Document:

Exhibit 10.3

 

GUARANTY 

 

GUARANTY, dated as of
April 30, 2015 (as amended, supplemented, or otherwise modified from time to time, this “Guaranty”), made by
PennyMac Mortgage Investment Trust (“Guarantor”), in favor of Credit Suisse First Boston Mortgage Capital LLC
(“Lender”).

 

RECITALS

 

Pursuant to the Third
Amended and Restated Loan and Security Agreement, dated as of March 27, 2015 (as amended, supplemented or otherwise modified from
time to time, the “Loan Agreement”), among PennyMac Loan Services, LLC (the “Borrower”),
Guarantor and Lender, Lender has agreed from time to time to make Loans to Borrower secured by the Collateral, including the Repledge
Collateral. Such Repledge Collateral is subject to a Lien in favor of Lender pursuant to the Security Agreement.

 

Pursuant to the Loan
and Security Agreement, dated as of April 30, 2015 (as amended, supplemented or otherwise modified from time to time, the “Underlying
Spread Loan Agreement”), between Borrower, in its capacity as lender thereunder, and PennyMac Holdings, LLC (the “Underlying
Spread Counterparty”), Borrower has agreed from time to time to make loans to the Underlying Spread Counterparty secured
by the Repledge Collateral (the “Underlying Loans”).

 

The Lender has agreed
to make Loans to Borrower on account of the Repledge Collateral (the “Repledge Collateral Loans”); provided
that the Guarantor guarantees such Repledge Collateral Loans. Borrower’s agreement to make Underlying Loans to Underlying
Spread Counterparty under the Underlying Spread Loan Agreement is subject, in part, to Lender’s agreement to make Repledge
Collateral Loans. The Guarantor, as owner of the Underlying Spread Counterparty, shall derive substantial benefit from Borrower
making Underlying Loans to Underlying Spread Counterparty.

 

NOW,
THEREFORE, in consideration of the foregoing premises, to induce Lender to make Repledge Collateral Loans thereunder, and
for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Guarantor hereby agrees
with Lender, as follows:

 

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

 

(b) 
For purposes of this Guaranty, “Maximum Guarantee Amount” shall mean the aggregate outstanding principal balance
of the Repledge Collateral Loans outstanding from time to time.

 

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

 

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2.    
Guaranty. (a) Guarantor hereby unconditionally and irrevocably guarantees to Lender the prompt and complete payment
and performance by Borrower when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations in an amount
not to exceed, in the aggregate for the Obligations, the Maximum Guarantee Amount.

 

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

 

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

 

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

 

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

 

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

 

(b)    Guarantor acknowledges
and agrees that notwithstanding that the Repledge Collateral is subject to the Underlying Spread Loan Agreement and the Security
Agreement, the rights of the Borrower under the Underlying Spread Loan Agreement with respect to the Repledge Collateral are and
shall continue to be at all times junior and subordinate to the rights of Lender under the Security Agreement. In furtherance of
the foregoing, notwithstanding any rights or remedies available to Underlying Spread Counterparty with respect to the Repledge
Collateral, such rights of the Underlying Spread Counterparty under the Underlying Spread Loan Agreement are solely against the
Borrower and do not extend to the Lender.

 

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

 

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6.    
Guaranty Absolute and Unconditional. (a) Guarantor waives any and all notice of the creation, renewal, extension
or accrual of any of the Obligations and notice of or proof of reliance by Lender upon this Guaranty or acceptance of this Guaranty;
the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived in reliance upon this Guaranty; and all dealings between Borrower or Guarantor, on the one hand, and Lender,
on the other, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guaranty. Guarantor
waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon Borrower or the Guaranty
with respect to the Obligations. This Guaranty shall be construed as a continuing, absolute and unconditional guarantee of payment
without regard to (i) the validity or enforceability of the Loan Agreement, the other Loan Documents, any of the Obligations or
any collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by
Lender, (ii) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available
to or be asserted by Borrower against Lender, or (iii) any other circumstance whatsoever (with or without notice to or knowledge
of Borrower or Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of Borrower for
the Obligations, or of Guarantor under this Guaranty, in bankruptcy or in any other instance. When pursuing its rights and remedies
hereunder against Guarantor, Lender may, but shall be under no obligation, to pursue such rights and remedies that they may have
against Borrower or any other Person or against any collateral security or guarantee for the Obligations or any right of offset
with respect thereto, and any failure by Lender to pursue such other rights or remedies or to collect any payments from Borrower
or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset,
or any release of Borrower or any such other Person or any such collateral security, guarantee or right of offset, shall not relieve
Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of Lender against Guarantor. This Guaranty shall remain in full force and effect and be binding in accordance
with and to the extent of its terms upon Guarantor and their successors and assigns thereof, and shall inure to the benefit of
Lender, and successors, indorsees, transferees and assigns, until all the Obligations and the obligations of Guarantor under this
Guaranty shall have been satisfied by payment in full, notwithstanding that from time to time during the term of the Loan Agreement
Borrower may be free from any Obligations.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14. 
Notices. Notices delivered in connection with this Guaranty shall be given in accordance with Section 10.05 of the
Loan Agreement.

 

15. 
Jurisdiction.

 

(a)  
THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

(b) 
GUARANTOR HEREBY WAIVES TRIAL BY JURY. GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY COURT
OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING OUT OF OR
RELATING TO THE LOAN DOCUMENTS IN ANY ACTION OR PROCEEDING. GUARANTOR HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION IT MAY HAVE TO,
EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS.

 

16. 
Integration. This Guaranty represents the agreement of Guarantor with respect to the subject matter hereof and there
are no promises or representations by Lender relative to the subject matter hereof not reflected herein.

 

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17. 
Acknowledgments. Guarantor hereby acknowledges that:

 

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

 

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

 

(c)            
no joint venture exists between Lender and Guarantor or among Lender, Borrower and Guarantor.

 

[Signature pages follow]

 

 

 

 

 

 

 

 

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

 

 

	 	PENNYMAC MORTGAGE INVESTMENT TRUST, as Guarantor
	 	 	 
	 	 	 
	 	 	 
	 	By:	/s/ Pamela Marsh
	 	 	Name:  Pamela Marsh
	 	 	Title:    Executive Vice President, Treasurer

 

 

 

 

 

 

    	8Exhbit 10.4

 

 

 

 

AMENDED AND RESTATED SECURITY
AND SUBORDINATION AGREEMENT

 

 

Between

 

 

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL
LLC, as Lender (“Lender”)

 

 

And

 

 

PENNYMAC HOLDINGS, LLC, as Pledgor (“Pledgor”)

 

 

 

 

(Excess Servicing)

Dated as of April 30, 2015

 

 

 

 

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	 	Page
	 	 
	ARTICLE I DEFINITIONS	2
	 	 
	Section 1.01   Certain Defined Terms.	2
	Section 1.02   Other Defined Terms.	8
	 	 
	ARTICLE II Collateral Security	8
	 	 
	Section 2.01   Collateral; Security Interest.	8
	Section 2.02   Further Documentation.	9
	Section 2.03   Participation Certificate.	9
	Section 2.04   Limited Pledge of Ginnie Mae Servicing	10
	Section 2.05   Reserved	10
	Section 2.06   Changes in Locations, Name, etc.	11
	Section 2.07   Lender’s Appointment as Attorney-in-Fact.	11
	Section 2.08   Proceeds.	12
	Section 2.09   Remedies.	13
	Section 2.10   Limitation on Duties Regarding Preservation of Collateral.	14
	Section 2.11   Powers Coupled with an Interest.	14
	Section 2.12   Release of Security Interest.	14
	Section 2.13   Reinstatement.	14
	Section 2.14   Use of Collateral.	14
	 	 
	ARTICLE III RECOURSE; SUBORDINATION	15
	 	 
	Section 3.01   Recourse.	15
	Section 3.02   Subordination in Connection with Financing.	15
	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES	16
	 	 
	Section 4.01   Pledgor Existence.	16
	Section 4.02   Licenses.	16
	Section 4.03   Power.	16
	Section 4.04   Due Authorization.	16
	Section 4.05   Financial Statements.	17
	Section 4.06   No Trigger Event.	17
	Section 4.07   Solvency.	17
	Section 4.08   No Conflicts.	17
	Section 4.09   True and Complete Disclosure.	18
	Section 4.10   Approvals.	18
	Section 4.11   Litigation.	18
	Section 4.12   Material Adverse Change.	18

 

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	Section 4.13   Ownership.	18
	Section 4.14   Taxes.	19
	Section 4.15   Investment Company.	19
	Section 4.16   Chief Executive Office; Jurisdiction of Organization.	19
	Section 4.17   Location of Books and Records.	19
	Section 4.18   Adjusted Tangible Net Worth.	19
	Section 4.19   ERISA.	19
	Section 4.20   Agreements.	20
	Section 4.21   Other Indebtedness.	20
	Section 4.22   No Reliance.	20
	Section 4.23   Plan Assets.	20
	Section 4.24   No Prohibited Persons.	20
	 	 
	ARTICLE V COVENANTS	21
	 	 
	Section 5.01   Financial Covenants.	21
	Section 5.02   Litigation.	21
	Section 5.03   Prohibition of Fundamental Changes.	21
	Section 5.04   Insurance.	21
	Section 5.05   No Adverse Claims.	22
	Section 5.06   Assignment.	22
	Section 5.07   Security Interest.	22
	Section 5.08   Records.	22
	Section 5.09   Books.	22
	Section 5.10   Approvals.	22
	Section 5.11   Material Change in Business.	22
	Section 5.12   Reserved.	23
	Section 5.13   Applicable Law.	23
	Section 5.14   Existence.	23
	Section 5.15   Chief Executive Office; Jurisdiction of Organization.	23
	Section 5.16   Taxes.	23
	Section 5.17   Transactions with Affiliates.	23
	Section 5.18   Guarantees.	23
	Section 5.19   Indebtedness.	23
	Section 5.20   True and Correct Information.	23
	Section 5.21   Portfolio Excess Spread Not To Be Evidenced by Promissory Notes	24
	Section 5.22   No Pledge; Other Liens; Creditors.	24
	Section 5.23   Plan Assets.	24
	Section 5.24   Sharing of Information.	24
	Section 5.25   No Modification of the Master Spread Acquisition Agreement; Intended Third Party Beneficiary.	24
	Section 5.26   Reporting Requirements.	24

 

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	ARTICLE VI TRIGGER EVENTS /RIGHTS AND REMEDIES OF LENDER UPON TRIGGER EVENT OR EVENT OF DEFAULT	26
	 	 
	Section 6.01   Trigger Events.	26
	Section 6.02   No Waiver	28
	Section 6.03   Liquidation of Collateral	28
	 	 
	ARTICLE VII ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; SEPARATE ACTIONS BY LENDER	28
	 	 
	Section 7.01   Entire Agreement	28
	Section 7.02   Waivers, Separate Actions by Lender	28
	 	 
	ARTICLE VIII SUCCESSORS AND ASSIGNS	29
	 	 
	Section 8.01   Successors and Assigns	29
	 	 
	ARTICLE IX MISCELLANEOUS	29
	 	 
	Section 9.01   Survival	29
	Section 9.02   Indemnification	29
	Section 9.03   Nonliability of Lender	30
	Section 9.04   Governing Law; Jurisdiction, Waiver of Jury Trial:  Waiver of Damages	30
	Section 9.05   Notices	31
	Section 9.06   Severability	32
	Section 9.07   Section Headings	32
	Section 9.08   Counterparts	32
	Section 9.09   Periodic Due Diligence Review	32
	Section 9.10   Hypothecation or Pledge of Collateral	32
	Section 9.11   Non-Confidentiality of Tax Treatment	33
	Section 9.12   Set-off	34
	Section 9.13   Amendment and Restatement.	34

 

 

 

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SCHEDULES

 

Schedule 1 –Servicing Contracts

 

Schedule 2 – Responsible Officers
of Pledgor

 

Schedule 3 – List of Master Spread
Acquisition Agreements

 

EXHIBITS

 

Exhibit A-1 – Form of Power
of Attorney (Lender)

 

Exhibit A-2 – Form of Power of Attorney
(SPS)

 

Exhibit B – Existing Indebtedness

 

 

 

 

 

 

 

 

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AMENDED AND RESTATED SECURITY AND SUBORDINATION
AGREEMENT

 

This Amended and Restated
Security and Subordination Agreement (as the same may be amended, modified, restated or supplemented from time to time, this “Agreement”)
is made as of April 30, 2015 between CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the “Lender”), and PENNYMAC
HOLDINGS, LLC, as Pledgor (the “Pledgor”).

 

Lender and Pledgor previously
entered into a Security and Subordination Agreement, dated as of December 30, 2013 (the “Existing Security Agreement”).

