Document:

Exhibit 10.25

 

AMENDMENT NO. 1

 

 TO MASTER SPREAD ACQUISITION AND

MSR SERVICING AGREEMENT

 

Amendment No. 1 to Master Spread Acquisition and MSR Servicing Agreement, dated as of September 30, 2013 (the “Amendment”), by and between PennyMac Loan Services, LLC, a Delaware limited liability company (the “Seller”), and PennyMac Operating Partnership, L.P., a Delaware limited partnership (the “Purchaser”).

 

RECITALS

 

WHEREAS, the Seller and the Purchaser are parties to that certain Master Spread Acquisition and MSR Servicing Agreement, dated as of February 1, 2013 (the “Existing Spread Agreement” and, as amended by this Amendment, the “Spread Agreement”).  Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Spread Agreement.

 

WHEREAS, the Seller and the Purchaser have agreed, subject to the terms and conditions of this Amendment, that the Existing Spread Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Spread Agreement.

 

NOW, THEREFORE, in consideration of the mutual premises and mutual obligations set forth herein, the Seller and the Purchaser hereby agree that the Existing Spread Agreement is hereby amended as follows:

 

SECTION 1.           Amendments.

 

1.1                            Definitions.  Section 1.01 of the Existing Spread Agreement is hereby amended by adding the following definition in its proper alphabetical order:

 

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

 

1.2                            Section 4.01(a).  Section 4.01(a) of the Existing Spread Agreement is hereby amended by adding the following paragraph to the end thereof:

 

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

 

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1.3                            Section 5.02.  Section 5.02 of the Existing Spread Agreement is hereby amended by deleting it in its entirety and replacing it with the following language:

 

“Deposits.  With respect to each Primary Portfolio, the Seller shall deposit into the Primary Spread Custodial Account from time to time any and all Primary Portfolio Collections received on or after the Transaction Settlement Date, in each case within three (3) Business Days following receipt thereof.  The Seller shall direct each loan owner or master servicer to remit any Primary Portfolio Termination Payments directly to the Primary Spread Custodial Account.”

 

1.4                            Section 6.02.  Section 6.02 of the Existing Spread Agreement is hereby amended by deleting it in its entirety and replacing it with the following language:

 

Deposits.  With respect to each Secondary Portfolio, the Seller shall deposit into the Secondary Portfolio Spread Custodial Account from time to time any and all Secondary Portfolio Collections received on or after the Transaction Settlement Date, in each case within three (3) Business Days following receipt thereof.  The Seller shall direct each loan owner or master servicer to remit any Secondary Portfolio Termination Payments directly to the Secondary Portfolio Spread Custodial Account.

 

SECTION 2.           Exhibit A.  Exhibit A of the Existing Spread Agreement is hereby amended by deleting it in its entirety and replacing it with the form attached hereto as Exhibit A.

 

SECTION 3.           Conditions Precedent.  This Amendment shall become effective as of the date first set forth above (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:

 

3.1                            Delivered Documents.  On the Amendment Effective Date, each party shall have received the following documents, each of which shall be satisfactory to such party in form and substance:

 

(a)                               this Amendment, executed and delivered by duly authorized officers of the Seller and the Purchaser; and

 

(b)                              such other documents as such party or counsel to such party may reasonably request.

 

SECTION 4.           Representations and Warranties. Each party represents that it is in compliance in all material respects with all the terms and provisions set forth in the Existing Spread Agreement on its part to be observed or performed.

 

SECTION 5.           Limited Effect.  Except as expressly amended and modified by this Amendment, the Existing Spread Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.

 

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SECTION 6.           GOVERNING LAW.  THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

SECTION 7.           Counterparts.  This Amendment may be executed in one or more counterparts and by different parties hereto on separate counterparts, each of which, when so executed, shall constitute one and the same agreement.

 

SECTION 8.           Conflicts.  The parties hereto agree that in the event there is any conflict between the terms of this Amendment, and the terms of the Existing Spread Agreement, the provisions of this Amendment shall control.

