Document:

Exhibit 10.3

 

Execution Version 

 

SECOND AMENDED AND RESTATED

MORTGAGE BANKING SERVICES AGREEMENT

 

This Second Amended and
Restated Mortgage Banking Services Agreement (the “Agreement”) is dated as of June 30, 2020, by and between
PennyMac Loan Services, LLC, a Delaware limited liability company, for and on behalf of itself and its Affiliates (collectively,
the “Service Provider”), and PennyMac Corp., a Delaware corporation, for and on behalf of itself and its Affiliates
(collectively, the “Company”), and is effective as of July 1, 2020.

 

RECITALS

 

WHEREAS, the Company
engages in the business of purchasing conventional, government and jumbo residential mortgage loans from originators under the
Correspondent Lending Program (as hereafter defined);

 

WHEREAS, the Service
Provider provides mortgage banking services relating to the acquisition, financing and disposition of residential mortgage loans;

 

WHEREAS, the Company
and the Service Provider desire to set forth the terms of such services and the compensation to which the Service Provider shall
be entitled for performing such services;

 

WHEREAS, the Company
and the Service Provider previously entered into that certain Amended and Restated Mortgage Banking and Warehouse Services Agreement,
dated as of September 12, 2016, as amended by Amendment No. 1 thereto dated as of May 25, 2017, Amendment No. 2 thereto dated as
of October 31, 2017, and Amendment No. 3 thereto dated as of December 1, 2017 (the “Original Agreement”); and

 

WHEREAS, the Company
and the Service Provider desire to amend and restate the Original Agreement.

 

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:

 

ARTICLE
1

DEFINITIONS

 

Section 1.01       
Definitions. For purposes of this Agreement, the following capitalized terms, unless the context otherwise requires,
shall have the respective meanings set forth below:

 

“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
Company shall include only PennyMac Mortgage Investment Trust and its wholly-owned subsidiaries, and Affiliates of the
Service Provider shall include only PennyMac Financial Services, Inc., Private National Mortgage Acceptance Company, LLC
(“PNMAC”) and PNMAC’s wholly-owned subsidiaries.

 

    

     

    

 

“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 California or New York are authorized or obligated by law or executive order to be closed.

 

“Correspondent”
means a lender that originates conventional, government and/or jumbo residential mortgage loans under the Correspondent Lending
Program.

 

“Correspondent
Lending Program” means that certain correspondent lending program established by the Service Provider for the Company
and its Affiliates and pursuant to which the Company acquires Mortgage Loans that satisfy the terms of the related loan purchase
agreement, including the requirements set forth in the applicable Guide(s), and any additional terms or conditions identified in
acquisition policies and procedures adopted by the Service Provider from time to time on the Company’s behalf.

 

“Customer
Information” means any personally identifiable information or records in any form (written, electronic, or otherwise)
relating to a mortgagor, including, but not limited to, a mortgagor’s name, address, telephone number, loan number, loan
payment history, delinquency status, insurance carrier or payment information, tax amount or payment information; the fact that
the mortgagor has a relationship with the lender; and any other mortgagor financial information.

 

“Dwell Time”
means, for the purposes of the Purchase Price, the number of days a Mortgage Loan is held by the Company prior to its purchase
by the Service Provider, including the date on which the Company purchases the Mortgage Loan from a Correspondent but excluding
the Purchase Date.

 

“Early Purchase
Program” means a purchase program offered by the Company to certain of its Correspondents that provides for the early
purchase and sale of Mortgage Loans by a Correspondent to the Company. Such purchase and sale is subject to the Company’s
holdback of a percentage of the related purchase price while the Company, through the Service Provider, completes its due diligence
and ensures that such Mortgage Loans meet the eligibility requirements of the Correspondent Lending Program.

 

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

 

“Fannie Mae Guide” means,
collectively, the Fannie Mae Selling Guide and Servicing Guide, as such Guides 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 and either delivered directly into a Fannie Mae security or otherwise sold directly to Fannie Mae through its cash window.

 

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“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 and either delivered directly into a Freddie Mac security or otherwise sold directly to Freddie Mac through its cash
window.

 

“Fulfillment
Fees” means the fees set forth on Exhibit A that are payable by the Company to the Service Provider in partial
consideration for the services provided by the Service Provider.

 

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

 

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

 

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

 

“Guide”
means the Fannie Mae Guide, the Freddie Mac Guide, the Ginnie Mae Guide or the PennyMac Guide, as applicable.

 

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

 

“Loan Commitment”
means a loan commitment or confirmation issued by the Company to a Correspondent that evidences the intent of the Company to purchase,
and the Correspondent to sell, a Mortgage Loan.

 

“Loan Commitment
Price” means the percentage of Par at which the Company has agreed to purchase, and a Correspondent has agreed to sell,
the Mortgage Loan relating to a Loan Commitment.

 

“LTV”
or “Loan-to-Value Ratio” means, as of any date of determination, the fraction, expressed as a percentage, the
numerator of which is the principal balance of the related Mortgage Loan at such date and the denominator of which is the lesser
of (a) the appraised value of the underlying property at the origination of such Mortgage Loan, and (b) if the underlying property
was purchased within twelve (12) months of the origination of the Mortgage Loan, the purchase price of such property.

 

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

 

“MERS Identification
Number” means the mortgage identification number for any Mortgage Loan registered with MERS on the MERS® System.

 

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

 

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

 

“Mortgage
File” means, with respect to a Mortgage Loan, the documents and instruments relating to such Mortgage Loan that are required
to be delivered under the terms of the PennyMac Guide.

 

“Mortgage
Loan” means a one-to-four family residential loan that is secured by a mortgage, deed of trust or other similar security
instrument and originated by a Correspondent. A Mortgage Loan includes the Mortgage Loan Documents, the Mortgage File, the monthly
payments, any principal payments or prepayments, any related escrow accounts, the mortgage servicing rights and all other rights,
benefits, proceeds and obligations arising from or in connection with such Mortgage Loan.

 

“Mortgage
Loan Documents” means, with respect to a mortgage loan, the mortgage, deed of trust or other similar security instrument,
the promissory note, any assignments and an electronic record or copy of the mortgage loan application.

 

“Par”
means the principal balance of a Mortgage Loan.

 

“PennyMac
Guide” means the PennyMac Seller’s Guide, as amended and supplemented from time to time.

 

“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.

 

“Purchase
Date” means the date on which the Service Provider purchases a Mortgage Loan from the Company.

 

“Purchase
Price” means, with respect to each Mortgage Loan, a dollar amount equal to the sum of (a) Par multiplied by the sum of
(i) the Loan Commitment Price and (ii) the applicable Sourcing Fee, plus (b) accrued interest on Par from and including the date
on which the Company purchases the Mortgage Loan from a Correspondent to but excluding the Purchase Date, less (c) any loan administrative
fee paid by the Correspondent to the Company in connection with its purchase of such Mortgage Loan.

 

“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.

 

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“Sourcing
Fee” means a percentage of Par equal to one (1) basis point, or .01%; provided, however, that such Sourcing Fee shall
be increased to two basis points, or .02%, during any fiscal quarter in which the average Dwell Time during the prior fiscal quarter
was greater than three (3) calendar days.

 

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 United States 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.

 

ARTICLE
2

REPRESENTATIONS AND WARRANTIES

 

Section 2.01       
Representations, Warranties and Agreements of the Service Provider. The Service Provider hereby makes to the Company,
as of the date hereof and as of each Purchase Date, the representations and warranties set forth on Exhibit B.

 

Section 2.02       
Representations, Warranties and Agreements of the Company. The Company hereby makes to the Service Provider, as of
the date hereof and as of each Purchase Date, the representations and warranties set forth on Exhibit C.

