Document:

Exhibit 10.2

 

 

 

 

 

 

 

 

MORTGAGE LOAN PARTICIPATION PURCHASE AND
SALE AGREEMENT

 

 

 

between

 

 

 

 

PENNYMAC LOAN SERVICES, LLC

as Seller and Servicer

 

 

and

 

 

 

BARCLAYS BANK PLC

Purchaser and Agent

 

 

 

 

 

Dated December 4, 2015

 

 

 

 

 

 

 

 

    	 	 
	 

     

    

 

TABLE
OF CONTENTS

Page

	Section 1.    Definitions.	2
	Section 2.    Procedures for Purchases of Participation Certificates.	16
	Section 3.    Takeout Commitments.	19
	Section 4.    Completion Fee.	20
	Section 5.    Issuance of Securities.	21
	Section 6.    Servicing of the Mortgage Loans; Servicer Termination; Backup Servicer.	22
	Section 7.    Transfers of Participation Certificates and Securities by Purchaser	27
	Section 8.    Record Title to Mortgage Loans; Intent of Parties; Security Interest.	28
	Section 9.    Representations and Warranties.	29
	Section 10.   Covenants of Seller	35
	Section 11.   Term	38
	Section 12.   Set-Off	38
	Section 13.   Indemnification	39
	Section 14.   Exclusive Benefit of Parties; Assignment	39
	Section 15.   Amendments; Waivers; Cumulative Rights	40
	Section 16.   Execution in Counterparts	40
	Section 17.   Effect of Invalidity of Provisions	40
	Section 18.   Governing Law	40
	Section 19.   Notices	41
	Section 20.   Entire Agreement	41
	Section 21.   Costs of Enforcement	41
	Section 22.   Securities Contract; Netting Agreement.	42
	Section 23.   Consent to Service	43
	Section 24.   Construction	43
	Section 25.   Further Assurances	43
	Section 26.   Due Diligence	43
	Section 27.   Confidentiality	44

 

 

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EXHIBITS

 

Exhibit AParticipation Certificate

 

Exhibit BTrade Assignment

 

Exhibit C[RESERVED]

 

Exhibit DWarehouse Lender’s
Release

 

Exhibit EAssignment

 

Exhibit FForm of Confirmation

 

Exhibit GSeller’s Officer’s
Certificate

 

Annex A[RESERVED]

 

Annex BPurchaser Notices

 

 

 

 

 

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MORTGAGE
LOAN PARTICIPATION PURCHASE AND SALE AGREEMENT

 

This is a MORTGAGE LOAN
PARTICIPATION PURCHASE AND SALE AGREEMENT (“Agreement”), dated as of December 4, 2015, between Barclays Bank
PLC, as administrative agent (“Agent”) and purchaser (“Purchaser”) and PennyMac Loan Services,
LLC, as servicer (“Servicer”) and seller (“Seller”).

 

PRELIMINARY
STATEMENT

 

Seller desires to sell
to Purchaser from time to time all of Seller’s beneficial right, title and interest in and to designated pools of fully amortizing
first lien single-family residential Mortgage Loans eligible in the aggregate to back Securities, and in and to the servicing rights
relating thereto, with the terms described in related Takeout Commitments, each in the form of a 100% undivided beneficial ownership
interest evidenced by a Participation Certificate.

 

Purchaser desires and
(i) shall, subject to satisfaction of certain conditions precedent, purchase such Participation Certificates with an aggregate
Purchase Price not to exceed the Committed Amount, and (ii) may, subject to satisfaction of certain conditions precedent,
purchase such Participation Certificates with an aggregate Purchase Price not to exceed the Uncommitted Amount, in each case from
Seller in accordance with the terms and conditions set forth in this Agreement. Seller, subject to the terms hereof, will cause
(a) the Related Mortgage Loans to back a Security issued or guaranteed by the Applicable Agency, and (b) Delivery of such Security
by the Applicable Agency to Purchaser or its designee in exchange for the Related Participation Certificate, which Security will
be purchased by a Takeout Investor.

 

Purchaser’s willingness
to purchase any Participation Certificate evidencing a beneficial interest in the Related Mortgage Loans and the servicing rights
related thereto is at the sole discretion of Purchaser and based on Purchaser’s expectation, in reliance upon Seller’s
representations and warranties herein, that (a) such Mortgage Loans in the aggregate, constitute a pool or pools of mortgage loans
that are eligible to back a Security, (b) such Mortgage Loans are sufficient for the Applicable Agency to issue and/or guarantee
the Security, (c) such Security will be issued in the amount and with the terms described in the related Takeout Commitment, (d)
Purchaser’s broker-dealer affiliate, Barclays Capital Inc. (“BCI”) will receive Delivery of such Security
on the specified Anticipated Delivery Date on behalf of Purchaser, and (e) such Security will be purchased by the related Takeout
Investor.

