Exhibit 10.1


 


AMENDED AND RESTATED
MASTER SPREAD ACQUISITION AND MSR SERVICING AGREEMENT


 


PREAMBLE


 


This Amended
and Restated Master Spread Acquisition and MSR Servicing Agreement (the “Agreement”) is entered into by and
between PennyMac Loan Services, LLC, a Delaware limited liability company (the “Seller”), on the one hand, and
PennyMac Holdings, LLC, a Delaware limited liability company (“PMH”) (the “Purchaser”), as
of April 30, 2015.


 


RECITALS


 


WHEREAS,
the Seller and the Purchaser previously entered into a Master Spread Acquisition and MSR Servicing Agreement dated as of December
30, 2013 (the “Existing Agreement”);


 


WHEREAS,
the Seller may from time to time originate, or acquire from third parties, mortgage servicing rights;


 


WHEREAS,
the Purchaser may from time to time desire to acquire the right to excess servicing spread arising from such mortgage servicing
rights;


 


WHEREAS,
the Seller and the Purchaser desire that the Seller service the mortgage loans to which such servicing rights relate and provide
additional administrative services;


 


WHEREAS,
the Seller desires to retain the right to refinance the residential mortgage loans in the pool and the Seller will obtain a competitive
benefit from serving as the servicer of such mortgage loans and the Purchaser consents to such right, as long as the Servicing
Rights and a portion of the servicing spread with respect to the newly-originated residential mortgage loans and/or similar residential
mortgage loans are retained by the Seller and the excess servicing spread with respect to such mortgage loans is assigned by the
Seller to the Purchaser as described herein;


 


WHEREAS,
the Seller desires to create a Participation Certificate (as defined herein) to evidence the Primary Portfolio Excess Spread and
any Second Portfolio Excess Spread;


 


WHEREAS,
the Purchaser desires to finance the Participation Certificate with the Seller and the Seller has required certain changes in
order to facilitate the same; and


 


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


 


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


 






    	1



    	 



    

 


ARTICLE 1


 


DEFINITIONS


 


Section
1.01 Definitions. For purposes of this Agreement (which, for the avoidance of doubt, shall include the Preamble and Recitals
hereto), the following capitalized terms, unless the context otherwise requires, shall have the respective meanings set forth below:


 


“Accepted
Servicing Practices” means, with respect to each Mortgage Loan (including all real estate acquired in respect of such
Mortgage upon a foreclosure or acceptance of a deed in lieu of foreclosure), each of those mortgage servicing practices (including
collection procedures) of prudent mortgage lending institutions which service mortgage loans of the same type as such Mortgage
Loan in the jurisdiction where the related Mortgaged Property is located, which servicing practices (i) are in compliance with
all federal, state and local laws and regulations, (ii) shall be in accordance with the Seller’s policies and procedures
as amended from time to time for mortgage loans of the same type, (iii) are in accordance with the terms of the related mortgage,
deed of trust or similar security instrument and the related promissory note and (iv) are at a minimum based on the requirements
set forth from time to time by the Agencies.


 


“Additional
Mortgage Loan” means a Mortgage Loan with respect to which the Seller, (i) in order to eliminate the Shortfall Amount
in whole or in part, assigns to the Purchaser the applicable Transaction Excess Spread Percentage of the Secondary Portfolio Excess
Spread on such Additional Mortgage Loan, or (ii) in lieu of including any Modified Loan(s) in the Primary Portfolio or Secondary
Portfolio, as applicable, assigns to the Purchaser the applicable Transaction Excess Spread Percentage of the Primary Portfolio
Excess Spread or Secondary Portfolio Excess Spread, as applicable, on such Additional Mortgage Loan.


 


“Affiliate”
means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power
to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities,
by management contract or otherwise and the terms “controlling” and “controlled” have meanings correlative
to the foregoing; provided, however, that Affiliates of the Purchaser shall include only PennyMac Mortgage Investment Trust and
its wholly-owned subsidiaries, and Affiliates of the Seller shall include only Private National Mortgage Acceptance Company, LLC
and its wholly-owned subsidiaries.


 


“Agency”
means, with respect to an Agency Mortgage Loan, Fannie Mae, Freddie Mac or Ginnie Mae, as applicable.


 


“Agency
Mortgage Loan” means a Mortgage Loan that is a Fannie Mae Mortgage Loan, a Freddie Mac Mortgage Loan or a Ginnie Mae
Mortgage Loan.


 


“Allowed Retention Percentage” has
the meaning set forth in Section 4.01(a).


 


“Alternative Mortgage Loan”
has the meaning set forth in Section 4.01(b).


 






    	2



    	 



    

 


“Ancillary Income” means all income derived from a
Mortgage Loan (other than payments or other collections in respect of principal, interest, escrow payments and prepayment penalties
attributable to such Mortgage Loan) and to which the Seller, as the servicer of the Mortgage Loan, is entitled in accordance with
the applicable Guide.


 


“Approved
Valuation Firm” means any valuation firm that has been approved by a majority of both the independent directors of PennyMac
Financial Services, Inc., in the case of the Seller, and the independent trustees of PennyMac Mortgage Investment Trust, in the
case of the Purchaser.


 


“Assignment” means an assignment substantially
in the form of Exhibit C.


 


“Assignment
Date” means, with respect to any Mortgage Loan Identification Date, the date that is ten (10) Business Days following
such Mortgage Loan Identification Date or such other date as may be set forth in the applicable Confirmation.


 


“Base
Servicing Fee” means, with respect to each Primary Portfolio or its related Secondary Portfolio and each Collection Period,
an amount equal to the product of (A) the aggregate outstanding principal balance of the Primary Portfolio Mortgage Loans or the
Secondary Portfolio Mortgage Loans, as the case may be, as of the first day of such Collection Period and (B) one-twelfth of the
Transaction Base Servicing Fee Rate; provided, however, that (1) with respect to all Primary Portfolio Mortgage Loans
in such Primary Portfolio or all Secondary Portfolio Mortgage Loans in such Secondary Portfolio, if the initial Collection Period
is less than a full month, such fee for each such Primary Portfolio Mortgage Loan or each such Secondary Portfolio Mortgage Loan
shall be an amount equal to the product of the fee otherwise described above and a fraction, the numerator of which is the number
of days in such initial Collection Period and the denominator of which is 360; (2) if any Primary Portfolio Mortgage Loan or Secondary
Portfolio Mortgage Loan ceases to be part of the Primary Portfolio or the Secondary Portfolio, as the case may be, during such
Collection Period as a result of a termination of the Seller’s duties as servicer under the applicable Servicing Agreement
or Guide, the portion of such amount that is attributable to such Primary Portfolio Mortgage Loan or Secondary Portfolio Mortgage
Loan shall be adjusted to an amount equal to the product of such portion and a fraction, the numerator of which is the number of
days in such Collection Period during which such Primary Portfolio Mortgage Loan or Secondary Portfolio Mortgage Loan was included
in the Primary Portfolio or in the Secondary Portfolio, as the case may be, and denominator of which is 360; and (3) if the Primary
Portfolio Collections for such Primary Portfolio and such Collection Period or the Secondary Portfolio Collections for such Secondary
Portfolio and such Collection Period were used to cover prepayment interest shortfalls on the Primary Portfolio Mortgage Loans
or the Secondary Portfolio Mortgage Loans, as the case may be, the fee otherwise described above shall be reduced by the amount
of such reduction.


 


“Business
Day” means any day other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings and loan institutions
in the States of New York or California are authorized or obligated by law or executive authority to be closed.


 


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


 






    	3



    	 



    

 


“Collection
Period” means, with respect to each Transaction Remittance Date, the calendar month preceding the month in which such
Transaction Remittance Date occurs.


 


“Confirmation”
means a letter agreement between the Seller and the Purchaser substantially in the form attached hereto as Exhibit A that
includes a mortgage loan schedule and sets forth each of a “transaction settlement date”, a “transaction base
servicing fee rate”, a “transaction remittance date”, a “transaction purchase price percentage” a
“transaction excess spread percentage”, a “transaction asset purchase agreement,” “a transaction
threshold percentage” and an “allowed retention percentage”.


 


“Confirmation Date” means the date
of a Confirmation.


 


“Creation
Date” means with respect to Primary Portfolio Excess Spread and the Secondary Portfolio Excess Spread previously acquired,
the date hereof, and with respect to Primary Portfolio Excess Spread and the Secondary Portfolio Excess Spread acquired after the
date hereof, the Transaction Settlement Date.


 


“Cut-off
Date” means, with respect to each Primary Portfolio, the date set forth in the related Confirmation.


 


“Dedicated
Account” has the meaning set forth in the Loan and Security Agreement.


 


“Eligible Account” means
either (i) an account maintained with a federal or state chartered depository institution or trust company, the long-term
deposit or long-term unsecured debt obligations of which are rated no less than “AA” or the equivalent by at
least two Rating Agencies, if the deposits are to be held in the account for more than thirty (30) days, or the short- term
deposit or short-term unsecured debt obligations of which are rated no less than “AA” or the equivalent by at
least two Rating Agencies, or (ii) an account approved by the Seller and the Purchaser.


 


“Excess Refinancing Percentage” has
the meaning set forth in Section 4.01(a).


 


“Excess
Servicing Fee Rate” means, as to any Mortgage Loan, the excess of the Gross Servicing Fee Rate for such Mortgage Loan
over the Transaction Base Servicing Fee Rate for such Mortgage Loan.


 


“Expense Amount” has the meaning set
forth in Section 9.16.


 


“Expense Amount Accountant’s Letter”
has the meaning set forth in Section 9.16.


 


“Expense Amount Tax Opinion”
has the meaning set forth in Section 9.16.


 


“Expense Escrow Account” has
the meaning set forth in Section 9.16.


 


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


 






    	4



    	 



    

 


“Fannie
Mae Guide” means, collectively, the Fannie Mae Selling Guide and Fannie Mae Servicing Guide, as such Guide may be
amended from time to time hereafter.


 


“Fannie
Mae Mortgage Loan” means a Mortgage Loan underwritten in accordance with the guidelines of Fannie Mae described in the
Fannie Mae Guide.


 


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


 


“Freddie
Mac Guide” means the Freddie Mac Single-Family Seller/Servicer Guide, as such Guide may be amended from time to time
hereafter.


 


“Freddie
Mac Mortgage Loan” means a Mortgage Loan underwritten in accordance with the guidelines of Freddie Mac described in the
Freddie Mac Guide.


 


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


 


“Ginnie
Mae Mortgage Loan” means a Mortgage Loan underwritten in accordance with the guidelines of Ginnie Mae described in the
Ginnie Mae Guide.


 


“Ginnie
Mae Guide” means the Ginnie Mae Mortgage-Backed Securities Guide, as such Guide may hereafter from time to time be
amended.


 


“Gross
Servicing Fee Rate” means, as to any Mortgage Loan, the annual rate at which the servicing fee is calculated for such
Mortgage Loan, determined as provided in the related Servicing Agreement.


 


“Guaranty”
means the Guaranty dated as of April 30, 2015, made by PennyMac Mortgage Investment Trust in favor of Lender, as the same may be
amended, restated, supplemented or otherwise modified from time to time.


 


“Guide”
means with respect to any Fannie Mae Mortgage Loan, the Fannie Mae Guide; with respect to any Freddie Mac Mortgage Loan, the Freddie
Mac Guide; and with respect to any Ginnie Mae Mortgage Loan, the Ginnie Mae Guide.


 


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


 


“Lender”
means Credit Suisse First Boston Mortgage Capital LLC, together with its successors and assigns.


 


“Lien”
means any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit, arrangement, encumbrance, lien
(statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any
kind or nature whatsoever intended to assure payment of any indebtedness or the performance of any other obligation, including
any conditional sale or other title retention agreement.


 






    	5



    	 



    

 


“Loan
and Security Agreement” means the Third Amended and Restated Loan and Security Agreement dated as of March 27, 2015,
among Seller, Lender and Private National Mortgage Acceptance Company, LLC, as the same may be amended, restated, supplemented
or otherwise modified from time to time.