 

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ARTICLE
3

 

TERM, ACQUISITIONS AND SERVICES

 

Section 3.01       
Term of Agreement.

 

(a)              
This Agreement shall have an initial term of five years from the date hereof (the “Initial Term”) unless
earlier terminated in accordance with this Section or Section 5.01. After the Initial Term, this Agreement shall be deemed
renewed automatically every 18 months for an additional 18 month period (an “Automatic Renewal Term”) unless
the Company or the Service Provider terminates this Agreement upon the expiration of the Initial Term or any Automatic Renewal
Term and upon at least 180 days’ prior written notice to the Company or the Service Provider, as applicable. Notwithstanding
the foregoing, if (i) the Second Amended and Restated MSR Recapture Agreement, between the Company and the Service Provider, dated
as of June 30, 2020 (the “MSR Recapture Agreement”) is terminated by the Company without cause as provided in
such agreement, (ii) the Fourth Amended and Restated Flow Servicing Agreement, between PennyMac Operating Partnership, L.P. and
the Service Provider, dated as of June 30, 2020 (the “Servicing Agreement”), is terminated by PennyMac Operating
Partnership, L.P. without cause as provided in such agreement or (iii) if the Third Amended and Restated Management Agreement,
between PennyMac Mortgage Investment Trust, PennyMac Operating Partnership, L.P. and PNMAC Capital Management, LLC, dated as of
June 30, 2020 (the “Management Agreement”), is terminated by PennyMac Mortgage Investment Trust without cause
as provided in such agreement, the Service Provider shall have the right to terminate this Agreement without cause upon notice
to the Company. In addition, if (i) either of the MSR Recapture Agreement or the Servicing Agreement is terminated by the Service
Provider without cause as provided in each such agreement or (ii) the Management Agreement is terminated by PNMAC Capital Management,
LLC without cause as provided in such agreement, the Company shall have the right to terminate this Agreement without cause upon
notice to the Service Provider.

 

(b)              
In the case of a non-renewal or termination of this Agreement by the Company for any reason, (i) the Company may require
that the Service Provider continue to provide correspondent lending services for up to 6 months following the date of expiration
or termination of this Agreement, and under such circumstances the then current fee structure and exclusivity obligations applicable
to such services shall remain in effect, and (ii) the Company shall not, and shall not encourage any Affiliate or non-affiliated
third party to, solicit for employment or retain in any capacity key employees of the Service Provider or its Affiliates (including
any person who served as a key employee of the Service Provider or its Affiliates during the one year period prior to such notice),
following notice of termination or non-renewal and for one year after expiration or termination of this Agreement, provided
that the Company and its representatives may engage in general solicitations for employees (including through any recruiting firm
that has not been directed to target employees of the Service Provider or its Affiliates) and employ, and/or encourage others to
employ, any person who contacts the Company on his or her own initiative, without any solicitation by the Company, or as a result
of such general advertisements for employment.

 

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(c)               In
the case of a non-renewal or termination of this Agreement by the Service Provider (other than pursuant to the final sentence
of Section 5.01 hereof), (i) the Company may require that the Service Provider continue to provide correspondent lending
services for up to 12 months following the date of expiration or termination of this Agreement, and under such circumstances
the then current fee structure and exclusivity obligations applicable to such services shall remain in effect, and (ii) the
Company shall not, and shall not encourage any Affiliate or non-affiliated third party to, solicit for employment or retain
in any capacity key employees of the Service Provider or its Affiliates (including any person who served as a key employee of
the Service Provider or its Affiliates during the one year period prior to such notice), following notice of termination or
non-renewal and for one year after expiration or termination of this Agreement, provided that the Company and its
representatives may engage in general solicitations for employees (including through any recruiting firm that has not been
directed to target employees of the Service Provider or its Affiliates) and employ, and/or encourage others to employ, any
person who contacts the Company on his or her own initiative, without any solicitation by the Company, or as a result of such
general advertisements for employment.

 

Section 3.02       
Exclusivity in Favor of Company. During the term of this Agreement, as between the Company and the Service Provider,
(i) the Service Provider shall perform the services identified in Section 3.03 and Section 3.04 exclusively
for the benefit of the Company and (ii) the Service Provider and its Affiliates shall be prohibited from providing such services
for any other third party; provided, however, if the Company is unable to purchase or finance Mortgage Loans as contemplated
hereunder for any reason, including, without limitation, a lack of capacity, an inability to comply with applicable law or an inability
to satisfy any income or asset tests applicable to real estate investment trusts under the Internal Revenue Code of 1986, as amended
from time to time, then such exclusivity and prohibition shall not apply and the Service Provider shall either purchase such Mortgage
Loan from the Company for a cash purchase price equal to the Purchase Price, and on an “as is” basis and without recourse
of any kind, or use commercially reasonable efforts to facilitate the sale of such Mortgage Loan on market terms and conditions
as determined by the Service Provider in its sole discretion exercised in good faith.

 

Section 3.03       
Mortgage Banking Services. During the term of this Agreement, the Service Provider shall provide the mortgage banking
services set forth below:

 

(a)              
The Service Provider shall provide fulfillment services in connection with Mortgage Loans to be purchased or acquired by
the Company under the Correspondent Lending Program, as follows:

 

(i)              
reviewing the Mortgage File to determine whether it contains the required Mortgage Loan Documents and contacting Correspondents
to obtain missing documentation or the correction of inaccurate documentation;

 

(ii)             
reviewing the Mortgage File and Mortgage Loan Documents to confirm generally that such Mortgage Loans are being originated
and delivered in accordance with the applicable Guide;

 

(iii)            
reviewing such Mortgage Loan and assessing its marketability for sale and/or securitization into the secondary mortgage
market;

 

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(iv)            
 retrieving data from the Mortgage File that is required in order for such Mortgage Loan to be properly serviced or as may
be necessary or advisable in connection with a sale, pledge or repurchase transaction;

 

(v)             
confirming that the Mortgage Loan is registered with the MERS® System and has a MERS Identification Number;

 

(vi)            
calculating the final purchase price for such Mortgage Loan based on its review of the Mortgage Loan Documents and then
requesting funds and directing payment to the appropriate party; and

 

(vii)           
providing such other services as may be reasonably requested by the Company or otherwise required in connection with the
processing of such Mortgage Loan from time to time.

 

(b)              
From time to time, the Service Provider shall provide general services as reasonably required by the Company, as follows:

 

(i)               
re-reviewing selected Mortgage Loans for consistency with the applicable Guide;

 

(ii)              
reviewing underwriting, fulfillment, compliance and servicing activities for compliance with the applicable Guide;

 

(iii)            
coordinating investor, capital provider and regulatory audit activities;

 

(iv)            
negotiating with Fannie Mae and Freddie Mac with respect to fees and securities stipulations;

 

(v)             
reviewing correspondent lenders or prospective correspondent lenders for consistency with the applicable Guide;

 

(vi)            
reviewing and analyzing financial statements for each correspondent lender and prepayment and credit performance statistics
relating to the Mortgage Loans sold by such correspondent lender;

 

(vii)          
negotiating loan purchase agreements, including any amendments or extensions thereto, and any applicable Early Purchase
Program documentation between the Company and the Correspondents, administering such agreements, and monitoring compliance therewith;

 

(viii)          
negotiating and establishing repurchase facilities or other warehouse lines of credit to be provided by third parties in
favor of the Company and its affiliates;

 

(ix)            
determining the repurchase facilities or other warehouse lines of credit to be drawn or used by the Company and its affiliates
in connection with purchases or other acquisitions of Mortgage Loans and monitoring the duration of such draws or usage;

 

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(x)            
performing quarterly certification and annual recertification reviews in light of the requirements of the applicable Guide;

 