 

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

 

W I T N E S S E T H:

 

WHEREAS, PennyMac
Loan Services, LLC (“PLS”) previously entered into that certain Third Amended and Restated Loan and Security
Agreement, dated March 27, 2015 among PLS, Private National Mortgage Acceptance Company, LLC and the Lender, as amended from time
to time (the “Loan Agreement”). Pursuant to that Loan Agreement, the Lender was granted a blanket lien on all
Ginnie Mae Servicing Rights.

 

WHEREAS,  PLS
is the servicer under the Servicing Contracts related to the Ginnie Mae Servicing Rights and has sold and desires to sell from
time to time to Pledgor all of PLS’s right, title and interest in and to the Portfolio Excess Spread (as defined below).

 

WHEREAS, the
sale of any Portfolio Excess Spread is subject to the consent of the Lender, in its sole discretion.

 

WHEREAS, Lender
has agreed to consent to the sale of the Portfolio Excess Spread by PLS to the Pledgor in consideration of (i) such sale being
made subject and subordinate to the Lender’s Lien on the Servicing Rights including the Portfolio Excess Spread and (ii)
the Pledgor reaffirming such lien and Pledgor’s subordination of its rights by Pledgor entering into this Agreement.

 

WHEREAS, PLS and
Pledgor desire to enter into a Loan and Security Agreement (the “Underlying Loan Agreement”), so that Pledgor
can borrow money from PLS secured by the Portfolio Excess Spread.

 

WHEREAS, Lender
has agreed to lend to PLS against some or all of the Portfolio Excess Spread under the Loan Agreement, as long as (i) Pledgor’s
rights are solely to PLS under the Underlying Loan Agreement and (ii) PLS’s lien on the Portfolio Excess Spread is subordinate
to the rights of Lender hereunder and under the Loan Agreement.

 

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

 

NOW, THEREFORE,
in consideration of the mutual agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Lender and Pledgor hereby agree as follows.

   

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ARTICLE
I

DEFINITIONS

 

Section 1.01      
Certain Defined Terms. Capitalized terms used herein shall have the indicated meanings:

 

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

 

“Acknowledgment
Agreement” has the meaning assigned to such term in the Loan Agreement.

 

“Act”
has the meaning set forth in Section 9.11(b) hereof.

 

“Act of Insolvency”
has the meaning assigned to such term in the Loan Agreement.

 

“Adjusted Tangible
Net Worth” means (a) the sum of (i) Net Worth and (ii) Subordinated Debt, minus (b) intangibles, goodwill and receivables
from Affiliates.

 

“Affiliate”
means, with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code;
provided, however, that any entity that is otherwise not directly or indirectly owned or controlled by Pledgor shall
not be deemed an “Affiliate” for the purposes of this definition.

 

“Agency”
means Ginnie Mae.

 

“Agreement”
means this Amended and Restated Security and Subordination Agreement, as it may be amended, restated, supplemented or otherwise
modified from time to time.

 

“Amendment Date”
means April 30, 2015.

 

“Asset”
means any Portfolio Excess Spread related to a Servicing Contract.

 

“Bankruptcy
Code” means the United States Bankruptcy Code of 1978, as amended from time to time.

 

“Business Day”
means any day other than (A) a Saturday or Sunday and (B) a public or bank holiday in New York City.

 

 

    	2

    	 

    

 

“Cash Equivalents”
has the meaning assigned to such term in the Loan Agreement.

 

“Change in Control”
means:

 

(A)          
any transaction or event as a result of which PennyMac Operating Partnership, L.P. ceases to own, beneficially or of record,
100% of the membership interests of Pledgor;

 

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

 

 

(C)          
the consummation of a merger or consolidation of Pledgor with or into another entity or any other corporate reorganization,
if more than 50% of the combined voting power of the continuing or surviving entity’s stock outstanding immediately after
such merger, consolidation or such other reorganization is owned by Persons who were not stockholders of Pledgor immediately prior
to such merger, consolidation or other reorganization.

 

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

 

“Collateral”
has the meaning assigned to such term in Section 2.01 hereof.

 

“Confidential
Information” has the meaning set forth in Section 9.11(b) hereof.

 

“Dedicated Account”
has the meaning assigned to such term in the Loan Agreement.

 

“EO13224”
has the meaning set forth in Section 4.24 hereof.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate”
means any corporation or trade or business that, together with Pledgor is treated as a single employer under Section 414(b)
or (c) of the Code or solely for purposes of Section 302 of ERISA and Section 412 of the Code is treated as single employer
described in Section 414 of the Code.

 

 

    	3

    	 

    

 

“ERISA Event
of Termination” means with respect to Pledgor (i) with respect to any Plan, a reportable event, as defined in Section
4043 of ERISA, as to which the PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified
with 30 days of the occurrence of such event, or (ii) the withdrawal of Pledgor or any ERISA Affiliate thereof from a Plan
during a plan year in which it is a substantial employer, as defined in Section 4001(a)(2) of ERISA, or (iii) the failure
by Pledgor or any ERISA Affiliate thereof to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA
with respect to any Plan, including, without limitation, the failure to make on or before its due date a required installment under
Section 412(m) of the Code (or Section 430(j) of the Code as amended by the Pension Protection Act) or Section 302(e) of ERISA
(or Section 303(j) of ERISA, as amended by the Pension Protection Act), or (iv) the distribution under Section 4041 of ERISA
of a notice of intent to terminate any Plan or any action taken by Pledgor or any ERISA Affiliate thereof to terminate any plan,
or (v) the failure to meet requirements of Section 436 of the Code resulting in the loss of qualified status under Section
401(a)(29) of the Code, or (vi) the institution by the PBGC of proceedings under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan, or (vii) the receipt by Pledgor or any ERISA Affiliate thereof
of a notice from a Multiemployer Plan that action of the type described in the previous clause (vi) has been taken by the PBGC
with respect to such Multiemployer Plan, or (viii) any event or circumstance exists which may reasonably be expected to constitute
grounds for Pledgor or any ERISA Affiliate thereof to incur liability under Title IV of ERISA or under Sections 412(b) or 430(k)
of the Code with respect to any Plan.

 

“Event of Default”
has the meaning assigned to such term in the Loan Agreement.

 

“Existing Indebtedness”
has the meaning specified in Section 4.21 hereof.

 

“FHA”
has the meaning assigned to such term in the Loan Agreement.

 

“Fidelity Insurance”
means insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and destruction,
robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount acceptable to Pledgor’s
regulators.

 

“Financial Statement
Date” has the meaning set forth in Section 4.05 hereof.

 

“GAAP”
means generally accepted accounting principles in the United States of America, applied on a consistent basis and applied to both
classification of items and amounts, and shall include, without limitation, the official interpretations thereof by the Financial
Accounting Standards Board, its predecessors and successors.

 

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

 

“Ginnie Mae
Acquisition Date” means any date on which the Pledgor acquires portfolio excess spread on account of Ginnie Mae Servicing
Rights.

 

“Ginnie Mae
Guide” means the Ginnie Mae Mortgage-Backed Securities Guide, Handbook 5500.3, Rev. 1, as amended from time to time,
and any related announcements, directives and correspondence issued by Ginnie Mae.

 

 

    	4

    	 

    

 

“Ginnie Mae
Servicing Rights” means Servicing Rights of the Servicer with respect to Mortgage Loans that are subject to a Ginnie
Mae MBS or are owned by or administered by Ginnie Mae.

 

“Governmental
Authority” means any nation or government, any state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions over Pledgor, Servicer or Lender, as applicable.

 

“Guarantee”
has the meaning assigned to such term in the Loan Agreement.

 

“Indebtedness”
has the meaning assigned to such term in the Loan Agreement.

 

“Lender”
means Credit Suisse First Boston Mortgage Capital LLC, together with its successors, and any assignee of and Participant or Transferee
in the Loan.

 

“Lien”
has the meaning assigned to such term in the Loan Agreement.

 

“Loan”
has the meaning assigned to such term in the Loan Agreement.

 

“Loan Agreement”
has the meaning assigned to such term in the recitals of this Agreement.

 

“Loan Documents”
has the meaning assigned to such term in the Loan Agreement.

 

“Master Spread
Acquisition Agreement” means each agreement, as amended from time to time, related to the acquisition of Portfolio Excess
Spread related to Servicing Rights, as more particularly set forth therein and identified on Schedule 3 hereto.

 

“Material Adverse
Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of Pledgor; (b) a material impairment of the ability of Pledgor to perform
under this Agreement and to avoid any Trigger Event; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability of this Agreement against Pledgor.

 

“MBS”
means collateralized mortgage obligations and other mortgage-backed securities.

 

“Mortgage Loan”
has the meaning assigned to such term in the Loan Agreement.

 

“Multiemployer
Plan” means a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been or are
required to be made by Pledgor or any ERISA Affiliate and that is covered by Title IV of ERISA.

 

“Net Income”
has the meaning assigned to such term in the Loan Agreement.

 

“Net Worth”
has the meaning assigned to such term in the Loan Agreement.

 

“Note”
has the meaning assigned to such term in the Loan Agreement.

 

“Obligations”
has the meaning assigned to such term in the Loan Agreement, excluding clause (e) thereof.

 

    	5

    	 

    

 

“OFAC”
has the meaning set forth in Section 4.24 hereof.

 

 

 

“Participation
Certificate” means the original participation certificate issued and delivered in connection with a Master Spread Acquisition
Agreement.

 

“Participant”
has the meaning assigned to such term in the Loan Agreement.

 

“PBGC”
has the meaning assigned to such term in the Loan Agreement.

 

“Pension Protection
Act” has the meaning assigned to such term in the Loan Agreement.

 

“Person”
has the meaning assigned to such term in the Loan Agreement.

 

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

 

“Pledgor”
means PennyMac Holdings, LLC or its permitted successors and assigns.

 

“Pledgor Guarantor”
means PennyMac Mortgage Investment Trust or its permitted successors and assigns.

 

“Pledgor Guaranty
Agreement” means that certain Guaranty dated as of April 30, 2015, made by Pledgor Guarantor for the benefit of the Lender,
as amended from time to time.

 

“PMIT”
means PennyMac Mortgage Investment Trust.

 

“Portfolio Excess
Spread” means any Primary Portfolio Excess Spread and Secondary Portfolio Excess Spread, each as defined in, and sold
by the Servicer to the Pledgor under, a Master Spread Acquisition Agreement, from time to time, as evidenced by a Participation
Certificate.

 

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

 

“Power of Attorney”
has the meaning set forth in Section 2.07(e) hereof.

 

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

 

“Prohibited
Person” has the meaning set forth in Section 4.24 hereof.

 

“Property”
has the meaning assigned to such term in the Loan Agreement.

 

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

 

    	6

    	 

    

 

“REIT”
means a real estate investment trust, as defined in Section 856 of the Code.

 

“Repurchase
Agreements” means each of (i) that certain Master Repurchase Agreement, dated as of March 29, 2012, among Credit Suisse
First Boston Mortgage Capital LLC, PennyMac Operating Partnership, L.P., as a seller, Pledgor, PMIT and PennyMac Operating Partnership,
L.P., as a guarantor, and (ii) that certain Master Repurchase Agreement, dated as of August 25, 2011, among Credit Suisse First
Boston Mortgage Capital LLC, PennyMac Corp. and Pledgor, as sellers, and PMIT, as a guarantor, as each may be amended and/or restated
from time to time.

 

“Repurchase
Documents” means “Program Agreements” as defined in the respective Repurchase Agreement.

 

“Responsible
Officer” means as to any Person, the chief executive officer or, with respect to financial matters, the chief financial
officer of such Person. The Responsible Officers of Pledgor as of the date hereof are listed on Schedule 2 hereto.

 

“Restricted
Cash” has the meaning assigned to such term in the Loan Agreement.

 

“SEC”
has the meaning assigned to such term in the Loan Agreement.

 

“Servicer”
means PennyMac Loan Services, LLC.

 

“Servicing Contracts”
means, collectively, those servicing agreements described on Schedule 1 attached hereto.

 

“Servicing Rights”
means all of the Servicer’s rights and interests under any Servicing Contract, including the rights to (a) service the Mortgage
Loans that are the subject matter of such Servicing Contract and (b) be compensated, directly or indirectly, for doing so.

 

“SPS”
means Select Portfolio Servicing, Inc. and its successors and permitted assigns.

 

“Subordinated
Debt” means, Indebtedness of Pledgor (i) which is unsecured, (ii) of which no part of the principal of such
Indebtedness is required to be paid (whether by way of mandatory sinking fund, mandatory redemption, mandatory prepayment or otherwise)
prior to the date which is one year following the Termination Date and (iii) of which the payment of the principal of and
interest on such Indebtedness and other obligations of Pledgor in respect of such Indebtedness are subordinated to all obligations
and liabilities of Pledgor to Lender hereunder, in all cases, on terms and conditions approved in writing by Lender and all other
terms and conditions of which are satisfactory in form and substance to Lender.

