency (plus
accrued interest thereon as contemplated herein) if the proceeds of any sale or
other disposition of the Repurchase Assets are insufficient to pay the
Obligations and the fees and disbursements in amounts reasonable under the
circumstances, of any attorneys employed by the Buyer or the Administrative
Agent to collect such deficiency. Notwithstanding anything to the contrary
herein or in any of the other Program Agreements, the remedies set forth in this
Section 4.09 shall be subject to the applicable Servicing Contract, the
applicable Agency Agreement, in the case of Repurchase Assets relating to Fannie
Mae Mortgage Loans, the Fannie Mae Requirements, the Freddie Mac Purchase
Documents and the Freddie Mac Guide each to the extent applicable.

Section 4.10 Limitation on Duties Regarding Preservation of Repurchase Assets.
The Buyer’s or the Administrative Agent’s duty with respect to the custody,
safekeeping and physical preservation of the Repurchase Assets in its
possession, under Section 9-207 of the Uniform Commercial Code or otherwise,
shall be to deal with it in the same manner as the Buyer or the Administrative
Agent deals with similar property for its own account. Neither the Buyer, the
Administrative Agent, nor any of their directors, officers or employees shall be
liable for failure to demand, collect or realize upon all or any part of the
Repurchase Assets or for any delay in doing so or shall be under any obligation
to sell or otherwise dispose of any Repurchase Assets upon the request of the
Repo Seller or otherwise.

Section 4.11 Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Repurchase Assets are irrevocable and are
powers coupled with an interest.

Section 4.12 Release of Security Interest. Upon the latest to occur of (a) the
repayment to the Buyer of all Obligations hereunder, and (b) the occurrence of
the Termination Date, the Administrative Agent shall release its security
interest in any remaining Repurchase Assets hereunder and shall promptly execute
and deliver to the Repo Seller such documents or instruments as the Repo Seller
shall reasonably request to evidence such release.

Section 4.13 Reinstatement. All security interests created by this Article IV
shall continue to be effective, or be reinstated, as the case may be, if at any
time any payment, or any part thereof, of any Obligation of the Repo Seller is
rescinded or must otherwise be restored or returned by the Buyer upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the Repo
Seller or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Repo Seller or any
substantial part of its property, or otherwise, all as if such release had not
been made.

 

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Section 4.14 Subordination. The Repo Seller acknowledges and agrees that its
rights with respect to the Repurchase Assets are and shall continue to be at all
times junior and subordinate to the rights of the Buyer and the Administrative
Agent under this Agreement.

ARTICLE V

CONDITIONS PRECEDENT

Section 5.01 Initial Transaction. The obligation of the Buyer to enter into
Transactions with the Repo Seller hereunder is subject to the satisfaction,
immediately prior to or concurrently with the entering into such Transaction, of
the condition precedent that the Buyer shall have received all of the following
items, each of which shall be satisfactory to the Buyer and its counsel in form
and substance:

(a) Executed Agreements. The Administrative Agent and the Buyer shall have
received a duly executed counterpart of each of the Program Agreements and the
Agency Agreements, each in form acceptable to the Buyer, each Participation
Certificate and each and every document or certification delivered by any party
in connection with any such Program Agreements or each Participation
Certificate, and each such document shall be in full force and effect and free
of any modification, breach or waiver.

(b) Security Interest. Evidence that all other actions necessary or, in the
opinion of the Buyer, desirable to perfect and protect the Administrative
Agent’s interest in the Repurchase Assets have been taken, including duly
authorized and filed Uniform Commercial Code financing statements on Form UCC1
or Form UCC3.

(c) Organizational Documents. A certificate of the corporate secretary of the
Repo Seller in form and substance acceptable to the Buyer, attaching certified
copies of the Repo Seller’s certificate of incorporation, bylaws and corporate
resolutions approving the Program Agreements, the Agency 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 and the Agency
Agreements.

(d) Good Standing Certificate. A certified copy of a good standing certificate
from the jurisdiction of organization of the Repo Seller, dated as of no earlier
than the date ten (10) Business Days prior to the Closing Date.

(e) Incumbency Certificate. An incumbency certificate of the corporate secretary
of the Repo Seller, certifying the names, true signatures and titles of the
representatives duly authorized to request transactions hereunder and to execute
the Program Agreements and the Agency Agreements.

 

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(f) Servicing Contracts; Assets. The Buyer shall have:

(i) received each Servicing Contract relating to any Purchased Assets, which the
Buyer shall have determined prior to financing the first Asset that relates to
such Servicing Contract that such Servicing Contract is in form and substance
satisfactory to the Buyer in its sole discretion;

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

(iii) received a copy of each Participation Agreement, which the Buyer shall
have determined, prior to entering into the first Transaction related to an
Asset that relates to such Participation Agreement, is in form and substance
satisfactory to the Buyer in its sole discretion.

(g) Fees. The Buyer shall have received payment in full of all fees and Expenses
(including the Structuring Fee) which are payable hereunder or under any Program
Agreement to the Buyer on or before such date.

(h) Insurance. Evidence that the Repo Seller has added the Buyer as an
additional loss payee under the Repo Seller’s Fidelity Insurance.

Section 5.02 All Transactions. The obligation of the Buyer to enter into each
Transaction pursuant to this Agreement is subject to the following conditions
precedent:

(a) Due Diligence Review. Without limiting the generality of Section 10.09
hereof, the Buyer shall have completed, to its satisfaction, its due diligence
review of the related Assets of the Repo Seller.

(b) Transaction Notice and Asset Schedule. In accordance with Section 2.02, the
Buyer shall have received from the Repo Seller a Transaction Notice with an
Asset Schedule that has been updated to include Assets related to a proposed
Transaction hereunder as of the date of such Transaction Notice.

(c) No Margin Deficit. After giving effect to each new Transaction, the
aggregate outstanding amount of the Purchase Price shall not exceed the Asset
Base then in effect.

(d) No Default; No Early Amortization Event. No Early Amortization Event,
Default or Event of Default shall have occurred and be continuing under this
Agreement, any other Program Agreement, or any of the Agency Agreements.

(e) Requirements of Law. The Buyer shall not have determined that the
introduction of or a change in any Requirement of Law or in the interpretation
or administration of any Requirement of Law applicable to the Buyer has made it
unlawful, and no Governmental Authority shall have asserted that it is unlawful,
for the Buyer to enter into Transactions with a Pricing Rate based on Base Rate.

 

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(f) Representations and Warranties. Both immediately prior to the related
Transaction and also after giving effect thereto and to the intended use
thereof, the representations and warranties made by the Repo Seller in each
Program Agreement or the Agency Agreements shall be true, correct and complete
on and as of such Purchase Date in all material respects with the same force and
effect as if made on and as of such date (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, as of such
specific date).

(g) Participation Certificates. With respect to any Asset that constitutes a
Participation Certificate, the Buyer shall have received an original
Participation Certificate which is in form and substance satisfactory to the
Buyer in its sole discretion.

(h) Financing Statements. All financing statements, amendments to financing
statements and other documents required to be recorded or filed in order to
perfect the Buyer’s security interest in such Assets, and protect such Assets
and the other related Assets against all creditors of, and purchasers from, the
Repo Seller and all other Persons whatsoever have been duly filed in each filing
office necessary for such purpose, and all filing fees and taxes, if any,
payable in connection with such filings have been paid in full.

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

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

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

(j) Advance Verification Report. The Advance Verification Report immediately
preceding the date of such Transaction has been delivered in accordance with
Section 6.25(b) and to the extent such Advance Verification Report contains any
exceptions noted therein, such exceptions have been waived by the Administrative
Agent in its sole discretion.

Section 5.03 Closing Subject to Conditions Precedent. The closing of this
Agreement is subject to the satisfaction on or prior to the Closing Date of the
following conditions (any or all of which may be waived in writing by the
Buyer):

(a) Performance. All the terms, covenants, agreements and conditions of the
Program Agreements and the Agency Agreements to be complied with, satisfied,
observed and performed by the Repo Seller or the Servicer, as applicable, on or
before the Closing Date shall have been complied with, satisfied, observed and
performed in all material respects.

 

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(b) Representations and Warranties. Each of the representations and warranties
made in the Program Agreements and the Agency Agreements by the Repo Seller or
the Servicer, as applicable, shall be true and correct in all material respects
as of the Closing Date (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof and except to the extent they
expressly relate to an earlier or later time).

(c) Subservicer Side Letter Agreement. The Repo Seller shall deliver to the
Buyer a fully executed and effective Subservicer Side Letter Agreement in form
and substance acceptable to the Buyer.

(d) Opinions of Counsel. Counsel to the Repo Guarantor and the Repo Seller shall
have delivered to the Administrative Agent and the Buyer favorable opinions,
dated the Closing Date and satisfactory in form and substance to the
Administrative Agent and its counsel, including but not limited to those
relating to corporate matters, enforceability, perfection and an opinion as to
which state’s law applies to security interest and perfection matters, the
inapplicability of the Investment Company Act to the Repo Seller and Repo
Guarantor, and a Bankruptcy Code safe harbor opinion.

(e) Filings and Recordations. The Administrative Agent and the Buyer shall have
received evidence reasonably satisfactory to the Administrative Agent of the
completion of all recordings, registrations and filings as may be necessary or,
in the reasonable opinion of the Administrative Agent, desirable to perfect or
evidence the assignment by the Repo Seller to the Administrative Agent on behalf
of the Buyer of the ownership interest in the Repurchase Assets conveyed
pursuant hereto and the proceeds thereof.

(f) [Reserved].

(g) Actions or Proceedings. No action, suit, proceeding or investigation by or
before any Governmental Authority shall have been instituted to restrain or
prohibit the consummation of, or to invalidate, any of the transactions
contemplated by the Program Agreements, the Agency Agreements, the Participation
Certificates and the documents related thereto in any material respect.

(h) Approvals and Consents. All Governmental Actions of all Governmental
Authorities required with respect to the transactions contemplated by the
Program Agreements, the Agency Agreements, the Participation Certificates and
the documents related thereto shall have been obtained or made.

(i) [Reserved].

(j) Advance Verification Agent. PMC shall have engaged the Advance Verification
Agent pursuant to an agreement reasonably satisfactory to the Administrative
Agent.

If any condition specified in this Section 5.03 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Buyer by notice to the Repo Seller at any time at or prior to the Closing Date
and the Buyer shall incur no liability as a result of such termination.

 

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ARTICLE VI

COVENANTS

PMC, in its capacity as the Repo Seller and, with respect to each applicable
Agency Agreement, as the Servicer covenants and agrees that until the payment
and satisfaction in full of all Obligations, whether now existing or arising
hereafter, shall have occurred:

Section 6.01 Litigation. The Repo Seller will promptly, and in any event within
ten (10) days after service of process on any of the following, give to the
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 each
the Repo Seller or the Servicer, the Repo 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, any of the Agency 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 five percent
(5%) of (i) with respect to the Repo Seller, the Repo Seller’s Net Worth, or
(ii) with respect to the Repo Guarantor, the Repo Guarantor’s Net Worth, or
(iii) which, individually or in the aggregate, if adversely determined, could be
reasonably likely to have a Material Adverse Effect. On the fifth (5th) day of
each calendar month (or if such day is not a Business Day, the next succeeding
Business Day), the Repo Seller will provide to the 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 the
Repo Seller, the Repo Guarantor or any of their Subsidiaries or affecting any of
the Property of any of them before any Governmental Authority. The Repo Seller
will promptly provide notice of any judgment, which with the passage of time,
could cause an Event of Default hereunder.

Section 6.02 Prohibition of Fundamental Changes. The Repo 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 the
Repo Seller may merge or consolidate with (a) any wholly owned subsidiary of the
Repo Seller, or (b) any other Person if the Repo Seller is the surviving entity;
and provided further, that if after giving effect thereto, no Default would
exist hereunder.