(xi)           
developing and maintaining models for pricing loans and mortgage servicing rights;

 

(xii)          
generating daily rate sheets for correspondent lenders;

 

(xiii)         
reviewing daily interest rate lock commitments;

 

(xiv)         
monitoring market pricing trends;

 

(xv)          
developing and maintaining models for the management of interest rate and other risks;

 

(xvi)         
developing and maintaining hedging strategies and models for interest rate and risk management;

 

(xvii)        
establish hedging instruments and executing hedge transactions;

 

(xviii)       
developing and maintaining execution models;

 

(xix)          
forming pools to back securities and entering into pooling transactions;

 

(xx)          
using reasonable efforts to resolve issues related to delivery of Mortgage Loan Documents to or at direction of Fannie Mae
and Freddie Mac;

 

(xxi)         
monitoring delivery of post-closing documentation, such as final title policies and recorded mortgages;

 

(xxii)        
reviewing post-closing adjustments to pricing and confirming accurate disbursements to Correspondents;

 

(xxiii)       
obtaining and maintaining information technology systems, including those for secondary marketing, appraisals, data warehouse
and accounts receivable;

 

(xxiv)        complying
with reporting requirements imposed on the Company under applicable Guides and agreements (insofar as neither Service Provider
nor any other Person is required to perform such reporting on behalf of the Company under another agreement);

 

(xxv)         causing
the appointment of the Service Provider as servicer to service such Mortgage Loan under and in accordance with the Servicing Agreement,
or causing the appointment of a sub-servicer to the extent otherwise required;

 

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(xxvi)       
purchasing from the Company at the Purchase Price, on an “as is” basis and without recourse of any kind, any
Ginnie Mae Mortgage Loan purchased by the Company from a Correspondent pursuant to the related Loan Commitment; and

 

(xxvii)       other similar mortgage banking-related activities.

 

Section 3.04       
Ginnie Mae Mortgage Loans; Repurchases. In connection with any Ginnie Mae Mortgage Loan purchased from the Company
by the Service Provider and in respect of which the Company has a claim for repurchase, indemnity or otherwise as against a Correspondent,
the Service Provider shall be entitled to pursue any such claim through or in the name of the Company, and the Company agrees to
facilitate any such claim. Any action taken by the Service Provider under this Section 3.04 shall be at the Service Provider’s
sole cost and expense, and any costs, expenses or losses of any kind incurred by the Company shall be reimbursed in full by the
Service Provider.

 

Section 3.05       
Reserved.

 

Section 3.06       
Compensation; Expenses.

 

(a)              
In consideration for the services provided to the Company by the Service Provider under this Agreement, the Company shall
pay to the Service Provider the applicable Fulfillment Fees and Early Purchase Program Fees set forth on Exhibit A.

 

(b)              
The Service Provider shall be required to pay all expenses incurred by it in connection with the services it provides hereunder
and shall not be entitled to reimbursement therefor except as otherwise provided in this Agreement.

 

(c)              
Notwithstanding any provision of this Agreement to the contrary, if it becomes reasonably necessary or advisable for the
Service Provider to engage in additional services in connection with the occurrence of any breach by a Correspondent of any terms
or conditions to which such Correspondent is subject under its agreement with the Company under the Correspondent Lending Program,
or initiate and pursue any legal proceeding against a Correspondent or guarantor thereof, or appear on behalf of the Company in
any bankruptcy, insolvency or other similar proceeding involving a Correspondent or any guarantor thereof or otherwise engage in
post-breach or post-default resolution activities, then the Service Provider and the Company shall negotiate in good faith for
additional compensation and reimbursement of expenses to be paid to the Service Provider for the performance of such additional
services.

 

(d)               Notwithstanding
anything to the contrary contained herein (other than subsection (c) above), upon the written request (a “Fee
Negotiation Request”) of the Company or the Service Provider following a determination by the Company or the
Service Provider that the rates of compensation payable to the Service Provider hereunder differ materially from market rates
of compensation for services comparable to those provided hereunder, which request includes a proposal for revised rates of
compensation hereunder, the parties hereto shall negotiate in good faith to amend the provisions of this Agreement relating
to the compensation of the Service Provider in order to cause such compensation to be materially consistent with market rates
of compensation for services comparable to those provided hereunder (a “Fee Amendment”); provided, however,
that no such request shall be made until the second anniversary of the effective date of this Agreement, after which time
each party may make such request (i) once with respect to fees to be paid during the remainder of the Initial Term,
which request shall be made prior to the expiration of the Initial Term, and (ii) once with respect to fees to be paid during
any Automatic Renewal Term, which request shall be made at least 210 days prior to the start of such Automatic Renewal Term.
If the parties are unable to reach agreement on the terms of a Fee Amendment within thirty (30) days of the date of delivery
of the relevant Fee Negotiation Request, then the terms of such Fee Amendment shall be determined by final and binding
arbitration in accordance with Section 3.06(e).

 

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(e)              
All disputes, differences and controversies of the Company or the Service Provider relating to a Fee Amendment (individually,
a “Dispute” and, collectively, “Disputes”) shall be resolved by final and binding arbitration
administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules, subject
to the following provisions:

 

(i)                
Following the delivery of a written demand for arbitration by either the Company or the Service Provider, each party shall
choose one (1) arbitrator within ten (10) Business Days after the date of such written demand and the two chosen arbitrators shall
mutually, within ten (10) Business Days after selection select a third (3rd) arbitrator (each, an “Arbitrator”
and together, the “Arbitrators”), each of whom shall be a retired judge selected from a roster of arbitrators
provided by the AAA. If the third (3rd) Arbitrator is not selected within fifteen (15) Business Days after delivery of the written
demand for arbitration (or such other time period as the Company and the Service Provider may agree), the Company and the Service
Provider shall promptly request that the commercial panel of the AAA select an independent Arbitrator meeting such criteria.

 

(ii)             
The rules of arbitration shall be the Commercial Rules of the American Arbitration Association; provided, however,
that notwithstanding any provisions of the Commercial Arbitration Rules to the contrary, unless otherwise mutually agreed to by
the Company and the Service Provider, the sole discovery available to each party shall be its right to conduct up to two (2) non-expert
depositions of no more than three (3) hours of testimony each.

 

(iii)           
The Arbitrators shall render a decision by majority decision within three (3) months after the date of appointment, unless
the Company and the Service Provider agree to extend such time. The decision shall be final and binding upon the Company and the
Service Provider; provided, however, that such decision shall not restrict either the Company or the Service Provider
from terminating this Agreement pursuant to the terms hereof.

 

(iv)            
Each party shall pay its own expenses in connection with the resolution of Disputes, including attorneys’ fees, unless
determined otherwise by the Arbitrator.

 

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(v)              
 The Company and the Service Provider agree that the existence, conduct and content of any arbitration pursuant to this
Section 3.06(e) shall be kept confidential and neither the Company nor the Service Provider shall disclose to any Person any information
about such arbitration, except in connection with such arbitration or as may be required by law or by any regulatory authority
(or any exchange on which such party’s securities are listed) or for financial reporting purposes in such party’s financial
statements.

 

Section 3.07       
Net Funding. The Company and the Service Provider acknowledge and agree that the Service Provider may provide third
party services including, without limitation, underwriting, administrative and other mortgage-related services to Correspondents
from time to time under bilateral or tri-party agreements by and between the Service Provider and the Correspondent or by and among
the Service Provider, the Correspondent and the Company, respectively. In connection with the Service Provider’s provision
of such services, and for administrative purposes only, the Service Provider may cause the Company to “net fund” its
purchase of Mortgage Loans from a Correspondent by reducing any Loan Commitment Price(s) paid by the Company to the Correspondent
by the amount of fees owed to the Service Provider by such Correspondent; provided, however, that any such “net funding”
shall comply with the terms of any applicable bailee letter governing the terms of the related purchase. The Service Provider shall
then be entitled to collect the amount of such fees relating to such reduction directly from the Company. Any such “net funding”
shall be at no cost to the Company and, in effect, a pass through of the Service Provider’s fees through the reduction in
the Loan Commitment Price(s) on an individual or aggregate basis.