 

“Subordinated
Lender” means PennyMac Loan Services, LLC, in its capacity as lender under the Subordinated Loan Agreement.

 

“Subordinated
Loan Agreement” means the Loan and Security Agreement, dated as of April 30, 2015, between the Subordinated Lender and
the Pledgor, as amended, supplemented or otherwise modified from time to time, pursuant to which the Subordinated Lender has agreed
from time to time to make loans to the Pledgor secured by a second priority lien in the Collateral.

 

    	7

    	 

    

 

“Subsidiary”
has the meaning assigned to such term in the Loan Agreement.

 

“Termination
Date” has the meaning assigned to such term in the Loan Agreement.

 

“Test Period”
means any calendar quarter.

 

“Transferee”
has the meaning assigned to such term in the Loan Agreement.

 

“Trigger Event”
has the meaning assigned to such term in Section 6.01 hereof.

 

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

 

Section 1.02      
Other Defined Terms.

 

(a)           The words
“hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise specified herein,
the term “or” has the inclusive meaning represented by the term “and/or” and the term “including”
is not limiting. All references to Sections, subsections, Articles and Exhibits shall be to Sections, subsections, and Articles
of, and Exhibits to, this Agreement unless otherwise specifically provided.

 

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

 

ARTICLE
II

Collateral Security

 

Section 2.01      
Collateral; Security Interest. (a)  All of Pledgor’s right, title and interest in, to and under each
of the following items of property, whether now owned or hereafter acquired, now existing or hereafter created and wherever located,
is hereinafter referred to as the “Collateral”:

 

(i)           all Portfolio Excess Spread arising under or related to any Servicing Contract;

 

(ii)          all rights to payment of amounts due under the Master Spread Acquisition Agreement on account of, or related to, the Portfolio
Excess Spread;

 

    	8

    	 

    

 

 (iii)         all
Assets, including the related Participation Certificates, arising under or relating to the Master Spread Acquisition Agreement
and all rights thereunder;

 

(iv)        all
rights to reimbursement of Assets and/or amounts due in respect thereof under the related Servicing Contract;

 

(v)          the Dedicated Account to the extent of any rights thereto;

 

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

 

 (vii)        all
“general intangibles”, “accounts”, “chattel paper”, “securities accounts”, “investment
property”, “deposit accounts” and “money” as defined in the Uniform Commercial Code relating to or
constituting any and all of the foregoing (including, without limitation, all of Pledgor’s rights, title and interest in
and under the Portfolio Excess Spread and Servicing Contracts); and

 

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

 

(b)           
In consideration of the agreements described in the Recitals hereto, Pledgor hereby assigns, pledges and grants a security
interest in all of its right, title and interest in, to and under the Collateral to Lender to secure the Obligations. Pledgor agrees
to mark its computer records and tapes to evidence the interests granted to Lender hereunder.

 

(c)            
Pledgor acknowledges and agrees that it has purchased the Collateral from the Servicer, subject to the first priority Lien
of the Lender and the second priority Lien of the Subordinated Lender, and that its rights with respect to the Collateral are and
shall continue to be at all times junior and subordinate to the rights of Lender under the Loan Documents.

 

Section 2.02      
Further Documentation. At any time and from time to time, upon the written request of Lender, and at the sole expense
of Pledgor, Pledgor will promptly and duly execute and deliver, or will promptly cause to be executed and delivered, such further
instruments and documents and take such further action as Lender may reasonably request for the purpose of obtaining or preserving
the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in effect in any applicable jurisdiction with respect to
the Liens created hereby. Pledgor also hereby authorizes Lender and SPS to file any such financing or continuation statement to
the extent permitted by applicable law.

 

Section 2.03      
Participation Certificate. With respect to any Collateral that constitutes a Participation Certificate, Lender shall
have received the original Participation Certificate registered into the name of the Lender.

 

    	9

    	 

    

 

Section 2.04      
Limited Pledge of Ginnie Mae Servicing. To the extent that the pledge of the Pledgor’s right, title and interest
in the Portfolio Excess Spread shall at any time be included within the Ginnie Mae Servicing Rights the Pledgor and Lender each
acknowledges and agrees that prior to the occurrence of an Event of Default, (x) PLS is entitled to servicing income with respect
to a given mortgage pool only so long as PLS is an issuer in good standing pursuant to Ginnie Mae rules, regulations, guides and
similar announcements; (y) upon PLS’s loss of such good-standing issuer status, PLS’s rights to any servicing income
related to a given mortgage pool also terminate; and (z) the pledge of the Pledgor’s rights to servicing income conveys no
rights (such as a right to become a substitute servicer or issuer) that are not otherwise specifically provided for in the rules,
regulations, guides or similar announcements by Ginnie Mae, provided that this sentence shall automatically be deemed amended or
modified if and to the extent Ginnie Mae amends the corresponding requirement, whether in its rules, regulations, guides, Servicing
Contracts, Acknowledgment Agreements, if any, or published announcements and provided further that the security interest created
hereby is subject to the following provision to be included in each financing statement filed in respect hereof (defined terms
used below shall have the meaning set forth in the applicable Acknowledgment Agreement):

 

The property subject to the security
interest reflected in this instrument includes all of the right, title and interest of PennyMac Loan Services, LLC (“Debtor”)
in certain mortgages and/or participation interests related to such mortgages (“Pooled Mortgages”) and pooled
under the mortgage-backed securities program of the Government National Mortgage Association (“Ginnie Mae”),
pursuant to section 306(g) of the National Housing Act, 12 U.S.C. § 1721(g);

 

To the extent that the security interest
reflected in this instrument relates in any way to the Pooled Mortgages, such security interest is subject and subordinate to all
rights, powers and prerogatives of Ginnie Mae, whether now existing or hereafter arising, under and in connection with: (i) 12
U.S.C. § 1721(g) and any implementing regulations; (ii) the terms and conditions of that certain Acknowledgment Agreement,
with respect to the Security Interest, by and between Ginnie Mae, Debtor and Credit Suisse First Boston Mortgage Capital LLC; (iii)
applicable Guaranty Agreements and contractual agreements between Ginnie Mae and Debtor; and (iv) the Ginnie Mae Mortgage-Backed
Securities Guide, Handbook 5500.3 Rev. 1, and other applicable guides; and

 

Such rights, powers and prerogatives
of Ginnie Mae include, but are not limited to, Ginnie Mae’s right, by issuing a letter of extinguishment to Debtor, to effect
and complete the extinguishment of all redemption, equitable, legal or other right, title or interest of Debtor in the Pooled Mortgages,
in which event the security interest as it relates in any way to the Pooled Mortgages shall instantly and automatically be extinguished
as well.

 

Section 2.05      
Reserved.

 

 

 

    	10

    	 

    

 

Section 2.06      
Changes in Locations, Name, etc. Pledgor shall not (a) change the location of its chief executive office/chief
place of business from that specified in Section 4.16 or (b) change its name or identity, unless it shall have given
Lender at least 30 days’ prior written notice thereof and shall have delivered to Lender all Uniform Commercial Code financing
statements and amendments thereto as Lender shall request and taken all other actions deemed necessary by Lender to continue its
perfected status in the Collateral with the same or better priority.

 

Section 2.07      
Lender’s Appointment as Attorney-in-Fact. (a)  Pledgor hereby irrevocably constitutes and appoints
Lender and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of Pledgor and in the name of Pledgor or in its own name, from time to time in Lender’s
discretion if an Event of Default or Trigger Event shall have occurred and be continuing, for the purpose of carrying out the terms
of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary
or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, Pledgor hereby
gives Lender the power and right, on behalf of Pledgor, without assent by, but with notice to, Pledgor to do the following:

 

 (i)          in
the name of Pledgor or its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances
or other instruments for the payment of moneys due with respect to any Collateral and to file any claim or to take any other action
or proceeding in any court of law or equity or otherwise deemed appropriate by Lender for the purpose of collecting any and all
such moneys due with respect to any Collateral whenever payable;

 

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

 

(iii)         to
the extent permitted under the Master Spread Acquisition Agreement, to request that Ginnie Mae Servicing Rights be transferred
to Lender or to another servicer approved by Ginnie Mae and perform (without assuming or being deemed to have assumed any of the
obligations of Servicer thereunder) all aspects of each Servicing Contract to which the Portfolio Excess Spread relates;

 

(iv)         to request distribution to Lender of sale proceeds or any applicable contract termination fees arising from the sale or
termination of such Servicing Rights to the extent of the Portfolio Excess Spread and remaining after satisfaction of Servicer’s
relevant obligations to Ginnie Mae, including costs and expenses related to any such sale or transfer of such Servicing Rights
and other amounts due for unmet obligations of Servicer to Ginnie Mae under applicable Ginnie Mae Guides or such other investor’s
contract;

 

(v)          to
deal with third parties, including, without limitation, investors and any and all subservicers and master servicers in respect
of any of the Collateral in the same manner and with the same effect as if done by Pledgor;

 

    	11

    	 

    

 

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

 

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

 

(c)            
Pledgor also authorizes Lender, at any time and from time to time, to execute, in connection with any sale provided for
in Section 2.09 hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral.

 

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

 

(e)            
In addition to the foregoing, Pledgor agrees to execute a power of attorney (the “Power of Attorney”)
in favor of Lender in the form of Exhibit A-1 hereto to be delivered on the date hereof and in favor of SPS in the form
of Exhibit A-2 hereto to be delivered on the date hereof.

 

Section 2.08      
Proceeds. 

 

(a)            
If an Event of Default or Trigger Event shall occur and be continuing, (a) all proceeds of Collateral received by Pledgor
consisting of cash, checks and other near-cash items shall be held by Pledgor in trust for Lender, segregated from other funds
of Pledgor, and shall forthwith upon receipt by Pledgor be remitted to the Dedicated Account in the exact form received by Pledgor
(duly endorsed by Pledgor to Lender, if required) and (b) any and all such proceeds received by Lender (whether from Pledgor
or otherwise) may, in the sole discretion of Lender, be held by Lender as collateral security for, and/or then or at any time thereafter
may be applied by Lender against, the Obligations (whether matured or unmatured), such application to be in such order as Lender
shall elect. Any balance of such proceeds remaining after the Obligations shall have been paid in full and this Agreement shall
have been terminated shall be remitted in accordance with Loan Documents. For the avoidance of doubt, the Servicer shall be solely
responsible for remitting to the Pledgor any amounts owed the Pledgor. In no event shall the Lender be accountable to the Pledgor
for any excess proceeds, which the Pledgor acknowledges, may be remitted by the Lender in accordance with the Loan Documents.

 

    	12

    	 

    

 

(b)           
Each of Pledgor and Servicer acknowledges and agrees that all amounts with respect to the Portfolio Excess Spread and related
Servicing Rights shall be remitted by Servicer to the Dedicated Account to be applied by Lender in accordance with the terms of
the Loan Agreement.

 

Section 2.09      
Remedies. If an Event of Default shall occur and be continuing, Lender may exercise, in addition to all other rights
and remedies granted to it in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations,
all rights and remedies of a secured party under the Uniform Commercial Code (including without limitation, Lender’s rights
to a strict foreclosure under Section 9-620 of the Uniform Commercial Code). Without limiting the generality of the foregoing,
Lender may seek the appointment of a receiver, liquidator, conservator, trustee, or similar official in respect of any of the Collateral.
Without limiting the generality of the foregoing, Lender without demand of performance or other demand, presentment, protest, advertisement
or notice of any kind (except any notice required under this Agreement or by law referred to below) to or upon Pledgor or any other
Person (each and all of which demands, presentments, protests, advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease,
assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels or as an entirety at public or private sale or sales, at any exchange, broker’s
board or office of Lender or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any credit risk. Lender shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any
part of the Collateral so sold, free of any right or equity of redemption in Pledgor, which right or equity is hereby waived or
released. Pledgor further agrees, at Lender’s request, to assemble the Collateral and make it available to Lender at places
which Lender shall reasonably select, whether at Pledgor’s premises or elsewhere. Lender shall apply the net proceeds of
any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable (under the circumstances)
out-of-pocket costs and expenses of every kind actually incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of Lender hereunder, including without limitation reasonable
attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations, in such order as Lender may elect,
and only after such application and after the payment by Lender of any other amount required or permitted by any provision of law,
including without limitation Section 9-615 of the Uniform Commercial Code, need Lender account for the surplus, if any, to
the Servicer as agent for the Pledgor. To the extent that there are any excess proceeds resulting from any collection, recovery,
receipt, appropriation, realization or sale of the Collateral by Lender after satisfaction of all Obligations, Lender shall remit
such excess to the Servicer. To the extent permitted by applicable law, Pledgor waives all claims, damages and demands it may acquire
against Lender arising out of the exercise by Lender of any of its rights hereunder, other than those claims, damages and demands
arising from the gross negligence or willful misconduct of Lender. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if given at least ten (10) days before such sale or
other disposition. Pledgor shall not be liable for any deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the Obligations, it being understood that the sole recourse of the Lender to the Pledgor hereunder for
the Obligations (other than for Pledgor’s gross negligence or willful misconduct) shall be to the Collateral pledged by the
Pledgor hereunder.