Section 6.03 [Reserved].

Section 6.04 Asset Schedule. The Repo Seller shall at all times maintain a
current list (which may be stored in electronic form) of all Assets. The Repo
Seller shall deliver to the Administrative Agent a revised Asset Schedule on a
monthly basis on the same day it delivers the Advances Monthly Report. As of
each date an updated Asset Schedule and Schedule I are delivered in accordance
with this Section 6.04, the Repo Seller hereby certifies, represents and
warrants to the Buyer that each such updated Asset Schedule and Schedule I to
each Participation Certificate are true, complete and correct in all material
respects.

 

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Section 6.05 No Adverse Claims. The Repo Seller warrants and will defend the
right, title and interest of the Buyer in and to all Purchased Assets against
all Adverse Claims and demands.

Section 6.06 Assignment. Except as permitted herein, the Repo Seller shall not
sell, assign, transfer or otherwise dispose of, or grant any option with respect
to, or pledge, hypothecate or grant a security interest in or lien on or
otherwise encumber (except pursuant to the Program Agreements), any of the
Purchased Assets or any interest therein, provided that this Section 6.06 shall
not prevent any transfer of Purchased Assets in accordance with the Program
Agreements.

Section 6.07 Security Interest. The Repo Seller shall do all things necessary to
preserve the Purchased Assets so that they remain subject to a first priority
perfected security interest hereunder, subject to the rights and interest of the
applicable Agency, including in the case of Purchased Assets relating to Fannie
Mae Mortgage Loans, the Fannie Mae Requirements. Without limiting the foregoing,
the Repo Seller will comply with all rules, regulations and other laws of any
Governmental Authority and cause the Purchased Assets or the related Repurchase
Assets to comply with all applicable rules, regulations and other laws. The Repo
Seller will not allow any default for which each of the Repo Seller and the
Servicer, as applicable, is responsible to occur under any Purchased Assets or
any Program Agreement or any Agency Agreement, and each of the Repo Seller and
the Servicer, as applicable, shall fully perform or cause to be performed when
due all of its obligations under any Purchased Assets, any Program Agreement and
each Agency Agreement.

Section 6.08 Records.

(a) The Repo Seller shall (and shall cause the Servicer to) collect and maintain
or cause to be collected and maintained all Records relating to the Purchased
Assets in accordance with the Accepted Servicing Practices and industry custom
and practice for assets similar to the Purchased Assets not in the possession of
a custodian, including those maintained pursuant to Section 6.09, and all such
Records shall be in the Repo Seller’s or the Buyer’s possession unless
Administrative Agent otherwise approves. The Repo Seller will (and will cause
the Servicer to) maintain all such Records in good and complete condition in
accordance with industry practices for assets similar to the Purchased Assets
and preserve them against loss.

(b) For so long as the Buyer has an interest in or lien on any Purchased Assets,
the Repo Seller will hold or cause to be held all related Records in trust for
the Buyer, subject in all cases to the applicable Agency Agreements. The Repo
Seller shall notify, or cause to be notified, every other party holding any such
Records of the interests and liens in favor of the Buyer granted hereby.

(c) Upon reasonable advance notice from Administrative Agent, the Repo Seller
shall (x) make any and all such Records available to Administrative Agent and
the 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 the Buyer or its authorized
agents to discuss the affairs, finances and accounts of the Repo Seller with its
chief operating officer and chief financial officer and to discuss the affairs,
finances and accounts of the Repo Seller with its independent certified public
accountants.

 

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Section 6.09 Books. The Repo Seller shall keep or cause to be kept in reasonable
detail books and records of account of its assets and business and shall clearly
reflect therein the transfer of Purchased Assets to the Buyer.

Section 6.10 Approvals. The Repo Seller shall cause the Servicer to maintain its
status as an approved lender and approved seller/servicer with Fannie Mae and
Freddie Mac, as applicable, in each case, to the extent applicable, in good
standing, and all licenses, permits or other approvals necessary for the
Servicer to perform its obligations under the Program Agreements and the Agency
Agreements (collectively, the “Agency Approvals”). The Repo Seller shall cause
the Servicer to (i) service each Mortgage Loan in respect of which an Advance
has been made, (ii) make each Advance, and (iii) collect all Advance
Reimbursement Amounts, in each case of (i), (ii), and (iii) in accordance with
the applicable Servicing Contract, the applicable Agency Guide, the Freddie Mac
Purchase Documents (as applicable), and any and all instruments, agreements,
invoices or other writings which give rise to or otherwise evidence any of the
Advance Reimbursement Rights in all material respects. Should the Servicer, for
any reason, cease to possess all such Agency Approvals, or should notification
to the relevant Agency or, if and to the extent that any Mortgage Loan is an FHA
Loan, USDA Loan or VA Loan, to HUD, FHA, VA, or USDA as described in
Section 3.20 hereof be required, the Repo Seller shall so notify the Buyer and
the Administrative Agent promptly in writing. Notwithstanding the preceding
sentence, the Servicer shall take all necessary action to maintain all of its
Agency Approvals at all times during the term of this Agreement.

Section 6.11 Material Change in Business. Neither the Repo Seller nor the
Servicer shall make any material change in the nature of its business as carried
on at the Closing Date.

Section 6.12 Distributions. If an Event of Default has occurred and is
continuing, the Repo Seller shall not 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 the Repo Seller.

Section 6.13 Collections on Assets and the Dedicated Account.

(a) Prior to the Repo Seller making any withdrawal from the custodial account or
any other clearing account maintained under the related Servicing Contract on or
after the Closing Date, the Repo Seller shall, and shall cause any Subservicer
to, instruct the related depository institution to remit all Advance
Reimbursement Amounts to the applicable Dedicated Account (but only to the
extent that such funds are payable to the Servicer free and clear of any
applicable Agency rights or other restrictions on transfer set forth in the
applicable Servicing Contract or the applicable Agency Agreement (subject solely
to the limited payment subordination in the related Agency Agreement). The
Servicer shall (and shall cause any Subservicer to) cause (i) the portion of
such Advance Reimbursement Amounts withdrawn from a custodial account relating
to a Servicing Contract subject to the applicable Agency Agreement (including
the limited

 

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payment subordination in the related Agency Agreement) for any Delinquency
Advance to be deposited into the applicable Dedicated Account within one
(1) Business Day of receipt of such funds; and (ii) the portion of such Advance
Reimbursement Amounts withdrawn from a custodial account in accordance with the
related Servicing Contract for any other Advance to be deposited into the
related Dedicated Account within two (2) Business Days of receipt of such funds.

(b) The Repo Seller may offset, net, withdraw or direct the withdrawal or
remittance of any Advance Reimbursement Amount which has been or are to be
deposited into the applicable Dedicated Account for such Advance Reimbursement
Amounts relating to any Corporate Advance or Escrow Advance (“Permitted Use”) so
long as (i) no Early Amortization Event, Default, or Event of Default has
occurred and is continuing, (ii) the Administrative Agent, in its sole and
absolute discretion, has not restricted the Permitted Use of such funds,
(iii) no Margin Deficit then exists or will exist after giving effect to such
Permitted Use of funds, and (iv) there exists an excess over the Required Amount
in the applicable Dedicated Account after giving effect to such Permitted Use of
funds. For the avoidance of doubt, if an Early Amortization Event, a Default, or
an Event of Default has occurred and is continuing, the funds in each Dedicated
Account may only be used to satisfy the Repo Seller’s Obligations hereunder in
accordance with Section 2.06.

(c) All or any part of the amounts under this Section 6.12 may only be applied
by the Repo Seller to the extent that such proceeds have been received by, or
for the account of, the Repo Seller free and clear of all applicable Agency
rights and other restrictions on transfer under applicable Agency guidelines.

Section 6.14 Applicable Law. The Repo Seller shall comply with the requirements
of all Applicable Laws, rules, regulations and orders of any Governmental
Authority.

Section 6.15 Existence. The Repo Seller shall preserve and maintain its legal
existence and all of its material rights, privileges, licenses and franchises.

Section 6.16 Chief Executive Office; Jurisdiction of Organization. Neither the
Repo Seller nor the Servicer shall move its chief executive office from the
address referred to in Section 3.17 or change its jurisdiction of organization
from the jurisdiction referred to in Section 3.13(e) unless it shall have
provided the Buyer at least thirty (30) days’ prior written notice of such
change.

Section 6.17 Taxes. The Repo Seller shall timely file all tax returns that are
required to be filed by it and shall timely pay and discharge all taxes,
assessments and governmental charges or levies imposed on it or on its income or
profits or on any of its property prior to the date on which penalties attach
thereto, except for any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained.

Section 6.18 Transactions with Affiliates. The Repo Seller will not enter into
any transaction, including any purchase, sale, lease or exchange of property or
the rendering of any service, with any Affiliate unless such transaction
(a) does not result in a Default hereunder and (b) is in the ordinary course of
the Repo Seller’s business and (c) is upon fair and reasonable terms no less
favorable to the Repo Seller than it would obtain in a comparable arm’s length
transaction with a Person which is not an Affiliate, or make a payment that is
not otherwise permitted by this Section 6.18 to any Affiliate.

 

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Section 6.19 True and Correct Information. All information, reports, exhibits,
schedules, financial statements or certificates of the Repo Seller, any
Affiliate thereof or any of their officers furnished to Administrative Agent
and/or the Buyer hereunder and during Administrative Agent’s and/or the Buyer’s
diligence of the Repo Seller are and will be true and complete in all material
respects and do not omit to disclose any material facts necessary to make the
statements herein or therein, in light of the circumstances in which they are
made, not misleading. All required financial statements, information and reports
delivered by the Repo Seller and Repo Guarantor to the Buyer pursuant to this
Agreement shall be prepared in accordance with U.S. GAAP, or, if applicable, to
SEC filings, the appropriate SEC accounting regulations.

Section 6.20 Servicing with respect to Advances. The Repo Seller shall cause the
Servicer to maintain adequate financial standing, facilities, procedures and
experienced personnel necessary for the making of Advances and collecting of
Advance Reimbursement Amounts and in accordance with Accepted Servicing
Practices and the relevant Servicing Contract, the applicable Agency Guide, and
the Freddie Mac Purchase Documents (as applicable) in each case, in all material
respects. The Mortgage Loans for which Advances are or will be made and Advance
Reimbursement Amounts are or will be collected shall be serviced by the Servicer
and not any other servicer without the consent of the Administrative Agent,
which consent shall not be unreasonably withheld, subject to the rights and
interests of the applicable Agency, including, in the case of Fannie Mae
Mortgage Loans, the Fannie Mae Requirements; provided, however, that the
foregoing consent requirement shall not be applicable if either (i) an Agency
terminates the Servicer or subservicer, as applicable, or (ii) an Agency directs
the Servicer to cause the Mortgage Loans for which Advances are made or Advance
Reimbursement Amounts will be collected to be serviced by another servicer, and
in each case, such successor servicer shall be an approved servicer under such
Agency’s guidelines.

Section 6.21 No Pledge. Except as contemplated herein, the Repo Seller shall not
(a) pledge, transfer or convey any security interest in the Dedicated Accounts
to any Person without the express written consent of the Buyer or (b) pledge,
grant a security interest or assign any existing or future (x) Advance
Reimbursement Rights, (y) rights to any of the Repurchase Assets or (z) Advance
Reimbursement Amounts, or pledge or grant to any other Person any security
interest in any Assets.

Section 6.22 Plan Assets. The Repo 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 the Repo Seller shall not use “plan assets”
within the meaning of 29 CFR § 2510.3 101, as amended by Section 3(42) of ERISA
to engage in this Agreement or any Transaction hereunder. Transactions to or
with the Repo Seller 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 or church plans within the
meaning of Section 3(33) of ERISA.