 

Section 3.08       
Reporting. On or before the tenth (10th) Business Day of each month, the Service Provider shall provide the Company
with a report identifying all Mortgage Loans purchased by the Company from a Correspondent during the prior month, the aggregate
unpaid principal balance of such Mortgage Loans, the aggregate Fulfillment Fees paid by the Company to the Service Provider during
such month and, as applicable, the aggregate Purchase Prices paid by the Service Provider to the Company during such month. The
Service Provider, upon the Company’s request, shall also provide the Company with reports regarding the financial results
of the Service Provider and/or its affiliates and any such other matters as the Company shall reasonably request, but in no case
more frequently than quarterly.

 

ARTICLE
4

LIABILITIES OF SERVICE PROVIDER AND COMPANY

 

Section 4.01       
Liability of the Company and the Service Provider. The Company and the Service Provider shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively imposed upon and undertaken by the Company and Service
Provider herein.

 

Section 4.02       
Merger or Consolidation of the Service Provider.

 

(a)               The
Service Provider 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.

 

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(b)              
Any Person into which the Service Provider may be merged, converted, or consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Service Provider shall be a party, or any Person succeeding to the business of the Service
Provider, shall be the successor of the Service Provider 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 no Person shall so become the successor of the Service Provider hereunder unless such Person satisfies all legal requirements,
including, without limitation, with respect to licensing, that are necessary to be satisfied in order for such Person to perform
the Service Provider’s duties hereunder.

 

Section 4.03       
Service Provider Not to Resign. The Company has entered into this Agreement with the Service Provider in reliance
upon the independent status of the Service Provider, and the representations as to the adequacy of its servicing facilities, plant,
personnel, records and procedures, its integrity, reputation and financial standing, and the continuance thereof. Therefore, the
Service Provider shall not assign this Agreement or the servicing hereunder or delegate its rights or duties hereunder or any portion
hereof or sell or otherwise dispose of all or substantially all of its property or assets in the absence of prior written consent
of the Company, which consent shall be granted or withheld in the reasonable discretion of the Company. The Service Provider shall
not resign from the obligations and duties hereby imposed on it except by mutual consent of the Service Provider and the Company
or upon the determination that its duties hereunder are no longer permissible under applicable law and such incapacity cannot be
cured by the Service Provider. Any such determination permitting the resignation of the Service Provider shall be evidenced by
an Opinion of Counsel to such effect delivered to the Company, which Opinion of Counsel shall be in form and substance acceptable
to the Company. No such resignation shall become effective until the Company or another successor designated by the Company shall
have assumed the Service Provider’s responsibilities and obligations hereunder.

 

Section 4.04       
No Duty to Supervise. The parties hereto acknowledge that the Company is not obligated to supervise the performance
of the Service Provider under this Agreement or any subcontractor for Service Provider under any subcontracting agreement.

 

Section 4.05       
Indemnification.

 

(a)               The
Service Provider shall indemnify the Company, its directors, officers, employees and agents and hold them harmless against
any and all claims, losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain by reason of the Service Provider’s (i) willful
misfeasance, bad faith or gross negligence in the performance of its duties under this Agreement, (ii) reckless disregard of
its obligations or duties under this Agreement, or (iii) breach of its representations or warranties under this Agreement, or
(iv) gross negligence in the performance of its duties under any agreement with a Correspondent pursuant to which it performs
underwriting services relating to a Mortgage Loan purchased by the Company and where such Mortgage Loan is subject to a
repurchase or indemnity claim from one of the Company’s investors as a result of such gross negligence, or (v) exercise
of its rights under Section 3.04 or use of the “net funding” mechanism provided under Section 3.07
of this Agreement, in either case without regard to any action, inaction or fault of any kind on the part of the Service
Provider or the Company. For the purposes of this Section 4.05, the term “gross negligence” shall include
any ordinary negligence to the extent systemic in nature or otherwise occurring on a regular basis.

 

    13

     

    

 

(b)              
The Company shall indemnify the Service Provider, its directors, officers, employees and agents and hold them harmless against
any and all claims, losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments, and any
other costs, fees and expenses that any of them may sustain by reason of the Company’s (i) willful misfeasance, bad faith
or gross negligence in the performance of its duties under this Agreement, (ii) reckless disregard of its obligations or duties
under this Agreement, or (iii) breach of its representations or warranties under this Agreement.

 

ARTICLE
5

TERMINATION

 

Section 5.01        Termination.
Except as otherwise specifically set forth herein (including in Section 3.01 above), the obligations and
responsibilities of the Service Provider shall terminate upon the mutual consent of the Service Provider and the Company in
writing. In addition, the Company shall be entitled to terminate the Service Provider hereunder upon any of the following
events: (i) the failure by the Service Provider duly to observe or perform in any material respect any other covenant or
agreement on the part of the Service Provider set forth in this Agreement that continues unremedied for a period of thirty
(30) days after the date on which notice of such failure, requiring the same to be remedied, is given to the Service Provider
by the Company; provided, however, that, with respect to any such failure that is susceptible to cure but not curable
within such 30-day period, the Service Provider shall have an additional cure period of thirty (30) days to effect such cure
so long as the Service Provider has commenced to cure such failure within the initial 30-day period, the Service Provider is
diligently pursuing a full cure and the Service Provider has provided evidence of such curability and such diligent pursuit
that is reasonably satisfactory to the Company; (ii) any breach of any representation or warranty on the part of the Service
Provider set forth in this Agreement that continues unremedied for a period of thirty (30) days after the date on which
notice of such breach, requiring the same to be remedied, is given to the Service Provider by the Company; provided,
however, that, with respect to any such breach that is susceptible to cure but not curable within such 30-day period, the
Service Provider shall have an additional cure period of thirty (30) days to effect such cure so long as the Service Provider
has commenced to cure such failure within the initial 30-day period, the Service Provider is diligently pursuing a full cure
and the Service Provider has provided evidence of such curability and such diligent pursuit that is reasonably satisfactory
to the Company; (iii) a decree or order of a court or agency or supervisory authority having jurisdiction for the appointment
of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding up or liquidation of its affairs, shall have been entered against the
Service Provider and such decree or order shall have remained in force undischarged or unstayed for a period of 60 days; (iv)
the Service Provider shall consent to the appointment of a conservator or receiver or liquidator in any insolvency,
bankruptcy, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to the Service
Provider or of or relating to all or substantially all of its property; (v) the Service Provider shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its
obligations; or (vi) without the prior consent of the Company or as expressly permitted or required by the other provisions
of this Agreement, the Service Provider attempts to assign this Agreement or its right to compensation hereunder, or to
delegate its duties hereunder, in each case whether in whole or in part, or the Service Provider sells or otherwise disposes
of all or substantially all of its property or assets. Further, the Service Provider shall be entitled at any time during the
term of this Agreement, to terminate this Agreement upon at least 60 days’ prior written notice of termination from the
Service Provider to the Company, if the Company shall have defaulted in the performance of any material term of this
Agreement, and such default has continued uncured for a period of 30 days after the Company’s receipt of written notice
of such default from the Service Provider.

 

    14

     

    

 

Section 5.02       
Succession.