 

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Section 2.10      
Limitation on Duties Regarding Preservation of Collateral. Lender’s duty with respect to the custody, safekeeping
and physical preservation of the Collateral in its possession, under Section 9-207 of the Uniform Commercial Code or otherwise,
shall be to deal with it in the same manner as Lender deals with similar property for its own account. Neither Lender nor any of
its directors, officers or employees shall be liable for failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of
Pledgor or otherwise.

 

Section 2.11      
Powers Coupled with an Interest. All authorizations and agencies herein contained with respect to the Collateral
are irrevocable and powers coupled with an interest.

 

Section 2.12      
Release of Security Interest. Upon the latest to occur of (a) the repayment of the Loan, and (b) the occurrence of
the Termination Date, Lender shall release its security interest in any remaining Collateral hereunder and shall promptly execute
and deliver to Borrower such documents or instruments as Borrower shall reasonably request to evidence such release; provided that,
such release shall not be required until such time as the Acknowledgment Agreement is terminated.

 

Section 2.13      
Reinstatement. All security interests created by this Article II shall continue to be effective, or be reinstated,
as the case may be, if at any time any payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored
or returned by the Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Pledgor or upon or as
a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, Pledgor or any substantial
part of its property, or otherwise, all as if such release had not been made.

 

Section 2.14      
Use of Collateral. Lender and Pledgor hereby acknowledge and agree that should any Collateral be liquidated or foreclosed
upon by Lender, Lender shall apply the Proceeds of such Collateral to the Obligations.

 

 

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ARTICLE
III 

rECOURSE; SUBORDINATION

 

Section 3.01      
Recourse. Notwithstanding anything else to the contrary contained or implied herein or in any other Loan Document,
Lender’s recourse against Pledgor in order to satisfy the Obligations shall be limited to the Collateral that is the subject
of this Agreement and its recourse as against the Pledgor Guarantor shall be as more particularly described in the Pledgor Guaranty
Agreement; provided that such limitation shall not extend to the gross negligence or willful misconduct of the Pledgor.

 

Section 3.02      
Subordination in Connection with Financing.  

 

(a)            
It is anticipated that in connection with the transactions contemplated by the Loan Documents, that (x) the Pledgor has
purchased the Collateral from the Servicer subject to the first priority Lien of the Lender and (y) Pledgor hereby reaffirms such
lien and pledges its interest in such Collateral hereunder to the Lender. In connection with the foregoing Pledgor acknowledges
and agrees that its rights with respect to the Collateral (including without limitation its security interest in the Portfolio
Excess Spread and pursuant to the Master Spread Acquisition Agreement and any other collateral purchased by Pledgor thereunder
and in which a security interest is granted to Lender pursuant to Section 2.01) are and shall continue to be at all times junior
and subordinate to the rights of Lender under the Loan Documents. In furtherance of the foregoing, notwithstanding any rights or
remedies available to Pledgor thereunder or under the Master Spread Acquisition Agreement, applicable law or otherwise, Pledgor
shall not, directly or indirectly, exercise any remedies available to it under the Master Spread Acquisition Agreement or at law
or equity for ninety-one (91) days following the date that all Obligations are paid in full under the Loan Documents; provided
that nothing in the foregoing shall prohibit Pledgor from receiving, payments with respect to the obligations under the Master
Spread Acquisition Agreement as, and in the manner, contemplated therein, but subject to the prior rights of the Lender hereunder
and under the Loan Documents. For the avoidance of doubt, in no instance shall the Lender succeed to any liabilities or obligations
of Pledgor under the Master Spread Acquisition Agreement.

 

(b)            
In furtherance
of the foregoing, Pledgor agrees to not assert any objection to, and shall be deemed to have otherwise consented to, a disposition
of any assets subject to the Master Spread Acquisition Agreement and subject to the Loan Documents during an Act of Insolvency
of Pledgor or the Servicer, free and clear of any lien, encumbrance, pledge or other claims under Section 363 of the Bankruptcy
Code (or any similar bankruptcy law) if Lender has consented to such disposition.

 

(c)            
If an Act of Insolvency
of Pledgor or the Servicer occurs, the Pledgor agrees not to contest (or support any other Person contesting) any request by Lender
for adequate protection, or any objection by Lender to any motion, relief, action or proceeding based on Lender claiming a lack
of adequate protection.

 

(d)            
Until the obligations
under the Loan Documents are paid in full, the Pledgor shall not oppose any request by Lender for relief from the automatic stay
or any other stay in any Act of Insolvency of Pledgor or the Servicer.

 

    	15

    	 

    

(e)            
Pledgor shall
not oppose or seek to challenge any claim by Lender for allowance and payment in any Act of Insolvency of Pledgor or the Servicer,
of obligations under the Loan Documents consisting of post-petition interest, fees, costs or other charges to the extent of the
value of Lender’s lien, encumbrance, pledge or other claims on the assets that are the subject of this Agreement or the Loan
Agreement, without regard to the existence of a lien, encumbrance, pledge or other claims of Pledgor applicable to the obligations
of the other parties to the Loan Documents.

 

(f)            
Pledgor shall
not seek in any Act of Insolvency of Pledgor or the Servicer, to be treated as part of the same class of creditors as Lender and
shall not oppose any pleading or motion by Lender advocating that Lender and Pledgor and the Servicer should be treated as separate
classes of creditors. Pledgor acknowledges and agrees that its rights with respect to the Collateral are and shall continue to
be at all times junior and subordinate to the rights of Lender under this Agreement.

 

ARTICLE
IV

REPRESENTATIONS AND WARRANTIES

 

Pledgor represents and
warrants to Lender as of the date hereof and as of each Ginnie Mae Acquisition Date that:

 

Section 4.01      
Pledgor Existence. Pledgor has been duly organized and is validly existing as a limited liability company in
good standing under the laws of the State of Delaware.

 

Section 4.02      
Licenses. Pledgor is duly licensed or is otherwise qualified in each jurisdiction in which it transacts business
for the business which it conducts and is not in default of any applicable federal, state or local laws, rules and regulations
unless, in either instance, the failure to take such action is not reasonably likely (either individually or in the aggregate)
to cause a Material Adverse Effect and is not in default of such state’s applicable laws, rules and regulations. Pledgor
has the requisite power and authority and legal right to own, sell and grant a lien on all of its right, title and interest in
and to the Collateral. Pledgor has the requisite power and authority and legal right to execute and deliver, engage in the transactions
contemplated by, and perform and observe the terms and conditions of, this Agreement and each Loan Document to which it is a party.

 

Section 4.03      
Power. Pledgor has all requisite corporate or other power, and has all governmental licenses, authorizations, consents
and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the
lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect.

 

Section 4.04      
Due Authorization. Pledgor has all necessary corporate or other power, authority and legal right to execute, deliver
and perform its obligations under each of the Loan Documents, as applicable. This Agreement, and the Loan Documents to which it
is a party have been duly authorized, executed and delivered by Pledgor, all requisite or other corporate action having been taken,
and each is valid, binding and enforceable against Pledgor in accordance with its terms except as such enforcement may be affected
by bankruptcy, by other insolvency laws, or by general principles of equity.

 

    	16

    	 

    

 

Section 4.05      
Financial Statements. (a)  Reserved.

 

(b)           
Pledgor has heretofore furnished to Lender a copy of (a) its balance sheet for the fiscal year of Pledgor ended December 31,
2014 and the related statements of income for Pledgor for such fiscal year, with the opinion thereon of Deloitte & Touche LLP
and (b) its balance sheet for the quarterly fiscal period of Pledgor ended December 31, 2014 and the related statements of
income for Pledgor for such quarterly fiscal period. All such financial statements are complete and correct and fairly present,
in all material respects, the financial condition of Pledgor and the results of its operations as at such dates and for such fiscal
periods, all in accordance with GAAP applied on a consistent basis. Since December 31, 2014, there has been no material adverse
change in the consolidated business, operations or financial condition of Pledgor from that set forth in said financial statements
nor is Pledgor aware of any state of facts which (with notice or the lapse of time) would or could result in any such material
adverse change. Pledgor has, on the Financial Statement Date no liabilities, direct or indirect, fixed or contingent, matured or
unmatured, known or unknown, or liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed
by, or reserved against in, said balance sheet and related statements, and at the present time there are no material unrealized
or anticipated losses from any loans, advances or other commitments of Pledgor except as heretofore disclosed to Lender in writing.

 

Section 4.06      
No Trigger Event. There exists no Trigger Event under Section 6.01 hereof, under any mortgage, borrowing agreement
or other instrument or agreement pertaining to indebtedness for borrowed money or to the repurchase of mortgage loans or securities.

 

Section 4.07      
Solvency. Pledgor is solvent and will not be rendered insolvent by the acquisition of the Portfolio Excess Spread
or by this Agreement and, after giving effect to such acquisition and this Agreement, will not be left with an unreasonably small
amount of capital with which to engage in its business. Pledgor does not intend to incur, nor does it believe that it has incurred,
debts beyond its ability to pay such debts as they mature and is not contemplating the commencement of insolvency, bankruptcy,
liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official
in respect of such entity or any of its assets. Pledgor is not pledging any Collateral with any intent to hinder, delay or defraud
any of its creditors.

 

Section 4.08      
No Conflicts. The execution, delivery and performance by Pledgor of this Agreement, and the Loan Documents to which
it is a party do not conflict with any term or provision of the organizational documents of Pledgor or any law, rule, regulation,
order, judgment, writ, injunction or decree applicable to Pledgor of any court, regulatory body, administrative agency or governmental
body having jurisdiction over Pledgor, which conflict would have a Material Adverse Effect, and will not result in any violation
of any such mortgage, instrument, agreement, obligation to which Pledgor is a party.

 

    	17

    	 

    

 

Section 4.09      
True and Complete Disclosure. All information, reports, exhibits, schedules, financial statements or certificates
of Pledgor or any Affiliate thereof or any of their officers furnished or to be furnished to Lender in connection with the initial
or any ongoing due diligence of Pledgor or any Affiliate or officer thereof, negotiation, preparation, or delivery of the Loan
Documents to which it is a party are true and complete in all material respects and do not omit to disclose any material facts
necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading. All financial
statements have been prepared in accordance with GAAP (other than monthly financial statements solely with respect to footnotes,
year-end adjustments and cash flow statements).

 

Section 4.10      
Approvals. No consent, approval, authorization or order of, registration or filing with, or notice to any governmental
authority or court is required under applicable law in connection with the execution, delivery and performance by Pledgor of this
Agreement, and the Loan Documents to which it is a party.

 

Section 4.11      
Litigation. There is no action, proceeding or investigation pending with respect to which Pledgor has received service
of process or, to the best of Pledgor’s knowledge threatened against it before any court, administrative agency or other
tribunal (A) asserting the invalidity of this Agreement, or any Loan Document to which it is a party, (B) seeking to
prevent the consummation of any of the transactions contemplated by this Agreement, or any Loan Document to which it is a party,
(C) makes a claim individually in an amount greater than $10,000,000, (D) which requires filing with the Securities and
Exchange Commission in accordance with the 1934 Act or any rules thereunder or (E) which might materially and adversely affect
the performance by it of its obligations under, or the validity or enforceability of, this Agreement, or any Loan Document to which
it is a party.

 

Section 4.12      
Material Adverse Change. There has been no material adverse change in the business, operations, financial condition,
properties or prospects of Pledgor, or its Affiliates since the date set forth in the most recent financial statements supplied
to Lender.

 

Section 4.13      
Ownership. (a)  Pledgor has good title to all of the Collateral, free and clear of all mortgages, security
interests, restrictions, Liens and encumbrances of any kind other than the Liens created hereby and the Liens created pursuant
to the Loan Agreement and the Liens created pursuant to the Subordinated Loan Agreement; provided that, for the avoidance of doubt,
the Pledgor has purchased the Collateral subject hereto from the Servicer, subject and subordinate to, the Lien of the Lender originally
created under the Loan Agreement, and further perfected hereby.

 

(b)           
Each item of Collateral was acquired by Pledgor in the ordinary course of its business, in good faith, for value and without
notice of any defense against or claim to it on the part of any Person other than the Lender.

 

(c)            
Except as set forth herein, there are no agreements or understandings between Pledgor and any other party which would modify,
release, terminate or delay the attachment of the security interests granted to Lender under this Agreement.

 

    	18

    	 

    

 

(d)           
The provisions of this Agreement are effective to create in favor of Lender a valid security interest in all right, title
and interest of Pledgor in, to and under the Collateral.