Section 6.23 Sharing of Information. The Repo Seller shall allow Administrative
Agent and the Buyer to exchange information related to the Repo Seller and the
Transactions hereunder with third party lenders and the Repo Seller shall permit
each third party lender to share such information with Administrative Agent and
the Buyer to the extent permitted by each Agency Agreement.

 

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Section 6.24 Termination of Servicing Notice. The Repo Seller shall give notice
to the Buyer promptly upon receipt or notice or knowledge of any default, notice
of termination of servicing for cause under any Servicing Contract or other
Agency mortgage-related servicing agreement, or any resignation of servicing,
termination of servicing or notice of resignation of or termination of
servicing, regardless of whether such agreement or the rights thereunder
constitute Purchased Assets hereunder.

Section 6.25 Advance Reporting Requirements.

(a) Advances Monthly Report. On a monthly basis and in no event later than the
seventh (7th) Business Day of each month (or, if such day is not a Business Day,
the Business Day following such day), the Repo Seller shall deliver to the
Administrative Agent, the Advance Verification Agent the monthly data file with
respect to all Mortgage Loans serviced by the Repo Seller for each Agency,
including, without limitation, a report of the Advance Reimbursement Amounts
applied in accordance with clause (ii) of the definition of Accepted Servicing
Practices to the extent practicable, the Monthly Reimbursement Rate for the
upcoming Price Differential Payment Date, and a calculation of the Net Proceeds
Coverage Percentage in respect of each of the three preceding Price Differential
Periods (or each that has occurred since the Closing Date, if less than three),
and the arithmetic average of the three (the “Advances Monthly Report”), and
which shall include all updates to the Assets as of the last day of the
immediately preceding month.

(b) Advance Verification Report. The Advance Verification Agent shall verify
that Delinquency Advances, Escrow Advances and Corporate Advances are reasonably
calculated by the Servicer in accordance with the Advance Verification Agent
Agreement. The Advance Verification Agent shall deliver to the Administrative
Agent a monthly report (the “Advance Verification Report”) no later than the
twenty-fifth (25th) day (or the immediately preceding Business Day if the
twenty-fifth (25th) is not a Business Day) of each month, stating that the
Advance Verification Agent produced such Advance Verification Report in
conformance with the requirements set forth in the Advance Verification Agent
Agreement. In the event that the Advance Verification Agent does not provide its
Advance Verification Report for two (2) consecutive months, the Servicer shall
be required to terminate the Advance Verification Agent and appoint a
replacement Advance Verification Agent within thirty (30) days that is
acceptable to the Administrative Agent in its sole discretion and shall be
required to deliver an Advance Verification Report no later than the
twenty-fifth (25th) day (or the immediately preceding Business Day if the
twenty-fifth (25th) is not a Business Day) of the month immediately following
the month that such replacement Advance Verification Agent was appointed.

Section 6.26 [Reserved].

Section 6.27 Financial Covenants. The Repo Guarantor shall at all times comply
with all financial covenants and/or financial ratios set forth in Section 2 of
the Pricing Side Letter.

 

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Section 6.28 No Prohibited Persons. The Repo Seller nor any of its officers,
directors, partners or members, shall be an entity or person (or to the Repo
Seller’s knowledge, fifty percent (50%) or greater owned by an entity or
person): (i) whose name appears on OFAC’s 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); or (ii) shall otherwise be the target of
Sanctions.

Section 6.29 Investment Company. Neither the Repo Seller nor any of its
Subsidiaries shall become required to register as an “investment company”, or a
company “controlled” by an “investment company,” within the meaning of the
Investment Company Act.

Section 6.30 Modification of the Servicing Contracts or Participation
Agreements. Neither the Repo Seller nor the Servicer shall consent with respect
to any Servicing Contract or Participation Agreement related to any Asset that
constitutes a Purchased Asset or Repurchase Asset, to (i) the modification,
amendment or termination of such Servicing Contract or Participation Agreement,
(ii) the waiver of any provision of such Servicing Contract or Participation
Agreement or (iii) the resignation of the Servicer under any Servicing Contract,
or the assignment, transfer, or material delegation of any of the Servicer’s
rights or obligations, under such Servicing Contract or Participation Agreement,
without the prior written consent of the Buyer. Notwithstanding anything to the
contrary herein or any of the other Program Agreements, Fannie Mae and Freddie
Mac, as applicable, have the absolute and unconditional right to modify the
related Servicing Contracts at any time and to unilaterally assign, transfer or
delegate any of the rights or obligations pursuant to the applicable Servicing
Contract in accordance with the terms and conditions of such Servicing Contract.

Section 6.31 Insurance. The Repo Seller shall, and shall cause the Repo
Guarantor to keep all property useful and necessary in its business in good
working order and condition. the Repo Seller shall maintain a fidelity bond and
be covered by insurance (including, without limitation, errors and omissions
insurance) of the kinds and in the amounts customarily maintained by such
similarly situated entities in the same jurisdiction and industry as the Repo
Seller, in amounts acceptable to each Agency, and the Repo Seller shall not
reduce such coverage without the written consent of the Buyer, and shall also
maintain such other insurance with financially sound and reputable insurance
companies, and with respect to property and risks of a character usually
maintained by entities engaged in the same or similar business similarly
situated, against loss, damage and liability of the kinds and in the amounts
customarily maintained by such entities.

Section 6.32 Guarantees. The Repo Seller shall not create, incur, assume or
suffer to exist any Guarantees, except (i) to the extent reflected in the Repo
Seller’s financial statements or notes thereto and (ii) to the extent the
aggregate Guarantees of the Repo Seller do not exceed $250,000.

Section 6.33 Indebtedness. The Repo Seller shall not incur any additional
material Indebtedness (other than (i) the Existing Indebtedness specified on
Schedule 3.21 hereto; (ii) Indebtedness incurred with the Buyer or its
Affiliates; (iii) Indebtedness incurred in connection with new or existing
secured lending facilities and (iv) usual and customary accounts payable for a
mortgage company), without the prior written consent of the Buyer.

 

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Section 6.34 Requests for Information. The Repo Seller shall furnish, or cause
to be furnished, to the Buyer within five (5) Business Days after the Buyer’s
request, any information, documents, records or reports with respect to the
servicing or subservicing of the Repurchase Assets, the Repo Seller’s or Repo
Guarantor’s business or the Repo Seller’s relationship with any Agency, as the
Buyer may from time to time reasonably request.

Section 6.35 Changes in the Servicing Contracts. The Repo Seller shall provide
written notice to the Buyer of any changes in any Servicing Contract that may
materially affect the Advance Reimbursement Rights within two (2) Business Days
after the Repo Seller or the Servicer receives notice thereof.

Section 6.36 Reporting Requirements.

(a) The Repo Seller shall furnish to the Buyer (1) promptly, copies of any
material and adverse notices (including notices of defaults, breaches, potential
defaults or potential breaches) and any material financial information that is
not otherwise required to be provided by the Repo Seller hereunder which is
given to the Repo Seller’s lenders, (2) promptly, notice of the occurrence of
(A) any Event of Default hereunder; (B) any default or material breach by the
Repo Seller of any obligation under any Program Agreement or any material
contract or agreement of the Repo Seller, (C) any Early Amortization Event, or
(D) the occurrence of any event or circumstance that such party reasonably
expects has resulted in, or will, with the passage of time, result in, a
Material Adverse Effect or an Event of Default and (3) the following:

(i) as soon as available and in any event within forty (40) calendar days after
the end of each calendar month, the unaudited balance sheet of the Repo Seller,
as at the end of such period and the related unaudited consolidated statements
of income for the Repo 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 the Repo Seller, 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 the Repo Seller in
accordance with GAAP, consistently applied, as at the end of, and for, such
period (subject to normal year-end adjustments);

(ii) as soon as available and in any event within forty (40) calendar days after
the end of each calendar quarter, the unaudited cash flow statements of the Repo
Seller, 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
the Repo Seller, 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 the Repo Seller in accordance with
GAAP, consistently applied, as at the end of, and for, such period (subject to
normal year-end adjustments);

(iii) as soon as available and in any event within ninety (90) days after the
end of each fiscal year of the Repo Seller, the balance sheet of the Repo
Seller, as at the end of such fiscal year and the related consolidated
statements of income and retained

 

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earnings and of cash flows for the Repo Seller for such year, setting forth 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 the Buyer
in its sole discretion, shall have no “going concern” qualification and shall
state that said consolidated financial statements or financial statements, as
applicable, fairly present the consolidated financial condition or financial
condition, as applicable, and results of operations of the Repo Seller as at the
end of, and for, such fiscal year in accordance with GAAP;

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

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

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

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

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

(B) any material change in accounting policies or financial reporting practices
of the Repo Seller;

(C) any material issues raised upon examination of the Repo Seller or the
Servicer or the Repo Seller’s or the Servicer’s facilities by any Governmental
Authority;

(D) any material change in the Indebtedness of the Repo Seller, including any
default, renewal, non-renewal, termination, increase in available amount or
decrease in available amount related thereto;

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

(F) any other event, circumstance or condition that has resulted, or has a
reasonable possibility of resulting, in a Material Adverse Effect with respect
to the Repo Seller or the Servicer.

(b) Officer’s Certificates. The Repo Seller will furnish to the Buyer, at the
time the Repo Seller furnishes each set of financial statements pursuant to
Section 6.36(a)(i), (ii) or (iii) above, an Officer’s Compliance Certificate of
the Repo Seller substantially in the form of Exhibit B to this Agreement.

 

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(c) Other. The Repo Seller shall deliver to the Buyer any other reports or
information reasonably requested by the Buyer or as otherwise required pursuant
to this Agreement and the Participation Agreement (including all reports and
information delivered by the Repo Seller relating to the Participation
Certificates).

(d) Regulatory Reporting Compliance. The Repo Seller shall, on or before the
last Business Day of the fifth (5th) month following the end of each of the Repo
Seller’s fiscal years (December 31), beginning with the fiscal year ending in
2020, deliver to the Buyer and each Agency a copy of the results of any Uniform
Single Attestation Program for Mortgage Bankers or an Officer’s Certificate that
satisfies the requirements of Item 1122(a) of Regulation AB, an independent
public accountant’s report that satisfies the requirements of Item 1123 of
Regulation AB, or similar review conducted on the Repo Seller by its
accountants, and such other reports as the Repo Seller may prepare relating to
its servicing functions as the Repo Seller.

(e) Quarterly Hedging Report. On each date on which the Officer’s Compliance
Certificate is delivered, the Repo Seller shall provide a true and correct
summary of all interest rate protection agreements entered into or maintained by
the Repo Seller.

Section 6.37 Liens on Substantially All Assets. The Repo Seller shall not grant
a security interest to any Person other than the Buyer or an Affiliate of the
Buyer in substantially all assets of the Repo Seller unless the Repo Seller has
entered into an amendment to this Agreement that grants to the Buyer a pari
passu security interest on such assets; provided, however, that the foregoing
shall not be applicable to any security interest granted in respect of any
mortgage servicing rights held by the Servicer pertaining to any Servicing
Contract.Section 6.38 Litigation Summary. On each date on which the Officer’s
Compliance Certificate is delivered, the Repo Seller shall provide to the Buyer
a true and correct summary of all material actions, notices, proceedings and
investigations pending with respect to which the Repo Seller has received
service of process or other form of notice or, to the best of the Repo Seller’s
knowledge, threatened against it, before any court, administrative or
governmental agency or other regulatory body or tribunal.