 

(a)              
Upon the appointment by the Company of a successor Service Provider following the Service Provider’s termination or
resignation, the Service Provider shall immediately deliver to such successor the funds in any account maintained by the Service
Provider and the related documents and statements held by it hereunder and the Service Provider shall account for all funds. The
Service Provider shall execute and deliver such instruments and do all such other things as may reasonably be required to more
fully and definitely vest and confirm in the successor all such rights, powers, duties, responsibilities, obligations and liabilities
of the Service Provider.

 

(b)              
No termination of this Agreement or resignation or termination of the Service Provider hereunder shall relieve the Service
Provider or the Company of the covenants, representations and warranties made herein or any liability that accrued or arose hereunder
prior to the effective date of termination or resignation.

 

ARTICLE
6

MISCELLANEOUS

 

Section 6.01       
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 Service Provider:

 

PennyMac Loan Services, LLC

Attn: Managing Director, Mortgage Fulfillment

3043 Townsgate Road

Westlake Village, CA 91361

 

    15

     

    

 

With a copy to:

 

PennyMac Loan Services, LLC

Attn: Chief Legal Officer

3043 Townsgate Road

Westlake Village, CA 91361

 

(ii)           
if to the Company:

 

PennyMac Corp.

Attn: Chief Legal Officer

3043 Townsgate Road

Westlake Village, CA 91361

 

With copies to:

 

PennyMac Operating Partnership, L.P.

Attn: Chief Legal Officer

3043 Townsgate Road

Westlake Village, CA 91361

 

and

 

Stoner Fox Law Group, LLP

Attn: John Stoner

120 Vantis, Suite 300

Aliso Viejo, California 92656

 

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

 

Section 6.02       
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.

 

Section 6.03       
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 6.04       
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.

 

    16

     

    

 

 

Section 6.05       
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 6.06       
Further Assurances. The Service Provider agrees to execute and deliver such instruments and take such further actions
as the Owner may, from time to time, reasonably request in order to effectuate the purposes and to carry out the terms of this
Agreement.

 

Section 6.07       
Governing Law. This Agreement shall be construed in accordance with the substantive laws of the State of New York
applicable to agreements made and to be performed entirely in such State, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. The parties hereto intend that the provisions of Section 5-1401 of
the New York General Obligations Law shall apply to this Agreement.

 

Section 6.08       
Relationship of Parties. Nothing herein contained shall be deemed or construed to create a partnership or joint venture
between the parties. The duties and responsibilities of the Service Provider shall be rendered by it as an independent contractor
and not as an agent of the Company. The Servicer 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 6.09       
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 6.10       
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 6.11       
Exhibits. The exhibits to this Agreement are hereby incorporated and made a part hereof and form integral parts of
this Agreement.

 

Section 6.12       
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 6.13       
Protection of Confidential Information. All Customer Information in the possession of the Service Provider other
than information independently obtained by the Service Provider is and shall remain confidential and proprietary information of
the Company. The Service Provider shall not disclose any Customer Information to any person or entity except for the purpose of
carrying out its obligations under this Agreement. The Service Provider represents and warrants that it has, and will continue
to have for so long as it retains Customer Information, adequate administrative, technical, and physical safeguards (a) to ensure
the security and confidentiality of customer records and information, (b) to protect against any anticipated threats or hazards
to the security or integrity of such records, and (c) to protect against unauthorized access to or use of such records or information
which could result in substantial harm or inconvenience to any customer.

 

    17

     

    

 

Section 6.14       
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 6.15       
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 IMITATION SHALL NOT BE APPLICABLE WITH RESPECT TO ANY THIRD PARTY CLAIM MADE AGAINST
A PARTY.

 

Section 6.16       
SUBMISSION TO JURISDICTION; WAIVERS.

 

EACH OF THE OWNER AND
THE SERVICER 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 AND FEDERAL COURTS 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.

 

    18

     

    

 

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

 

	 	PENNYMAC
    CORP.
	 	(Company)
	 	 
	 	By:	 /s/ Andrew S. Chang
	 	Name:  	 Andrew S. Chang
	 	Title: 	Senior
    Managing Director and Chief Financial Officer
	 	 
	 	PENNYMAC
    LOAN SERVICES, LLC
	 	(Service
    Provider)
	 	 
	 	By:	 /s/ Douglas E. Jones
	 	Name: 	Douglas E. Jones
	 	Title: 	President

 

     

     

    

 

EXHIBIT A

 

(Compensation)

 

Fulfillment Fees

 

The aggregate Fulfillment Fees for Mortgage
Loans during any fiscal quarter, commencing on and after July 1, 2020, shall not exceed:

 

(a) the product
of (i) the number of Mortgage Loans with respect to which the Company issues Loan Commitments during such quarter, (ii) a factor
of either .99 or .80 (representing the estimated pull through rate) depending on whether the Loan Commitments are subject to a
 “mandatory trade confirmation” or a “best efforts lock confirmation,” respectively, and (iii) (A) $585.00
for each pull-through adjusted Loan Commitment issued during such quarter up to and including a total of 16,500, and (B) $315.00
for each pull-through adjusted Loan Commitment issued during such quarter in excess of 16,500, the payment of which shall made
no later than the end of the calendar month following the calendar month of such Loan Commitments, plus

 

(b) (I) for the
first 16,500 Mortgage Loans that are purchased by the Company from an approved Correspondent during such quarter (the “Tier
1 Purchased Loans”), funding fees in an amount no greater than the product of (i) $355.00, and (ii) the number of such
Tier 1 Purchased Loans, plus (II) for all Mortgage Loans purchased in excess of 16,500 during such quarter (the “Tier
2 Purchased Loans”), funding fees in an amount no greater than the product of (i) $195.00, and (ii) the number of such
Tier 2 Purchased Loans, the payment of which shall be made no later than the end of the calendar month following the calendar month
in which such Purchased Loans were purchased by the Company; plus

 

(c) in the case
of all Mortgage Loans other than Fannie Mae Mortgage Loans and Freddie Mac Mortgage Loans that are purchased by the Company from
an approved Correspondent during such quarter, supplemental fees in an amount no greater than the product of (i) $750.00, and (ii)
the number of such Mortgage Loans sold and securitized, the payment of which shall be made no later than the end of the calendar
month following the calendar month in which such Mortgage Loan was sold or securitized.

 

To the extent any Loan Commitments
issued prior to July 1, 2020 result in the funding of Mortgage Loans on or after July 1, 2020, the aggregate Fulfillment Fees
for all such Mortgage Loans purchased from an approved Correspondent shall equal (a) no greater than the product of (i) 0.35%
and (ii) the aggregate initial unpaid principal balance (the “Initial UPB”) of all such Mortgage Loans purchased
in such month, the payment of which shall made no later than the end of the calendar month following the calendar month in
which such Mortgage Loan was purchased, plus (b) in the case of all Mortgage Loans other than Fannie Mae Mortgage Loans and
Freddie Mac Mortgage Loans, no greater than the product of (i) 0.50% and (ii) the aggregate Initial UPB of all such Mortgage
Loans sold and securitized in any month, the payment of which shall be made no later than the end of the calendar month
following the calendar month in which such Mortgage Loan was sold or securitized.

 

    B-1

     

    

 

No Fulfillment Fee shall be due or payable
to the Service Provider with respect to any Ginnie Mae Mortgage Loan or any Mortgage Loan acquired from the Servicer Provider.

 

For the purposes of this Exhibit A, “mandatory
trade confirmation” and “best efforts lock confirmation” shall have the meanings ascribed to them in the PennyMac
Guide.

 

Early Purchase Program Fees

 

With respect to each Early Purchase Program,
the Service Provider shall be entitled to fees that accrue (a) at a rate equal to $1,500 per annum, and (b) in the amount of $35
with respect to each Mortgage Loan purchased by the Company thereunder. The fee described in clause (a) shall accrue and be payable
monthly not later than the last Business Day of each month from and after the execution of the Early Purchase Program documentation.
The fee described in clause (b) shall accrue and be payable monthly not later than the fifth (5th) Business Day following
the month during which the related Mortgage Loan first becomes subject to a transaction thereunder.