 

(e)            
Upon the filing of financing statements on Form UCC-1 naming Lender as “Secured Party” and Pledgor as “Debtor”,
and describing the Collateral, in the recording offices of the Secretary of State of Delaware the security interests granted hereunder
in the Collateral will constitute fully perfected first priority security interests under the Uniform Commercial Code in all right,
title and interest of Pledgor in, to and under such Collateral which can be perfected by filing under the Uniform Commercial Code.

 

Section 4.14      
Taxes. Pledgor and its Subsidiaries have timely filed all tax returns that are required to be filed by them and have
paid all taxes, except for any such taxes as are being appropriately contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves have been provided. The charges, accruals and reserves on the books of Pledgor
and its Subsidiaries in respect of taxes and other governmental charges are, in the opinion of Pledgor, adequate.

 

Section 4.15      
Investment Company. Neither Pledgor nor any of its Subsidiaries is an “investment company”, or a company
“controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended;
provided, however, that any entity that is under the management of PNMAC Capital Management LLC in its capacity as an “investment
adviser” within the meaning of the Investment Advisers Act of 1940 and is otherwise not directly or indirectly owned or controlled
by Pledgor shall not be deemed a “Subsidiary” for the purposes of this Section 4.15.

 

Section 4.16      
Chief Executive Office; Jurisdiction of Organization. On the date hereof, Pledgor’s chief executive office,
is, and has been, located at 6101 Condor Drive, Moorpark, CA 93021. On the Amendment Date, Pledgor’s jurisdiction of organization
is the State of Delaware. Pledgor shall provide Lender with thirty days advance notice of any change in Pledgor’s principal
office or place of business or jurisdiction. Pledgor has no trade name. During the preceding five years, Pledgor has not been known
by or done business under any other name, corporate or fictitious, and has not filed or had filed against it any bankruptcy receivership
or similar petitions nor has it made any assignments for the benefit of creditors.

 

Section 4.17      
Location of Books and Records. The location where Pledgor keeps its books and records, including all computer tapes
and records relating to the Collateral is its chief executive office.

 

Section 4.18      
Adjusted Tangible Net Worth. On the Amendment Date, Pledgor’s Adjusted Tangible Net Worth is not less than
$250,000,000.

 

Section 4.19      
ERISA. Each Plan to which Pledgor or its Subsidiaries make direct contributions, and, to the knowledge of Pledgor,
each other Plan and each Multiemployer Plan, is in compliance in all material respects with, and has been administered in all material
respects in compliance with, the applicable provisions of ERISA, the Code and any other Federal or State law.

 

    	19

    	 

    

 

Section 4.20      
Agreements. Neither Pledgor nor any Subsidiary of Pledgor is a party to any agreement, instrument, or indenture or
subject to any restriction materially and adversely affecting its business, operations, assets or financial condition, except as
disclosed in the financial statements described in Section 4.05 hereof. Neither Pledgor nor any Subsidiary of Pledgor is in
default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement,
instrument, or indenture which default could have a material adverse effect on the business, operations, properties, or financial
condition of Pledgor as a whole. No holder of any indebtedness of Pledgor or of any of its Subsidiaries has given notice of any
asserted default thereunder.

 

Section 4.21      
Other Indebtedness. All Indebtedness (other than Indebtedness evidenced by this Agreement) of Pledgor existing on
the date hereof is listed on Exhibit B hereto (the “Existing Indebtedness”).

 

Section 4.22      
No Reliance. Pledgor has made its own independent decisions to enter into the Loan Documents to which it is a party.
Pledgor is not relying upon any advice from Lender as to any aspect of the Loan Documents, including without limitation, the legal,
accounting or tax treatment of such Loan Documents.

 

Section 4.23      
Plan Assets. Pledgor is not an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan
described in Section 4975(e)(1) of the Code, and the Collateral are not “plan assets” within the meaning of 29
CFR §2510.3 101 as amended by Section 3(42) of ERISA, in Pledgor’s hands, and transactions by or with Pledgor are
not subject to any state or local statute regulating investments or fiduciary obligations with respect to governmental plans within
the meaning of Section 3(32) of ERISA.

 

Section 4.24      
No Prohibited Persons. Neither Pledgor nor any of its Affiliates, officers, directors, partners or members, is an
entity or person (or to the Pledgor’s knowledge, owned or controlled by an entity or person): (i) that is listed in
the Annex to, or is otherwise subject to the provisions of Executive Order 13224 issued on September 24, 2001 (“EO13224”);
(ii) whose name appears on the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”)
most current list of “Specifically Designated National and Blocked Persons” (which list may be published from time
to time in various mediums including, but not limited to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf); (iii) who
commits, threatens to commit or supports “terrorism”, as that term is defined in EO13224; or (iv) who is otherwise
affiliated with any entity or person listed above (any and all parties or persons described in clauses (i) through (iv) above
are herein referred to as a “Prohibited Person”).

 

 

    	20

    	 

    

 

ARTICLE
V

COVENANTS

 

Pledgor covenants and
agrees that until the payment and satisfaction in full of all Obligations, whether now existing or arising hereafter, shall have
occurred and termination of the Loan Agreement:

 

Section 5.01      
Financial Covenants. Pledgor shall at all times comply with the following financial covenants and/or financial ratios:

 

(a)            
Adjusted Tangible Net Worth. Pledgor shall maintain an Adjusted Tangible Net Worth of at least $250,000,000.

 

(b)           
Indebtedness to Adjusted Tangible Net Worth Ratio. Pledgor’s ratio of Indebtedness to Adjusted Tangible Net
Worth shall not exceed 5:1.

 

(c)            
Maintenance of Liquidity. Pledgor shall, as of the end of each calendar month, have cash and Cash Equivalents other
than Restricted Cash in amounts not less than$10,000,000.

 

Section 5.02      
Litigation. Pledgor will promptly, and in any event within ten (10) days after service of process on any of the following,
give to Lender notice of all litigation, actions, suits, arbitrations, investigations (including, without limitation, any of the
foregoing which are threatened or pending) or other legal or arbitrable proceedings affecting Pledgor or any of its Subsidiaries
or affecting any of the Property of any of them before any Governmental Authority that (i) questions or challenges the validity
or enforceability of any of the Loan Documents or any action to be taken in connection with the transactions contemplated hereby,
(ii) makes a claim individually or in the aggregate in an amount greater than $10,000,000, or (iii) which, individually or in the
aggregate, if adversely determined, could be reasonably likely to have a Material Adverse Effect. Pledgor will promptly provide
notice of any judgment, which with the passage of time, could cause a Trigger Event hereunder.

 

Section 5.03      
Prohibition of Fundamental Changes. Pledgor shall not enter into any transaction of merger or consolidation or amalgamation,
or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) or sell all or substantially all
of its assets; provided, that Pledgor may merge or consolidate with (a) any wholly owned subsidiary of Pledgor, or (b) any other
Person if Pledgor is the surviving entity; and provided further, that if after giving effect thereto, no Trigger Event would exist
hereunder.

 

Section 5.04      
Insurance. Pledgor shall continue to maintain, for Pledgor and its Subsidiaries, Fidelity Insurance in an aggregate
amount at least equal to $300,000. Pledgor shall maintain, for Pledgor and its Subsidiaries, Fidelity Insurance in respect of its
officers, employees and agents, with respect to any claims made in connection with all or any portion of the Assets. Pledgor shall
notify Lender of any material change in the terms of any such Fidelity Insurance.

 

    	21

    	 

    

 

Section 5.05      
No Adverse Claims. Pledgor warrants and will defend, and shall cause Servicer to defend, the right, title and interest
of Lender in and to all Collateral against all adverse claims and demands.

 

Section 5.06      
Assignment. Except as permitted herein, neither Pledgor nor Servicer shall sell, assign, transfer or otherwise dispose
of, or grant any option with respect to, or pledge, hypothecate or grant a security interest in or lien on or otherwise encumber
(except as permitted by the Loan Documents), any of the Collateral or any interest therein, provided that this Section 5.06
shall not prevent any transfer of Collateral in accordance with the Loan Documents.

 

Section 5.07      
Security Interest. Pledgor shall do all things necessary to preserve the Collateral so that they remain subject to
a first priority perfected security interest hereunder. Without limiting the foregoing, Pledgor will comply with all rules, regulations
and other laws of any Governmental Authority and cause the Collateral to comply with all applicable rules, regulations and other
laws.

 

Section 5.08      
Records. (a)  Pledgor shall collect and maintain or cause to be collected and maintained all Records relating
to the Collateral in accordance with industry custom and practice for assets similar to the Collateral and all such Records shall
be in Pledgor’s possession unless Lender otherwise approves. Pledgor will not allow any such papers, records or files that
are an original or an only copy to leave Pledgor’s possession. Pledgor or Servicer will maintain all such Records in good
and complete condition in accordance with industry practices for assets similar to the Collateral and preserve them against loss.

 

(b)           
For so long as Lender has an interest in or lien on any Collateral, Pledgor will hold or cause to be held all related Records
in trust for Lender. Pledgor shall notify, or cause to be notified, every other party holding any such Records of the interests
and liens in favor of Lender granted hereby.

 

(c)            
Upon reasonable advance notice from Lender, Pledgor shall (x) make any and all such Records available to Lender to
examine any such Records, either by its own officers or employees, or by agents or contractors, or both, and make copies of all
or any portion thereof, and (y) permit Lender or its authorized agents to discuss the affairs, finances and accounts of Pledgor
with its chief operating officer and chief financial officer and to discuss the affairs, finances and accounts of Pledgor with
its independent certified public accountants.

 

Section 5.09      
Books. Pledgor shall keep or cause to be kept in reasonable detail books and records of account of its assets and
business and shall clearly reflect therein the pledge of Collateral to Lender.

 

Section 5.10      
Approvals. Pledgor shall maintain all licenses, permits or other approvals necessary for Pledgor to conduct its business
and to perform its obligations under the Loan Documents, and Pledgor shall conduct its business strictly in accordance with applicable
law.

 

Section 5.11      
Material Change in Business. Pledgor shall not make any material change in the nature of its business as carried
on at the date hereof.

 

    	22

    	 

    

 

Section 5.12      
Reserved.

 

Section 5.13      
Applicable Law. Pledgor shall comply with the requirements of all applicable laws, rules, regulations and orders
of any Governmental Authority.

 

Section 5.14      
Existence. Pledgor shall preserve and maintain its legal existence and all of its material rights, privileges, material
licenses and franchises.

 

Section 5.15      
Chief Executive Office; Jurisdiction of Organization. Pledgor shall not move its chief executive office from the
address referred to in Section 4.16 or change its jurisdiction of organization from the jurisdiction referred to in Section 4.16
unless it shall have provided Lender thirty (30) days’ prior written notice of such change.

 

Section 5.16      
Taxes. Pledgor shall timely file all tax returns that are required to be filed by it and shall timely pay and discharge
all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its property prior
to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being
contested in good faith and by proper proceedings and against which adequate reserves are being maintained.

 

Section 5.17      
Transactions with Affiliates. Except as contemplated by the Loan Documents, Pledgor will not enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate
unless such transaction (a) does not result in a Potential Trigger Event hereunder, (b) is in the ordinary course of
Pledgor’s business and (c) is upon fair and reasonable terms no less favorable to Pledgor than it would obtain in a
comparable arm’s length transaction with a Person which is not an Affiliate, or make a payment that is not otherwise permitted
by this Section 5.17 to any Affiliate.

 

Section 5.18      
Guarantees. Except as contemplated by this Agreement, Pledgor shall not create, incur, assume or suffer to exist
any Guarantees, except (i) to the extent reflected in Pledgor’s financial statements or notes thereto and (ii) to
the extent the aggregate Guarantees of Pledgor do not exceed $250,000.

 

Section 5.19      
Indebtedness. Pledgor shall not incur any additional material Indebtedness (other than (i) the Existing Indebtedness
specified on Exhibit B hereto; (ii) Indebtedness incurred in connection with an intercompany lending agreement;
(iii) Indebtedness incurred in connection with new or existing secured lending facilities and (iv) usual and customary accounts
payable for a mortgage company), without the prior written consent of Lender.

 

Section 5.20      
True and Correct Information. All information, reports, exhibits, schedules, financial statements or certificates
of Pledgor, any Affiliate thereof or any of their officers furnished to Lender hereunder and during Lender’s diligence of
Pledgor are and will be true and complete in all material respects and do not omit to disclose any material facts necessary to
make the statements herein or therein, in light of the circumstances in which they are made, not misleading. All required financial
statements, information and reports delivered by Pledgor to Lender pursuant to this Agreement shall be prepared in accordance with
U.S. GAAP, or, if applicable, to SEC filings, the appropriate SEC accounting regulations.