 

[SIGNATURE PAGE FOLLOWS]

 

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

 

 

 

	
The Seller:
    	
PENNYMAC LOAN SERVICES, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:  /s/ Anne D. McCallion
    
	
 
    	
 
    	
Name:  Anne D. McCallion
    
	
 
    	
 
    	
Title:    Vice   President, Finance
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
The Purchaser:
    	
PENNYMAC OPERATING PARTNERSHIP,   L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
PennyMac GP OP, Inc.,
    
	
 
    	
 
    	
its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:  /s/ Andrew Chang
    
	
 
    	
 
    	
Name:  Andrew Chang
    
	
 
    	
 
    	
Title:    Chief Business Development Officer
    
				

 

 

EXHIBIT A

 

(Form of Confirmation)

 

 

 

CONFIRMATION

 

OF SPREAD ACQUISITION TRANSACTION UNDER
 MASTER SPREAD ACQUISITION AND MSR SERVICING AGREEMENT

 

 

PARTIES:                                PennyMac Loan Services, LLC (Seller)

 

PennyMac Operating Partnership, L.P. (Purchaser)

 

DATE:                                                    _______________, ___

 

RE:                                                                         Spread Acquisition – Pool No. [___]

 

_______________________________

 

 

 

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

 

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

 

This Confirmation supplements, forms part of and is subject to the Master Spread Acquisition and MSR Servicing Agreement dated as of February 1, 2013, between PennyMac Loan Services, LLC, as seller, and PennyMac Operating Partnership, L.P., as purchaser, as amended and supplemented from time to time (the “Master Agreement”).  All provisions contained in the Master Agreement govern this Confirmation except as expressly modified below.

 

 

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

 

	
Primary Portfolio:
    	
 
    	
As set forth in Schedule   I hereto.
    
	
Transaction Settlement Date:
    	
 
    	
___________, 20____.
    
	
Transaction Base Servicing Fee Rate:
    	
 
    	
[____] basis points   (per annum)
    
	
Transaction Remittance Date:
    	
 
    	
[__]th day of each   month
    
	
Transaction Purchase Price Percentage:
    	
 
    	
_______%
    
	
Transaction Excess Spread Percentage:
    	
 
    	
_______%
    
	
Transaction Asset Purchase Agreement:
    	
 
    	
 
    
	
Transaction Threshold Percentage:
    	
 
    	
[___%]
    
	
Allowed Retention Percentage:
    	
 
    	
As   set forth opposite the applicable Excess Refinancing Percentage in the   following table:
    
	
Cut-off Date
    	
 
    	
___________, 20____.
    
	
Other:
    	
 
    	
In   the event Seller, whether voluntarily or involuntarily, transfers the   Servicing Rights related to the Mortgage Loans in any Primary Portfolio or   Secondary Portfolio and receives any termination fee or other compensation or   proceeds in connection with such transfer (the “Transfer Proceeds”),   Seller shall remit to Purchaser an amount equal to the product of   (a) such Transfer Proceeds, multiplied by (b) a fraction, the   numerator of which is the Transaction Purchase Price allocable to the Primary   Portfolio Excess Spread relating to such Servicing Rights and the denominator   of which is the actual purchase price paid by the Seller for such Servicing   Rights.
    

 

 

 

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

 

 

Accepted and confirmed as of the date first written above:

 

 

 

	
 
    	
PENNYMAC LOAN SERVICES, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PENNYMAC OPERATING PARTNERSHIP,   L.P.
    
	
 
    	
 
    
	
 
    	
By PennyMac GP OP, Inc.,   its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

SCHEDULE I

TO CONFIRMATION DATED __________, 20___

UNDER THE MASTER SPREAD ACQUISITION AND
 MSR SERVICING AGREEMENT DATED AS OF FEBRUARY 5, 2013Exhibit 10.9 Employment Agreement

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of October 17, 2013 (the “Effective Date”) by and between LED Lighting Company, a Delaware corporation (the “Company”) and Kevin Kearney (the “Employee”).

A.

Employee has served as the Chief Executive Officer, Chief Financial Officer, President and Secretary of the Company since May 28, 2013, and the Company desires to enter into this Agreement to retain the services of the Employee in such capacities, and the Employee desires to continue to provide services to the Company in such capacities.  

B.

The Employee is willing to be employed by the Company on the terms and subject to the conditions set forth in this Agreement.

THE PARTIES AGREE AS FOLLOWS:

1.

Positions and Duties.

1.1

Title.  The Employee shall be employed by the Company as its Chief Executive Officer, Chief Financial Officer, President and the Company agrees to employ and retain the Employee in such capacity.  The Employee shall report to, and serve at the pleasure of, the Company Board of Directors (the “Board”). 

1.2

Duties.  Employee shall devote a reasonable amount of time, energy, and skills to the affairs of the Company to perform the duties required and necessary for a chief executive officer of a public company at the Company’s stage in the Company’s industry.  The Company acknowledges that Employee has other business activities.  

1.3

Term of Employment.  The term of Employee's employment pursuant to this Agreement shall commence on the Effective Date, and shall expire on the one year anniversary of the Effective Date, unless renewed or extended by the agreement of the parties hereto.