 

    B-2

     

    

 

EXHIBIT B

 

(Representations and Warranties of the Service
Provider)

 

(a)              
Due Organization and Good Standing. The Service Provider 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, and the Service Provider is in material compliance with the laws of each
state or other jurisdiction in which any Mortgaged Property is located to the extent necessary to perform its obligations under
this Agreement.

 

(b)              
No Violation of Organizational Documents or Agreements. The execution and delivery of this Agreement by the Service
Provider, and the performance and compliance with the terms of this Agreement by the Service Provider, will not violate the Service
Provider’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 Service Provider
is a party or which is applicable to it or any of its assets.

 

(c)              
Full Power and Authority. The Service Provider 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 Service Provider, enforceable against the Service Provider 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 Service Provider 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 Service Provider’s knowledge, any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which violation, in the Service Provider’s good faith
and reasonable judgment, is likely to affect materially and adversely either the ability of the Service Provider to perform its
obligations under this Agreement or the financial condition of the Service Provider.

 

    B-3

     

    

 

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

 

(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 Service Provider of or compliance by the Service
Provider 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 Service Provider under this Agreement.

 

(h)              
Ordinary Course of Business. The consummation of the transactions contemplated by this Agreement are in the ordinary
course of business of the Service Provider.

 

    B-4

     

    

 

EXHIBIT C

 

(Representations and Warranties of the Company)

 

(a)              
Due Organization and Good Standing. The Company is duly organized, validly existing and in good standing as a corporation
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 Company,
and the performance and compliance with the terms of this Agreement by the Company, will not violate the Company’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 Company is a party or which is applicable to
it or any of its assets.

 

(c)              
Full Power and Authority. The Company 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 Company, enforceable against the Company 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 Company 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 Company’s knowledge, any order, regulation or demand of any federal,
state or local governmental or regulatory authority, which violation, in the Company’s good faith and reasonable judgment,
is likely to affect materially and adversely either the ability of the Company to perform its obligations under this Agreement
or the financial condition of the Company.

 

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

 

(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 Company of or compliance by the Company 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 Company
under this Agreement.

 

    C-1Exhibit 10.4

 

Execution Version

 

SECOND AMENDED AND RESTATED

MSR RECAPTURE AGREEMENT

 

This Second Amended and
Restated MSR Recapture Agreement (the “Agreement”) is dated as of June 30, 2020, by and between PennyMac Loan
Services, LLC, a Delaware limited liability company (the “Servicer”), and PennyMac Corp., a Delaware corporation
(the “MSR Owner”), and is effective as of July 1, 2020.

 

RECITALS

 

WHEREAS, the MSR Owner
engages in the business of purchasing conventional, government and jumbo residential mortgage loans from originators under the
correspondent lending program established by the MSR Owner and its affiliates and owning the related mortgage servicing rights;

 

WHEREAS, the MSR Owner
has caused or will cause the appointment of the Servicer as servicer to perform the servicing duties with respect to certain of
such mortgage loans pursuant to the Fourth Amended and Restated Flow Servicing Agreement (the “Servicing Agreement”),
dated as of June 30, 2020, between the Servicer, as servicer, and the MSR Owner, as owner;

 

WHEREAS, the Servicer
obtains a competitive benefit from so serving as the servicer of such mortgage loans;

 

WHEREAS, the MSR Owner
and the Servicer entered into the Amended and Restated MSR Recapture Agreement dated as of September 12, 2016 (the “Original
Agreement”) and Amendment No. 1 to MSR Recapture Agreement, dated as of December 1, 2017 (“Amendment No. 1,”
and the Original Agreement, as amended by Amendment No. 1, the “Existing MSR Recapture Agreement”), pursuant
to which the MSR Owner engaged the Servicer as a service provider to provide other services to the MSR Owner and its affiliates
in connection with the purchasing activities of MSR Owner; and

 

WHEREAS, the MSR Owner
and the Servicer have agreed to amend and restate the Existing MSR Recapture Agreement on the terms 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:

 

ARTICLE
1

 

DEFINITIONS

 

Section 1.01       
Definitions. For purposes of this Agreement, the following capitalized terms, unless the context otherwise requires,
shall have the respective meanings set forth below:

 

“AAA”
has the meaning set forth in Section 3.02(f).

 

     

     

    

 

“Acknowledgment
Letter” means that certain letter of even date herewith between the MSR Owner and the Servicer, to which letter a mortgage
loan schedule is attached.

 

“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 MSR Owner shall include only PennyMac Mortgage Investment Trust and
its wholly-owned subsidiaries, and Affiliates of the Servicer shall include only PennyMac Financial Services, Inc., Private National
Mortgage Acceptance Company, LLC and their wholly-owned subsidiaries.

 

“Arbitrator”
has the meaning set forth in Section 3.02(f).

 

“Correspondent”
means any lender that originates conventional, government and jumbo residential mortgage loans under the correspondent lending
program established by the MSR Owner and its Affiliates.

 

“Correspondent
Loan” means a newly originated Mortgage Loan acquired by the MSR Owner or one of its wholly-owned subsidiaries from a
Correspondent.

 

“Dispute”
has the meaning set forth in Section 3.02(f).

 

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

 

“Fee Amendment” has the
meaning set forth in Section 3.02(e).

 

“Fee Negotiation Request”
has the meaning set forth in Section 3.02(e).

 

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

 

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

 

“Mortgage
File” means, with respect to each Mortgage Loan, the documents and instruments relating to such Mortgage Loan and set
forth in an exhibit to the applicable custodial agreement.

 

    2 

     

    

 

“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, the mortgage servicing rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan.

 

“Mortgage
Loan Documents” means, with respect to a mortgage loan, the mortgage, deed of trust or other similar security instrument,
the promissory note, any assignments and an electronic record or copy of the mortgage loan application.

 

“Mortgage
Loan Identification Date” means, with respect to each calendar month in which the Servicer originates one or more New
Mortgage Loans, the 25th day of the immediately succeeding calendar month.

 

“New Mortgage
Loan” has the meaning set forth in Section 3.02(c).

 

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

 

“Portfolio”
means the entire group of Correspondent Loans for which the MSR Owner owns the Servicing Rights from time to time and the Servicer
is serving as the servicer or subservicer.

 

“Recapture
Payment” means, for each month, the sum of the following: (i) the product of (A) .040, and (B) the fair market value
of the Servicing Rights relating to New Mortgage Loans subject to the first 15% of Recapture Rate for such month, plus (ii) the
product of (A) .035, and (B) the fair market value of the Servicing Rights relating to New Mortgage Loans subject to the Recapture
Rate in excess of 15% and up to 30% for such month, plus (iii) the product of (A) .030, and (B) the fair market value of the Servicing
Rights relating to New Mortgage Loans subject to the Recapture Rate in excess of 30% for such month.

 

“Recapture
Rate” means, during each month, the ratio of (i) the aggregate unpaid principal balance of all New Mortgage Loans originated
in such month, to (ii) the aggregate unpaid principal balance of all Mortgage Loans from the Portfolio that were refinanced or
otherwise paid off in such month.

 

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

 

“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.

 

    3 

     

    

 

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.

 

ARTICLE
2

 

REPRESENTATIONS AND WARRANTIES

 

Section 2.01       
Representations, Warranties and Agreements of the Servicer. The Servicer hereby makes to the MSR Owner, as of the
date hereof and as of the date of each transfer hereunder, the representations and warranties set forth on Exhibit B.