Section 6.39 Most Favored Status. The Repo Seller and the Buyer each agree that
should the Repo Seller or any Affiliate thereof enter into a repurchase
agreement or credit facility with any Person other than the Buyer or an
Affiliate of the Buyer which by its terms provides any of the following (each, a
“More Favorable Agreement”):

(a) more favorable terms with respect to any guaranties or financial covenants,
including covenants covering the same or similar subject matter set forth or
referred to in Section 6.12 hereof and Section 2 of the Pricing Side Letter;

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

 

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(c) a requirement that the Repo Seller has added or will add any Person other
than the Buyer or an Affiliate of the Buyer as a loss payee under the Repo
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 Buyer or an Affiliate of the Buyer;
provided, that in the event that such More Favorable Agreement is terminated,
upon notice by the Repo Seller to the Buyer of such termination, the original
terms of this Agreement shall be deemed to be automatically reinstated. the Repo
Seller and the Buyer further agree to execute and deliver any new guaranties,
agreements or amendments to this Agreement evidencing such provisions, provided
that the execution of such amendment shall not be a precondition to the
effectiveness of such amendment, but shall merely be for the convenience of the
parties hereto. Promptly upon the Repo Seller or any Affiliate thereof entering
into a repurchase agreement or other credit facility with any Person other than
the Buyer, the Repo Seller shall deliver to the Buyer a true, correct and
complete copy of such repurchase agreement, loan agreement, guaranty or other
financing documentation.

Section 6.40 No Subservicing. Except with respect to an Eligible Subservicing
Agreement, the Repo Seller shall not permit any of the Purchased Assets or
Repurchase Assets to be subject to any subservicing agreement or subservicing
arrangement without the prior written consent of the Buyer.

Section 6.41 Servicer Administration. If at any time the Servicer intends to
service the Mortgage Loans directly without a subservicer, the Servicer shall
not less than ninety (90) days prior to the anticipated servicing transfer date,
provide notice to the Administrative Agent of such intention and solicit
Administrative Agent’s prior written consent, which the Administrative Agent
shall have sixty (60) days from the receipt of the notice to provide and which
consent may not be unreasonably withheld. If the Administrative Agent denies the
request for consent in writing, then the Repo Seller shall repurchase the
Purchased Assets not later than the later of (x) the sixtieth (60th) day
following receipt of the Administrative Agent’s denial letter or (y) such
anticipated servicing transfer date; provided, however, that the foregoing
consent requirement shall not be applicable if either (i) an Agency terminates
the Servicer or subservicer, as applicable, or (ii) an Agency directs the
Servicer to cause the Mortgage Loans for which Advances are made or Advance
Reimbursement Amounts will be collected to be serviced by another servicer, and
in each case, such successor servicer shall be an approved servicer under such
Agency’s guidelines. The parties acknowledge that Fannie Mae has certain rights
under the Acknowledgment Agreement and the Fannie Mae Guide, including the right
to terminate the Seller as Servicer.

ARTICLE VII

DEFAULTS/RIGHTS AND REMEDIES OF BUYER UPON DEFAULT

Section 7.01 Events of Default. Each of the following events or circumstances
shall constitute an “Event of Default”:

(a) Payment Failure. Failure of the Repo Seller to (i) make any payment (which
failure continues for a period of two (2) Business Days following written notice
(which may be in

 

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electronic form) from the Buyer) 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, in each case evidencing or securing Indebtedness of the Repo Seller to
the Buyer or to any Affiliate of the Buyer, or (ii) cure any Margin Deficit when
due pursuant to Section 2.04 hereof.

(b) Cross Default. The Repo Seller or Affiliates thereof shall be in default
under (i) any Program Agreement; (ii) any Indebtedness, in the aggregate, in
excess of $1,000,000 of the Repo Seller or any Affiliate thereof which default
(1) involves the failure to pay a matured obligation, or (2) permits the
acceleration of the maturity of obligations by any other party to or beneficiary
with respect to such Indebtedness, or (iii) any other contract or contracts, in
the aggregate in excess of $1,000,000 to which the Repo Seller 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 the Repo Seller of this
Agreement or any rights hereunder without first obtaining the specific written
consent of the Buyer, or the granting by the Repo Seller of any security
interest, lien or other encumbrances on any Purchased Assets to any person other
than the Buyer.

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

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

(f) Immediate Breach of Representation or Covenant or Obligation. A breach by
the Repo Seller of any of the representations, warranties or covenants or
obligations set forth in Sections 3.01 (the Repo Seller Existence), 3.07
(Solvency), Section 3.21 (Other Indebtedness), Section 6.02 (Prohibition of
Fundamental Changes), Section 6.15 (Existence), Section 6.21 (No Pledge),
Section 6.22 (Plan Assets), Section 6.32 (Guarantees), or Section 6.33
(Indebtedness) of this Agreement.

(g) Additional Breach of Representation or Covenant. A material breach by the
Repo Seller of any other material representation, warranty or covenant set forth
in this Agreement (and not otherwise specified in Section 7.01(f) above), if
such breach is not cured within five (5) Business Days and in the case of a
breach of Section 2 of the Pricing Side Letter (Financial Covenants), one
(1) Business Day.

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

 

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(i) Failure to Transfer. The Repo Seller fails to transfer a material portion of
the Purchased Assets to the Buyer on the applicable Purchase Date (provided the
Buyer has tendered the related Purchase Price).

(j) Judgment. A final judgment or judgments for the payment of money in excess
of $10,000,000 shall be rendered against the Repo Seller, the Repo 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.

(k) 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 the Repo Seller or any Affiliate
thereof, or shall have taken any action to displace the management of the Repo
Seller or any Affiliate thereof or to curtail its authority in the conduct of
the business of the Repo Seller or any Affiliate thereof, or takes any action in
the nature of enforcement to remove, limit or restrict the approval of the Repo
Seller 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.

(l) Inability to Perform. A Responsible Officer of the Repo Seller or the Repo
Guarantor shall admit its inability to, or its intention not to, perform any of
the Repo Seller’s Obligations or the Repo Guarantor’s obligations hereunder or
the Repo Guaranty.

(m) Security Interest. This Agreement shall for any reason cease to create a
valid, first priority security interest in any material portion of the
Repurchase Assets purported to be covered hereby.

(n) Financial Statements. The Repo Seller’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 the Repo Seller as a “going
concern” or a reference of similar import.

(o) Validity of Agreements. For any reason, this Agreement at any time shall not
be in full force and effect in all material respects or shall not be enforceable
in all material respects in accordance with its terms, or any Lien granted
pursuant thereto shall fail to be perfected and of first priority, or the Repo
Seller or any Affiliate of the Repo Seller shall seek to disaffirm, terminate,
limit or reduce its obligations hereunder or the Repo Guarantor’s obligations
under the Repo Guaranty.

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

(q) [Reserved].

 

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(r) Dedicated Accounts. Except as permitted under Section 6.13(b), the Repo
Seller or any other Person shall have withdrawn any amounts on deposit in the
Dedicated Accounts without the consent of the Administrative Agent other than
funds deposited or withdrawn in error.

(s) Deposit and Remittance Requirements. The Repo Seller shall fail to comply in
any material respect with the deposit and remittance requirements set forth in
the related Servicing Contract, the applicable Agency Guide and any and all
instruments, agreements, invoices or other writings which give rise to or
otherwise evidence any of the Advance Reimbursement Rights (subject to any cure
period provided therein).

(t) Approved Mortgagee; Approved Servicer; Replacement Subservicer.

(i) The Servicer ceases to be (A) if and to the extent that any Mortgage Loan is
a FHA Loan, USDA Loan or VA Loan, a HUD approved mortgagee pursuant to
Section 203 of the National Housing Act or (B) a Fannie Mae- or Freddie
Mac-approved seller/servicer, or HUD, if and to the extent that any FHA Loans,
USDA Loans or VA Loans are Subject Mortgages, Fannie Mae or Freddie Mac, as
applicable, suspends, rescinds, halts, eliminates, withdraws, annuls, repeals,
voids or terminates the status of the Servicer as either (1) if and to the
extent that any Mortgage Loan is an FHA Loan, USDA Loan or VA Loan, a HUD
approved mortgagee pursuant to Section 203 of the National Housing Act or (2) a
Fannie Mae-approved or Freddie Mac-approved seller/servicer; or

(ii) A Subservicer Termination Event; provided that no Event of Default shall
occur if, upon a Subservicer Termination Event, a replacement Subservicer (i) is
identified by the Servicer that meets all the qualifications of a Subservicer
within thirty (30) days and (ii) such Subservicer replaces the Subservicer
within sixty (60) days, of such Subservicer Termination Event.

(u) Fraud; Violation of Requirements. (i) Either the Repo Seller or the Servicer
engages or has engaged in fraud or other reckless or intentional wrongdoing in
connection herewith or any other Program Agreement, Agency Agreement, or any
document submitted pursuant thereto or otherwise in connection with any Advance
Reimbursement Right, or in connection with any federal mortgage insurance or
loan guaranty program, or other federal program related to any of the Mortgage
Loans; or (ii) either the Repo Seller or the Servicer has used any payments,
collections, recoveries or other funds pertaining in any way to the Mortgage
Loans in violation of the requirements of the related Servicing Contract or any
and all instruments, agreements, invoices or other writings which give rise to
or otherwise evidence any of the Advance Reimbursement Rights.

(v) [Reserved].

(w) Improper Transfer of Participation Certificate. The Servicer or Initial
Participant sells and/or contributes any Participation Certificate to any Person
other than the Buyer hereunder.

(x) Cross Acceleration. (i) An “event of default” has occurred and is continuing
under the Other CS Facility Documents, (ii) the Repo Seller or Affiliates
thereof shall be in default under (i) any Indebtedness, in the aggregate, in
excess of $100,000,000 of the Repo Seller or any

 

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Affiliate thereof which default (1) involves the failure to pay a matured
obligation, or (2) permits the acceleration of the maturity of obligations by
any other party to or beneficiary with respect to such Indebtedness, or
(iii) any other contract or contracts, in the aggregate in excess of
$100,000,000 to which the Repo Seller 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.

(y) Performance Tests. Any failure to satisfy one or more of the following
tests:

(i) Net Proceeds Coverage Test. On any Price Differential Payment Date, the
arithmetic average of the Net Proceeds Coverage Percentage determined for such
Price Differential Payment Date and the two preceding Price Differential Payment
Dates is less than five times the percentage equivalent of a fraction (A) the
numerator of which equals the sum of the accrued and unpaid Price Differential
on such date and (B) the denominator of which equals the aggregate average
outstanding amount of the Purchase Price of the Participation Certificates then
subject to all Transactions during the related Price Differential Period; and

(ii) Monthly Reimbursement Rate Test. The Monthly Reimbursement Rate is less
than 10% as of any date of determination date following the third full calendar
month after the Closing Date.

(z) Early Amortization Event. Any failure of the Repo Seller to pay to the Buyer
when due any amount set forth in Section 2.14(c).

Section 7.02 No Waiver. An Event of Default shall be deemed to be continuing
unless expressly waived by the Buyer in writing.

Section 7.03 Due and Payable. Upon the occurrence of any Event of Default which
has not been waived in writing by the Buyer, the Buyer may, by notice to the
Repo Seller, declare all Obligations to be immediately due and payable, and any
obligation of the Buyer to enter into Transactions with the Repo Seller shall
thereupon immediately terminate. Upon such declaration, the Obligations shall
become immediately due and payable, both as to Purchase Price outstanding and
Price Differential, without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived, anything contained herein or other
evidence of such Obligations to the contrary notwithstanding, except with
respect to any Event of Default set forth in Section 7.01(d), in which case all
Obligations shall automatically become immediately due and payable without the
necessity of any notice or other demand, and any obligation of the Buyer to
enter into Transactions with the Repo Seller shall immediately terminate. the
Buyer may enforce payment of the same and exercise any or all of the rights,
powers and remedies possessed by the Buyer, whether under this Agreement, any
other Program Agreement, the Agency Agreements or afforded by Applicable Law.