 

    	23

    	 

    

 

Section 5.21      
Portfolio Excess Spread Not To Be Evidenced by Promissory Notes. Pledgor shall not take any action, or permit any
other Person to take any action, to cause any of the Portfolio Excess Spread to be evidenced by any “instrument” (as
such term is defined in the Uniform Commercial Code), except in connection with the enforcement or collection of the Portfolio
Excess Spread; provided that each Participation Certificate pledged hereunder shall be a security (as such term is defined
in the Uniform Commercial Code).

 

Section 5.22      
No Pledge; Other Liens; Creditors. Pledgor shall not (other than with respect to the Liens created pursuant to the
Subordinated Loan Agreement) (a) pledge, grant a security interest or assign any existing or future rights to the Collateral, or
pledge or grant to any other Person any security interest in any Assets or Servicing Contracts; or (b) pledge, transfer or convey
any security interest or suffer to exist, any Lien on any interest of any kind (whether in whole or in part) in any Portfolio Excess
Spread or Servicing Contract, unless such parties enter into an intercreditor agreement with the recipient of such security interest
or Lien, in form and substance acceptable to the Lender.

 

Section 5.23      
Plan Assets. Pledgor shall not be an employee benefit plan as defined in Section 3 of Title I of ERISA, or a
plan described in Section 4975(e)(1) of the Code and Pledgor shall not use “plan assets” within the meaning of
29 CFR §2510.3 101, as amended by Section 3(42) of ERISA to engage in this Agreement.

 

Section 5.24      
Sharing of Information. Pledgor shall allow Lender to exchange information related to Pledgor and the Collateral
hereunder with third party lenders and Pledgor shall permit each third party lender to share such information with Lender.

 

Section 5.25      
No Modification of the Master Spread Acquisition Agreement; Intended Third Party Beneficiary. Pledgor shall not consent,
with respect to the Master Spread Acquisition Agreement related to any Collateral, to (i) the modification, amendment or termination
of such Master Spread Acquisition Agreement, (ii) the waiver of any provision of such Master Spread Acquisition Agreement
or (iii) the resignation of Servicer as servicer, or the assignment, transfer, or material delegation of any of its rights
or obligations, under Master Spread Acquisition Agreement, without the prior written consent of Lender exercised in Lender’s
sole discretion. Notwithstanding anything to the contrary set forth in the Master Spread Acquisition Agreement, the Lender is hereby
appointed and is an intended third party beneficiary thereof, with full enforcement rights as if a party thereto.

 

Section 5.26      
Reporting Requirements. (a)  Pledgor shall furnish to Lender (i) promptly, copies of any material
and adverse notices (including, without limitation, notices of defaults, breaches, potential defaults or potential breaches) and
any material financial information that is not otherwise required to be provided by Pledgor hereunder which is given to Pledgor’s
lenders, (ii) immediately, notice of the occurrence of (1) any Trigger Event hereunder; (2) any default or material
breach under any Servicing Contract or the Master Spread Acquisition Agreement; (3) any default or breach by Pledgor of any
obligation under this Agreement or any material contract or agreement of Pledgor or (4) the occurrence of any event or circumstance
that such party reasonably expects has resulted in, or will, with the passage of time, result in, a Material Adverse Effect or
a Trigger Event and (iii) the following:

 

    	24

    	 

    

 

(1)           
as soon as available, and in any event within thirty (30) days of receipt, copies of relevant portions of all final written
Agency, FHA, Governmental Authority and investor audits, examinations, evaluations, monitoring reviews and reports of its operations
(including those prepared on a contract basis) which provide for or relate to (i) material corrective action required, (ii) material
sanctions proposed, imposed or required, including without limitation notices of defaults, notices of termination of approved status,
notices of imposition of supervisory agreements or interim servicing agreements, and notices of probation, suspension, or non-renewal,
or (iii) “report cards,” “grades” or other classifications of the quality of Pledgor’s operations;

 

(2)           
such other information regarding the financial condition, operations, or business of Pledgor as Lender may reasonably request;

 

(3)           
as soon as reasonably possible, and in any event within thirty (30) days after a Responsible Officer of Pledgor has knowledge
of the occurrence of any ERISA Event of Termination, stating the particulars of such ERISA Event of Termination in reasonable detail;

 

(4)           
As soon as reasonably possible, and in any event within five (5) Business Days of knowledge thereof, notice of any of the
following events:

 

a.               
change in the insurance coverage required of Pledgor, with a copy of evidence of same attached;

 

b.              
any material dispute, litigation, investigation, proceeding or suspension between Pledgor, on the one hand, and any Governmental
Authority or any Person;

 

c.               
any material change in accounting policies or financial reporting practices of Pledgor;

 

d.              
any material issues raised upon examination of Pledgor or Pledgor’s facilities by any Governmental Authority;

 

e.               
any material change in the Indebtedness of Pledgor, including, without limitation, any default, renewal, non-renewal, termination,
increase in available amount or decrease in available amount related thereto;

 

f.                
any default relating to any Assets, or promptly upon receipt of notice or knowledge of any lien or security interest (other
than security interests created hereby or by the other Loan Documents) on, or claim asserted against, any of the Collateral;

 

    	25

    	 

    

 

g.               
the transfer, expiration without renewal, termination or other loss of all or any part of any Servicing Contract, or the
right of Servicer to service Mortgage Loans thereunder (or the termination or replacement of Servicer thereunder), the reason for
such transfer, loss, termination or replacement, if known to Pledgor, and the effects that such transfer, loss, termination or
replacement will have (or will likely have) on the prospects for full and timely collection of all amounts owing to Pledgor under
or in respect of the income relating to the Portfolio Excess Spread under that Servicing Contract;

 

h.               
any other event, circumstance or condition that has resulted, or has a possibility of resulting, in a Material Adverse Effect
with respect to Pledgor; and

 

i.                
the occurrence of any material employment dispute and a description of the strategy for resolving it that has the possibility
of resulting in a Material Adverse Effect.

 

(b)             Quality Control Reports. Pledgor shall furnish to Lender periodic internal quality control reports and internal audit
reports as they are distributed to the board of directors of Pledgor.

 

(c)            
Other. Pledgor shall deliver to Lender any other reports or information reasonably requested by Lender or as otherwise
required pursuant to this Agreement.

 

ARTICLE
VI

TRIGGER EVENTS /RIGHTS AND REMEDIES OF LENDER UPON TRIGGER EVENT OR EVENT OF DEFAULT

 

Section 6.01      
Trigger Events. Each of the following events or circumstances shall constitute a “Trigger Event”:

 

(a)            
Cross Default. Pledgor or Affiliates thereof or Pledge Guarantor shall be in default under (A) any Repurchase
Document; (B) any Indebtedness, in the aggregate, in excess of (x) $1,500,000 of Pledgor or any Affiliate thereof or (y) $1,000,000
of Pledge Guarantor, which default (1) involves the failure to pay a matured obligation, or (2) permits the acceleration
of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness, or (C) any other contract
or contracts, in the aggregate in excess of (x) $1,500,000 to which Pledgor or any Affiliate thereof is a party or (y) $1,000,000
to which Pledge Guarantor is a party, which default (1) involves the failure to pay a matured obligation, or (2) permits
the acceleration of the maturity of obligations by any other party to or beneficiary of such contract.

 

(b)           
Assignment. Assignment or attempted assignment by Pledgor of this Agreement or any rights hereunder without first
obtaining the specific written consent of Lender, or the granting by Pledgor of any security interest, lien or other encumbrances
on any Collateral to any person other than Lender, except for the second priority Lien of the Subordinated Lender.

 

    	26

    	 

    

 

(c)            
Insolvency. An Act of Insolvency shall have occurred with respect to Pledgor or any Affiliate thereof or Pledge Guarantor.

 

(d)           
Material Adverse Change. Any material adverse change in the Property, business, financial condition or operations
of Pledgor or any of their Affiliates or the Pledge Guarantor shall occur, in each case as determined by Lender in its sole good
faith discretion, or any other condition shall exist which, in Lender’s sole good faith discretion, constitutes a material
impairment of Pledgor’s ability to perform its obligations under this Agreement or any other Loan Document or Pledge Guarantor’s
ability to perform its obligations under the Pledge Guaranty Agreement, as applicable.

 

(e)            
Breach of Material Representation or Covenant or Obligation. A breach by Pledgor of any of the representations, warranties
or covenants or obligations set forth in Sections 4.01, 4.07, 4.12, 4.18, 4.21, 5.01, 5.03, 5.14, 5.18, 5.19, 5.22 or 5.23
of this Agreement.

 

(f)             
Breach of Other Representation or Covenant. A material breach by Pledgor of any other material representation, warranty
or covenant set forth in this Agreement (and not otherwise specified in Section 6.01(e) above), if such breach is not cured
within five (5) Business Days.

 

(g)            
Change in Control. The occurrence of a Change in Control with respect to Pledgor or a Change in Control (as defined
in the Underlying Loan Agreement) with respect to Pledge Guarantor.

 

(h)            
Judgment. A final judgment or judgments for the payment of money in excess of $10,000,000 shall be rendered against
Pledgor or any of their Affiliates or Pledge Guarantor by one or more courts, administrative tribunals or other bodies having jurisdiction
and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution
thereof shall not be procured, within thirty (30) days from the date of entry thereof.

 

(i)             
Government Action. Any Governmental Authority or any person, agency or entity acting or purporting to act under governmental
authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial
part of the Property of Pledgor or any Affiliate thereof or Pledge Guarantor, or shall have taken any action to displace the management
of Pledgor or any Affiliate thereof or Pledge Guarantor or to curtail its authority in the conduct of the business of Pledgor or
any Affiliate thereof or Pledge Guarantor, or takes any action in the nature of enforcement to remove, limit or restrict the approval
of Pledgor or Affiliate or Pledge Guarantor as an issuer, buyer or a seller/servicer of Mortgage Loans or securities backed thereby,
and such action provided for in this subparagraph (i) shall not have been discontinued or stayed within thirty (30) days.

 

(j)             
Inability to Perform. A Responsible Officer of (i) Pledgor shall admit its inability to, or its intention not to,
perform any of their respective obligations under the applicable Loan Documents or (ii) Pledge Guarantor shall admit its inability
to, or its intention not to, perform any of their respective obligations under the Pledge Guaranty Agreement.

 

    	27

    	 

    

 

(k)            
Security Interest. This Agreement shall for any reason cease to create a valid security interest in any material
portion of the Collateral purported to be covered hereby.

 

(l)             
Financial Statements. Pledgor’s or Pledge Guarantor’s audited annual financial statements or the notes
thereto or other opinions or conclusions stated therein shall be qualified or limited by reference to the status of Pledgor or
Pledge Guarantor as a “going concern” or a reference of similar import.

 

(m)          
Termination of Repurchase Agreements. All Repurchase Agreements shall have been terminated, or shall have terminated
by their terms, in either case, regardless of reason or circumstance.

 

Section 6.02      
No Waiver. A Trigger Event shall be deemed to be continuing unless expressly waived by Lender in writing.

 

Section 6.03      
Liquidation of Collateral. Pledgor hereby authorizes Lender to liquidate the Collateral should an Event of Default
occur and apply the Proceeds of such liquidation to the Obligations existing under the Loan Agreement. Pledgor hereby acknowledges
and agrees that on the occurrence of an Event of Default under the Loan Agreement, Lender shall have the right to liquidate the
Portfolio Excess Spread, the Servicing Rights and any other Assets constituting Collateral as provided under the Loan Agreement.
In the event that there are any excess Proceeds remaining after such application, such Proceeds will be then remitted pursuant
to the Loan Agreement.

 

ARTICLE
VII 

ENTIRE AGREEMENT; AMENDMENTS

AND WAIVERS; SEPARATE ACTIONS BY LENDER

 

Section 7.01      
Entire Agreement. This Agreement (including the Schedules and Exhibits hereto) and the related Loan Documents constitute
the entire agreement of the parties hereto and supersedes any and all prior or contemporaneous agreements, written or oral, as
to the matters contained herein, and no modification or waiver of any provision hereof or of the Loan Documents, nor consent to
the departure by Pledgor therefrom, shall be effective unless the same is in writing, and then such waiver or consent shall be
effective only in the specific instance, and for the purpose, for which it is given.

 

Section 7.02      
Waivers, Separate Actions by Lender. Any amendment or waiver effected in accordance with this Article VII shall be
binding upon Lender and Pledgor; and Lender’s failure to insist upon the strict performance of any term, condition or other
provision of this Agreement, or any of the Loan Documents, or to exercise any right or remedy hereunder or thereunder, shall not
constitute a waiver by Lender of any such term, condition or other provision or Trigger Event, Potential Trigger Event or Event
of Default in connection therewith, nor shall a single or partial exercise of any such right or remedy preclude any other or future
exercise, or the exercise of any other right or remedy; and any waiver of any such term, condition or other provision or of any
such Trigger Event, Potential Trigger Event or Event of Default shall not affect or alter this Agreement, or any of the Loan Documents,
and each and every term, condition and other provision of this Agreement, and the Loan Documents shall, in such event, continue
in full force and effect and shall be operative with respect to any other then existing or subsequent Trigger Event, Potential
Trigger Event or Event of Default in connection therewith. A Trigger Event or Event of Default hereunder and under any of the Loan
Documents shall be deemed to be continuing unless and until waived in writing by Lender, as provided in Section 6.02.