 

Section 2.02      
Representations, Warranties and Agreements of the MSR Owner. The MSR Owner hereby makes to the Servicer, as of the
date hereof and as of the date of each transfer hereunder, the representations and warranties set forth on Exhibit C.

 

    4 

     

    

 

ARTICLE
3

 

TERM; MSR RECAPTURE

 

Section 3.01        Term
of Agreement; Rights to Terminate. This Agreement shall have an initial term of five years from the date hereof (the
 “Initial Term”). After the Initial Term, this Agreement shall be deemed renewed automatically every 18
months for an additional 18 month period (an “Automatic Renewal Term”) unless the MSR Owner or the
Servicer terminates this Agreement upon the expiration of the Initial Term or any Automatic Renewal Term and upon at least
180 days’ prior written notice to the MSR Owner or the Servicer, as applicable. Notwithstanding the foregoing, if (i)
the Amended and Restated Mortgage Banking Services Agreement, between the Servicer and the MSR Owner, dated as of June 30,
2020 (the “MBS Agreement”), is terminated by the MSR Owner without cause as provided in such agreement,
(ii) the Servicing Agreement is terminated by PennyMac Operating Partnership, L.P. without cause as provided in such
agreement or (iii) the Second Amended and Restated Management Agreement, among PennyMac Mortgage Investment Trust,
PennyMac Operating Partnership, L.P. and PNMAC Capital Management, LLC, dated as of June 30, 2020 (the “Management
Agreement”), is terminated by PennyMac Mortgage Investment Trust without cause as provided in such agreement, the
Servicer shall have the right to terminate this Agreement without cause upon notice to the MSR Owner. In addition, if (i)
either of the MBS Agreement or the Servicing Agreement is terminated by PennyMac Loan Services without cause as provided in
each such agreement or (ii) the Management Agreement is terminated by PNMAC Capital Management, LLC without cause as provided
in such agreement, the MSR Owner shall have the right to terminate this Agreement without cause upon notice to the Servicer.
Further, if PennyMac Operating Partnership, L.P. exercises its right to terminate the Servicing Agreement without cause under
Section 8.01(a)(iii) thereof with respect to one or more Mortgage Loans, then such loans shall be deemed to be removed from
the Portfolio upon such termination and this Agreement shall continue in effect with respect to the remaining loans in the
Portfolio until scheduled expiration or early termination with respect to such remaining loans pursuant to this Section 3.01.
Following any such termination of this Agreement, the Servicer shall not take any action with respect to the refinancing of
any loans in the Portfolio (or, if termination occurs with respect to some such loans and not others pursuant to this Section
3.01, the loans that are deemed to be removed from the Portfolio as described in the preceding sentence); provided, however,
that such restrictions shall not prohibit the Servicer from generalized advertising not targeted exclusively to the borrowers
under such mortgage loans, including on its website, monthly account statements, or VRU (voice response unit), mortgage leads
purchased from third parties, recorded communications, or otherwise engaging in a program directed to the general public at
large to encourage or recommend mortgage loan products and other products and services provided by the Servicer or its
affiliates, or from taking applications for refinance from such borrowers as a result thereof.

 

Section 3.02       
MSR Recapture.

 

(a)              
The Servicer acknowledges that the Mortgage Loans described in the Acknowledgment Letter constitute the initial Portfolio.

 

(b)              
On each date when the MSR Owner acquires the Servicing Rights with respect to any Correspondent Loan and appoints the Servicer
as servicer therefor under the Servicing Agreement, such Correspondent Loan shall be added to the Portfolio.

 

(c)               The
MSR Owner hereby waives any right it has to contractually prohibit the Servicer from soliciting the Mortgage Loans in the
Portfolio. In consideration for such waiver and for other value received, if, during any calendar month, the Servicer
or its Affiliates originate new residential mortgage loans the proceeds of which are used to refinance a Mortgage Loan in the
Portfolio (such new mortgage loan, a “New Mortgage Loan”), the Servicer shall wire
to the MSR Owner cash in an amount equal to the Recapture Payment. Such
Recapture Payment shall be made within five (5) calendar days of the Mortgage Loan Identification Date related to such
month. Further, the Servicer covenants and agrees to allocate resources to achieve a Recapture Rate of at least 15% and
report, from time to time and no less than quarterly, on monthly Recapture Rates and any other relevant metrics or other
activities involving such allocated resources that support this covenant.

 

    5 

     

    

 

(d)              
Not later than the Mortgage Loan Identification Date related to each month in which the Servicer or an Affiliate thereof
has originated New Mortgage Loans, the Servicer shall prepare and maintain a schedule (or schedules), available upon the MSR Owner’s
request, (i) identifying, in order of origination date, each New Mortgage Loan and the related Mortgage Loan in the Portfolio that
was refinanced using proceeds of such New Mortgage Loan, and (ii) setting forth the Servicer’s calculations of the fair market
value of the Servicing Rights relating to such New Mortgage Loans.

 

(e)              
Notwithstanding anything to the contrary contained herein, upon the written request (a “Fee Negotiation Request”)
of the MSR Owner or the Servicer following a determination by the MSR Owner or the Servicer that the Recapture Payments payable
to the MSR Owner hereunder differ materially from market rates of compensation for agreements comparable to this Agreement, which
request includes a proposal for revised rates of compensation hereunder, the parties hereto shall negotiate in good faith to amend
the provisions of this Agreement relating to the Recapture Payments in order to cause such compensation to be materially consistent
with market rates of compensation for agreements comparable to this Agreement (a “Fee Amendment”); provided,
however, that no such request shall be made until eighteen (18) months after the effective date of this Agreement, after which
time each such party may make such request (i) once with respect to compensation to be paid during the remainder of the Initial
Term, which request shall be made prior to the expiration of the Initial Term, and (ii) once with respect to compensation to be
paid during any Automatic Renewal Term, which request shall be made at least 210 days prior to the start of such Automatic Renewal
Term. If the parties are unable to reach agreement on the terms of a Fee Amendment within thirty (30) days of the date of delivery
of the relevant Fee Negotiation Request, then the terms of such Fee Amendment shall be determined by final and binding arbitration
in accordance with Section 3.02(f).

 

(f)               
 All disputes, differences and controversies of the MSR Owner or the Servicer relating to a Fee Amendment (individually,
a “Dispute” and, collectively, “Disputes”) shall be resolved by final and binding arbitration
administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules, subject
to the following provisions:

 

(i)                Following
the delivery of a written demand for arbitration by either the MSR Owner or the Servicer, each party shall choose one (1)
arbitrator within ten (10) business days after the date of such written demand and the two chosen arbitrators shall mutually,
within ten (10) business days after selection select a third (3rd) arbitrator (each, an “Arbitrator” and
together, the “Arbitrators”), each of whom shall be a retired judge selected from a roster of arbitrators
provided by the AAA. If the third (3rd) Arbitrator is not selected within fifteen (15) business days after delivery of the
written demand for arbitration (or such other time period as the MSR Owner and the Servicer may agree), the MSR Owner and the
Servicer shall promptly request that the commercial panel of the AAA select an independent Arbitrator meeting such
criteria.

 

    6 

     

    

 

(ii)             
The rules of arbitration shall be the Commercial Rules of the American Arbitration Association; provided, however, that
notwithstanding any provisions of the Commercial Arbitration Rules to the contrary, unless otherwise mutually agreed to by the
MSR Owner and the Servicer, the sole discovery available to each party shall be its right to conduct up to two (2) non-expert depositions
of no more than three (3) hours of testimony each.

 

(iii)             
The Arbitrators shall render a decision by majority decision within three (3) months after the date of appointment, unless
the MSR Owner and the Servicer agree to extend such time. The decision shall be final and binding upon the MSR Owner and the Servicer;
provided, however, that such decision shall not restrict either the MSR Owner or the Servicer from terminating this Agreement pursuant
to the terms hereof.