Section 7.04 Fees. The remedies provided for herein are cumulative and are not
exclusive of any other remedies provided by law. the Repo Seller agrees to pay
to the Buyer reasonable attorneys’ fees and reasonable legal expenses incurred
in enforcing the Buyer’s rights, powers and remedies under this Agreement and
each other Program Agreement and the Agency Agreements.

 

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Section 7.05 Default Rate. Without regard to whether the Buyer has exercised any
other rights or remedies hereunder, if an Event of Default shall have occurred
and be continuing, the applicable Pricing Rate shall be increased as set forth
in the Pricing Side Letter, but in no event shall the Pricing Rate exceed the
maximum amount permitted by law.

ARTICLE VIII

ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; SEPARATE ACTIONS BY BUYER

Section 8.01 Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) constitutes the entire agreement of the parties hereto and
supersedes any and all prior or contemporaneous agreements, written or oral, as
to the matters contained herein, and no modification or waiver of any provision
hereof, any of the Program Agreements or the Agency Agreements, nor consent to
the departure by the Repo Seller therefrom, shall be effective unless the same
is in writing, and then such waiver or consent shall be effective only in the
specific instance, and for the purpose, for which it is given.

Section 8.02 Waivers, Separate Actions by the Buyer. Any amendment or waiver
effected in accordance with this Article VIII shall be binding upon the Buyer
and the Repo Seller; and the Buyer’s failure to insist upon the strict
performance of any term, condition or other provision of this Agreement, any of
the Program Agreements, or any of the Agency Agreements, or to exercise any
right or remedy hereunder or thereunder, shall not constitute a waiver by the
Buyer of any such term, condition or other provision or Default or Event of
Default in connection therewith, nor shall a single or partial exercise of any
such right or remedy preclude any other or future exercise, or the exercise of
any other right or remedy; and any waiver of any such term, condition or other
provision or of any such Default or Event of Default shall not affect or alter
this Agreement, any of the Program Agreements or the Agency Agreements, and each
and every term, condition and other provision hereof or thereof shall, in such
event, continue in full force and effect and shall be operative with respect to
any other then existing or subsequent Default or Event of Default in connection
therewith.

ARTICLE IX

SUCCESSORS AND ASSIGNS

Section 9.01 Successors and Assigns. Subject to Section 9.04 hereof, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, any portion thereof, or
any interest therein. The Repo Seller shall not have the right to assign all or
any part of this Agreement or any interest herein without the prior written
consent of the Buyer. Prior to the occurrence and continuance of an Event of
Default, the Buyer shall not assign all or any part of this Agreement or any
interest herein to any Person listed on Schedule 5 attached hereto (each such
Person, a “Competitor”) without the prior written consent of the Repo Seller.

 

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Section 9.02 Participations and Transfers.

(a) The Buyer may, in accordance with Applicable Law and the Acknowledgment
Agreement, at any time sell to one or more banks or other entities
(“Participants”) participating interests in all or a portion of Buyer’s rights
and obligations under this Agreement and the other Program Agreements; provided
that (i) each such sale shall represent an interest in a Transaction in a
Purchase Price of $1,000,000 or more, (ii) and no such sale shall be made to any
Competitor listed on Schedule 5, without the prior written consent of the Repo
Seller. In the event of any such sale by the Buyer of participating interests to
a Participant, the Buyer shall remain a party to the Transaction for all
purposes under this Agreement and the Repo Seller shall continue to deal solely
and directly with the Buyer in connection with Buyer’s rights and obligations
under this Agreement. No such transaction shall relieve the Buyer of its
obligations to transfer Purchased Assets to the Repo Seller pursuant to this
Agreement.

(b) In addition to its rights to pledge and hypothecate the Repurchase Assets
pursuant to Section 10.10, the Buyer may in accordance with Applicable Law at
any time assign or otherwise transfer to one or more banks, financial
institutions, investment companies, investment funds or any other Person (each,
a “Transferee”) all or a portion of Buyer’s rights and obligations under this
Agreement and the other Program Agreements. In the event of any such assignment
or transfer by the Buyer of Buyer’s rights under this Agreement and the other
Program Agreements, the Repo Seller shall continue to deal solely and directly
with the Buyer in connection with Buyer’s rights and obligations under this
Agreement. The Buyer (acting solely for this purpose as an agent for the Repo
Seller) shall maintain at its address referred to in Section 10.05 a copy of
each assignment and assumption delivered to it and a register (the “Register”)
for the recordation of the names and addresses of Transferees, and the Purchase
Price outstanding and Price Differential in the Transactions held by each
thereof. The entries in the Register shall be prima facie conclusive and
binding, and the Repo Seller may treat each Person whose name is recorded in the
Register as the owner of the Transactions recorded therein for all purposes of
this Agreement. No assignment shall be effective until it is recorded in the
Register. The Register shall be available for inspection by the Repo Seller and
any Buyer, at any reasonable time and from time to time upon reasonable prior
notice.

(c) All actions taken by the Buyer pursuant to this Section 9.02 shall be at the
expense of the Buyer. The Buyer may distribute to any prospective assignee any
document or other information delivered to the Buyer by the Repo Seller subject
to any related confidentiality provisions contained herein.

(d) Notwithstanding anything in this Agreement to the contrary, Buyer agrees,
and each Participant and Transferee is deemed to agree, that such Persons are
prohibited from participating in or entering into an offering of the Repurchase
Assets, any interest in such Repurchase Assets or any derivative rights related
thereto, which offering would be subject to the registration requirements of the
Securities Act of 1933, including any transaction structured to claim a “safe
harbor” exemption to such registration requirements, such as Rule 144A or
Regulation S.

 

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Section 9.03 Buyer and Participant Register.

(a) Subject to acceptance and recording thereof pursuant to paragraph (b) of
this Section 9.03, from and after the effective date specified in each
assignment and acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such assignment and acceptance, have
the rights and obligations of the Buyer under this Agreement. Any assignment or
transfer by the Buyer of rights or obligations under this Agreement that does
not comply with this Section 9.03 shall be treated for purposes of this
Agreement as a sale by such the Buyer of a participation in such rights and
obligations in accordance with Section 9.02.

(b) The Buyer or an agent of the Buyer shall maintain a register (the
“Transaction Register”) on which it will record the Transactions entered into
hereunder, and each assignment and acceptance and participation. The Transaction
Register shall include the names and addresses of Buyers (including all
assignees, successors and Participants), and the Purchase Price (and stated
interest) of the Transactions entered into by the Buyer. Failure to make any
such recordation, or any error in such recordation shall not affect the Repo
Seller’s obligations in respect of such Transactions. If the Buyer sells a
participation in any Transaction, it shall provide the Repo Seller, or maintain
as agent of the Repo Seller, the information described in this paragraph and
permit the Repo Seller to review such information as reasonably needed for the
Repo Seller to comply with its obligations under this Agreement or under any
Applicable Law or governmental regulation or procedure, including, without
limitation, as necessary to establish that such Transaction is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
information maintained by a Buyer or by the Repo Seller with respect to
participations shall be conclusive absent manifest error, and the Buyer shall
treat each Person whose name is recorded in such participant registers as the
owner of such participation for all purposes of this Agreement notwithstanding
any notice to the contrary. For the avoidance of doubt, the Administrative Agent
(in its capacity as Administrative Agent) shall have no responsibility for
maintaining a participant register.

Section 9.04 Administrative Transactions. Notwithstanding anything in Sections
9.01, 9.02 (other than clause (d) thereof) and 10.10 of this Agreement to the
contrary, no consent of the Repo Seller or any Agency shall be required for any
Participant, Transferee, assignee of this Agreement, or any holder of the
Participation Certificate, including for the avoidance of doubt, the Buyer (or
the Administrative Agent on behalf of the Buyer) (i) to engage in any repurchase
transactions with respect to any Participation Certificate or any beneficial
interest therein, or (ii) otherwise to pledge (in connection with any hedging or
otherwise), hypothecate or finance any Participation Certificate or any
beneficial interest therein (each, an “Administrative Transaction”) in the
normal course as permitted by this Agreement; provided, that no Administrative
Transaction shall result in the counterparty thereto becoming the Buyer under
this Agreement.

Section 9.05 Participation Certificate Transfers. Any assignment or other
transfer of the Participation Certificate shall require the assignee or
transferee to make the representations and warranties in Section 5 of the
Participation Agreement and each such assignment or transfer shall be in
compliance with the requirements of Section 11 of the Participation Agreement.

 

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ARTICLE X

MISCELLANEOUS

Section 10.01 Survival. This Agreement and the other Program Agreements and all
covenants, agreements, representations and warranties herein and therein and in
the certificates delivered pursuant hereto and thereto, shall survive the
entering into of the Transaction and shall continue in full force and effect so
long as any Obligations are outstanding and unpaid.

Section 10.02 Indemnification. The Repo Seller shall, and hereby agrees to,
indemnify, defend and hold harmless the Buyer, any Affiliate of the Buyer and
their respective directors, officers, agents, employees and counsel from and
against any and all losses, claims, damages, liabilities, deficiencies,
judgments or expenses incurred by any of them (except to the extent that it is
finally judicially determined to have resulted from their own gross negligence
or willful misconduct) as a consequence of, or arising out of or by reason of
any litigation, investigations, claims or proceedings which arise out of or are
in any way related to, (i) this Agreement, any other Program Agreement, the
Agency Agreements or the transactions contemplated hereby or thereby, (ii) the
Repo Seller’s failure to service the Mortgage Loans in accordance with Accepted
Servicing Practices; (iii) any actual or proposed use by the Repo Seller of the
proceeds of the Purchase Price, or (iv) any set-off obligation of the Repo
Seller, in each case including amounts paid in settlement, court costs and
reasonable fees and disbursements of counsel incurred in connection with any
such litigation, investigation, claim or proceeding or any advice rendered in
connection with any of the foregoing.

If and to the extent that any Obligations are unenforceable for any reason, the
Repo Seller hereby agrees to make the maximum contribution to the payment and
satisfaction of such Obligations which is permissible under Applicable Law . The
Repo Seller’s obligations set forth in this Section 10.02 shall survive any
termination of this Agreement and each other Program Agreement and the payment
in full of the Obligations, and are in addition to, and not in substitution of,
any other of its obligations set forth in this Agreement or otherwise.

In addition, the Repo Seller shall, upon demand, pay to the Buyer all reasonable
costs and Expenses (including the reasonable out of pocket fees and
disbursements of counsel) paid or incurred by the Buyer in (i) enforcing or
defending its rights under or in respect of this Agreement, any other Program
Agreement or the Agency Agreements, (ii) collecting the Purchase Price
outstanding, (iii) foreclosing or otherwise collecting upon any Repurchase
Assets and (iv) obtaining any legal, accounting or other advice in connection
with any of the foregoing. This Section shall not apply with respect to taxes
other than taxes that represent losses, claims, damages, etc. arising from any
non-tax claim.