 


“Modified
Loan” means a Mortgage Loan, the terms of which have been modified in accordance with the requirements of the applicable
Guide and which Mortgage Loan, as so modified, is eligible to be resold or re-securitized by Seller to the applicable Agency.


 


“Mortgage
Loan” means a one-to-four family residential loan that is secured by a mortgage, deed of trust or other similar security
instrument. A Mortgage Loan includes the Mortgage Loan Documents, the mortgage file, the monthly payments, any principal payments
or prepayments, any related escrow accounts, and all other rights, benefits, proceeds and obligations arising from or in connection
with such Mortgage Loan but excludes the Servicing Rights that are the subject of this Agreement. A Mortgage Loan also includes
any Modified Loan .


 


“Mortgage
Loan Documents” means the mortgages, notes, assignments and an electronic record or copy of a mortgage loan application.


 


“Mortgage
Loan Identification Date” means, with respect to a calendar month, the 20th day of the immediately succeeding
calendar month.


 


“Mortgaged Property” means the real
property that secures a Mortgage Loan.


 


“New Mortgage
Loan” has the meaning set forth in Section 4.01(a).


 


“Non-Agency Mortgage Loan” means a Mortgage
Loan that is not an Agency Mortgage Loan.


 


“Nonqualifying
Income” means any amount that is treated as gross income for purposes of Section 856 of the Code and which is not Qualifying
Income.


 


“Participation
Certificate” means each participation certificate in the form of Exhibit B attached hereto, which evidences the
related Participation Interest.


 


“Participation
Certificate Register” has the meaning assigned to such term in Section 9.20.


 


“Participation Certificate
Registrar” has the meaning assigned to such term in Section 9.20.


 


“Participation
Interest” means each participating beneficial ownership interest (of the type and nature contemplated by 11 U.S.C. §
541(d) of the United States Bankruptcy Code) in Primary Portfolio Excess Spread with respect to a Primary Portfolio and Secondary
Portfolio Excess Spread with respect to a Secondary Portfolio, and proceeds thereof together with the other rights and privileges
specified in this Agreement as evidenced by the issuance of a Participation Certificate.


 






    	6



    	 



    

 


“Payoff”
means, with respect to a Mortgage Loan, any payment in full of the unpaid principal balance of such Mortgage Loan that is received
in advance of the last scheduled due date for such Mortgage Loan and accompanied by the accrued and unpaid interest to the date
of such payment in full.


 


“Person”
means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision thereof.


 


“Primary
Portfolio” means the residential mortgage loans identified and listed on a schedule to a Participation Certificate.


 


“Primary
Portfolio Collections” means, with respect to each Primary Portfolio, the funds collected on the related Primary Portfolio
Mortgage Loans and allocated as the servicing compensation payable to the Seller as servicer of such Primary Portfolio Mortgage
Loans pursuant to one or more Servicing Agreements and Guides, other than Ancillary Income and, for the avoidance of doubt, other
than reimbursements received by the Seller from a loan owner for advances and other out-of-pocket expenditures pursuant to such
Servicing Agreements and Guides.


 


“Primary
Portfolio Excess Spread” means, with respect to each Primary Portfolio, the rights of the Seller, severable from any
and all other rights and obligations under the applicable Servicing Agreements and Guides, to the Transaction Excess Spread Percentage
of the Primary Portfolio Total Spread on such Primary Portfolio.


 


“Primary Portfolio Mortgage Loan” means a Mortgage
Loan that is included in the Primary Portfolio.


 


“Primary
Portfolio Retained Spread” means, with respect to each Primary Portfolio, the rights of the Seller to the Transaction
Retained Spread Percentage of the Primary Portfolio Total Spread on such Primary Portfolio.


 


“Primary
Portfolio Spread Custodial Account” means, with respect to each Primary Portfolio, the account established under Section
5.01, which shall be entitled “PennyMac Loan Services, LLC, as Seller, on behalf of PennyMac Holdings, LLC, Primary Portfolio
Collection Account”, and into which account all Primary Portfolio Collections and Primary Portfolio Termination Payments
in respect of such Primary Portfolio shall be deposited.


 


“Primary
Portfolio Termination Payment” means, with respect to each Primary Portfolio, any payment made by a loan owner or master
servicer in connection with an exercise of any right that such Person may have to terminate the Seller as the servicer of any Primary
Portfolio Mortgage Loan; provided, however, that, if such a payment is made with respect to a group of mortgage loans
and fewer than all such mortgage loans are Primary Portfolio Mortgage Loans, then the “Primary Portfolio Termination Payment”
shall mean the portion of such termination payment that is reasonably attributable to the Primary Portfolio Mortgage Loans in such
group based upon the methodology set forth in the applicable Servicing Agreement for the calculation of termination payments thereunder.


 






    	7



    	 



    

 


“Primary
Portfolio Total Spread” means, with respect to each Primary Portfolio, for each Collection Period on or after the related
Transaction Settlement Date, the sum of the following: (a) the Primary Portfolio Collections received during such Collection Period,
net of the Base Servicing Fee; and (b) all other amounts payable by a loan owner or master servicer to the Seller with respect
to the Servicing Rights for the Primary Portfolio Mortgage Loans, including any Primary Portfolio Termination Payments, but for
the avoidance of doubt, excluding all Ancillary Income and reimbursements for advances and other out-of-pocket expenditures received
by the Seller from a loan owner in accordance with the applicable Servicing Agreements and Guides.


 


“Protected
REIT” means any entity that (i) has elected to be taxed as a real estate investment trust pursuant to Section 856 et
seq. of the Code, (ii) owns a direct or indirect equity interest in Purchaser, and (iii) is treated for purposes of Section 856
of the Code as owning all or a portion of the assets of the Purchaser or as receiving all or a portion of the Purchaser’s
income.


 


“Qualifying Income”
means gross income that is described in Section 856(c)(2) or 856(c)(3) of the Code.


 


“Refinanced Mortgage
Loan” means a Primary Portfolio Mortgage Loan or a Secondary Portfolio Mortgage Loan that is refinanced during the
term of this Agreement.


 


“Refinancing
Date” means the date on which a Refinanced Mortgage Loan is prepaid by the related New Mortgage Loan.


 


“REIT
Requirements” means the requirements imposed on real estate investment trusts pursuant to Sections 856 through and including
860 of the Code.


 


“Replacement Mortgage Loans” has the
meaning set forth in Section 4.01(a).


 


“Replacement Portfolio” has the
meaning set forth in Section 4.01(a).


 


“Retained Mortgage Loans” has
the meaning set forth in Section 4.01(a).


 


“Secondary Portfolio” has the
meaning set forth in Section 4.01(h).


 


“Secondary
Portfolio Collections” means, with respect to each Secondary Portfolio, the funds collected on the related Secondary
Portfolio Mortgage Loans and allocated as the servicing compensation payable to the Seller as servicer of such Secondary Portfolio
Mortgage Loans pursuant to one or more Servicing Agreements and Guides, other than Ancillary Income and, for the avoidance of doubt,
other than reimbursements received by the Seller from a loan owner for advances and other out-of-pocket expenditures pursuant to
such Servicing Agreements and Guides.


 


“Secondary
Portfolio Excess Spread” means, with respect to the Secondary Portfolio related to each Primary Portfolio, the rights
of the Seller, severable from any and all other rights under the applicable Servicing Agreements and Guides, to the Transaction
Excess Spread Percentage of the Secondary Portfolio Total Spread on such Secondary Portfolio.


 






    	8



    	 



    

 


“Secondary
Portfolio Mortgage Loan” means a Mortgage Loan that is included in the Secondary Portfolio.


 


“Secondary
Portfolio Retained Spread” means, with respect to each Secondary Portfolio, the rights of the Seller to the Transaction
Retained Spread Percentage of the Secondary Portfolio Total Spread on such Secondary Portfolio.


 


“Secondary
Portfolio Spread Custodial Account” means, with respect to each Secondary Portfolio, the account established under Section
6.01, which shall be entitled “PennyMac Loan Services, LLC, as Seller, on behalf of PennyMac Holdings, LLC, Secondary
Portfolio Collection Account”, and into which account all Secondary Portfolio Collections and Secondary Portfolio Termination
Payments in respect of such Secondary Portfolio shall be deposited.


 


“Secondary
Portfolio Termination Payment” means, with respect to each Secondary Portfolio, any payment made by a loan owner or master
servicer in connection with an exercise of any right that such Person may have to terminate the Seller as the servicer of any Secondary
Portfolio Mortgage Loan; provided, however, that, if such a payment is made with respect to a group of mortgage loans
and fewer than all such mortgage loans are Secondary Portfolio Mortgage Loans, then the “Secondary Portfolio Termination
Payment” shall mean the portion of such termination payment that is reasonably attributable to the Secondary Portfolio Mortgage
Loans in such group based upon the methodology set forth in the applicable Servicing Agreement for the calculation of termination
payments thereunder.


 


“Secondary
Portfolio Total Spread” means, with respect to each Secondary Portfolio, for each Collection Period on or after the initial
Assignment Date when Secondary Portfolio Mortgage Loans became part of the Secondary Portfolio, the sum of the following: (a) the
Secondary Portfolio Collections received during such Collection Period net of the Base Servicing Fee; and (b) all other amounts
payable by a loan owner or master servicer to the Seller with respect to the Servicing Rights for Secondary Portfolio Mortgage
Loans, including any Secondary Portfolio Termination Payments, but for the avoidance of doubt, excluding all Ancillary Income and
reimbursements for advances and other out-of-pocket expenditures received by the Seller from a loan owner or master servicer in
accordance with the applicable Servicing Agreements and Guides.


 


“Servicing
Agreement” means, with respect to each Mortgage Loan, any servicing agreement, as amended from time to time, and any
waivers, consent letters, acknowledgments and other agreements under which such Mortgage Loan is serviced and administered.


 


“Servicing
Rights” means, with respect to each Mortgage Loan, the right to do any and all of the following: (a) service and
administer such Mortgage Loan; (b) collect any payments or monies payable or received for servicing such Mortgage Loan; (c)
collect any late fees, assumption fees, penalties or similar payments with respect to such Mortgage Loan; (d) enforce the
provisions of all agreements or documents creating, defining or evidencing any such servicing rights and all rights of the
servicer thereunder, including, but not limited to, any clean- up calls and termination options; (e) collect and apply any
escrow payments or other similar payments with respect to such Mortgage Loan; (f) control and maintain all accounts and other
rights to payments related to any of the property described in the other clauses of this definition; (g) possess and use any
and all documents, files, records, servicing files, servicing documents, servicing records, data tapes, computer records, or
other information pertaining to such Mortgage Loan or pertaining to the past, present or prospective servicing of such
Mortgage Loan; and (h) enforce any and all rights, powers and privileges incident to any of the foregoing.


 






    	9



    	 



    

 


“Shortfall
Amount” means, for any calendar month, an amount equal to the sum of the following:


 


(a)
for each Mortgage Loan that became a Refinanced Mortgage Loan during such calendar month, the product of (x) the applicable Transaction
Excess Spread Percentage for such Refinanced Mortgage Loan, (y) 100% minus the Allowed Retention Percentage, and (z) the excess,
if any, of (i) 90% of the product of the Excess Servicing Fee Rate of such Refinanced Mortgage Loan and the unpaid principal balance
of such Refinanced Mortgage Loan as of its Refinancing Date, over (ii) the product of the Excess Servicing Fee Rate of the related
New Mortgage Loan and the original principal balance of such New Mortgage Loan; plus


 


(b) for each
Modified Loan that is a Ginnie Mae Mortgage Loan, the product of (x) the applicable Transaction Excess Spread Percentage for such
Refinanced Mortgage Loan, and (y) the excess, if any, of (i) 90% of the product of the Excess Servicing Fee Rate of such Refinanced
Mortgage Loan and the unpaid principal balance of such Refinanced Mortgage Loan as of its Refinancing Date, over (ii) the product
of the Excess Servicing Fee Rate of the related New Mortgage Loan and the original principal balance of such New Mortgage Loan.