 

(iv)             
Each party shall pay its own expenses in connection with the resolution of Disputes, including attorneys’ fees, unless
determined otherwise by the Arbitrator.

 

(v)              
The MSR Owner and the Servicer agree that the existence, conduct and content of any arbitration pursuant to this Section
3.02(f) shall be kept confidential and neither the MSR Owner nor the Servicer shall disclose to any Person any information
about such arbitration, except in connection with such arbitration or as may be required by law or by any regulatory authority
(or any exchange on which such party’s securities are listed) or for financial reporting purposes in such party’s financial
statements.

 

ARTICLE
4

 

LIABILITIES OF SERVICER AND MSR OWNER

 

Section 4.01       
Liability of the MSR Owner and the Servicer. The MSR Owner and the Servicer shall each be liable in accordance herewith
only to the extent of the obligations specifically and respectively imposed upon and undertaken by the MSR Owner and Servicer herein.

 

Section 4.02       
Merger or Consolidation of the Servicer.

 

(a)              
The Servicer 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.

 

    7 

     

    

 

(b)              
 Any Person into which the Servicer may be merged, converted, or consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Servicer shall be a party, or any Person succeeding to the business of the Servicer, shall
be the successor of the Servicer 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 Servicer hereunder.

 

Section 4.03       
Indemnification.

 

(a)              
The Servicer shall indemnify the MSR Owner, its directors, officers, employees and agents and hold them harmless against
any and all claims, losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments, and any
other costs, fees and expenses that any of them may sustain by reason of the Servicer’s (i) willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement, (ii) reckless disregard of its obligations or duties under
this Agreement or (iii) breach of its representations, warranties or covenants under this Agreement.

 

(b)              
The MSR Owner shall indemnify the Servicer, its directors, officers, employees and agents and hold them harmless against
any and all claims, losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments, and any
other costs, fees and expenses that any of them may sustain by reason of the MSR Owner’s (i) willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement, (ii) reckless disregard of its obligations or duties under
this Agreement or (iii) breach of its representations or warranties under this Agreement.

 

ARTICLE
5

 

MISCELLANEOUS

 

Section 5.01       
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 Servicer:

 

PennyMac Loan Services, LLC

Attn: Director, Servicing Operations

3043 Townsgate Road

Westlake Village, CA 91361

 

With a copy to:

 

PennyMac Loan Services, LLC

Attn: Chief Legal Officer

3043 Townsgate Road

Westlake Village, CA 91361

 

    8 

     

    

 

(ii)        
if to the MSR Owner:

 

PennyMac Corp.

Attn: Chief Legal Officer

3043 Townsgate Road

Westlake Village, CA 91361

 

With copies to:

 

PennyMac Operating Partnership, L.P.

Attn: Chief Legal Officer

3043 Townsgate Road

Westlake Village, CA 91361

 

and

 

Stoner Fox Law Group, LLP

Attn: John E. Stoner

120 Vantis, Suite 300

Aliso Viejo, California 92656

 

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

 

Section 5.02       
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.

 

Section 5.03       
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 5.04       
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 5.05       
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 5.06       
Further Assurances. The Servicer agrees to execute and deliver such instruments and take such further actions as
the MSR Owner may, from time to time, reasonably request in order to effectuate the purposes and to carry out the terms of this
Agreement.

 

    9 

     

    

 

Section 5.07       
Governing Law. This Agreement shall be construed in accordance with the substantive laws of the State of New York applicable
to agreements made and to be performed entirely in such State, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws. The parties hereto intend that the provisions of Section 5-1401 of the New York
General Obligations Law shall apply to this Agreement.

 

Section 5.08       
Relationship of Parties. Nothing herein contained shall be deemed or construed to create a partnership or joint venture
between the parties. The duties and responsibilities of the Servicer shall be rendered by it as an independent contractor and not
as an agent of the MSR Owner. The Servicer 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 5.09       
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 5.10       
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 5.11        
Exhibits. The exhibits to this Agreement are hereby incorporated and made a part hereof and form integral parts of
this Agreement.

 

Section 5.12       
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 5.13        
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 5.14        
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.

 

    10 

     

    

 

Section 5.15       
SUBMISSION TO JURISDICTION; WAIVERS.

 

EACH OF THE MSR OWNER
AND THE SERVICER 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 AND FEDERAL COURTS 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.

 

(Remainder of page intentionally left blank)

 

    11 

     

    

 

IN WITNESS WHEREOF,
the Servicer and the MSR Owner 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
	 	(Servicer)
	 	 	 	 
	 	By:	/s/ Douglas E. Jones
	 	Name:	Douglas E. Jones
	 	Title:	 President
	 	 
	 	PENNYMAC CORP.
	 	(MSR Owner)
	 	 
	 	By:	/s/ Andrew S. Chang
	 	Name:	Andrew S. Chang
	 	Title:	Senior Managing Director and
	 	 	Chief Financial Officer

 

    12 

     

    

 

EXHIBIT A

 

(Reserved)

 

    A-1 

     

    

 

EXHIBIT B

 

(Representations and Warranties of the Servicer)

 

(a)              
Due Organization and Good Standing. The Servicer 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, and the Servicer is in compliance with the laws of each state or other jurisdiction
in which any Mortgaged Property is located to the extent necessary to perform its obligations under this Agreement.

 

(b)              
No Violation of Organizational Documents or Agreements. The execution and delivery of this Agreement by the Servicer,
and the performance and compliance with the terms of this Agreement by the Servicer, will not violate the Servicer’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 Servicer is a party or which is applicable
to it or any of its assets.

 

(c)              
Full Power and Authority. The Servicer 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 Servicer, enforceable against the Servicer 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 Servicer 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 Servicer’s knowledge, any order, regulation or demand of any federal,
state or local governmental or regulatory authority, which violation, in the Servicer’s good faith and reasonable judgment,
is likely to affect materially and adversely either the ability of the Servicer to perform its obligations under this Agreement
or the financial condition of the Servicer.

 

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

 

(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 Servicer of or compliance by the Servicer 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 Servicer under this Agreement.

 

    B-1 

     

    

 

(h)              
Ordinary Course of Business. The consummation of the transactions contemplated by this Agreement is in the ordinary
course of business of the Servicer.

 

    B-2 

     

    

 

EXHIBIT C

 

(Representations and Warranties of the MSR
Owner)

 

 

(i)               
Due Organization and Good Standing. The MSR Owner is duly organized, validly existing and in good standing as a corporation
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.

 

(j)               
No Violation of Organizational Documents or Agreements. The execution and delivery of this Agreement by the MSR Owner,
and the performance and compliance with the terms of this Agreement by the MSR Owner, will not violate the MSR Owner’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 MSR Owner is a party or which is applicable
to it or any of its assets.

 

(k)              
Full Power and Authority. The MSR Owner 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.

 

(l)               
Binding Obligation. This Agreement, assuming due authorization, execution and delivery by the other parties hereto,
constitutes a valid, legal and binding obligation of the MSR Owner, enforceable against the MSR Owner 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.

 

(m)             
No Violation of Law, Regulation or Order. The MSR Owner 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 MSR Owner’s knowledge, any order, regulation or demand of any federal,
state or local governmental or regulatory authority, which violation, in the MSR Owner’s good faith and reasonable judgment,
is likely to affect materially and adversely either the ability of the MSR Owner to perform its obligations under this Agreement
or the financial condition of the MSR Owner.

 

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

 

(o)               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 MSR Owner of or compliance by the MSR Owner
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 MSR Owner under this Agreement.

 

    C-1

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