Section 10.03 Nonliability of the Buyer. The parties hereto agree that,
notwithstanding any affiliation that may exist between the Repo Seller and the
Buyer, the relationship between the Repo Seller and the Buyer shall be solely
that of arms-length participants. the Buyer shall not have any fiduciary
responsibilities to the Repo Seller. The Repo Seller (i) agrees that the Buyer
shall not have any liability to the Repo Seller (whether sounding in tort,
contract or otherwise) for losses suffered by the Repo Seller in connection
with, arising out of, or in any way related to, the transactions contemplated
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Agreement, the other Program Agreements, the Agency Agreements or any other
agreement entered into in connection herewith or any act, omission or event
occurring in connection therewith, unless it is determined by a judgment of a
court that is binding on the Buyer (which judgment shall be final and not
subject to review on appeal), that such losses were the result of acts or
omissions on the part of the Buyer constituting gross negligence or willful
misconduct and (ii) waives, releases and agrees not to sue upon any claim
against the Buyer (whether sounding in tort, contract or otherwise), except a
claim based upon gross negligence or willful misconduct. Whether or not such
damages are related to a claim that is subject to such waiver and whether or not
such waiver is effective, the Buyer shall not have any liability with respect
to, and the Repo Seller hereby waives, releases and agrees not to sue upon any
claim for, any special, indirect, consequential or punitive damages suffered by
the Repo Seller in connection with, arising out of, or in any way related to the
transactions contemplated or the relationship established by this Agreement, the
other Program Agreements, the Agency Agreements or any other agreement entered
into in connection herewith or therewith or any act, omission or event occurring
in connection herewith or therewith, unless it is determined by a judgment of a
court that is binding on the Buyer (which judgment shall be final and not
subject to review on appeal), that such damages were the result of acts or
omissions on the part of the Buyer, as applicable, constituting willful
misconduct or gross negligence.

Section 10.04 Governing Law; Submission to Jurisdiction; Waivers.

(a) This Agreement shall be binding and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. The Repo Seller
acknowledges that the obligations of the Buyer hereunder or otherwise are not
the subject of any recourse to, any direct or indirect parent or other Affiliate
of the Buyer. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER
OR RELATED TO OR IN CONNECTION WITH THIS AGREEMENT, 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) EACH OF THE PARTIES HERETO AND BUYER, BY THEIR ACCEPTANCE OF THE
PARTICIPATION CERTIFICATES, HEREBY IRREVOCABLY AND UNCONDITIONALLY:

(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT, 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;

 

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(ii) 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;

(iii) 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 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;

(iv) 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

(v) 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 THE
PARTICIPATION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY AND HEREBY.

Section 10.05 Notices. Any and all notices (with the exception of Transaction
Notices, which shall be delivered via facsimile only), statements, demands or
other communications hereunder may be given by a party to the other by mail,
email, facsimile, messenger or otherwise to the address specified below, or so
sent to such party at any other place specified in a notice of change of address
hereafter received by the other. All notices, demands and requests hereunder may
be made orally, to be confirmed promptly in writing, or by other communication
as specified in the preceding sentence.

If to the Repo Seller:

PennyMac Corp.

3043 Townsgate Road, Suite 300

Westlake Village, CA 91361

Attention: Pamela Marsh/Rick Hetzel

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

E-mail:pamela.marsh@pnmac.com; richard.hetzel@pnmac.com;

contract.finance@pnmac.com

With copies to:

PennyMac Corp.

3043 Townsgate Road, Suite 300

Westlake Village, CA 91361

 

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Attention: Derek Stark

Phone Number: (818) 746-2289

E-mail: derek.stark@pnmac.com

If to the Buyer:

For Transaction Notice:

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

c/o Credit Suisse Securities (USA) LLC

One Madison Avenue, 2nd floor

New York, NY 10010

Attention: Resi Mortgage Warehouse Ops and Christopher Bergs

Phone: 212-538-5087

E-mail: christopher.bergs@credit-suisse.com

with a copy to:

Credit Suisse First Boston Mortgage Capital LLC

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, NY 10010

Attention: Dominic Obaditch, and Kwaw De Graft-Johnson

Phone Number: 212-325-3003 or 212-538-6694

Fax Number: 646-935-7470

E-mail: dominic.obaditch@credit-suisse.com; kwaw.degraft

-johnson@credit-suisse.com

For all other Notices:

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, NY 10010

Attention: Dominic Obaditch and Kwaw De Graft-Johnson

Phone Number: 212-325-3003 or 212-538-6694

Fax Number: 646-935-7470

E-mail: dominic.obaditch@credit-suisse.com;
kwaw.degraft-johnson@credit-suisse.com

Section 10.06 Severability. Each provision and agreement herein shall be treated
as separate and independent from any other provision or agreement herein and
shall be enforceable notwithstanding the unenforceability of any such other
provision or agreement. In case any provision in or obligation under this
Agreement, any other Program Agreement or the Agency Agreements shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

 

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Section 10.07 Section Headings. The Article and Section headings in this
Agreement are inserted for convenience of reference only and shall not in any
way affect the meaning or construction of any provision of this Agreement.

Section 10.08 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile, portable digital
format (PDF) or other electronic means shall be effective as delivery of a
manually executed counterpart of this Agreement.

Section 10.09 Periodic Due Diligence Review. The Repo Seller acknowledges that
the Buyer has the right to perform continuing due diligence reviews with respect
to the Repo Seller and the Assets, for purposes of verifying compliance with the
representations, warranties and specifications made hereunder, or otherwise, and
the Repo Seller agrees that upon reasonable (but no less than five (5) Business
Days’) prior notice unless an Event of Default shall have occurred, in which
case no notice is required, to the Repo Seller, the Buyer or its authorized
representatives will be permitted during normal business hours, and in a manner
that does not unreasonably interfere with the ordinary conduct of the Repo
Seller’s business, to examine, inspect, and make copies and extracts of, any and
all documents, records, agreements, instruments or information relating to such
Assets in the possession or under the control of the Repo Seller, subject to the
confidentiality provisions of this Agreement and the other Program Agreements.
The Repo Seller also shall make available to the Buyer a knowledgeable financial
or accounting officer for the purpose of answering questions respecting the
Assets. Without limiting the generality of the foregoing, the Repo Seller
acknowledges that the Buyer may enter into a Transaction related to any
Purchased Assets from the Repo Seller based solely upon the information provided
by the Repo Seller to the Buyer in the Asset Schedule and the representations,
warranties and covenants contained herein, and that the Buyer, at its option,
has the right at any time to conduct a partial or complete due diligence review
on some or all of the Assets related to a Transaction. The Repo Seller agrees to
cooperate with the Buyer and any third party underwriter in connection with such
underwriting, including providing the Buyer and any third party underwriter with
access to any and all documents, records, agreements, instruments or information
relating to such Purchased Assets in the possession, or under the control, of
the Repo Seller.

Section 10.10 Hypothecation or Pledge of Repurchase Assets. Subject to the
applicable Agency Agreement, the Buyer shall have free and unrestricted use of
all Repurchase Assets and nothing in this Agreement shall preclude the Buyer
from engaging in repurchase transactions with all or a portion of the Repurchase
Assets or otherwise pledging, repledging, transferring, hypothecating, or
rehypothecating all or a portion of the Repurchase Assets, provided that Buyer
shall be required to inform the other parties to any such transaction that such
parties are prohibited from participating in or entering into an offering of the
Repurchase Assets so pledged, repledged, transferred, hypothecated or
rehypothecated, any interest in such Repurchase Assets or any derivative rights
related thereto, which offering would be subject to the registration
requirements of the Securities Act of 1933, including any transaction structured
to claim a “safe harbor” exemption to such registration requirements, such as
Rule 144A or Regulation S. No such transaction shall relieve the Buyer of its
obligations to transfer the Repurchase Assets to the Repo Seller pursuant to
this Agreement.

 

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Section 10.11 Non-Confidentiality of Tax Treatment.

(a) This Agreement and its terms, provisions, supplements and amendments, and
notices hereunder, are proprietary to the Buyer or the Repo Seller, 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 the Buyer or the Repo Seller, except for (i) disclosure to the
Buyer’s or the Repo Seller’s direct and indirect Affiliates and wholly owned
subsidiaries, attorneys or accountants, but only to the extent such disclosure
is necessary and such parties agree to hold all information in strict
confidence, (ii) disclosure to each Agency, or (iii) disclosure required by law,
rule, regulation or order of a court or other regulatory body. Notwithstanding
the foregoing or anything to the contrary contained herein or in any other
Program Agreements, the parties hereto may disclose to any and all Persons,
without limitation of any kind, the federal, state and local tax treatment of
the Transactions, any fact relevant to understanding the federal, state and
local tax treatment of the Transactions, and all materials of any kind
(including opinions or other tax analyses) relating to such federal, state and
local tax treatment and that may be relevant to understanding such tax
treatment; provided that the Repo Seller may not disclose the name of or
identifying information with respect to the Buyer or any pricing terms
(including the Pricing Rate, the Purchase Price Percentage, the Purchase Price
and the Structuring Fee) or other nonpublic business or financial information
(including any sublimits) that is unrelated to the federal, state and local tax
treatment of the Transactions and is not relevant to understanding the federal,
state and local tax treatment of the Transactions, without the prior written
consent of the Buyer.

(b) The Buyer agrees to maintain the confidentiality of all information received
from the Repo Seller relating to the Repo Seller or its Subsidiaries or their
respective businesses (the “Information”), except that Information may be
disclosed: (i) to its Affiliates (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (ii) to the
extent required or requested by any regulatory authority purporting to have
jurisdiction over such Person (including each Agency or any self-regulatory
authority); (iii) to the extent required by any Applicable Law or regulations or
by any subpoena, court order or similar legal process; (iv) in connection with
the exercise of any remedies hereunder or under any other Program Agreements or
the Agency Agreements or any suit, action or proceeding relating to this
Agreement, any other Program Agreements or the Agency Agreements or the
enforcement of its rights hereunder or thereunder; (v) to (x) any actual or
potential assignee, transferee or participant in connection with the assignment
or transfer by the Buyer of any loans or any participations therein or (y) any
actual or prospective party to any swap, derivative or other transaction under
which payments are to be made by reference to the Repo Seller or any Subsidiary
or any of their respective obligations, this Agreement or payments hereunder;
provided that, any such potential assignee, transferee, participant, swap
counterparty or advisor is advised of, and agrees in writing to be bound by, the
provisions of this Section; (vi) with the consent of the Repo Seller; or
(vii) to the extent such Information (x) is or becomes publicly available other
than as a result of a breach of this Section or (y) is available to the Buyer on
a non-confidential basis prior to disclosure by the Repo Seller or any of its
Subsidiaries, or (z) becomes available to the Buyer or any of its Affiliates on
a non-confidential basis from a source other than the Repo Seller.

 

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(c) Notwithstanding anything in this Agreement to the contrary, the Repo Seller
shall comply with all applicable local, state and federal laws, including all
privacy and data protection law, rules and regulations that are applicable to
the Repurchase Assets and/or any applicable terms of this Agreement (the
“Confidential Information”). The Repo 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 “GLB Act”), and the
Repo Seller agrees to maintain such nonpublic personal information that it
receives hereunder in accordance with the GLB Act and other applicable federal
and state privacy laws. The Repo 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 GLB Act) of the Buyer, the
Administrative Agent or any Affiliate of the Administrative Agent which the Repo
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. The Repo
Seller represents and warrants that it has implemented appropriate measures to
meet the objectives of Section 501(b) of the GLB Act and of the applicable
standards adopted pursuant thereto, as now or hereafter in effect. Upon request,
the Repo Seller will provide evidence reasonably satisfactory to allow the Buyer
to confirm that the providing party has satisfied its obligations as required
under this Section 10.11. Without limitation, this may include the Buyer’s
review of audits, summaries of test results, and other equivalent evaluations of
the Repo Seller. Tthe Repo Seller shall notify the Buyer immediately following
discovery of any breach or compromise of the security, confidentiality, or
integrity of nonpublic personal information of the customers and consumers of
the Buyer, the Administrative Agent or any Affiliate of the Administrative Agent
provided directly to the Repo Seller by the Buyer or the Administrative Agent or
an Affiliate of the Administrative Agent. The Repo Seller shall provide such
notice to the Buyer by personal delivery, by facsimile with confirmation of
receipt, or by overnight courier with confirmation of receipt to the applicable
requesting individual.