 


“Transaction”
means the collective transactions scheduled to be consummated or that are consummated (as the context may require) with respect
to a Primary Portfolio and the related Secondary Portfolio on a Transaction Settlement Date or Assignment Date, as applicable.


 


“Transaction Asset Purchase
Agreement” means, with respect to each Transaction, the agreement pursuant to which the Seller is required to purchase
or otherwise acquire the Servicing Rights relating to the Primary Portfolio Mortgage Loans, as in effect from time to time.


 


“Transaction
Base Servicing Fee Rate” means, with respect to each Primary Portfolio and its related Secondary Portfolio, the rate
per annum denominated as such and set forth in the related Participation Certificate.


 


“Transaction
Excess Spread Percentage” means, with respect to each Primary Portfolio and its related Secondary Portfolio, the percentage
denominated as such and set forth in the related Participation Certificate.


 


“Transaction
Purchase Price” means, with respect to each Transaction, the product of (i) the aggregate outstanding principal balance
of the Primary Portfolio Mortgage Loans as of the Cut-off Date, (ii) the Transaction Purchase Price Percentage and (iii) the Transaction
Excess Spread Percentage.


 






    	10



    	 



    

 


“Transaction
Purchase Price Percentage” means, with respect to each Primary Portfolio, the percentage denominated as such and set
forth in the related Participation Certificate.


 


“Transaction
Remittance Date” means with respect to each Primary Portfolio and its related Secondary Portfolio, the date denominated
as such and set forth in the related Participation Certificate, or, if no date is set forth in such Participation Certificate,
the 10th day of each calendar month, or if such day is not a Business Day, the prior Business Day, beginning in the month following
the Transaction Settlement Date, or such other day as may be agreed upon by the Seller and the Purchaser.


 


“Transaction
Retained Spread Percentage” means, with respect to each Primary Portfolio and its related Secondary Portfolio, 100% minus
the Transaction Excess Spread Percentage.


 


“Transaction
Settlement Date” means, with respect to each Primary Portfolio, the date denominated as such and set forth in the related
Confirmation.


 


“Transaction
Threshold Percentage” means the percentage denominated as such and set forth in the related Participation Certificate.


 


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


 


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


 


Section
1.02 General Interpretive Principles. For purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires:


 


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


 


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


 


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


 


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


 


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


 


(f) The term “include”
or “including” shall mean without limitation by reason of enumeration.


 






    	11



    	 



    

 


ARTICLE 2


 


REPRESENTATIONS AND WARRANTIES


 


Section
2.01 Representations, Warranties and Agreements of the Seller. The Seller hereby makes to the Purchaser, as of the date
hereof and as of each Transaction Settlement Date and each Assignment Date, the representations and warranties set forth on Exhibit
D.


 


Section
2.02 Representations, Warranties and Agreements of the Purchaser. The Purchaser hereby makes to the Seller, as of the date
hereof and as of each Transaction Settlement Date and each Assignment Date, the representations and warranties set forth on Exhibit
E.


 


ARTICLE 3


 


PURCHASES; PARTICIPATION INTERESTS


Section
3.01 Purchases.


 


(a)
Transaction Agreement. The execution and delivery of each Confirmation between the Seller and the Purchaser shall be an
agreement between such parties to the effect that, with respect to the Primary Portfolio described therein, and subject to the
terms hereof and thereof, (i) the Seller shall sell, and the Purchaser shall purchase, on the Transaction Settlement Date all of
the Seller’s right, title and interest in and to the Primary Portfolio Excess Spread and all proceeds thereof and the Secondary
Portfolio Excess Spread and all proceeds thereof, all in exchange for the payment of the Transaction Purchase Price, and (ii) each
party shall perform its duties under this Agreement as supplemented and amended by such Confirmation.


 


(b)
Closing Conditions. The duties of the Seller and the Purchaser to consummate each Transaction shall be subject to the satisfaction
of various conditions as set forth below:


 


(i) The duty of each party to consummate such Transaction shall be subject to the
satisfaction of the following conditions:


 


		(A)	the Seller shall have acquired the Servicing Rights with respect to the related
Primary Portfolio;



 


		(B)	the representations and warranties made by the other party in this Agreement
and each other Transaction document to which such party is a party to be made on or prior to the Transaction Settlement Date shall
be true and correct in all material respects; and



 


		(C)	the other party shall have performed or caused the performance of each
                                                               covenant or obligation required to be performed by such party on or before the Transaction Settlement Date (including the
                                                               delivery of documents required to be delivered
by such other party under Section 3.01 (c));



 






    	12



    	 



    

 


(ii) The
duty of the Seller to consummate such Transaction shall be further subject to the satisfaction of the additional condition that
no change in the Purchaser’s financial conditions shall have occurred following the Confirmation Date which would be reasonably
likely to materially and adversely affect the Purchaser’s ability to consummate the Transaction on the Transaction Settlement
Date;


 


(iii) The
duty of the Purchaser to consummate such Transaction shall be further subject to the satisfaction of the following additional conditions:


 


		(A)	no change in the Seller’s financial or operating condition, the Seller’s
good standing with and authority from the related loan owners and (if applicable) master servicers, Fannie Mae, Freddie Mac or
Ginnie Mae, the Servicing Rights, the Primary Portfolio Mortgage Loans or the escrow accounts related to the Primary Portfolio
Mortgage Loans shall have occurred following the Confirmation Date that, individually or in the aggregate, would be reasonably
likely to materially and adversely affect one or more of (x) the Seller’s ability to consummate such Transaction on the Transaction
Settlement Date, or (y) the practical or other ability of an owner of the Servicing Rights to realize the benefits thereof;



 


		(B)	the Seller shall have obtained or caused to have been obtained all consents,
approvals or other requirements of third parties required for the consummation of the transactions contemplated by this Agreement,
including (if applicable) all requisite Agency approvals;
	 	 	 
	 	(C)	the Seller shall have been appointed
as the servicer for the Primary Portfolio Mortgage Loans;
	 	 	 
		(D)	the information set forth in the data tape delivered to Purchaser on the
Transaction Settlement Date is true and correct in all material respects as of the date specified.



 


(c) Closing
Documents. The closing documents for each Transaction shall consist of the documents set forth below, which the Seller shall
deliver or cause to be delivered to Purchaser on or before the Transaction Settlement Date:


 


(i) an
Assignment executed by the Seller in which the Seller assigns to the Purchaser all of the Seller’s right, title and interest
in, to and under the Primary Portfolio Excess Spread;


 


(ii) a copy of the executed Transaction Asset Purchase
Agreement;


 






    	13



    	 



    

 


(iii)
a copy of the executed instrument evidencing the Seller’s acquisition of the Servicing Rights with respect to the Primary
Portfolio;


 


(iv) with
respect to non-Agency Mortgage Loans, a copy of the executed Servicing Agreement;


 


(v) with
respect to Agency Mortgage Loans, a copy of the executed Acknowledgment Agreement of the related Agency, if applicable, in form
and substance satisfactory to the Seller and Purchaser;


 


(vi) all
consents, approvals or other requirements of third parties required for the consummation of the transactions contemplated by this
Agreement, including (if applicable) all requisite Agency approvals; and


 


(vii)
such officers’ certificates, opinions of counsel, instruments and documents as the Purchaser may reasonably request.


 


(d) Closing.
On the Transaction Settlement Date for each Primary Portfolio, the Purchaser shall pay the Transaction Purchase Price to the Seller,
the Seller shall convey the Primary Portfolio Excess Spread to the Purchaser and the Seller shall commence servicing or subservicing
the Primary Portfolio Mortgage Loans in accordance with the applicable Servicing Agreements and Guides if such servicing or subservicing
has not already commenced. The Transaction Purchase Price shall be paid by wire transfer of immediately available funds.


 


(e) Additional
Representations and Warranties. Upon the consummation of the transactions scheduled to occur on the Transaction Settlement
Date for each Primary Portfolio:


 


(i) the
Seller hereby represents and warrants to the Purchaser as of the applicable Transaction Settlement Date (and such representations
and warranties shall survive the Transaction Settlement Date) that:


 


		(A)	with respect to each Primary Portfolio Mortgage Loan, the Seller has been
duly and validly appointed as the servicer thereof under the applicable Servicing Agreement or Guide and, for the purposes of such
capacity, such Servicing Agreement or Guide is in full force and effect;



 


		(B)	the Seller is not in material breach of or in default of its duties under
any applicable Servicing Agreement or Guide;



 


		(C)	no event has occurred that, with or without notice or the passage of time,
would entitle any Person to terminate the Seller as servicer of any Primary Portfolio Mortgage Loan under any applicable Servicing
Agreement or Guide, and the Seller has no notice or knowledge of the intention of any Person to terminate or cause the termination
of the Seller’s rights and duties as servicer under any applicable Servicing Agreement or Guide;



 






    	14



    	 



    

 


		(D)	the information set forth in the data tape delivered to Purchaser on the
Transaction Settlement Date is true and correct in all material respects as of the date specified;



 


		(E)	the Seller is the sole owner of the Servicing Rights related to each Mortgage
Loan in such Primary Portfolio (subject to the terms of the related Servicing Agreement or Guide), free and clear of any Lien,
claim, encumbrance or ownership interest in favor or any Person other than the interests of the Purchaser contemplated hereby;
and



 


		(F)	the Seller has serviced the applicable Mortgage Loans in accordance with
the terms of the related Servicing Agreement and Accepted Servicing Practices.



 


(ii) the
Purchaser hereby represents and warrants to the Seller as of the applicable Transaction Settlement Date (and such representations
and warranties shall survive the Transaction Settlement Date) that the Purchaser is a sophisticated investor and its decision to
enter into such Transaction is based upon the Purchaser’s independent experience, knowledge and due diligence and evaluation
of such Transaction without reliance on any oral or written information provided by Seller other than the representations and warranties
made by Seller pursuant to the terms hereof.


 


Section 3.02 Intent of Parties.


 


(a)
The Seller and the Purchaser intend that each Transaction constitute a valid sale of the Primary Portfolio Excess Spread and all
proceeds thereof with respect to the related Primary Portfolio by the Seller to the Purchaser. If the conveyance of the Primary
Portfolio Excess Spread is characterized by a court or governmental authority as security for a loan rather than an absolute transfer
or sale, the Seller will be deemed to have granted, and hereby grants, to Purchaser, a security interest in all of its right,
title and interest in, to and under, whether now existing or in the future arising or acquired, (i) all Primary Portfolio Excess
Spread and all rights under this Agreement with respect to any Primary Portfolio Excess Spread; (ii) the Primary Portfolio Spread
Custodial Account; (iii) all rights to payment of amounts due under this Agreement on account of or related to the Primary Portfolio
Excess Spread; (iv) all rights to reimbursement of Primary Portfolio Excess Spreads and/or amounts due in respect thereof under
the related Servicing Agreements and Guides; (v) all records, instruments or other documentation evidencing any of the foregoing;
(vi) all "general intangibles", "accounts", "chattel paper", "securities accounts", "investment
property", "deposit accounts" and "money" as defined in the Uniform Commercial Code relating to or constituting
any and all of the foregoing (including, without limitation, all of Seller's rights, title and interest in and under the Primary
Portfolio Excess Spreads); and (vii) any and all replacements, substitutions, distributions on or proceeds of any and all of the
foregoing, as security for a loan in an amount equal to the Transaction Purchase Price.


 






    	15



    	 



    

 


(b) The Seller hereby authorizes the filing
of any financing statements or continuation statements, and amendments to financing statements, in any jurisdictions and with
any filing offices as the Purchaser may determine, in its sole discretion, are necessary or advisable to perfect the sale of the
assets conveyed and security interests granted to Purchaser and agrees to execute financing statements in form reasonably acceptable
to the Purchaser and the Seller at the request of the Purchaser in order to reflect the Purchaser’s interests in the assets
conveyed to or subjected to a security interest in favor of the Purchaser pursuant hereto and in the Primary Portfolio Spread
Custodial Account and Secondary Portfolio Spread Custodial Account.