 

The amount of the Purchase
Price and the Completion Fee to be paid by Purchaser to Seller with respect to each Participation Certificate will be calculated
on the expectation of Purchaser, based upon the representations and warranties of Seller herein, that Purchaser or BCI, on behalf
of Purchaser, will receive Delivery of the Security to be backed by the Related Mortgage Loans on the specified Anticipated Delivery
Date, that failure to receive such Delivery will result in a material decrease in the market value of the Participation Certificate
and the Related Mortgage Loans considered as a whole and that the related Takeout Investor will purchase the Security from Purchaser
or BCI, on behalf of Purchaser. During the period from the purchase of a Participation Certificate to Delivery of the related Security,
Purchaser expects to rely entirely upon Servicer to service the Related Mortgage Loans for the benefit of Purchaser, it being acknowledged
that the continued effectiveness of Seller’s Approvals during such period constitutes an essential factor in the calculation
by Agent of the Purchase Price and the Completion Fee paid to Seller for the Related Participation Certificate and that loss of
such Approvals by Seller would result in a material decrease in the market value of the Participation Certificate and the Related
Mortgage Loans considered as a whole.

 

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In consideration of the
mutual promises and agreements herein contained the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

Section
1.Definitions.

 

Capitalized terms used
but not defined herein shall have the meanings set forth in the Custodial Agreement. As used in this Agreement, the following terms
shall have the following meanings:

 

“30+ Day Delinquent
Mortgage Loan” means any Mortgage Loan (other than Modified Loans) for which the Monthly Payment was not received within
twenty-nine (29) days after its Due Date.

 

“Accepted Servicing
Practices” means, with respect to any Related Mortgage Loan, those accepted and prudent mortgage servicing practices
and procedures (including collection procedures) of prudent mortgage lending institutions which service mortgage loans of the same
type as the Mortgage Loans in the jurisdiction where the related Mortgaged Property is located, and which are in accordance with
the requirements of each Agency Program, applicable law, FHA regulations and VA regulations and the requirements of any private
mortgage insurer so that the FHA insurance, VA guarantee or any other applicable insurance or guarantee in respect of any Mortgage
Loan is not voided or reduced.

 

“Act of Insolvency”
means, with respect to Seller or any Affiliate of Seller: (i) becoming insolvent or admitting in writing its inability to pay its
debts as they come due, or the commencement of a voluntary case under the federal bankruptcy laws, as now or hereafter in effect,
or any other present or future federal or state bankruptcy, insolvency or similar law, or the consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official or of any substantial
part of its property or the making of an assignment for the benefit of creditors or the failure generally to pay debts as such
debts become due or the taking of action in furtherance of any of the foregoing; (ii) a petition or a proceeding shall have been
filed or commenced against the Seller or such Affiliate seeking (a) a decree or order for relief in an involuntary case under the
federal bankruptcy laws, as now or hereafter in effect, or any other present or future federal or state bankruptcy laws or similar
law, as now or hereafter in effect, (b) the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or such Affiliate or of any substantial part of its property, or (c) the winding up or liquidation
of the affairs of the Seller or such Affiliate and such petition or proceeding shall not have been dismissed for a period of thirty
(30) consecutive days, or an order or decree for relief against the Seller or such Affiliate shall be entered in any such proceeding;
(iii) the making or offering by Seller or such Affiliate of a concession with its creditors or a general assignment for the benefit
of creditors; (iv) the Seller or such Affiliate shall (a) either fail or admit in writing its inability to pay or discharge its
debts or obligations generally as they become due or mature, (b) admit in writing its inability to, or intention not to, perform
any of its material obligations, or (c) voluntarily suspend payment of any of its debts or obligations as they become due or mature;
(v) any governmental authority or agency or any person, agency or entity acting or purporting to act under governmental authority
shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of
the property of Seller or of any of its Affiliates, or shall have taken any action to displace the management of Seller or of any
of its Affiliates or to curtail its authority in the conduct of the business of Seller or of any of its Affiliates; or (vi) the
audited annual financial statements of the Seller or such Affiliate or the notes thereto or other opinions or conclusions stated
therein shall be qualified or limited by reference to the status of the Seller as a “going concern” or a reference
of similar import or shall indicate that the Seller has a negative net worth or is insolvent.