(d) Notwithstanding anything in this Agreement to the contrary, to the extent
the terms and provisions of this Section 10.11, conflict with the terms and
provisions of an Agency Agreement, the terms and provisions of such Agency
Agreement shall control. Freddie Mac shall be an express and intended third
party beneficiary of this Section 10.11(d), and shall be entitled to rely upon
this Section 10.11(d) in all respects. This Section 10.11(d) shall not be
amended or modified without the express written consent of each Agency.

Section 10.12 Set-off. In addition to any rights and remedies of the Buyer
hereunder and by law, the Buyer shall have the right, with one (1) Business
Day’s prior written notice to the Repo Seller, unless an Event of Default has
occurred and is continuing, in which case no notice will be required, any such
notice following an Event of Default being expressly waived by the Repo Seller
to the extent permitted by Applicable Law, upon any such amount coming due
hereunder, to set-off and appropriate and apply against any Obligation from the
Repo Seller to the Buyer, any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other obligation
(including to return funds to the Repo Seller), credits, indebtedness or claims,
in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by or due from the
Buyer, to or for the credit or the account of the Repo Seller. The Buyer agrees
promptly to notify the Repo Seller after any such set off and application made
by the Buyer; provided that the failure to give such notice shall not affect the
validity of such set off and application.

 

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Section 10.13 Intent.

(a) To the extent that the Buyer qualifies as a “financial institution,”
“financial participant” and/or “master netting agreement participant”, as each
such term is defined in Sections 101(22), 101(22A) and/or 101(38) of the
Bankruptcy Code, as applicable, (hereinafter a “Financial Institution”,
Financial Participant” and/or “Master Netting Agreement Participant”, as
applicable), the parties recognize and intend for (i) this Agreement and each
Transaction hereunder to qualify for the applicable safe harbor treatment
provided by Sections 362(b)(6), 362(b)(27), 546(e), 546(j), 555 and/or 561 of
the Bankruptcy Code, and for the Buyer to be entitled to all of the rights,
benefits and protections afforded to a Financial Institution, Financial
Participant and/or Master Netting Agreement Participant with respect to a
“securities contract” as defined in Section 741(7) of the Bankruptcy Code and a
“master netting agreement” as defined in Section 101(38A) of the Bankruptcy
Code, (ii) any payments or transfers of property made to satisfy a Margin
Deficit to be considered “margin payments”, as such term is defined in
Section 741(5) of the Bankruptcy Code, and any payments or transfers of property
made to complete a securities transaction under this Agreement to be considered
“settlement payments”, as such term is defined in Section 741(8) of the
Bankruptcy Code, (iii) the grant of a security interest set forth in
Section 4.02 that creates the pledge of the Purchased Assets, (subject to the
terms and provisions of the applicable Agency Agreement), to constitute “a
security agreement or other arrangement or other credit enhancement” that is
“related to” this Agreement and Transactions hereunder, within the meaning of
Sections 101(38A)(A) and 741(7)(A)(xi) of the Bankruptcy Code, (iv) the Guaranty
to constitute “a security agreement or other arrangement or other credit
enhancement” that is “related to” this Agreement and Transactions hereunder,
within the meaning of Sections 101(38A)(A) and 741(7)(A)(xi) of the Bankruptcy
Code and (v) each of the Purchased Assets, (subject to the terms and provisions
of the applicable Agency Agreement), to be a security, as contemplated in
Section 101(49) of the Bankruptcy Code. The Repo Seller and the Buyer further
recognize and intend that this Agreement is an agreement to provide financial
accommodations, and is not subject to assumption pursuant to Section 365(a) of
the Bankruptcy Code. Each party further agrees that it shall not challenge, and
hereby waives to the fullest extent available under Applicable Law its right to
challenge, the characterization of (i) any Purchased Asset, (except as otherwise
provided in the applicable Agency Agreement), as a security under
Section 101(49) of the Bankruptcy Code and/or under federal securities laws and
(ii) any Transaction under this Agreement or this Agreement as a “master netting
agreement” and/or “securities contract” within the meaning of the Bankruptcy
Code.

(b) To the extent that the Buyer qualifies as a Financial Institution, Financial
Participant and/or Master Netting Agreement Participant, the Buyer’s (i) right,
upon an Act of Insolvency pursuant to the Bankruptcy Code, to liquidate the
Purchased Assets, (subject to the terms and provisions of the applicable Agency
Agreement), delivered to it in connection with the Transactions hereunder or to
accelerate or terminate this Agreement, (including as may be provided for in
Section 4.09, Section 7.03, and Section 10.12 herein), is a contractual right to
liquidate, accelerate or terminate such Transaction and/or this Agreement, as
described in Sections 555 and 561 of the Bankruptcy Code, (ii) right to offset
or net out as set forth in Section 10.12 is a contractual right that shall not
be subject to the automatic stay, as set forth in Sections 362(b)(6)

 

80

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or 362(b)(27) of the Bankruptcy Code, and (iii) rights concerning the pledge of
the Purchased Assets, (subject to the terms and provisions of the applicable
Agency Agreement), and rights concerning the Repo Guaranty are rights under a
security agreement or arrangement or other credit enhancement forming a part of
or related to this Agreement that shall not be subject to the automatic stay, as
set forth in Sections 362(b)(6) or 362(b)(27) of the Bankruptcy Code. In
addition, to the extent that the Buyer qualifies as a Financial Institution,
Financial Participant and/or Master Netting Agreement Participant, transfers
made, in connection with this Agreement, shall not be avoided as set forth in
Sections 546(e) and 546(j) of the Bankruptcy Code.

(c) The parties agree and acknowledge that if a party hereto is an “insured
depository institution,” as such term is defined in the Federal Deposit
Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a
“qualified financial contract,” as that term is defined in FDIA and any rules,
orders or policy statements thereunder (except insofar as the type of assets
subject to such Transaction would render such definition inapplicable).

(d) It is understood that this Agreement constitutes a “netting contract” as
defined in and subject to Title IV of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment
obligation under any Transaction hereunder shall constitute a “covered
contractual payment entitlement” or “covered contractual payment obligation,”
respectively, as defined in and subject to FDICIA (except insofar as one or both
of the parties is not a “financial institution” as that term is defined in
FDICIA).

(e) 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.

(f) It is the intention of the parties that, for U.S. federal income tax
purposes and for accounting purposes, each Transaction constitute a financing
with the Repo Seller incurring an indebtedness, and that the Repo Seller be
(except to the extent that the Buyer shall have exercised its remedies following
an Event of Default) the owner of the Purchased Assets for such purposes. Unless
prohibited by Applicable Law that becomes effective after the date of this
Agreement, the Repo Seller and the Buyer shall treat the Transactions as
described in the preceding sentence (including on any and all filings with any
U.S. federal, state, or local taxing authority and agree not to take any action
inconsistent with such treatment).

Section 10.14 Electronic Signatures and Transmission.

(a) For purposes of this Agreement, any reference to “written” or “in writing”
means any form of written communication, including, without limitation,
electronic signatures, and any such written communication may be transmitted by
Electronic Transmission. The parties hereto are authorized to accept written
instructions, directions, reports, notices or other communications delivered by
Electronic Transmission and shall not have any duty or obligation to verify or
confirm that the Person sending instructions, directions, reports, notices or
other communications or information by Electronic Transmission is, in fact, a
Person authorized to give such instructions, directions, reports, notices or
other communications or information on behalf of the party purporting to send
such Electronic Transmission; and the parties hereto shall not have any
liability for any losses, liabilities, costs or expenses incurred or sustained
by any party as a

 

81

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result of such reliance upon or compliance with such instructions, directions,
reports, notices or other communications or information to the receiving party,
including, without limitation, the risk of the receiving party acting on
unauthorized instructions, notices, reports or other communications or
information, and the risk of interception and misuse by third parties.

(b) Any requirement in this Agreement or any other Program Agreement that a
document, including the Participation Certificates, is to be signed or
authenticated by “manual signature” or similar language shall not be deemed to
prohibit signature to be by facsimile or electronic signature and shall not be
deemed to prohibit delivery thereof by Electronic Transmission.

Section 10.15 Rights and Remedies of Freddie Mac. Notwithstanding anything in
this Agreement to the contrary, the transactions contemplated in this Agreement
and arising from the Freddie Mac Advances pursuant to this Agreement are
subject, in each and every respect, to all rights, powers, and prerogatives of
Freddie Mac under and in connection with (i) the terms and conditions of that
certain Consent Agreement dated on or after the Closing Date (as may be amended,
modified, restated or supplemented from time to time, the “Consent Agreement”),
with respect to the “Reimbursement Assignments and Pledge” of the “Reimbursement
Rights” (as such terms are defined in the Consent Agreement) by and among
Freddie Mac, the Servicer, the Repo Buyer and the Administrative Agent, (ii) the
terms and conditions of the Freddie Mac Purchase Documents, other than as set
forth pursuant to the express terms and provisions of the Consent Agreement and
(iii) all claims of Freddie Mac arising out of or relating to any and all
breaches, defaults and outstanding obligations of the Servicer to Freddie Mac,
except as solely to the limited payment subordination provided by Freddie Mac
pursuant to the express provisions of the Consent Agreement. Freddie Mac shall
be an express and intended third party beneficiary of this Section 10.15 and
shall be entitled to rely upon this Section 10.15 in all respects. This
Section 10.15 shall not be amended or modified without the express written
consent of Freddie Mac.

 

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

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Buyer By:   /s/ Kwaw de
Graft-Johnson  

Name:  Kwaw de Graft-Johnson

 

Title:   Authorized Signatory

By:  

/s/ Dominic Obaditch

 

Name:  Dominic Obaditch

 

Title:   Authorized Signatory

 

[Signature Page to Master Repurchase Agreement – PMC GSE Advance PC Repo]

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

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as Administrative Agent By:  
/s/ Kwaw de Graft-Johnson  

Name:  Kwaw de Graft-Johnson

 

Title:   Vice President

 

[Signature Page to Master Repurchase Agreement – PMC GSE Advance PC Repo]

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

PENNYMAC CORP.,

as Repo Seller

By:   /s/ Pamela Marsh  

Name:  Pamela Marsh

 

Title:   Senior Managing Director and Treasurer

 

[Signature Page to Master Repurchase Agreement – PMC GSE Advance PC Repo]

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

SCHEDULE 1

[RESERVED]

 

Schedule 1 -1

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

SCHEDULE 2

ASSET SCHEDULE

 

Schedule 2 -1

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

SCHEDULE 3

RESPONSIBLE OFFICERS – REPO SELLER

 

Schedule 3 -1

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

SCHEDULE 3.21

EXISTING INDEBTEDNESS

 

Schedule 3.21 -1

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

SCHEDULE 4

BUYER ACCOUNT

 

Schedule 4 -1

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

SCHEDULE 5

COMPETITORS

 

Schedule 5 -1

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

EXHIBIT A

[FORM OF TRANSACTION NOTICE]

Dated: [                    ]

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

c/o

Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, NY 10010

Attention: Dominic Obaditch or Kwaw de Graft-Johnson

Email: dominic.obaditch@credit-suisse.com;
kwaw.degraft-johnson@credit-suisse.com

TRANSACTION NOTICE

Ladies and Gentlemen:

We refer to the Master Repurchase Agreement, dated as of August 7, 2020 (the
“Repurchase Agreement”), among PennyMac Corp. (the “Repo Seller”), Credit Suisse
AG, Cayman Islands Branch (the “Buyer”) and Credit Suisse First Boston Mortgage
Capital LLC (the “Administrative Agent”). Each capitalized term used but not
defined herein shall have the meaning specified in the Repurchase Agreement.
This notice is being delivered by the Repo Seller pursuant to Section 2.02 of
the Repurchase Agreement.