 


(c) In connection
with each Transaction involving Ginnie Mae Mortgage Loans, the Seller and the Purchaser further agree and acknowledge with respect
to such Ginnie Mae Mortgage Loans as follows:


 


(i) the Seller is entitled
to the Base Servicing Fee and the Seller and the Purchaser, as applicable, are entitled to the Primary Portfolio Excess Spread
only so long as the Seller maintains its status as an approved Ginnie Mae issuer and servicer;


 


(ii) upon the Seller’s
loss of its status as an approved Ginnie Mae issuer and servicer, the Purchaser’s rights to any Primary Portfolio Excess
Spread also terminate;


 


(iii) the pledge of the Seller’s
rights to the Primary Portfolio Excess Spread conveys no right (such as a right to become a substitute issuer or servicer) that
is not specifically provided for in the Ginnie Mae Guide; and


 


(iv) to the extent the Seller
has pledged or in the future pledges as collateral to a third party lender the Servicing Rights relating to any Primary Portfolio
Excess Spread, the pledged collateral will include such Primary Portfolio Excess Spread and the Purchaser will enter into any such
agreements and/or file any financing statements as reasonably required by such third party lender to give effect thereto.


 


Section 3.03 Participation Interests.


 


(a) On
each Creation Date, Seller will issue in the name of the Purchaser, the related Participation Certificate, as further described
in the schedule attached thereto. Thereafter, Purchaser shall be deemed the owner of the applicable Participation Interest described
therein. Each Participation Interest shall be evidenced by a Participation Certificate. During the term of the Loan and Security
Agreement, there shall only be one Participation Certificate issued hereunder unless otherwise consented to in writing by the Purchaser.


 


(b)
Administration of the Primary Portfolio Excess Spread and Secondary Portfolio Excess Spread shall be governed by the terms
of this Agreement and any applicable Servicing Agreement, and the servicing and administration of the underlying mortgage
loans and/or real estate owned properties that support the Primary Portfolio Excess Spread and the Secondary Portfolio Excess
Spread shall be subject in all respects to the provisions of this Agreement and any applicable Servicing Agreement. Seller
shall retain record legal title to any payments, distributions and other collections on the Primary Portfolio Excess Spread
and the Secondary Portfolio Excess Spread, in its capacity as the nominal owner of the Servicing Rights, but subject to the
Participation Interests, and Purchaser shall only be deemed to be in privity with Seller and in no event whatsoever shall
Purchaser be construed to be in privity with any underlying investor or owner of the Mortgage Loans.


 






    	16



    	 



    

 


ARTICLE 4


 


RECAPTURE


 


Section 4.01 Recapture.


 


(a)
With respect to each Primary Portfolio, if, during any calendar month, the Seller or its Affiliates originate new residential mortgage
loans the proceeds of which are used to refinance a Mortgage Loan in such Primary Portfolio (such a new mortgage loan, a “New
Mortgage Loan”), the Seller shall transfer and convey to the Purchaser on the related Assignment Date the Secondary
Portfolio Excess Spread and all proceeds thereof with respect to one or more of such New Mortgage Loans (subject to Section
4.01(b)) that together have an aggregate unpaid principal balance that is not less than the sum of the following amounts:


 


(i) the
product of (i) the aggregate amount of Payoffs (whether or not resulting from refinancings) received during such calendar month
on all loans that were Primary Portfolio Mortgage Loans at the beginning of the month and (ii) the Transaction Threshold Percentage;


 


(ii) the
product of (i) the dollar amount of New Mortgage Loans that were originated during the calendar month, net of the amount described
in clause (i) above, and (ii) 100% minus the Allowed Retention Percentage; and


 


(iii) either:


 


		(A)	a positive amount (and in no event less than zero) equal to the excess,
if any, of (i) the cumulative unpaid principal balance of loans for which transfers were actually made under this Article 4
in all such prior months, over (ii) the cumulative unpaid principal balance of loans for which transfers were required to be made
under this Article 4 in all prior months (whether or not they were actually made); or



 


		(B)	a negative amount (and in no event more than zero) equal to the excess of
(i) the cumulative unpaid principal balance of loans for which transfers were required to be made under this Article 4 in
all prior months (whether or not they were actually made), over (ii) the cumulative unpaid principal balance of loans for which
transfers were actually made under this Article 4 in all such prior months.



 






    	17



    	 



    

 


For
purposes of this subsection, the “Allowed Retention Percentage” means, with respect to each Primary Portfolio
and any month, the percentage set forth opposite the Excess Refinancing Percentage on the Participation Certificate; and the “Excess
Refinancing Percentage” means, with respect to each Primary Portfolio and any month, the excess, if any, of (a)
a fraction, expressed as a percentage, the numerator of which is equal to the aggregate principal balance of New Mortgage Loans
that were originated during such month, and the denominator of which is the aggregate amount of Payoffs (whether or not resulting
from refinancings) received during such calendar month on all loans that were Primary Portfolio Mortgage Loans at the beginning
of the month, over (b) the Transaction Threshold Percentage.


 


The New
Mortgage Loans and Alternative Mortgage Loans where the Servicing Rights are so transferred and conveyed shall constitute “Replacement
Mortgage Loans”; the entire group of such Replacement Mortgage Loans shall constitute the “Replacement Portfolio”;
the New Mortgage Loans where the Servicing Rights are not so transferred and conveyed shall constitute “Retained Mortgage
Loans”; and the entire group of such Retained Mortgage Loans shall constitute the “Retained Portfolio”.
For purposes of these definitions, if any Alternative Mortgage Loan is included in the Replacement Portfolio in lieu of a New Mortgage
Loan, then such New Mortgage Loan shall be neither part of the Replacement Portfolio nor part of the Retained Portfolio (including
for the purposes of the provisions set forth in Section 4.01(c)).


 


Notwithstanding
anything in this Section 4.01(a) to the contrary, in lieu of transferring and conveying to the Purchaser on the related
Assignment Date the related Secondary Portfolio Excess Spread as described herein, the Seller may, at its option, but only to the
extent that the fair market value of the aggregate Secondary Portfolio Excess Spread to be transferred is less than $200,000, and
shall, if the Secondary Portfolio Excess Spread otherwise required to be transferred is prohibited by the applicable Agency, wire
to the Purchaser cash in an amount equal to the fair market value of the related Secondary Portfolio Excess Spread.


 


(b) Each
New Mortgage Loan included in the Replacement Portfolio shall satisfy the following criteria: (1) such New Mortgage Loan shall
be the subject of a Servicing Agreement with a loan owner or master servicer; and (2) all consents, if any, required by the applicable
loan owner to assign all or a portion of the Servicing Rights with respect to such New Mortgage Loan shall have been obtained.
Notwithstanding the preceding sentence, if insufficient New Mortgage Loans are available that would allow satisfaction of the criteria
set forth in set forth in the preceding sentence, then the Seller shall use its best efforts to include in the Replacement Portfolio
another mortgage loan (an “Alternative Mortgage Loan”), in lieu of each New Mortgage Loan that, but for such
conditions in the preceding sentence, would have been included in the Replacement Portfolio, and that satisfies the following criteria:


 


(i) The
servicing fee rate for the Alternative Mortgage Loan is substantially similar to the servicing fee rate of the New Mortgage Loan;


 


(ii) The
interest accrual rate per annum on the Alternative Mortgage Loan is substantially equal to the interest accrual rate per annum
on the New Mortgage Loan;


 






    	18



    	 



    

 


(iii)
The final maturity date of the Alternative Mortgage Loan is within six months of the final maturity date of the New Mortgage Loan;


 


(iv) The
principal balance of the Alternative Mortgage Loan is substantially equal to the principal balance of the Refinanced Mortgage Loan;


 


(v) The
remaining credit characteristics of the Alternative Mortgage Loan (other than as specified in clauses (i), (ii), (iii) and (iv)
above) are substantially the same as the credit characteristics of the New Mortgage Loan;


 


(vi) The Alternative Mortgage Loan
is current as of the applicable Assignment Date; and


 


(vii) The
Alternative Mortgage Loan is not subject to any foreclosure or similar proceeding as of the applicable Assignment Date; is not
in process of any modification, workout or other loss mitigation process; and is not involved in litigation.


 


(c) The
Replacement Portfolio, on the one hand, and the Retained Portfolio, on the other, shall have the following characteristics:


 


(i) The
weighted average servicing fee rate for the Mortgage Loans in the Retained Portfolio shall be substantially equal to the weighted
average servicing fee rate for the Mortgage Loans in the Replacement Portfolio;


 


(ii) The
weighted average gross mortgage interest rate per annum of the New Mortgage Loans in the Retained Portfolio is substantially equal
to the weighted average gross mortgage interest rate per annum of the Mortgage Loans in the Replacement Portfolio;


 


(iii) The
weighted average final maturity date of the Mortgage Loans in the Retained Portfolio shall be within six months of the weighted
average final maturity date of the Mortgage Loans in the Replacement Portfolio; and


 


(iv) The
remaining credit characteristics of the pool of Mortgage Loans in the Retained Portfolio (other than the characteristics specified
in clauses (i) and (ii) above) shall be substantially the same as the credit characteristics of the pool of Mortgage Loans in the
Replacement Portfolio.


 


(d)
Not later than the Mortgage Loan Identification Date related to each month in which the Seller or an Affiliate thereof has
originated New Mortgage Loans with respect to a Primary Portfolio, the Seller shall (i) notify the Purchaser of the identity
of each such New Mortgage Loan and the Primary Portfolio Mortgage Loan that was refinanced using proceeds of such New
Mortgage Loan and (ii) provide a schedule setting forth the New Mortgage Loans (or Alternative Mortgage Loans) proposed to
compose the Replacement Portfolio, the New Mortgage Loans proposed to compose the Retained Portfolio and the Seller’s
calculations of the weighted average gross mortgage interest rate and weighted average final maturity date of each of the
proposed Replacement Portfolio and the proposed Retained Portfolio. The Seller and the Purchaser shall cooperate in good
faith to resolve any objections made by the Purchaser to the proposed compositions of the Replacement Portfolio and Retained
Portfolio.


 






    	19



    	 



    

 


(e) Not
later than the Mortgage Loan Identification Date related to each month in which a Modified Loan was re-securitized, the Seller
shall identify all such Modified Loans, each of which, for the avoidance of doubt, shall not be deemed to be a New Mortgage Loan
but rather shall either (i) continue to remain in its Primary Portfolio or Secondary Portfolio, as applicable, or (ii) in the case
of a Ginnie Mae Mortgage Loan, be returned to its Primary Portfolio or Secondary Portfolio, as applicable, pursuant to an Assignment
on the next Assignment Date following the redelivery of the modified Mortgage Loan into a new mortgage backed security guaranteed
by Ginnie Mae. Notwithstanding the foregoing, the Seller and the Purchaser may mutually agree that, in lieu of including any Modified
Loan(s) in the Primary Portfolio or Secondary Portfolio, as applicable, the Seller may designate Additional Mortgage Loans or pay
the Purchaser in cash, in either case in an amount equal to the fair market value of the Primary Portfolio Excess Spread or Secondary
Portfolio Excess Spread relating to such Modified Loan(s).


 


(f) The Seller shall be required to designate Additional
Mortgage Loans as follows:


 


(i)
On or before the Mortgage Loan Identification Date, the Seller shall calculate the Shortfall Amount, if any, with respect to such
calendar month and shall furnish the same to the Purchaser along with commercially reasonable documentation supporting such calculation.
The Purchaser shall have five (5) days to notify the Seller that the Purchaser accepts or objects to such calculation. If the Purchaser
objects to such calculation, it shall furnish the Seller with commercially reasonable supporting documentation of its objection,
and the parties shall cooperate in good faith to resolve the objection. If the parties cannot resolve the disagreement, they shall
proceed in accordance with subsection (iii) below. If the Purchaser accepts the calculation, or the disagreement is otherwise resolved
as provided in this Section 4.01(f), Seller shall designate Additional Mortgage Loans as provided in Section 4.01(h)
below as necessary to eliminate the Shortfall Amount (calculated as though such Additional Mortgage Loans were New Mortgage Loans).