 

    	28

    	 

    

 

ARTICLE
VIII

SUCCESSORS AND ASSIGNS

 

Section 8.01      
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, and all subsequent holders of the Note, any portion thereof, or any interest therein.
Pledgor shall not have the right to assign all or any part of this Agreement or any interest herein without the prior written consent
of Lender.

 

ARTICLE
IX

MISCELLANEOUS

 

Section 9.01      
Survival. This Agreement and the other Loan Documents and all covenants, agreements, representations and warranties
herein and therein and in the certificates delivered pursuant hereto and thereto, shall survive the making by Lender of the Loan
and the execution and delivery to Lender of this Agreement and the Loan Documents and shall continue in full force and effect so
long as the Obligations are outstanding and unpaid and the Loan Documents have not been terminated.

 

Section 9.02      
Indemnification. Pledgor shall, and hereby agrees to, indemnify, defend and hold harmless Lender, any Affiliate of
Lender and their respective directors, officers, agents, employees and counsel from and against any and all losses, claims, damages,
liabilities, deficiencies, judgments or expenses incurred by any of them as a consequence of, or arising out of or by reason of
any litigation, investigations, claims or proceedings which arise out of or are in any way related to the enforcement of this Agreement
or Pledgor’s gross negligence or willful misconduct in connection with, (i) this Agreement or any other Loan Document
or any Servicing Contract, or the transactions contemplated hereby or thereby, (ii) Pledgor’s practices or procedures;
and (iii) any Trigger Event, Potential Trigger Event, or any other breach by Pledgor of any of the provisions of this Agreement
or any other Loan Document, including, without limitation, amounts paid in settlement, court costs and reasonable fees and disbursements
of counsel incurred in connection with any such litigation, investigation, claim or proceeding or any advice rendered in connection
with any of the foregoing. In addition to the foregoing, the Pledgor shall also indemnify and hold harmless Lender, any Affiliate
of Lender and their respective directors, officers, agents, employees and counsel from and against any and all losses, claims,
damages, liabilities, deficiencies, judgments or expenses incurred by any of them as a consequence of, or any claims arising from
or relating to the Portfolio Excess Spread or the Master Spread Acquisition Agreement.

 

    	29

    	 

    

 

Section 9.03      
Nonliability of Lender. The parties hereto agree that, notwithstanding any affiliation that may exist between Pledgor
and Lender, the relationship between Pledgor and Lender shall be solely that of a Pledgor and a lender. Lender shall not have any
fiduciary responsibilities to Pledgor. Pledgor (i) agrees that Lender shall not have any liability to Pledgor (whether sounding
in tort, contract or otherwise) for losses suffered by Pledgor in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by this agreement, the other loan documents or any other agreement entered
into in connection herewith or any act, omission or event occurring in connection therewith, unless it is determined by a judgment
of a court that is binding on Lender (which judgment shall be final and not subject to review on appeal), that such losses were
the result of acts or omissions on the part of Lender constituting gross negligence or willful misconduct and (ii) waives,
releases and agrees not to sue upon any claim against Lender (whether sounding in tort, contract or otherwise), except a claim
based upon gross negligence or willful misconduct. Whether or not such damages are related to a claim that is subject to such waiver
and whether or not such waiver is effective, Lender shall not have any liability with respect to, and Pledgor hereby waives, releases
and agrees not to sue upon any claim for, any special, indirect, consequential or punitive damages suffered by Pledgor in connection
with, arising out of, or in any way related to the transactions contemplated or the relationship established by this Agreement,
the other loan documents or any other agreement entered into in connection herewith or therewith or any act, omission or event
occurring in connection herewith or therewith, unless it is determined by a judgment of a court that is binding on Lender (which
judgment shall be final and not subject to review on appeal), that such damages were the result of acts or omissions on the part
of Lender, as applicable, constituting willful misconduct or gross negligence.

 

Section 9.04      
Governing Law; Jurisdiction, Waiver of Jury Trial: Waiver of Damages. (a)  This Agreement shall be binding
and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Pledgor acknowledges that
the obligations of Lender hereunder or otherwise are not the subject of any guaranty by, or recourse to, any direct or indirect
parent or other Affiliate of Lender. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE STATE
OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

 

(b)           
PLEDGOR HEREBY WAIVES TRIAL BY JURY. PLEDGOR HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY COURT OF THE
STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING OUT OF OR RELATING
TO THE LOAN DOCUMENTS IN ANY ACTION OR PROCEEDING. PLEDGOR HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION IT MAY HAVE TO, EXCLUSIVE
PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS.

 

    	30

    	 

    

 

(c)            
Pledgor further irrevocably consents to the service of process of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to Pledgor at the address set forth
in Section 9.05 hereof.

 

(d)           
Nothing herein shall affect the right of Lender to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against Pledgor in any other jurisdiction.

 

(e)            
Pledgor waives the posting of any bond otherwise required of Lender in connection with any judicial process or proceeding
to enforce any judgment or other court order entered in favor of Lender, or to enforce by specific performance, temporary restraining
order or preliminary or permanent injunction this Agreement or any of the other Loan Documents.

 

Section 9.05      
Notices. Any and all notices statements, demands or other communications hereunder may be given by a party to the
other by mail, email, facsimile, messenger or otherwise to the address specified below, or so sent to such party at any other place
specified in a notice of change of address hereafter received by the other. All notices, demands and requests hereunder may be
made orally, to be confirmed promptly in writing, or by other communication as specified in the preceding sentence.

 

If to Pledgor:

 

PennyMac Holdings, LLC

6101 Condor Drive

Moorpark, CA 93021

Attention: Pamela Marsh/Michael
Wong

Phone Number: (805) 330-6059/(818)
224-7055

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

 

with a copy to:

 

PennyMac Holdings, LLC

6101 Condor Drive

Moorpark, CA 93021

Attention: Jeff Grogin

Phone Number: (818) 224-7050

E-mail: jeff.grogin@pnmac.com

 

If to Lender:

 

Credit Suisse First Boston Mortgage
Capital LLC

c/o Credit Suisse Securities (USA)
LLC

Eleven Madison Avenue, 4th Floor

New York, NY 10010

Attention: Margaret Dellafera

Phone Number: 212-325-6471

Fax Number: 212-743-4810

E-mail: margaret.dellafera@credit-suisse.com

 

    	31

    	 

    

 

Section 9.06      
Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision
or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement. In
case any provision in or obligation under this Agreement, or any other Loan Document shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

 

Section 9.07      
Section Headings. The Article and Section headings in this Agreement are inserted for convenience of reference only
and shall not in any way affect the meaning or construction of any provision of this Agreement.

 

Section 9.08      
Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto in
separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute
one and the same instrument.

 

Section 9.09      
Periodic Due Diligence Review. Pledgor acknowledges that Lender has the right to perform continuing due diligence
reviews with respect to Pledgor and the Collateral, for purposes of verifying compliance with the representations, warranties and
specifications made hereunder, or otherwise, and Pledgor agrees that upon reasonable (but no less than five (5) Business Days’)
prior notice unless a Trigger Event or an Event of Default shall have occurred, in which case no notice is required, to Pledgor,
Lender or its authorized representatives will be permitted during normal business hours, and in a manner that does not unreasonably
interfere with the ordinary conduct of Pledgor’s business, to examine, inspect, and make copies and extracts of, any and
all documents, records, agreements, instruments or information relating to such Collateral in the possession or under the control
of Pledgor. Pledgor also shall make available to Lender a knowledgeable financial or accounting officer for the purpose of answering
questions respecting the Collateral or the Pledgor.

 

Section 9.10      
Hypothecation or Pledge of Collateral. Lender shall have free and unrestricted use of all Collateral and nothing
in this Agreement shall preclude Lender from engaging in repurchase transactions with all or a portion of the Collateral or otherwise
pledging, repledging, transferring, hypothecating, or rehypothecating all or a portion of the Collateral.

 

    	32

    	 

    

 

Section 9.11      
Non-Confidentiality of Tax Treatment. (a) This Agreement and its terms, provisions, supplements and amendments, and
notices hereunder, are proprietary to Lender and Pledgor and shall be held by each party hereto, as applicable in strict confidence
and shall not be disclosed to any third party without the written consent of Lender or Pledgor, except for (i) disclosure
to Lender’s, Pledgor’s direct and indirect Affiliates and Subsidiaries, attorneys or accountants, but only to the extent
such disclosure is necessary and such parties agree to hold all information in strict confidence, or (ii) disclosure required
by law, rule, regulation or order of a court, other regulatory body or in connection with enforcement of rights and remedies hereunder.
Notwithstanding the foregoing or anything to the contrary contained herein or in any other Loan Documents, the parties hereto may
disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of the Loan, any fact
relevant to understanding the federal, state and local tax treatment of the Loan, and all materials of any kind (including opinions
or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax
treatment; provided that Pledgor may not disclose the name of or identifying information with respect to Lender or any pricing
terms or other nonpublic business or financial information (including any sublimits and financial covenants) that is unrelated
to the federal, state and local tax treatment of the Loan and is not relevant to understanding the federal, state and local tax
treatment of the Loan, without the prior written consent of Lender.

 

(b)           
Notwithstanding anything in this Agreement to the contrary, Pledgor shall comply with all applicable local, state and federal
laws, including, without limitation, all privacy and data protection law, rules and regulations that are applicable to the Collateral
and/or any applicable terms of this Agreement (the “Confidential Information”). Pledgor understands that the Confidential
Information may contain “nonpublic personal information”, as that term is defined in Section 509(4) of the Gramm-Leach-Bliley
Act (the “Act”), and Pledgor agrees to maintain such nonpublic personal information that it receives hereunder in accordance
with the Act and other applicable federal and state privacy laws. Pledgor shall implement such physical and other security measures
as shall be necessary to (a) ensure the security and confidentiality of the “nonpublic personal information” of
the “customers” and “consumers” (as those terms are defined in the Act) of Lender or any Affiliate of Lender
which Pledgor holds, (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information,
and (c) protect against any unauthorized access to or use of such nonpublic personal information. Pledgor represents and warrants
that it has implemented appropriate measures to meet the objectives of Section 501(b) of the Act and of the applicable standards
adopted pursuant thereto, as now or hereafter in effect. Upon request, Pledgor will provide evidence reasonably satisfactory to
allow Lender to confirm that the providing party has satisfied its obligations as required under this section. Without limitation,
this may include Lender’s review of audits, summaries of test results, and other equivalent evaluations of Pledgor. Pledgor
shall notify Lender immediately following discovery of any breach or compromise of the security, confidentiality, or integrity
of nonpublic personal information of the customers and consumers of Lender or any Affiliate of Lender provided directly to Pledgor
by Lender or such Affiliate. Pledgor shall provide such notice to Lender by personal delivery, by facsimile with confirmation of
receipt, or by overnight courier with confirmation of receipt to the applicable requesting individual.

 

    	33

    	 

    

 

Section 9.12      
Set-off. In addition to any rights and remedies of Lender hereunder and by law, Lender shall have the right, without
prior notice to Pledgor, any such notice being expressly waived by Pledgor to the extent permitted by applicable law to set-off
and appropriate and apply against any Obligation from Pledgor or any Affiliate thereof to Lender or any of its Affiliates any and
all deposits (general or special, time or demand, provisional or final), in any currency, and any other obligation (including to
return funds to Pledgor), credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by or due from Lender or any Affiliate thereof to or for the credit
or the account of Pledgor or any Affiliate thereof. Lender agrees promptly to notify Pledgor after any such set off and application
made by Lender; provided that the failure to give such notice shall not affect the validity of such set off and application.

 

Section 9.13      
Amendment and Restatement. The terms and provisions of the Existing Security Agreement are hereby amended and restated
in their entirety by the terms and provisions of this Agreement.

 

 

 

 

 

 

    	34

    	 

    

 

IN WITNESS WHEREOF, Pledgor
and Lender have caused this Amended and Restated Security and Subordination Agreement to be executed and delivered by their duly
authorized officers or trustees as of the date first above written.