1.4

Hold Harmless; Employee Indemnification.  The Company shall hold harmless and indemnify for the full extent permitted under the Company articles of incorporation, bylaws and at law for any claims against the Employee arising out of events occurring prior to Employee being appointed as the Chief Executive Officer of the Company.  The Employee shall be entitled to all rights to indemnification as a Company director and officer as provided under the laws of the State of Delaware, the Company’s Certificate of Incorporation, as amended, the Company’s Bylaws, and the Company’s insurance policies.

2.

Terms of Employment.

2.1

Definitions.  For purposes of this Agreement, the following terms shall have the following meanings:

(a)

“Accrued Compensation” shall mean any accrued Total Compensation, any benefits under any plan of the Company in which the Employee is a participant to the full extent of Employee’s rights under such plans, any accrued vacation pay, and any appropriate business expenses incurred by the Employee in connection with the performance of Employee’s duties hereunder, all to the extent unpaid on the date of termination.

(b)

“Base Compensation” shall have the meaning set forth in Section 3.1 hereof.

(c)

“Death Termination” shall mean termination of the Employee’s employment because of the death of the Employee.

(d)

“Disability Termination” means termination by the Company of the Employee’s employment by reason of the Employee’s incapacitation due to disability.  The Employee shall be deemed to be incapacitated due to disability if at the end of any month the Employee is unable to perform substantially all of his or her duties under this Agreement in the normal and regular manner due to illness, injury or mental or physical incapacity, and has been unable so to perform for either (i) three consecutive full calendar months then ending, or (ii) 90 or more of the normal working days during the 12 consecutive full calendar months then ending.  Nothing in this paragraph shall alter the Company’s obligations under applicable law, which may, in certain circumstances, result in the suspension or alteration of the foregoing time periods.

(e)

“Termination For Cause” means termination by the Company of the Employee’s employment by reason of the Employee’s (i) dishonesty or fraud, (ii) gross negligence in the performance of his or her duties hereunder, (iii) material breach of this Agreement, (iv) intentional engagement in acts seriously detrimental to the Company’s operations, (v) conviction of a felony involving moral turpitude, or (vi) failure to comply with any lawful orders or directions of the Board that are not incompatible with his position with the Company or manifestly unreasonable or unethical, provided that the Board (with the Employee agreeing he may not participate in such decision) delivers to Employee a written notification specifying in sufficient detail such order or direction and the Employee has thirty (30) days within which to comply with such order or direction (or such reasonably shorter period of time if such ordered or directed task by its nature requires completion in less than thirty (30) days)). 

(f)

“Termination Other Than For Cause” means termination by the Company of the Employee’s employment for any reason other than as specified in Sections 2.1(c), (d), (e) or (h) hereof.  

(g)

“Total Compensation” shall mean the Employee’s Base Compensation (as defined in Section 3.1).

(h)

“Voluntary Termination” means termination of the Employee’s employment by the voluntary action of the Employee other than by reason of a Disability Termination or a Death Termination.

2.2

Termination For Cause.  The Company shall have the right to effect a Termination For Cause as provide in Section 2.1(e). Upon Termination For Cause, the Company shall pay the Employee Accrued Compensation, if any.

2.3

Termination Other Than For Cause; Expiration.  Upon Termination Other Than For Cause before the expiration of the Employment Agreement, the Company shall pay the Employee all Accrued Compensation, if any.  Upon the expiration of the term of the Employment Agreement, the Company shall pay the Employee all Accrued Compensation, if any.

2.4

Disability Termination.  The Company shall have the right to effect a Disability Termination by giving written notice thereof to the Employee.  Upon Disability Termination, the Company shall pay the Employee all Accrued Compensation, if any.

2.5

Death Termination.  In the event of the Employee’s death during the term of this Agreement, the Employee’s employment shall be deemed to have terminated as of the last day of the month during which his or her death occurs, and the Company shall promptly pay to the Employee’s estate Accrued Compensation, if any.

2.6

Voluntary Termination.  The Employee shall have the right to effect a Voluntary Termination by giving at least 30 days advance written notice to the Company.  The Company shall have the right in such case to immediately terminate the Employee’s employment.  Following the effective date of a Voluntary Termination, the Company shall pay the Employee Accrued Compensation, if any.

2.7

Timing of Termination Payments.  Unless expressly provided otherwise, the foregoing termination payments shall be made at the usual and agreed times provided for in Section 3.1 of this Agreement.

3.

Compensation and Benefits.

3.1

Base Compensation.  Subject to the provisions of Section 2 of this Agreement, the Company shall pay the Employee a base annual compensation of $120,000 per year, payable monthly over the term of the Agreement, commencing as of October 1, 2013. Additionally, the Company and Employee agree that the amount of $30,000 of compensation is payable as of October 1, 2013 for past services provided by Employee. 