 


(ii) In
lieu of designating Additional Mortgage Loans to eliminate some or all of the Shortfall Amount, the Seller may pay the Purchaser,
on the Assignment Date, an amount in cash equal to the fair market value of the Secondary Portfolio Excess Spread relating to such
Additional Mortgage Loans that would otherwise be required to eliminate the Shortfall Amount.


 


(iii) If the parties cannot
resolve a disagreement under this Section 4.01(f), they shall select an Approved Valuation Firm to calculate the amount in
dispute, and the decision of such Approved Valuation Firm shall be final and binding on the parties. Each party agrees to
cooperate in good faith with the requests for information by such Approved Valuation Firm, and each party shall pay 50% of
the fees and expenses of such firm. Within two (2) Business Days after the decision of the Approved Valuation Firm, the
Seller shall designate Additional Mortgage Loans or pay the cash fair market value, as applicable, in order to eliminate the
Shortfall Amount.


 






    	20



    	 



    

 


(g) As of
the applicable Assignment Date, unless otherwise agreed upon by the Seller and the Purchaser, the Additional Mortgage Loans shall
satisfy the following criteria:


 


(i) Reserved;


 


(ii) The
weighted average of the mortgage rates on the Additional Mortgage Loans is substantially equal to the weighted average of the mortgage
rates on the New Mortgage Loans originated during the applicable calendar month;


 


(iii) The
weighted average remaining term to maturity of the Additional Mortgage Loans is within six months of the weighted average remaining
term to maturity of the New Mortgage Loans originated during the applicable calendar month;


 


(iv) The
weighted average seasoning of the Additional Mortgage Loans is less than or equal to that of the New Mortgage Loans originated
during the applicable calendar month;


 


(v) The
average unpaid principal balance of the Additional Mortgage Loans is substantially similar to the average unpaid principal balance
of the New Mortgage Loans that were originated during the applicable calendar month;


 


(vi) The
remaining material credit characteristics of the Additional Mortgage Loan (other than as specified in clauses (i)-(v)
above) are substantially similar to the credit characteristics of the New Mortgage Loans originated during the applicable calendar
month;


 


(vii) Each Additional Mortgage Loan
is current as of the applicable Assignment Date; and


 


(viii)
Each Additional Mortgage Loan is not subject to any foreclosure or similar proceeding, is not in, and has not gone through, the
process of modification, workout or any other loss mitigation process and is not involved in litigation.


 


(h)
On the Assignment Date related to each month in which the Seller has originated New Mortgage Loans, the Seller shall
transfer and convey to the Purchaser the Secondary Portfolio Excess Spread with respect to the Replacement Portfolio and any
Additional Mortgage Loans which shall become subject to the Participation Certificate. Such transfer and conveyance shall be
effected by an instrument of assignment substantially in the form attached hereto as Exhibit C. The Seller shall be
entitled to retain the related Secondary Portfolio Retained Excess Spread. The New Mortgage Loans, Alternative Mortgage Loans
or Additional Mortgage Loans for which the Seller transfers and conveys to the Purchaser the related Secondary Portfolio
Excess Spread on each Assignment Date and the New Mortgage Loans, Alternative Mortgage Loans or Additional Mortgage Loans for
which the Seller transferred and conveyed to the Purchaser the related Secondary Portfolio Excess Spread on all prior
Assignment Dates shall together constitute the “Secondary Portfolio”.


 






    	21



    	 



    

 


(i) If insufficient
New Mortgage Loans and Alternative Mortgage Loans are available in circumstances that require a transfer by the Seller under the
foregoing subsections, or if counsel or independent accountants for the Purchaser or any of its Affiliates determines that there
exists a material risk that such transfer would result in a violation of the REIT Requirements by such Person, then the Seller
shall consult with the Purchaser and the parties shall negotiate in good faith for the transfer of one or more investments in transactions
that would not, in the judgment of counsel or independent accountants for the Seller or the Purchaser or any of their respective
Affiliates, present such a risk and that would result in net economic benefits to the Purchaser that are no less favorable than
the economic benefit to the Purchaser that would have resulted from a transfer under foregoing subsections.


 


Section 4.02 Intent of Parties.


 


(a)
The parties intend that each transfer made by the Seller under Section 4.01 constitute a valid absolute transfer or sale
of the related Secondary Portfolio Excess Spread and all proceeds thereof for the related Replacement Portfolio by the Seller to
the Purchaser. If the conveyance of such Secondary Portfolio Excess Spread is characterized by a court or governmental authority
as security for a loan rather than an absolute transfer or sale, the Seller will be deemed to have granted, and hereby grants,
to the Purchaser, a security interest in all of its right, title and interest in, to and under, whether now existing or in the
future arising or acquired, (i) all Secondary Portfolio Excess Spread and all rights under this Agreement with respect to any Secondary
Portfolio Excess Spread; (ii) the Secondary Portfolio Spread Custodial Account; (iii) all rights to payment of amounts due under
this Agreement on account of or related to the Secondary Portfolio Excess Spread; (iv) all rights to reimbursement of Secondary
Portfolio Excess Spreads and/or amounts due in respect thereof under the related Servicing Agreements and Guides; (v) all records,
instruments or other documentation evidencing any of the foregoing; (vi) all "general intangibles", "accounts",
"chattel paper", "securities accounts", "investment property", "deposit accounts" and "money"
as defined in the Uniform Commercial Code relating to or constituting any and all of the foregoing (including, without limitation,
all of Seller's rights, title and interest in and under the Secondary Portfolio Excess Spreads); and (vii) any and all replacements,
substitutions, distributions on or proceeds of any and all of the foregoing, as security for a loan in an amount equal to the value
of such Secondary Portfolio Excess Spread.


 


(b) The
Seller hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements,
in any jurisdictions and with any filing offices as the Purchaser may determine, in its sole discretion, are necessary or advisable
to perfect the sale of the assets conveyed and security interests granted to Purchaser and agrees to execute financing statements
in form reasonably acceptable to the Purchaser and the Seller at the request of the Purchaser in order to reflect the Purchaser’s
interests in the assets conveyed to or subjected to a security interest in favor of the Purchaser pursuant hereto and in the related
Secondary Portfolio Spread Custodial Accounts.


 






    	22



    	 



    

 


(c)
In connection with each Transaction involving Ginnie Mae Mortgage Loans, the Seller and the Purchaser further agree and acknowledge
with respect to such Ginnie Mae Mortgage Loans as follows:


 


(i) the Seller is entitled to
the Base Servicing Fee and the Seller and the Purchaser, as applicable, are entitled to the Secondary Portfolio Excess Spread only
so long as the Seller maintains its status as an approved Ginnie Mae issuer and servicer;


 


(ii) upon the Seller’s
loss of its status as an approved Ginnie Mae issuer and servicer, the Purchaser’s rights to any Secondary Portfolio Excess
Spread also terminate;


 


(iii) the sale of the Seller’s
rights to the Secondary Portfolio Excess Spread conveys no right (such as a right to become a substitute issuer or servicer) that
is not specifically provided for in the Ginnie Mae Guide; and


 


(iv) to the extent the Seller
has pledged or in the future pledges as collateral to a third party lender the Servicing Rights relating to any Secondary Portfolio
Excess Spread, the pledged collateral will include such Secondary Portfolio Excess Spread and the Purchaser will enter into any
such agreements and/or file any financing statements as reasonably required by such third party lender to give effect thereto.


 


Section 4.03 Additional Representations and Warranties.


 


On the
Assignment Date with respect to each Replacement Portfolio, the provisions set forth in Section 3.01(b) and Section 3.01(c) shall
apply, as applicable, to each Replacement Mortgage Loan and the Replacement Portfolio, and Seller shall be deemed to have represented
and warranted to the Purchaser with respect to each Replacement Mortgage Loan and the Replacement Portfolio, as applicable, the
matters set forth in Section 3.01(e).


 


ARTICLE 5


 


PRIMARY PORTFOLIO COLLECTIONS
AND REMITTANCES


 


Section
5.01 Primary Portfolio Spread Custodial Account. With respect to each Primary Portfolio, the Seller shall establish a Primary
Portfolio Spread Custodial Account, which shall be an Eligible Account, not later than the Transaction Settlement Date. The Seller
shall deliver to the Seller and the Purchaser reasonable evidence of the establishment of such account upon request. The Seller
shall not pledge, obtain financing for or otherwise permit any Lien of any creditor of the Seller to exist on, any portion of the
Primary Portfolio Collections or the Seller’s interest in the Primary Portfolio Spread Custodial Account without the prior
written consent of the Purchaser.


 


Section
5.02 Deposits. With respect to each Primary Portfolio, the Seller shall deposit into the Primary Portfolio Spread
Custodial Account from time to time any and all Primary Portfolio Collections received on or after the Transaction Settlement
Date, in each case within two (2) Business Days following receipt thereof. The Seller shall direct each loan owner or master
servicer to remit any Primary Portfolio Termination Payments directly to the Primary Portfolio Spread Custodial Account to
the extent consistent with the terms of the related Servicing Agreement. Notwithstanding the foregoing, during the term of
the Loan and Security Agreement, the Seller shall deposit all funds received on account of the Participation Certificates
into the Dedicated Account.


 






    	23



    	 



    

 


Section 5.03 Withdrawals
and Remittances.


 


(a) On each
Business Day, during the term of the Loan and Security Agreement, the Seller shall deposit all funds received on account of the
Participation Certificates into the Dedicated Account; provided that upon the termination of the Loan and Security Agreement,
the Seller shall withdraw from the Primary Portfolio Spread Custodial Account the cash on deposit therein and pay such cash in
the following amounts and order of priority, in each case subject to funds remaining available after giving effect to each payment
having a higher priority:


 


(i) first,
from amounts in the Primary Portfolio Spread Custodial Account attributable to Primary Portfolio Termination Payments, pro
rata, (A) the Transaction Excess Spread Percentage of such Primary Portfolio Termination Payments to the Purchaser, and (B)
the Transaction Retained Excess Spread Percentage of such Primary Portfolio Termination Payments to the Seller;


 


(ii) second,
on the last Business Day of each calendar week, at the option of the Seller, any accrued and unpaid Base Servicing Fee in respect
of the Primary Portfolio Mortgage Loans to the Seller;


 


(iii) third,
on each Transaction Remittance Date, to the extent not previously paid to the Seller in accordance with Section 5.03(a)(ii),
any accrued and unpaid Base Servicing Fee in respect of the Primary Portfolio Mortgage Loans to the Seller;


 


(iv) fourth,
on each Transaction Remittance Date, pro rata, (A) to the Purchaser, any Primary Portfolio Excess Spread for the prior
Collection Period (other than the portion thereof consisting of Primary Portfolio Termination Payments paid pursuant to
the foregoing clauses); and (B) to the Seller, any Primary Portfolio Retained Spread for the prior Collection Period (other
than the portion thereof consisting of Primary Portfolio Termination Payments paid pursuant to the foregoing clauses)); provided,
however, that prior to the distribution to the Seller of any Primary Portfolio Retained Spread pursuant to clause (B),
the Primary Portfolio Retained Spread shall be applied to the payment of any indemnity payments then due and payable by the Seller
to the Purchaser or its related indemnified persons under Section 8.03; and


 


(v) fifth,
on each Transaction Remittance Date, to the Seller, any other amounts remaining on deposit in the Primary Portfolio Spread
Custodial Account.


 


(b)
All payments to the Purchaser shall be made by wire transfer of immediately available funds to an account designated by the Purchaser.