 

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“Adjustable
Rate Mortgage Loan” means a Mortgage Loan which provides for the adjustment of the Mortgage Interest Rate payable in
respect thereto.

 

“Adjusted Tangible
Net Worth” means, for any Person as of any date of determination thereof, an amount equal to (a) the Tangible Net Worth
of such Person as of such date, minus (b) amounts owing to such Person from its Affiliates, officers, directors and stockholders
as of such date, all determined in accordance with GAAP.

 

“Affiliate”
means, with respect to (i) any specified Person (other than the Seller, the Servicer or the Guarantor), any other Person controlling
or controlled by or under common control with such specified Person, (ii) the Seller, the Guarantor and its Subsidiaries, (iii)
the Servicer, the Guarantor and its wholly-owned Subsidiaries, and (iv) the Guarantor, the Subsidiaries of the Guarantor. For the
purposes of this definition, “control” means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms “controlling,”
“controlled by” and “under common control with” have meanings correlative to the meaning of “control.”

 

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

 

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

 

“Agent”
means Barclays Bank PLC and its successors in interest, as administrative agent for Purchaser and any additional purchasers that
may become a party hereto.

 

“Aggregate EPF
Purchase Price” means, as of any date of determination, an amount equal to the aggregate Purchase Price for all Participation
Certificates then owned by Purchaser and subject to the terms of this Agreement.

 

“Aggregate MRA
Purchase Price” means, as of any date of determination, an amount equal to the aggregate Purchase Price (as defined in
the Master Repurchase Agreement) for all Mortgage Loans then subject to Transactions (as defined in the Master Repurchase Agreement)
under the Master Repurchase Agreement.

 

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“Anticipated
Delivery Date” means, with respect to a Security, the date specified in the related Form HUD 11705 (Schedule of Subscribers),
Fannie Mae Form 2014 (Delivery Schedule) or Freddie Mac Form 939 (Settlement and Information Multiple Registration Form), as applicable,
on which it is anticipated that Delivery of the Security by the Applicable Agency will be made, which date shall occur no more
than thirty (30) days following the related Purchase Date.

 

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

 

“Applicable
Margin” has the meaning assigned thereto in the Pricing Side Letter.

 

“Appraised Value”
means the value set forth in an appraisal made in connection with the origination of the related Mortgage Loan as the value of
the Mortgaged Property.

 

“Approvals”
means, with respect to Seller or Servicer, any approvals obtained from the Applicable Agency, or HUD in designation of Seller as
a Ginnie Mae-approved issuer, a Ginnie Mae-approved servicer, an FHA-approved mortgagee, a VA-approved lender, a Fannie Mae-approved
Seller/Servicer or a Freddie Mac-approved Seller/Servicer, as applicable, in good standing.

 

“Assignee”
has the meaning assigned thereto in Section 7.

 

“Assignment
of Mortgage” means an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient
under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the assignment of the beneficial
interest in the Mortgage.

 

“Bank”
means City National Bank, N.A. and its permitted successors under the Custodial Account Control Agreement.

 

“Bankruptcy
Code” means Title 11 United States Code, Section 101 et seq., as amended from time to time.

 

“BCI”
means Barclays Capital Inc., and its successors in interest.

 

“Business Day”
means any day other than (i) a Saturday or Sunday, (ii) a day upon which the New York Stock Exchange or the Federal Reserve Bank
of New York is closed or (iii) with respect to any day on which the parties hereto have obligations to the Custodian or on which
the Custodian has obligations to any party hereto, a day upon which the Custodian’s offices are closed.

 

“Change in Control”
means: (a) any transaction or event as a result of which the Guarantor ceases to directly or indirectly own 100% of the certificates
representing the beneficial ownership of Seller, (b) the sale, transfer, or other disposition of all or substantially all of Seller’s
assets (excluding any such action taken in connection with any securitization transaction or routine sales of Mortgage Loans) or
(c) the consummation of a merger or consolidation of Seller with or into another entity or any other reorganization, if more than
50% of the combined voting power of the continuing or surviving entity’s equity outstanding immediately after such merger,
consolidation or such other reorganization is owned by persons who were not members of the Seller immediately prior to such merger,
consolidation or other reorganization.

 

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“Collateral”
has the meaning assigned thereto in Section 8(c).

 

“Committed Amount”
shall have the meaning assigned thereto in the Pricing Side Letter.