Please be notified that the Repo Seller hereby irrevocably requests that the
Buyer enter into the following Transaction(s) with the Repo Seller as follows:

 

     Delinquency   Escrow
(Judicial)   Escrow
(Non-Judicial)   Corp
(Judicial)   Corp
(Non-Judicial)   Total

Beginning Advance Reimbursement Right Balances

   $[____]   $[____]   $[____]   $[____]   $[____]   $[_______]

Ending Advance Reimbursement Right Balances

   $[____]   $[____]   $[____]   $[____]   $[____]   $[_______]

Ending Eligible Reimbursement Right Balances

   $[____]   $[____]   $[____]   $[____]   $[____]   $[_______]

 

Exhibit A -1

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

     Delinquency     Escrow
(Judicial)     Escrow
(Non-Judicial)     Corp
(Judicial)     Corp
(Non-Judicial)     Total  

Prior Eligible Advance Reimbursement Right Balances

   $ [____ ]    $ [____ ]    $ [____ ]    $ [____ ]    $ [____ ]    $ [_______
] 

Change in Eligible Receivables Balance

   $ [____ ]    $ [____ ]    $ [____ ]    $ [____ ]    $ [____ ]    $ [_______
] 

Market Value

            

Purchase Price Percentage

            

Purchase Price Percentage Reduction (Y/N)

            

Asset Base

            

WA Advance Rates

     %       %       %       %       %       %  

Committed Amount

   $ [________ ]           

Maximum Purchase Price

   $ [________ ]           

Current Purchase Price

   $ [________ ]           

Purchase Price change (increase/ (decrease))

   $ [________ ]           

New Repurchase Price/Market Value

   $ [________ ]           

The Repo Seller requests that the proceeds of the Purchase Price be deposited in
the Repo Seller’s account at:

 

  Bank Name:   [_______]   ABA Number:   [_______]

 

Exhibit A -2

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

  Account Number:   [_______]   References:   [_______]   Attn:   [_______]

Each of the Repo Seller and the Servicer hereby represents and warrants that
each of the representations and warranties made by the Repo Seller in each of
the Program Agreements to which it is a party and made by the Servicer in each
of the Agency Agreements is true and correct in all material respects, in each
case, on and as of the date hereof, except to the extent such representations
and warranties expressly relate to an earlier date. Attached hereto is a true
and complete updated copy of the Asset Schedule.

 

PennyMac Corp., as Repo Seller By:    

 

PennyMac Corp., as Servicer By:    

 

Exhibit A -3

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

[Asset Schedule]

 

Exhibit A - 4

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

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

I, ________________, do hereby certify that I am the [duly elected, qualified
and authorized] [CFO/TREASURER/FINANCIAL OFFICER] of PennyMac Corp. (“Repo
Seller”). This Certificate is delivered to you in connection with Section 6.25
of the Master Repurchase Agreement dated as of August 7, 2020, among the Repo
Seller, Credit Suisse AG, Cayman Islands Branch, as buyer, and Credit Suisse
First Boston Mortgage Capital LLC, as administrative agent (as amended,
restated, supplemented or otherwise modified from time to time, the
“Agreement”), as the same may have been amended from time to time. I hereby
certify that, as of the date of the financial statements attached hereto and as
of the date hereof, the Repo Seller is and has been in compliance with all the
terms of the Agreement and, without limiting the generality of the foregoing, I
certify that:

Financial Covenants. The Repo Seller is in compliance with all financial
covenants set forth in the Roll-up Agreement.

Financial Statements. The financial statements attached hereto are accurate and
complete, accurately reflect the financial condition of the Repo Seller, and do
not omit any material fact as of the date(s) thereof.

Compliance. The Repo Seller has observed or performed in all material respects
all of its covenants and other agreements, and satisfied every condition,
contained in the Agreement, the other Program Agreements and the Agency
Agreements to be observed, performed and satisfied by it. [If a covenant or
other agreement or condition has not been complied with, the Repo Seller shall
describe such lack of compliance and provide the date of any related waiver
thereof.]

Regulatory Action. Except as otherwise previously disclosed to the Buyer, the
Repo Seller is not currently under investigation or, to best of the Repo
Seller’s knowledge, no investigation by any federal, state or local government
agency is threatened. the Repo Seller has not been the subject of any government
investigation which has resulted in the voluntary or involuntary suspension of a
license, a cease and desist order, or such other action as could adversely
impact the Repo Seller’s business. [If so, the Repo Seller shall describe the
situation in reasonable detail and describe the action that the Repo Seller has
taken or proposes to take in connection therewith.]

No Default. No Default or Event of Default has occurred or is continuing. [If
any Default or Event of Default has occurred and is continuing, the Repo Seller
shall describe the same in reasonable detail and describe the action the Repo
Seller has taken or proposes to take with respect thereto, and if such Default
or Event of Default has been expressly waived by the Buyer in writing, the Repo
Seller shall describe the Default or Event of Default and provide the date of
the related waiver.]

Indebtedness. All Indebtedness (other than Indebtedness evidenced by the
Agreement) of the Repo Seller existing on the date hereof is listed on Schedule
3.21 of the Agreement and any off-balance sheet Indebtedness of the Repo Seller
is Non-Recourse Debt.

 

Exhibit B -1

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

IN WITNESS WHEREOF, I have set my hand this ____ day of _____, _____.

 

PennyMac Corp., as Repo Seller By:       Name:   Title:

:

 

Exhibit B -2

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

EXHIBIT C-1

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Buyers That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Master Repurchase Agreement dated as of
August 7, 2020 (as amended, supplemented or otherwise modified from time to
time, the “Master Repurchase Agreement”), among PennyMac Corp., as repo seller,
Credit Suisse AG, Cayman Islands Branch, as buyer, and Credit Suisse First
Boston Mortgage Capital LLC, as administrative agent, and each buyer, from time
to time, party thereto.

Pursuant to the provisions of Section 2.10 of the Master Repurchase Agreement,
the undersigned hereby certifies that (i) it is the sole record and beneficial
owner of the Purchased Assets in respect of which it is providing this
certificate, (ii) it is not a “bank” within the meaning of section 881(c)(3)(A)
of the Code, (iii) it is not a “ten percent shareholder” of the Repo Seller
within the meaning of section 871(h)(3)(B) of the Code and (iv) it is not a
“controlled foreign corporation” related to the Repo Seller as described in
section 881(c)(3)(C) of the Code. The undersigned has furnished the
Administrative Agent and the Repo Seller with a certificate of its non-U.S.
Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing this
certificate, the undersigned agrees that (1) if the information provided in this
certificate changes, the undersigned shall promptly so inform the Repo Seller
and the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Repo Seller and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

Unless otherwise defined herein, terms defined in the Master Repurchase
Agreement and used herein shall have the meanings given to them in the Master
Repurchase Agreement.

[NAME OF BUYER]

 

By:       Name:   Title:

Date: ________ __, 20[ ]

 

Exhibit C-1 -1

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

EXHIBIT C-2

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Master Repurchase Agreement dated as of
August 7, 2020 (as amended, supplemented or otherwise modified from time to
time, the “Master Repurchase Agreement”), among PennyMac Corp., as repo seller,
Credit Suisse AG, Cayman Islands Branch, as buyer, and Credit Suisse First
Boston Mortgage Capital LLC, as administrative agent, and each buyer from time
to time party thereto.

Pursuant to the provisions of Section 2.10 of the Master Repurchase Agreement,
the undersigned hereby certifies that (i) it is the sole record and beneficial
owner of the participation in respect of which it is providing this certificate,
(ii) it is not a “bank” within the meaning of section 881(c)(3)(A) of the Code,
(iii) it is not a “ten percent shareholder” of the Repo Seller within the
meaning of section 871(h)(3)(B) of the Code, and (iv) it is not a “controlled
foreign corporation” related to the Repo Seller as described in section
881(c)(3)(C) of the Code.

The undersigned has furnished its participating Buyer with a certificate of its
non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing
this certificate, the undersigned agrees that (1) if the information provided in
this certificate changes, the undersigned shall promptly so inform such Buyer in
writing, and (2) the undersigned shall have at all times furnished such Buyer
with a properly completed and currently effective certificate in either the
calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Master Repurchase
Agreement and used herein shall have the meanings given to them in the Master
Repurchase Agreement.

[NAME OF PARTICIPANT]

 

By:       Name:   Title:

Date: ________ __, 20[ ]

 

Exhibit C-2 -1

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

EXHIBIT C-3

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Master Repurchase Agreement dated as of
August 7, 2020 (as amended, supplemented or otherwise modified from time to
time, the “Master Repurchase Agreement”), among PennyMac Corp., as repo seller,
Credit Suisse AG, Cayman Islands Branch, as buyer, and Credit Suisse First
Boston Mortgage Capital LLC, as administrative agent, and each buyer from time
to time party thereto.

Pursuant to the provisions of Section 2.10 of the Master Repurchase Agreement,
the undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a “bank” extending credit
pursuant to a loan agreement or similar agreement entered into in the ordinary
course of its trade or business within the meaning of section 881(c)(3)(A) of
the Code, (iv) none of its direct or indirect partners/members is a “ten percent
shareholder” of the Repo Seller within the meaning of section 871(h)(3)(B) of
the Code and (v) none of its direct or indirect partners/members is a
“controlled foreign corporation” related to the Repo Seller as described in
section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Buyer with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form
W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS
Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is
claiming the portfolio interest exemption. By executing this certificate, the
undersigned agrees that (1) if the information provided in this certificate
changes, the undersigned shall promptly so inform such Buyer and (2) the
undersigned shall have at all times furnished such Buyer with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Master Repurchase
Agreement and used herein shall have the meanings given to them in the Master
Repurchase Agreement.

[NAME OF PARTICIPANT]

 

By:       Name:   Title:

Date: ________ __, 20[ ]

 

Exhibit C-3 - 1

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EXHIBIT C-4

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Buyers That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Master Repurchase Agreement dated as of
August 7, 2020 (as amended, supplemented or otherwise modified from time to
time, the “Master Repurchase Agreement”), among PennyMac Corp., as repo seller,
Credit Suisse AG, Cayman Islands Branch, as buyer, and Credit Suisse First
Boston Mortgage Capital LLC, as administrative agent, and each buyer from time
to time party thereto.

Pursuant to the provisions of Section 2.10 of the Master Repurchase Agreement,
the undersigned hereby certifies that (i) it is the sole record owner of the
Purchased Assets in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
[Certificates], (iii) with respect to the extension of credit pursuant to this
Master Repurchase Agreement or any other Program Agreement, neither the
undersigned nor any of its direct or indirect partners/members is a “bank”
extending credit pursuant to a loan agreement or similar agreement entered into
in the ordinary course of its trade or business within the meaning of section
881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members
is a “ten percent shareholder” of the Repo Seller within the meaning of section
871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members
is a “controlled foreign corporation” related to the Repo Seller as described in
section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Repo Seller with
IRS Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an
IRS Form W-8BEN or IRS Form W-8BEN-E from each of such partner’s/member’s
beneficial owners that is claiming the portfolio interest exemption. By
executing this certificate, the undersigned agrees that (1) if the information
provided in this certificate changes, the undersigned shall promptly so inform
the Repo Seller and the Administrative Agent, and (2) the undersigned shall have
at all times furnished the Repo Seller and the Administrative Agent with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Master Repurchase
Agreement and used herein shall have the meanings given to them in the Master
Repurchase Agreement.

[NAME OF BUYER]

 

By:       Name:   Title:

Date: ________ __, 20[ ]

 

Exhibit C-4 - 1