 






    	24



    	 



    

 


ARTICLE 6


 


SECONDARY PORTFOLIO COLLECTIONS
AND REMITTANCES


 


Section
6.01 Secondary Portfolio Spread Custodial Account. With respect to each Secondary Portfolio, the Seller shall establish
a Secondary Portfolio Spread Custodial Account, which shall be an Eligible Account, not later than the initial Assignment Date
for such Secondary Portfolio. The Seller shall deliver to the Purchaser reasonable evidence of the establishment of such account
upon request. The Seller shall not pledge, obtain financing for or otherwise permit any Lien of any creditor of the Seller to exist
on, any portion of the Secondary Portfolio Collections or the Seller’s interest in the Secondary Portfolio Spread Custodial
Account without the prior written consent of the Purchaser. Notwithstanding the foregoing, during the term of the Loan and Security
Agreement, the Seller shall deposit all funds received on account of the Participation Certificates into the Dedicated Account.


 


Section
6.02 Deposits. With respect to each Secondary Portfolio, the Seller shall deposit into the Secondary Portfolio Spread Custodial
Account from time to time any and all Secondary Portfolio Collections received on or after the Transaction Settlement Date, in
each case within one Business Day following receipt and identification thereof and in any event within three Business Days following
receipt thereof. The Seller shall direct each loan owner or master servicer to remit any Secondary Portfolio Termination Payments
directly to the Secondary Portfolio Spread Custodial Account.


 


Section 6.03 Withdrawals and Remittances.


 


(a) On each
Business Day, during the term of the Loan and Security Agreement, the Seller shall deposit all funds received on account of the
Participation Certificates into the Dedicated Account; provided that upon termination of the Loan and Security Agreement,
the Seller shall withdraw from the Secondary Portfolio Spread Custodial Account the cash on deposit therein and pay such cash in
the following amounts and order of priority, in each case subject to funds remaining available after giving effect to each payment
having a higher priority:


 


(i) first,
from amounts in the Secondary Portfolio Spread Custodial Account attributable to Secondary Portfolio Termination Payments,
pro rata, (A) the Secondary Portfolio Excess Spread Percentage of such Secondary Portfolio Termination Payments to the Purchaser,
and (B) the Retained Excess Spread Percentage of such Secondary Portfolio Termination Payments to the Seller;


 


(ii) second,
on the last Business Day of each calendar week, at the option of the Seller, any accrued and unpaid Base Servicing Fee in respect
of the Secondary Portfolio Mortgage Loans to the Seller;


 


(iii) third, on
each Transaction Remittance Date, to the extent not previously paid to the Seller in accordance with Section
6.03(a)(ii), any accrued and unpaid Base Servicing Fee in respect of the Secondary Portfolio Mortgage Loans to the
Seller;


 






    	25



    	 



    

 


(iv) fourth,
on each Transaction Remittance Date, pro rata, (A) to the Purchaser, any Secondary Portfolio Excess Spread for the prior Collection
Period (other than the portion thereof consisting of Secondary Portfolio Termination Payments paid pursuant to the foregoing clauses);
and (B) to the Seller, any Secondary Portfolio Retained Spread for the prior Collection Period (other than the portion thereof
consisting of Secondary Portfolio Termination Payments paid pursuant to the foregoing clauses)); provided, however,
that prior to the distribution to the Seller of any Primary Portfolio Retained Spread pursuant to clause (B), the Primary
Portfolio Retained Spread shall be applied to the payment of any indemnity payments then due and payable by the Seller to the Purchaser
or its related indemnified persons under Section 8.03;


 


(v) fifth,
on each Transaction Remittance Date, to the Seller, any other amounts remaining on deposit in the Secondary Portfolio Spread
Custodial Account.


 


(b) All payments to the Purchaser
shall be made by wire transfer of immediately available funds to an account designated by the Purchaser.


 


ARTICLE 7


 


SERVICING AND OTHER MATTERS


 


Section 7.01 Seller’s Duties With Respect to Servicing.


 


(a)
Effective on the Transaction Settlement Date for each Primary Portfolio, the Seller agrees for the benefit of the Purchaser to
service the related Primary Portfolio Mortgage Loans and any Secondary Portfolio Mortgage Loans at all times substantially in accordance
with the related Servicing Agreement, in the case of Non-Agency Mortgage Loans, or the applicable Guide, in the case of Agency
Mortgage Loans. In connection with the Primary Portfolio Mortgage Loans and Secondary Portfolio Mortgage Loans related to each
Transaction, the Seller shall not, without the express written consent of Purchaser (which consent may be withheld in its absolute
discretion), (a) terminate or amend any Servicing Rights, or (b) enter into any termination, modification, waiver or amendment
of any applicable Servicing Agreement or its rights and duties under any applicable Guide.


 


(b) Under
no circumstances shall the Purchaser be responsible for the servicing acts and omissions of the Seller or any other servicer or
any originator of the Mortgage Loans, or for any servicing related obligations or liabilities of any servicer under the Servicing
Agreements or the Guides or any Person under the Mortgage Loan Documents, or for any other obligations or liabilities of the Seller.


 


(c) Upon the termination of the
Seller as servicer under any Servicing Agreement or Guide, the Seller shall remain liable to the Purchaser and the applicable
loan owner or master servicer for all liabilities and obligations incurred by the Seller while the Seller was acting as the
servicer thereunder.


 






    	26



    	 



    

 


Section
7.02 Base Servicing Fees. The Seller agrees that, notwithstanding the provisions of the applicable Servicing Agreements
and Guides, as between the parties hereto, the Seller shall be entitled to servicing fees on the Primary Portfolio and any Secondary
Portfolio only to the extent of the applicable Base Servicing Fee and only to the extent that funds available for the payment of
such Base Servicing Fee are available in the Primary Portfolio Spread Custodial Account (in the case of the Primary Portfolio Mortgage
Loans) or the Secondary Portfolio Spread Custodial Account (in the case of the Secondary Portfolio Mortgage Loans). Under no circumstances
shall the Purchaser be liable to the Seller for the payment of any Base Servicing Fee. The portion of the Base Servicing Fee relating
to a Secondary Portfolio Mortgage Loan shall begin to accrue as of the commencement of the Collection Period in which the related
Assignment Date occurs but in no event shall such portion accrue on any day on which the portion of the Base Servicing Fee relating
to the Primary Portfolio Mortgage Loan in respect of which such Secondary Portfolio Mortgage Loan became a Secondary Portfolio
Mortgage Loan also accrues.


 


Section
7.03 Reporting. In connection with each Transaction, the Seller shall deliver to the Purchaser monthly reports, and afford
the Purchaser access to information, at such times and in such form and substance as are set forth in the related Confirmation
or as may reasonably be agreed between the Seller and the Purchaser.


 


Section
7.04 Certain Awards. If an award of damages is received by the Seller or the Purchaser as a result of a judgment, settlement
or arbitration (including payment pursuant to a guaranty of an obligor) pursuant to a breach by the seller under the Transaction
Asset Purchase Agreement for any Transaction, then (i) if such breach had an adverse effect on the value of the Total Servicing
Spread, then the Transaction Excess Spread Percentage of such award shall be distributed to the Purchaser or its designee promptly
and the remainder of such award shall be retained by the Seller and (ii) if such breach did not have an adverse effect on the value
of the Total Servicing Spread, the Seller shall be entitled to the entirety of such award.


 


ARTICLE 8


 


LIABILITIES OF THE SELLER; INDEMNIFICATION


 


Section
8.01 Liability of the Seller. The Seller shall be liable in accordance herewith only to the extent of the obligations specifically
and respectively imposed upon and undertaken by the Seller herein.


 


Section 8.02 Merger or Consolidation of the Seller.


 


(a)
The Seller shall keep in full effect its existence, rights and franchises as an entity and maintain its qualification to
service mortgage loans for each of Fannie Mae, Freddie Mac and HUD and comply with the laws of each State in which any
Mortgaged Property is located to the extent necessary to protect the validity and enforceability of this Agreement, and to
perform its duties under this Agreement. The Seller shall keep in full effect its existence, rights and franchises as an
entity.


 






    	27



    	 



    

 


(b) Any Person
into which the Seller may be merged, converted, or consolidated, or any Person resulting from any merger, conversion or consolidation
to which the Seller shall be a party, or any Person succeeding to the business of the Seller, shall be the successor of the Seller
hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding; provided, however, that such successor shall have expressly assumed the duties of the Seller hereunder.


 


Section
8.03 Indemnification By Seller. The Seller shall indemnify the Purchaser and its directors, officers, employees and agents
(the “Indemnified Parties”) and hold them harmless against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any other costs, fees and expenses that any of them may sustain
by reason of (A) the Seller’s willful misfeasance, bad faith or negligence in the performance of its duties under this Agreement,
any Servicing Agreement or any Guide, (B) the Seller’s reckless disregard of its obligations or duties under this Agreement,
any Servicing Agreement or any Guide, (C) the Seller’s breach of its representations, warranties or covenants under this
Agreement, any Servicing Agreement or any Guide, (D) Seller's breach of a representation, warranty or covenant under, or Seller's
failure to comply with any obligation under, any agreement or obligation secured by a Purchaser's right, title or interest in the
Primary Portfolio Excess Spread, the Secondary Portfolio Excess Spread or any other rights or interests of the Purchaser under
this Agreement, or (E) the Transactions being characterized by a court or governmental authority as anything other than an absolute
transfer or sale. The Seller hereby grants the Purchaser a security interest in all of its right, title and interest in, to and
under, whether now existing or in the future arising or acquired, (i) all Primary Portfolio Excess Spread, all Secondary Portfolio
Excess Spread and all rights under this Agreement with respect to any Primary Portfolio Excess Spread or any Secondary Portfolio
Excess Spread; (ii) the Primary Portfolio Spread Custodial Account and the Secondary Portfolio Spread Custodial Account; (iii)
all rights to payment of amounts due under this Agreement on account of or related to the Primary Portfolio Excess Spread or the
Secondary Portfolio Excess Spread; (iv) all rights to reimbursement of Primary Portfolio Excess Spreads, Secondary Portfolio Excess
Spreads and/or amounts due in respect thereof under the related Servicing Agreements and Guides; (v) all records, instruments or
other documentation evidencing any of the foregoing; (vi) all "general intangibles", "accounts", "chattel
paper", "securities accounts", "investment property", "deposit accounts" and "money"
as defined in the Uniform Commercial Code relating to or constituting any and all of the foregoing (including, without limitation,
all of Seller's rights, title and interest in and under the Primary Portfolio Excess Spreads and Secondary Portfolio Excess Spreads);
and (vii) any and all replacements, substitutions, distributions on or proceeds of any and all of the foregoing, as security for
the obligations of the Seller under this Section 8.03.


 


Section
8.04 Indemnification By Purchaser. The Purchaser shall indemnify the Seller and its directors, officers, employees
and agents and hold them harmless against any and all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and expenses that any of them may sustain by
reason of (A) the Purchaser’s willful misfeasance, bad faith or negligence in the performance of its duties under this
Agreement (B) the Purchaser’s reckless disregard of its obligations or duties under this Agreement, (C) the
Purchaser’s breach of its representations, warranties or covenants under this Agreement, or (D) the Transactions being
characterized by a court or governmental authority as a sale of any portion of the Servicing Rights greater than Primary
Portfolio Excess Spread or Secondary Portfolio Excess Spread, as applicable.


 






    	28



    	 



    

 


ARTICLE 9


 


MISCELLANEOUS


 


Section
9.01 Notices. All notices, requests, demands and other communications which are required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have been duly given upon the delivery or mailing thereof, as the case
may be, sent by registered or certified mail, return receipt requested:


 


(i) if to the Seller:


 


      PennyMac Loan Services, LLC


      Attn: Director, Servicing Operations


      6101 Condor Drive


      Moorpark, CA 93021


 


      With a copy to:


 


      PennyMac Loan Services, LLC


      Attn: General Counsel


      6101 Condor Drive


      Moorpark, CA 93021


 


(ii)
if to the Purchaser:


 


      PennyMac Holdings, LLC


      Attn: Treasurer


      6101 Condor Drive


      Moorpark, CA 93021


 


      With a copy to:


 


      PennyMac Holdings, LLC


      Attn: General Counsel


      6101
Condor Drive


      Moorpark, CA 93021


 


or such other address as may
hereafter be furnished to the other parties by like notice.