 

“Completion
Fee” means, with respect to each Participation Certificate, an amount equal to the Discount plus the Net Carry Adjustment,
less any reduction pursuant to Section 5(b), which amount shall be payable to Seller by Purchaser in two installments as
provided in Section 4(a), the Initial Completion Fee Installment and the Final Completion Fee Installment, as compensation to Seller
for its services in connection with the issuance of the related Security and performance of its obligations under this Agreement.

 

“Confirmation”
means a written confirmation of Purchaser’s intent to purchase a Participation Certificate, which written confirmation shall
be substantially in the form attached hereto as Exhibit F.

 

“Custodial Account
Control Agreement” means the Custodial Account Control Agreement, dated as of December 4, 2015, among Seller, Purchaser
and Bank entered into in connection with this Agreement, as amended, supplemented or otherwise modified from time to time.

 

“Custodial Account”
has the meaning assigned thereto in Section 6(c).

 

“Custodial and
Disbursement Agreement” means the Custodial and Disbursement Agreement, dated of even date herewith, among Seller, Purchaser,
Disbursement Agent and Custodian entered into in connection with this Agreement and the Master Repurchase Agreement, as the same
may be amended, modified or supplemented from time to time.

 

“Custodian”
means Deutsche Bank National Trust Company (which, under the appropriate circumstances, may include Freddie Mac as Custodian) and
its permitted successors under the Custodial and Disbursement Agreement.

 

“Daily Completion
Fee Reduction Amount” has the meaning assigned thereto in the Pricing Side Letter.

 

“Defective Mortgage
Loan” means, with respect to a Participation Certificate, a Related Mortgage Loan that is not in Strict Compliance with
the Ginnie Mae Program, Fannie Mae Program, or Freddie Mac Program, as applicable.

 

“Delinquent”
means, with respect to any Mortgage Loan, that a monthly payment due thereon is not made by the close of business on the Due Date.

 

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“Delivery”
means the later to occur of (a) the issuance of the related Security and (b) the transfer of all of the right, title and ownership
interest in that Security to Purchaser or its designee.

 

“Discount”
means, with respect to each Participation Certificate, the portion of the Trade Principal of the related Security agreed upon by
Seller and Purchaser, as set forth in the Pricing Side Letter, to reserve for the possibility that Seller may be unable to perform
its obligations under this Agreement in accordance with their terms.

 

“Disbursement
Agent” means Deutsche Bank National Trust Company, and its successors and permitted assigns, or such other entity as
mutually agreed upon by Agent and Seller.

 

“Due Date”
means the day of the month on which the Monthly Payment is due on a Loan, exclusive of any days of grace.

 

“Effective Date”
has the meaning assigned thereto in the Master Repurchase Agreement.

 

“Electronic
Agent” has the meaning assigned thereto in Section 2 of the Electronic Tracking Agreement.

 

“Electronic
Tracking Agreement” means the Electronic Tracking Agreement, dated as of the date hereof, among the Purchaser, the Seller,
the Electronic Agent and MERS entered into in connection with this Agreement and the Master Repurchase Agreement, as the same shall
be amended, supplemented or otherwise modified from time to time.

 

“Escrow Payments”
means, with respect to a Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water charges, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges and other payments as may
be required to be escrowed by the Mortgagor with the Mortgagee pursuant to the terms of the Mortgage or any other document.

 

“Fannie Mae”
means Fannie Mae or any successor thereto.

 

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

 

“Fannie Mae
Mortgage Loan” means, with respect to any Fannie Mae Participation Certificate or any Fannie Mae Security, a mortgage
loan that is in Strict Compliance on the related Purchase Date with the eligibility requirements specified for the applicable Fannie
Mae Program described in the Fannie Mae Guide.

 

“Fannie Mae
Participation Certificate” means, with respect to the Fannie Mae Program, a certificate, in the form of Exhibit A,
authenticated by Custodian, evidencing the 100% undivided beneficial ownership interest in the Fannie Mae Mortgage Loans set forth
on Fannie Mae Form 2005 (Schedule of Mortgages).

 

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“Fannie Mae
Program” means the Fannie Mae Guaranteed Mortgage-Backed Securities Programs, as described in the Fannie Mae Guide.