 

	 	CREDIT SUISSE FIRST BOSTON 

MORTGAGE CAPITAL LLC, as Lender
	 	 	 
	 	 	 
	 	By:	/s/ Elie Chau                                                         
	 	 	Name:  Elie Chau
	 	 	Title:    Vice President
	 	 	 
	 	 	 
	 	PENNYMAC HOLDINGS, LLC, as Pledgor
	 	 	 
	 	 	 
	 	By:	/s/ Pamela Marsh                                                
	 	 	Name:  Pamela Marsh
	 	 	Title:    Executive Vice President, Treasurer

 

 

 

 

 

 

 

 

Signature Page to Amended and Restated Security
and Subordination Agreement

 

    	35

    	 

    

 

SCHEDULE 1

SERVICING CONTRACTS 

 

Ginnie Mae I MBS and Ginnie Mae II MBS,
in either case issued by Seller and guaranteed by Ginnie Mae upon Servicer’s securitization of a pool of Ginnie Mae eligible
mortgage loans insured or guaranteed by the FHA or VA, as applicable. Servicer’s issuance of the related MBS and its servicing
of the underlying mortgage loans are governed in all respects by Ginnie Mae's 5500.3 REV-1: Mortgage-Backed Securities Guide, as
the same may be amended from time to time.

 

 

 

 

 

 

 

    	Sch 1-1

    	 

    

SCHEDULE 2

RESPONSIBLE OFFICERS – PLEDGOR

 

 

PLEDGOR AUTHORIZATIONS

 

Any of the persons whose signatures and
titles appear below are authorized, acting singly, to act for Pledgor under this Agreement:

 

Responsible Officers for execution of Loan
Documents and amendments

 

	Name	 	Title	 	Signature
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

Responsible Officers for execution of day-to-day
operational functions

 

	Name	 	Title	 	Signature
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

 

 

 

    	Sch 2-1

    	 

    

 

SCHEDULE 3

 

LIST OF MASTER SPREAD ACQUISITION AGREEMENTS

 

 

Amended and Restated Acquisition and MSR
Servicing Agreement, dated as of April 30, 2015, between PennyMac Loan Services, LLC and PennyMac Holdings, LLC, as amended, restated
or modified from time to time and the Participation Certificate issued thereunder.

 

 

 

 

    	Sch 3-1

    	 

    

 

EXHIBIT A-1

 

FORM OF POWER OF ATTORNEY

 

Reference is made to
the Amended and Restated Security and Subordination Agreement, dated as of April 30, 2015 (as amended from time to time, the “Agreement”)
between PENNYMAC HOLDINGS, LLC (the “Pledgor”) and CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the “Lender”).

 

KNOW ALL MEN BY THESE
PRESENTS, Pledgor hereby irrevocably constitutes and appoints Lender and any officer or agent thereof, with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Pledgor and in the
name of Pledgor or in its own name, from time to time in Lender’s discretion, in accordance with the terms of the Agreement,
for the purpose of carrying out the terms of the Agreement, to take any and all appropriate action and to execute any and all documents
and instruments which may be necessary or desirable to accomplish the purposes of the Agreement, and, without limiting the generality
of the foregoing, Pledgor hereby gives Lender the power and right, on behalf of Pledgor, without assent by, but with notice to,
Pledgor, if permitted under the terms of the Agreement, to do the following:

 

 (i)          in
the name of Pledgor or its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances
or other instruments for the payment of moneys due with respect to (i) all Portfolio Excess Spread arising under or related to
any Servicing Contract; (ii) all rights to payment of amounts due under the Master Spread Acquisition Agreement on account of,
or related to, the Portfolio Excess Spread; (iii) all Assets arising under or relating to the Master Spread Acquisition Agreement
and all rights thereunder; (iv) all rights to reimbursement of Assets and/or amounts due in respect thereof under the related Servicing
Contract; (v) the Dedicated Account; (vi) all records, instruments or other documentation evidencing any of the foregoing; (vii)
all “general intangibles”, “accounts”, “chattel paper”, “securities accounts”,
“investment property”, “deposit accounts” and “money” as defined in the Uniform Commercial
Code relating to or constituting any and all of the foregoing (including, without limitation, all of Pledgor’s rights, title
and interest in and under the Portfolio Excess Spread and Servicing Contracts); and (viii) any and all replacements, substitutions,
distributions on or proceeds of any and all of the foregoing (any and all property listed in clauses (i) through (viii), collectively,
the “Collateral”) and to file any claim or to take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by Lender for the purpose of collecting any and all such moneys due with respect to any Collateral
whenever payable;

 

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

 

 

    	Sch A-1--2

    	 

    

 

 (iii)          to
the extent permitted under the Master Spread Acquisition Agreement, to request that Ginnie Mae Servicing Rights and Servicing Rights
in respect of Mortgage Loans owned by any other investor be transferred to Lender or to another servicer approved by Ginnie Mae
or such other investor (as the case may be) and perform (without assuming or being deemed to have assumed any of the obligations
of Servicer thereunder) all aspects of each servicing contract for which the Portfolio Excess Spread is Collateral;

 

(iv)          to
request distribution to Lender of sale proceeds or any applicable contract termination fees arising from the sale or termination
of such Servicing Rights to the extent of the Portfolio Excess Spread and remaining after satisfaction of Servicer’s relevant
obligations to Ginnie Mae or such other investor (as the case may be), including costs and expenses related to any such sale or
transfer of such Servicing Rights and other amounts due for unmet obligations of Servicer to Ginnie Mae or such other investor
(as the case may be) under applicable Ginnie Mae Guides or such other investor’s contract;

 

(v)         
to deal with third parties, including, without limitation, investors and any and all subservicers and master servicers
in respect of any of the Collateral in the same manner and with the same effect as if done by Pledgor;

 

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

 

 

 

    	Sch A-1--3

    	 

    

 

This power of attorney
is a power coupled with an interest and shall be irrevocable until such time as all Obligations have been paid in full and the
Agreement is terminated.

 

Pledgor also authorizes
Lender, at any time and from time to time, to execute, in connection with any sale provided for in the Agreement, any endorsements,
assignments or other instruments of conveyance or transfer with respect to the Collateral.

 

The powers conferred
on Lender are solely to protect Lender’s interests in the Collateral and shall not impose any duty upon Lender to exercise
any such powers. Lender shall be accountable only for amounts that it actually receives as a result of the exercise of such powers,
and neither Lender nor any of its officers, directors, or employees shall be responsible to Pledgor for any act or failure to act
hereunder, except for Lender’s own gross negligence or willful misconduct.

 

Any capitalized term
used but not defined herein shall have the meaning assigned to such term in the Agreement.

 

TO INDUCE ANY THIRD PARTY
TO ACT HEREUNDER, PLEDGOR HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY
ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE
OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND LENDER ON ITS OWN BEHALF AND ON
BEHALF OF LENDER’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL
CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.

 

 

 

 

    	Sch A-1--4

    	 

    

 

IN WITNESS WHEREOF Pledgor
has caused this Power of Attorney to be executed and Pledgor’s seal to be affixed this ____ day of __________. 2015.

 

 

	 	PENNYMAC HOLDINGS, LLC
	 	 	 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

 

 

 

 

    	Sch A-1--5

    	 

    

 

	STATE OF	)	 
	 	)	ss.:
	COUNTY OF	)	 

 

On the ____________ day
of_______, 2015 before me, a Notary Public in and for said State, personally appeared __________________________________
, known to me to be ______________________________________________ of Pledgor, the institution that executed the within instrument
and also known to me to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

 

IN WITNESS WHEREOF, I
have hereunto set my hand affixed my office seal the day and year in this certificate first above written.

 

 

 

	 	 
	Notary Public	 

 

 

My Commission expires ___________________________

 

 

 

    	Sch A-1--6

    	 

    

EXHIBIT A-2

 

FORM OF POWER OF ATTORNEY

 

Reference is made to
the Amended and Restated Security and Subordination Agreement, dated as of April 30, 2015 (as amended from time to time, the “Agreement”)
between PENNYMAC HOLDINGS, LLC (the “Pledgor”) and CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the “Lender”).

 

KNOW ALL MEN BY THESE
PRESENTS, Pledgor hereby irrevocably constitutes and appoints Select Portfolio Servicing, Inc. (“SPS”) and any
officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power
and authority in the place and stead of Pledgor and in the name of Pledgor or in its own name, from time to time in SPS’s
discretion, in accordance with the terms of the Agreement, for the purpose of carrying out the terms of the Agreement, to take
any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish
the purposes of the Agreement, and, without limiting the generality of the foregoing, Pledgor hereby gives SPS the power and right,
on behalf of Pledgor, without assent by, but with notice to, Pledgor, if permitted under the terms of the Agreement, to do the
following:

 

(i)          in
the name of Pledgor or its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances
or other instruments for the payment of moneys due with respect to (i) all Portfolio Excess Spread arising under or related to
any Servicing Contract; (ii) all rights to payment of amounts due under the Master Spread Acquisition Agreement on account of,
or related to, the Portfolio Excess Spread; (iii) all Assets arising under or relating to the Master Spread Acquisition Agreement
and all rights thereunder; (iv) all rights to reimbursement of Assets and/or amounts due in respect thereof under the related Servicing
Contract; (v) the Dedicated Account; (vi) all records, instruments or other documentation evidencing any of the foregoing; (vii)
all “general intangibles”, “accounts”, “chattel paper”, “securities accounts”,
“investment property”, “deposit accounts” and “money” as defined in the Uniform Commercial
Code relating to or constituting any and all of the foregoing (including, without limitation, all of Pledgor’s rights, title
and interest in and under the Portfolio Excess Spread and Servicing Contracts); and (viii) any and all replacements, substitutions,
distributions on or proceeds of any and all of the foregoing (any and all property listed in clauses (i) through (viii), collectively,
the “Collateral”) and to file any claim or to take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by SPS for the purpose of collecting any and all such moneys due with respect to any Collateral whenever
payable;

 

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

 

    	Sch A-2--1

    	 

    

 

 (iii)          to
the extent permitted under the Master Spread Acquisition Agreement, to request that Ginnie Mae Servicing Rights and Servicing Rights
in respect of Mortgage Loans owned by any other investor be transferred to SPS or to another servicer approved by Ginnie Mae or
such other investor (as the case may be) and perform (without assuming or being deemed to have assumed any of the obligations of
Servicer thereunder) all aspects of each servicing contract for which the Portfolio Excess Spread is Collateral;

 

(iv)         
to request distribution to SPS of sale proceeds or any applicable contract termination fees arising from the sale or termination
of such Servicing Rights to the extent of the Portfolio Excess Spread and remaining after satisfaction of Servicer’s relevant
obligations to Ginnie Mae or such other investor (as the case may be), including costs and expenses related to any such sale or
transfer of such Servicing Rights and other amounts due for unmet obligations of Servicer to Ginnie Mae or such other investor
(as the case may be) under applicable Ginnie Mae Guides or such other investor’s contract;

 

(v)         
to deal with third parties, including, without limitation, investors and any and all subservicers and master servicers in respect
of any of the Collateral in the same manner and with the same effect as if done by Pledgor;

 

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

 

 

    	Sch A-2--2

    	 

    

 

This power of attorney
is a power coupled with an interest and shall be irrevocable until such time as all Obligations have been paid in full and the
Agreement is terminated.

 

Pledgor also authorizes
SPS, at any time and from time to time, to execute, in connection with any sale provided for in the Agreement, any endorsements,
assignments or other instruments of conveyance or transfer with respect to the Collateral.

 

The powers conferred
on SPS are solely to protect SPS’s interests in the Collateral and shall not impose any duty upon SPS to exercise any such
powers. SPS shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither
SPS nor any of its officers, directors, or employees shall be responsible to Pledgor for any act or failure to act hereunder, except
for SPS’s own gross negligence or willful misconduct.

 

Any capitalized term
used but not defined herein shall have the meaning assigned to such term in the Agreement.

 

TO INDUCE ANY THIRD PARTY
TO ACT HEREUNDER, PLEDGOR HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY
ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE
OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND SPS ON ITS OWN BEHALF AND ON BEHALF
OF SPS’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT
MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.

 

 

 

 

 

    	Sch A-2--3

    	 

    

 

 IN WITNESS WHEREOF
Pledgor has caused this Power of Attorney to be executed and Pledgor’s seal to be affixed this ___day of ___________, 2015.

 

 

	 	PENNYMAC HOLDINGS, LLC	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 

 

 

 

 

 

    	Sch A-2--4

    	 

    

 

	STATE OF	)	 
	 	)	ss.:
	COUNTY OF	)	 

 

On the ____________ day
of _______, 2015 before me, a Notary Public in and for said State, personally appeared ______________________________ ,
known to me to be ______________________________________________ of Pledgor, the institution that executed the within instrument
and also known to me to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

 

IN WITNESS WHEREOF, I
have hereunto set my hand affixed my office seal the day and year in this certificate first above written.

 

 

	 	 
	Notary Public	 

 

My Commission expires ___________________________

 

 

 

 

 

    	Sch A-2--5

    	 

    

 

EXHIBIT B

 

EXISTING INDEBTEDNESS

See Attached.

 

 

 

 

 

 

 

 

 

 

    	B-1

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