 


Section
9.02 Amendment. Neither this Agreement, nor any terms hereof, may be amended, supplemented or modified except in an instrument
in writing executed by the parties hereto.


 






    	29



    	 



    

 


Section
9.03 Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect
to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions,
express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.


 


Section
9.04 Binding Effect; Beneficiaries. The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective permitted successors and assigns. No provision of this Agreement is intended or shall be construed
to give to any Person, other than the parties hereto, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.


 


Section
9.05 Headings. The section and subsection headings in this Agreement are for convenience of reference only and shall not
be deemed to alter or affect the interpretation of any provisions hereof.


 


Section
9.06 Further Assurances. The Seller agrees to execute and deliver such instruments and take such further actions as the
Purchaser may, from time to time, reasonably request in order to effectuate the purposes and to carry out the terms of this Agreement.


 


Section
9.07 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
The parties hereto intend that the provisions of Section 5-1401 of the New York General Obligations Law shall apply to this Agreement.


 


Section
9.08 Relationship of Parties. Nothing herein contained shall be deemed or construed to create a partnership or joint venture
between the parties. Without limiting the generality of the preceding statement, the servicing duties and responsibilities of the
Seller shall be rendered by it as an independent contractor and not as an agent of the Purchaser. The Seller shall have full control
of all of its acts, doings, proceedings, relating to or requisite in connection with the discharge of its duties and responsibilities
under this Agreement.


 


Section
9.09 Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability
of the other provisions of this Agreement.


 


Section
9.10 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of a party hereto, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.


 


Section
9.11 Exhibits. The exhibits to this Agreement are hereby incorporated and made a part hereof and form integral parts of
this Agreement.


 






    	30



    	 



    

 


Section
9.12 Counterparts. This Agreement may be executed by the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.


 


Section 9.13 WAIVER
OF TRIAL BY JURY.


 


EACH
PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.


 


Section 9.14 LIMITATION OF DAMAGES.


 


NOTWITHSTANDING
ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE PARTIES AGREE THAT NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL
OR PUNITIVE DAMAGES WHATSOEVER, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), OR ANY OTHER LEGAL OR EQUITABLE
PRINCIPLE, PROVIDED, HOWEVER, THAT SUCH LIMITATION SHALL NOT BE APPLICABLE WITH RESPECT TO ANY THIRD PARTY CLAIM MADE AGAINST A
PARTY.


 


Section 9.15 SUBMISSION
TO JURISDICTION; WAIVERS.


 


EACH
PARTY HERETO HEREBY IRREVOCABLY (I) SUBMITS, FOR ITSELF IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION
AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN THE BOROUGH
OF MANHATTAN IN NEW YORK CITY WITH RESPECT TO MATTERS ARISING OUT OF OR RELATING TO THIS AGREEMENT; (II) AGREES THAT ALL CLAIMS
WITH RESPECT TO ANY ACTION OR PROCEEDING REGARDING SUCH MATTERS MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURTS;
(III) WAIVES, TO THE FULLEST POSSIBLE EXTENT, WITH RESPECT TO SUCH COURTS, THE DEFENSE OF AN INCONVENIENT FORUM; AND (IV) AGREES
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.


 


Section
9.16 Independent Analysis of Purchaser. Purchaser acknowledges that it has, independently and without reliance upon Seller
and based on such documents and information as Purchaser has deemed appropriate, made the Purchaser’s own credit analysis
and decision to purchase the applicable Participation Interest. Purchaser hereby acknowledges that (except as set forth hereinabove)
Seller has made no representations or warranties with respect to the Primary Portfolio Excess Spread, the Secondary Portfolio Excess
Spread or the Participation Interest, and that the Purchaser assumes all risk of loss in connection with its Participation Interest.


 






    	31



    	 



    

 


Section
9.17 No Creation of a Partnership. Nothing contained in this Agreement, and no action taken pursuant hereto shall be deemed
to constitute Seller with Purchaser, a partnership, association, joint venture or other entity.


 


Section
9.18 Article 8 Opt-In. The Seller hereby irrevocably elects that each Participation Certificate shall constitute and shall
remain a “security” for purposes of Article 8 of the Uniform Commercial Code.


 


Section 9.19 Reserved.


 


Section
9.20 Participation Certificate Register. The ownership of each Participation Interest shall be registered on a record of
ownership (the “Participation Certificate Register”) maintained by Lender, during the term of the Loan and Security
Agreement, and, thereafter, by Seller (the “Participation Certificate Registrar”). Notwithstanding anything
else in this Agreement to the contrary, the right to receive payments with respect to a Participation Interest hereunder may be
transferred only if the Transfer is registered on such record of ownership and the transferee is identified as the owner of an
interest in the obligation. The Seller shall be entitled to treat the registered holder of each Participation Interest (as recorded
on such record of ownership) as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in a Participation Interest or hereunder on the part of any other person or entity.


 


Section 9.21 Expense
Reserve.


 


Notwithstanding
anything in Section 8.03, in the event that counsel or independent accountants for a Protected REIT determine that
there exists a material risk that any amounts due to the Purchaser under Section 8.03 hereof would be treated as
Nonqualifying Income for such Protected REIT upon the payment of such amounts to the Purchaser, the amount paid to the
Purchaser, pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Purchaser
in such year without causing such Protected REIT to fail to meet the REIT Requirements for such year, determined as if the
payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to such Protected
REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the Person obligated
to make payment under Section 8.03 would otherwise be obligated to pay to the Seller or the Purchaser, as the case may
be, pursuant to such Section 8.03 of this Agreement (the “Expense Amount”), then: (1) such
obligated Person shall place the Expense Amount into an escrow account (the “Expense Escrow Account”)
using an escrow agent and agreement reasonably acceptable to the Purchaser and shall not release any portion thereof to the
Purchaser, and the Purchaser, shall not be entitled to any such amount, unless and until the Purchaser, delivers to such
obligated Person, at the sole option of such Protected REIT, (i) an opinion (an “Expense Amount Tax
Opinion”) of such Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid,
would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s
Letter”) from such Protected REIT’s independent accountants indicating the maximum amount that can be paid at
that time to the Purchaser, without causing such Protected REIT to fail to meet the REIT Requirements for any relevant
taxable year, or (iii) a private letter ruling issued by the IRS to such Protected REIT indicating that the receipt of any
Expense Amount hereunder will not cause such Protected REIT to fail to satisfy the REIT Requirements (a “REIT
Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s
Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Purchaser, to
such obligated Person, the Purchaser, shall have the right, but not the obligation, to borrow the Expense Amount from the
Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the
Purchaser, that (i) requires such obligated Person to lend the Purchaser, immediately available cash proceeds in an amount
equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially
reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the
Purchaser, as the case may be, or any guarantor of the Purchaser, as the case may be, including such Protected REIT, at the
time of such Indemnity Loan, and (B) a 15 year maturity with no periodic amortization.


 






    	32



    	 



    

 


Section 9.22 Survival.


 


This
Agreement and the Transactions, and all covenants, agreements, representations and warranties herein and therein and in the certificates
delivered pursuant hereto, shall survive the date hereof and each Transaction Settlement Date.


 


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


 


 


 


 


 


 


 


 


[SIGNATURE PAGE FOLLOWS]


 






    	33



    	 



    

 


IN
WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the date first above written.


 


PENNYMAC LOAN SERVICES, LLC (Seller)


 


 


 


 


By: /s/ Pamela Marsh


Name: Pamela
Marsh


Title: Executive Vice President, Treasurer


 


 


 


PENNYMAC HOLDINGS, LLC (Purchaser)


 


 


 


 


By: /s/ Pamela Marsh


Name: Pamela
Marsh


Title: Executive Vice President, Treasurer


 


 


 


 


 


Signature
Page – Amended and Restated Master Spread Acquisition and MSR Servicing Agreement






    	34



    	 



    

 


EXHIBIT A


 


(Form of Confirmation)


 


 


CONFIRMATION


 


OF SPREAD ACQUISITION TRANSACTION
UNDER


MASTER SPREAD ACQUISITION
AND MSR SERVICING AGREEMENT


 


 


 





	PARTIES:	PennyMac Loan Services, LLC (Seller)
	 	 
	 	PennyMac Holdings, LLC (Purchaser)
	 	 
	DATE:	_______________, ___
		 
	RE:	Spread Acquisition – Pool No. [___]




 


_______________________


 


The purpose
of this letter agreement is to confirm the terms and conditions of the Transaction entered into between PennyMac Loan Services,
LLC and PennyMac Holdings, LLC on the Transaction Settlement Date specified below. This letter agreement is a “Confirmation”
as described in the Master Spread Acquisition and MSR Servicing Agreement specified in paragraph 1 below .


 


The definitions
and provisions contained in the Master Agreement are incorporated into this Confirmation. In the event of any inconsistency between
the Master Agreement and this Confirmation, this Confirmation will govern. Capitalized terms used herein and not otherwise defined
have the meanings set forth in the Master Agreement.


 


This Confirmation
supplements, forms part of and is subject to the Amended and Restated Master Spread Acquisition and MSR Servicing Agreement dated
as of April 30, 2015, between PennyMac Loan Services, LLC, as seller, and PennyMac Holdings, LLC, as purchaser, as amended and
supplemented from time to time (the “Master Agreement”). All provisions contained in the Master Agreement govern
this Confirmation except as expressly modified below.


 






    	35



    	 



    

 


The terms of the Transaction to which this Confirmation
relates are as follows:


 





	Primary Portfolio:	As set forth in Schedule I hereto.
	Transaction Settlement Date:	___________, 20____.
	Transaction Base Servicing Fee Rate (for Primary Portfolio):	[____] basis points (per annum)
	Transaction Base Servicing Fee Rate (for Secondary Portfolio):	[____] basis points (per annum)
	Transaction Remittance Date:	The 10th day of each
        calendar month, or if such day is not a Business Day, the prior Business Day
	
        Transaction
Purchase Price Percentage:
	
        _______%

	Transaction Excess Spread Percentage (for Primary Portfolio):	_______%
	Transaction Excess Spread Percentage (for Secondary Portfolio):	_______%
	Transaction Asset Purchase Agreement:	 
	
        Transaction
Threshold Percentage:
	
        [___%]

	Allowed Retention Percentage:	As set forth opposite the applicable Excess Refinancing Percentage in the table set forth below.
	Cut-off Date	___________, 20____.
	Other:	In the event Seller, whether voluntarily or involuntarily, transfers the Servicing Rights related to the Mortgage Loans in any Primary Portfolio or Secondary Portfolio and receives any termination fee or other compensation or proceeds in connection with such transfer (the “Transfer Proceeds”) or (ii) recovers under any purchase agreement governing the acquisition of Servicing Rights any indemnity or reimbursement proceeds or other amounts relating to the purchase price of such Servicing Rights, including, without limitation, any amounts recovered with respect to early payoffs or early payment defaults (the “Recovery Proceeds” and, together with the Transfer Proceeds, the “Servicing Rights Proceeds”), Seller shall remit to Purchaser an amount equal to the product of (a) such Servicing Rights Proceeds, multiplied by (b) a fraction, the numerator of which is the Transaction Purchase Price allocable to the Primary Portfolio Excess Spread relating to such Servicing Rights and the denominator of which is the actual purchase price paid by the Seller for such Servicing Rights. 