3.2

Equity Compensation.  In consideration for the past services performed and for agreeing to enter into this Agreement and continue to provide services, as of the Effective Date, the Company shall issue Employee 500,000 shares of Company common stock.

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3.3

Fringe Benefits.

(a)

Fringe Benefits.  The Employee shall be eligible to participate in such of the Company’s benefit plans as are now generally available or later made generally available to senior officers of the Company, including, without limitation, medical, dental, life, and disability insurance plans, if any.

(b)

Expense Reimbursement.  The Company agrees to reimburse the Employee for all reasonable, ordinary and necessary travel and entertainment expenses incurred by the Employee in conjunction with Employee’s services to the Company consistent with the Company’s standard reimbursement policies.  The Company shall pay travel costs incurred by the Employee in conjunction with his or her services to the Company consistent with the Company’s standard travel policy.

(c)

Employee Acknowledgment re Shares of Company Common Stock.  Employee acknowledges and agrees that the shares of Common Stock to be issued hereunder are characterized as “restricted securities” under the Securities Act of 1933 (as amended and together with the rules and regulations promulgated thereunder, the “Securities Act”) and that, under the Securities Act and applicable regulations thereunder, such securities may not be resold, pledged or otherwise transferred without registration under the Securities Act or an exemption therefrom.  Additionally, Employee contractually agrees he may not sell or transfer such shares until they are eligible to be transferred or sold under the Rule 144 holding period.  Employee acknowledges and agrees that () the shares of Common Stock are being issued in a transaction not involving any public offering in the United States within the meaning of the Securities Act, and the shares of Common Stock have not yet been registered under the Securities Act, () such shares of Common Stock may be offered, resold, pledged or otherwise transferred only in a transaction registered under the Securities Act, or meeting the requirements of Rule 144, or in accordance with another exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel if the Company so requests) and in accordance with any applicable securities laws of any State of the United States or any other applicable jurisdiction, and  (iii) the shares of Common Stock shall bear a legend indicating their restricted nature.

4.

Proprietary Information.  The Employee shall as of the Effective Date or promptly thereafter execute and deliver to the Company the Company Employee Confidential Information and Inventions Agreement.

5.

Miscellaneous.

5.1

Waiver.  The waiver of the breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or other provision hereof.

5.2

Notices.  All notices and other communications under this Agreement shall be in writing and shall be given by personal or courier delivery, facsimile or first class mail, certified or registered with return receipt requested, and shall be deemed to have been duly given upon receipt if personally delivered or delivered by courier, on the date of transmission if transmitted by facsimile, or three days after mailing if mailed, to the addresses of the Company and the Employee contained in the records of the Company at the time of such notice.  Any party may Change such party’s address for notices by notice duly given pursuant to this Section 5.2.

5.3

Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts entered into and wholly to be performed within the State of California by California residents.

5.4

Survival of Obligations.  This Agreement shall be binding upon and inure to the benefit of the executors, administrators, heirs, successors, and assigns of the parties; provided, however, that except as herein expressly provided, this Agreement shall not be assignable either by the Company (except to an affiliate or successor of the Company) or by the Employee without the prior written consent of the other party.

5.5

Counterparts.  This Agreement may be executed in one or more counterparts and delivered by facsimile or PDF/electronic transmission, all of which taken together shall constitute one and the same Agreement.

5.6

Withholding.  All sums payable to the Employee hereunder shall be reduced by all federal, state, local, and other withholdings and similar taxes and payments required by applicable law.

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5.7

Enforcement.  If any portion of this Agreement is determined to be invalid or unenforceable, such portion shall be adjusted, rather than voided, to achieve the intent of the parties to the extent possible, and the remainder shall be enforced to the maximum extent possible.

5.8

Entire Agreement; Modifications.  Except as otherwise provided herein or in the exhibits hereto, this Agreement represents the entire understanding among the parties with respect to the subject matter of this Agreement, and this Agreement supersedes any and all prior and contemporaneous understandings, agreements, plans, and negotiations, whether written or oral, with respect to the subject matter hereof.  All modifications to the Agreement must be in writing and signed by each of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date set forth in the first paragraph.

LED LIGHTING COMPANY

By:

/s/ Steven J. Davis                                        

Steven James Davis, A Professional 

Corporation, legal counsel for the Company, 

pursuant to the authorization of the 

Company Board of Directors 

EMPLOYEE

/s/ Kevin Kearney                                                

Kevin Kearney

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