 






    	36



    	 



    

 





	Table of Allowed Retention Percentage
	Range of Excess Refinancing Percentages	Allowed Retention Percentage
	 	 
	 	 
	 	 







 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 






    	37



    	 



    

 


Accepted and confirmed
as of the date first written above:


 





	SELLER:	PennyMac Loan Services, LLC
	 	 
	 	 
	 	By:_____________________________

      Name:

      Title:
	 	 
	 	 
	 	 
	 	 
	PURCHASER:	PennyMac holdings, llc
	 	 
	 	 
	 	By:_____________________________

      Name:

      Title:







 



    	38



    	 



    

 


SCHEDULE I


TO CONFIRMATION
DATED __________, 20___


UNDER THE MASTER SPREAD ACQUISITION
AND


MSR SERVICING AGREEMENT DATED
AS OF DECEMBER 30, 2013


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 






    	39



    	 



    

 


EXHIBIT B


 


FORM OF PARTICIPATION
CERTIFICATE


 


This is
a participation interest certificate (“Participation Certificate”) evidencing a participation interest
granted to CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the “Participant”) in the Primary Portfolio
Excess Spread, the Secondary Portfolio Excess Spread, the Primary Portfolio Collections, the Secondary Portfolio Collections, the
Primary Portfolio Termination Payments and the Secondary Portfolio Termination Payments, in each case, related to the Portfolio
Excess Spread in the assets identified on Schedule I attached hereto, and as more particularly described in the Amended
and Restated Master Spread Acquisition and MSR Servicing Agreement, dated as of April 30, 2015 (as amended, restated, supplement
or otherwise modified from time to time, the “Participation Agreement”), by and among PENNYMAC LOAN SERVICES,
LLC (“Seller”) and PENNYMAC HOLDINGS, LLC (“Purchaser”). Capitalized terms
used herein and not otherwise defined shall have the meaning ascribed to them in the Participation Agreement.


 


Pursuant
to the terms of the Participation Agreement, Seller hereby grants a Participation Interest in the Primary Portfolio Excess Spread,
the Secondary Portfolio Excess Spread, the Primary Portfolio Collections, the Secondary Portfolio Collections, the Primary Portfolio
Termination Payments and the Secondary Portfolio Termination Payments, in each case, related to the Portfolio Excess Spread initially
to Purchaser and thereafter to Participant:


 





	Certificate No. 1	Percentage Interest:  100%




 


THIS
PARTICIPATION CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS PARTICIPATION
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT REQUIRE SUCH
REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 11 OF THE PARTICIPATION AGREEMENT (AS DEFINED
HEREIN).


 


The Seller
hereby irrevocably elects that this Participation Certificate shall constitute and shall remain a “security” for purposes
of Article 8 of the Uniform Commercial Code.


 


This Participation
Certificate is subject to the terms, provisions and conditions of the Participation Agreement, as to each of which the holder of
this Participation Certificate, by virtue of the acceptance hereof, assents and by which such holder is bound.


 


This
Participation Certificate shall be construed in accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in said State, without regard to conflicts of law principles (other than Section 5-1401
of the New York General Obligations Law, which shall govern), and the obligations, rights and remedies of the holder hereof
shall be determined in accordance with such laws.


 


[SIGNATURE FOLLOWS]


 






    	40



    	 



    

 


IN WITNESS WHEREOF,
the Seller has caused this Participation Certificate to be duly executed.


 


 


PENNYMAC LOAN SERVICES, LLC


 


 


By:______________________________


      Authorized Officer/Authorized Signer


 


 


 


Address for Notices:


 


PENNYMAC LOAN SERVICES, LLC


6101 Condor Drive


Moorpark, California 93021


Attention: Treasurer


Phone Number: 805 330-6059; 818 746-2877


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


kevin.chamberlain@pnmac.com


 


With a copy to:


 


PENNYMAC LOAN SERVICES, LLC


6101 Condor Drive


Moorpark, California 93021


Attention: General Counsel


 






    	41



    	 



    

 


ASSIGNMENT AND ASSUMPTION


 


 


FOR VALUE RECEIVED,
the undersigned Assignor hereby sell(s), assign(s) and transfer(s) unto _____________________________


___________________________________________________________________________________________________________________


___________________________________________________________________________________________________________________


___________________________________________________________________________________________________________________


(please print or typewrite name and
address including postal zip code of Assignee)


 


the Participation Interest evidenced
by the within Participation Certificate and hereby authorize(s) the registration of transfer of such Participation Interest to
the above named assignee on the participation register of the Seller. The Participation Certificate is subject to the terms, provisions
and conditions of the Participation Agreement.


 


I
(we) further direct the issuance of a new certificate of a like percentage interest and class to the above named assignee and delivery
of such certificate to the following address:


___________________________________________________________________________________________________________________


___________________________________________________________________________________________________________________


___________________________________________________________________________________________________________________


 


 


Dated:_____________________


 


 


______________________________________


Signature
by or on behalf of Assignor


 


 


 


 


 


 


ACCEPTANCE:


 


The
undersigned Assignee hereby accepts and assumes all of the rights, interests and obligations of the Participation Interest holder
under the Participation Agreement pursuant to which the participation interest transferred hereby was created. The undersigned
Assignee hereby makes the representations and warranties contained in Section 5 of the Participation Agreement to Seller and to
the Assignor.


 


Dated:_____________________


 


 





______________________________________


Signature by or on behalf of Assignee


 






    	42



    	 



    

 


DISTRIBUTION INSTRUCTIONS


 


Assignee
should include the following for purposes of distribution of any proceeds of a Participation Interest:


 


Distributions
shall, if permitted, be made by wire transfer or otherwise, in immediately available funds, to __________________
for the account of





___________________________________________________________________________________________________________________


___________________________________________________________________________________________________________________.


 


Distributions
made by check (such check to be made payable to ____________________ ) and all applicable statements and notices
should be mailed to  


___________________________________________________________________________________________________________________


___________________________________________________________________________________________________________________.


 


This
information is provided by _____________, the assignee named above, or _________________, as its agent.


 


 


 


 


 


 


 


 


 






    	43



    	 



    

 


SCHEDULE I


TO PARTICIPATION CERTIFICATE


 


 


 


The Mortgage Loans as listed
on the Confirmations, as delivered from time to time.


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 






    	44



    	 



    

 


EXHIBIT C


 


(Form of
Assignment)


 


PennyMac
Loan Services, LLC (the “Transferor”), hereby assigns, conveys and otherwise transfers to PennyMac Holdings,
LLC (the “Transferee”) all of the Transferor’s right, title and interest in, to and under the [Primary][Secondary]
Portfolio Excess Spread for the residential mortgage loans set forth in Annex A attached hereto which shall be deemed to be a
supplement to the Participation Certificate issued pursuant to the Participation Agreement (as defined below). Capitalized terms
used and not defined in this instrument have the meanings assigned to them in the Amended and Restated Master Spread Acquisition
and MSR Servicing Agreement dated as of April 30, 2015, between the Transferor and the Transferee, as supplemented and amended
by the Confirmation dated _____________ , between such parties (the “Participation Agreement”).


 


If
the conveyance of such [Primary][Secondary] Portfolio Excess Spread is characterized by a court or governmental authority as security
for a loan rather than an absolute transfer or sale, the Transferor will be deemed to have granted to the Transferee, and the Transferor
hereby grants to the Transferee, a security interest in all of its right, title and interest in, to and under whether now existing
or in the future arising or acquired, all Primary Portfolio Collections, Secondary Portfolio Collections, the Primary Portfolio
Spread Custodial Account, and the Secondary Portfolio Spread Custodial Account and all proceeds thereof as security for a loan
in an amount equal to the value of such [Primary][Secondary] Excess Spread.


 


PENNYMAC LOAN SERVICES, LLC


(Transferor)


 


 


By: _________________________


Name: _______________________


Title: ________________________


 






    	45



    	 



    

 


EXHIBIT D


 


(Representations and Warranties
of the Seller)


 


(a) Due
Organization and Good Standing. The Seller is duly organized, validly existing and in good standing as a limited liability
company under the laws of the State of Delaware and has the power and authority to own its assets and to transact the business
in which it is currently engaged.


 


(b) No
Violation of Organizational Documents or Agreements. The execution and delivery of this Agreement by the Seller, and the performance
and compliance with the terms of this Agreement by the Seller, will not violate the Seller’s organizational documents or
constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in
the breach of, any material agreement or other instrument to which the Seller is a party or which is applicable to it or any of
its assets.


 


(c) Full
Power and Authority. The Seller has the full power and authority to enter into and consummate all transactions contemplated
by this Agreement, has duly authorized the execution, delivery and performance of this Agreement, and has duly executed and delivered
this Agreement.


 


(d) Binding
Obligation. This Agreement, assuming due authorization, execution and delivery by the other parties hereto, constitutes a valid,
legal and binding obligation of the Seller, enforceable against the Seller in accordance with the terms hereof, subject to (A)
applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights
generally, and (B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity
or at law.


 


(e) No
Violation of Law, Regulation or Order. The Seller is not in violation of, and its execution and delivery of this Agreement
and its performance and compliance with the terms of this Agreement will not constitute a violation of, any law, any order or decree
of any court or arbiter, or, to the Seller’s knowledge, any order, regulation or demand of any federal, state or local governmental
or regulatory authority, which violation, in the Seller’s good faith and reasonable judgment, is likely to affect materially
and adversely either the ability of the Seller to perform its obligations under this Agreement or the financial condition of the
Seller.


 


(f) No
Material Litigation. No litigation is pending or, to the best of the Seller’s knowledge, threatened against the Seller
that, if determined adversely to the Seller, would prohibit the Seller from entering into this Agreement or that, in the Seller’s
good faith and reasonable judgment, is likely to materially and adversely affect either the ability of the Seller to perform its
obligations under this Agreement or the financial condition of the Seller.


 


(g) No
Consent Required. Any consent, approval, authorization or order of any court or governmental agency or body
required under federal or state law for the execution, delivery and performance by the Seller of or compliance by the Seller
with this Agreement or the consummation of the transactions contemplated by this Agreement has been obtained and is effective
except where the lack of consent, approval, authorization or order would not have a material adverse effect on the
performance by the Seller under this Agreement.


 






    	46



    	 



    

 


EXHIBIT E


 


(Representations and Warranties
of the Purchaser)


 


(a) Due
Organization and Good Standing. The Purchaser is duly organized, validly existing and in good standing under the laws of the
state of its organization and has the power and authority to own its assets and to transact the business in which it is currently
engaged.


 


(b) No
Violation of Organizational Documents or Agreements. The execution and delivery of this Agreement by the Purchaser, and the
performance and compliance with the terms of this Agreement by the Purchaser, will not violate the Purchaser’s organizational
documents or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material agreement or other instrument to which the Purchaser is a party or which is applicable
to it or any of its assets.


 


(c) Full
Power and Authority. The Purchaser has the full power and authority to enter into and consummate all transactions contemplated
by this Agreement, has duly authorized the execution, delivery and performance of this Agreement, and has duly executed and delivered
this Agreement.


 


(d) Binding
Obligation. This Agreement, assuming due authorization, execution and delivery by the other parties hereto, constitutes a valid,
legal and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with the terms hereof, subject to
(A) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’
rights generally, and (B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in
equity or at law.


 


(e) No
Violation of Law, Regulation or Order. The Purchaser is not in violation of, and its execution and delivery of this Agreement
and its performance and compliance with the terms of this Agreement will not constitute a violation of, any law, any order or decree
of any court or arbiter, or, to the Purchaser’s knowledge, any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the Purchaser’s good faith and reasonable judgment, is likely to
affect materially and adversely either the ability of the Purchaser to perform its obligations under this Agreement or the financial
condition of the Purchaser.


 


(f) No
Material Litigation. No litigation is pending or, to the best of the Purchaser’s knowledge, threatened against the Purchaser
that, if determined adversely to the Purchaser, would prohibit the Purchaser from entering into this Agreement or that, in the
Purchaser’s good faith and reasonable judgment, is likely to materially and adversely affect either the ability of the Purchaser
to perform its obligations under this Agreement or the financial condition of the Purchaser.


 


(g)
No Consent Required. Any consent, approval, authorization or order of any court or governmental agency or body required
under federal or state law for the execution, delivery and performance by the Purchaser of or compliance by the Purchaser with
this Agreement or the consummation of the transactions contemplated by this Agreement has been obtained and is effective except
where the lack of consent, approval, authorization or order would not have a material adverse effect on the performance by the
Purchaser under this Agreement.


 






    	47