 

“Fannie Mae
Security” means an ownership interest in a pool of Fannie Mae Mortgage Loans, evidenced by a book-entry account in a
depository institution having book-entry accounts at the Federal Reserve Bank of New York, issued and guaranteed, with respect
to timely payment of interest and ultimate payment of principal, by Fannie Mae and backed by a pool of Fannie Mae Mortgage Loans,
in substantially the principal amount and with substantially the other terms as specified with respect to such Fannie Mae Security
in the related Takeout Commitment, if any.

 

“FDIA”
means Title 12 United States Code, Section 1811 et seq., as amended from time to time.

 

“FDIC”
means the Federal Deposit Insurance Corporation or any successor thereto.

 

“FHA”
means the Federal Housing Administration, an agency within HUD, or any successor thereto, and including the Federal Housing Commissioner
and the Secretary of Housing and Urban Development where appropriate under the FHA regulations.

 

“FICO Score”
means the credit score of the Mortgagor provided by Fair, Isaac & Company, Inc. or such other organization providing credit
scores on or immediately prior to the Origination Date of a Mortgage Loan.

 

“Final Completion
Fee Installment” means the amount equal to the difference between the Completion Fee and the Initial Completion Fee Installment.

 

“First Mortgage
Loan” means a mortgage loan that is secured by a first lien on the related Mortgaged Property.

 

“Freddie Mac”
means Freddie Mac or any successor thereto.

 

“Freddie Mac
as Custodian” means, with respect to Freddie Mac Participation Certificates, the circumstances in which Seller elects
to appoint Freddie Mac (as opposed to some other third party as permitted by the Freddie Mac Guide) as Custodian for the Freddie
Mac Mortgage Loans subject to the Freddie Mac Participation Certificates to be purchased by Purchaser hereunder.

 

“Freddie Mac
Guide” means the Freddie Mac Sellers’ and Servicers’ Guide, as such Guide may hereafter from time to time
be amended.

 

“Freddie Mac
Mortgage Loan” means, with respect to any Freddie Mac Participation Certificate or any Freddie Mac Security, a mortgage
loan that is in Strict Compliance on the related Purchase Date with the eligibility requirements specified for the applicable Freddie
Mac Program described in the Freddie Mac Guide.

 

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“Freddie Mac
Participation Certificate” means, with respect to the Freddie Mac Program, a certificate, in the form of Exhibit A,
issued by Seller and authenticated by Custodian, evidencing the 100% undivided beneficial ownership interest in the Freddie Mac
Mortgage Loans that are either (a) set forth on a copy of the Freddie Mac Form 1034 (Fixed-Rate Custodial Certification Schedule)
attached to such Participation Certificate or (b) identified on a computer tape compatible with Selling System as belonging to
the mortgage loan pool described in such Participation Certificate.

 

“Freddie Mac
Program” means the Freddie Mac Home Mortgage Guarantor Program or the Freddie Mac FHA/VA Home Mortgage Guarantor Program,
as described in the Freddie Mac Guide.

 

“Freddie Mac
Security” means a modified pass-through mortgage-backed participation certificate, evidenced by a book-entry account
in a depository institution having book-entry accounts at the Federal Reserve Bank of New York, issued and guaranteed, with respect
to timely payment of interest and ultimate payment of principal, by Freddie Mac and backed by a pool of Freddie Mac Mortgage Loans,
in substantially the principal amount and with substantially the other terms as specified with respect to such Freddie Mac Security
in the related Takeout Commitment, if any.

 

“GAAP”
means generally accepted accounting principles as in effect from time to time in the United States of America.

 

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

 

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

 

“Ginnie Mae
Mortgage Loan” means, with respect to any Ginnie Mae Participation Certificate or any Ginnie Mae Security, a mortgage
loan that is in Strict Compliance on the related Purchase Date with the eligibility requirements specified for the applicable Ginnie
Mae Program in the applicable Ginnie Mae Guide.

 

“Ginnie Mae
Participation Certificate” means, with respect to the Ginnie Mae Program, a certificate, in the form of Exhibit A,
issued by Seller and authenticated by Custodian, evidencing the 100% undivided beneficial ownership interest in the Ginnie Mae
Mortgage Loans set forth on the Form HUD 11706 (Schedule of Pooled Mortgages).

 

“Ginnie Mae
Program” means the Ginnie Mae Mortgage-Backed Securities Programs, as described in the Ginnie Mae Guide.

 

“Ginnie Mae
Security” means a fully-modified pass-through mortgage-backed certificate guaranteed by Ginnie Mae, evidenced by a book-entry
account in a depository institution having book-entry accounts at the Federal Reserve Bank of New York and backed by a pool of
Ginnie Mae Mortgage Loans, in substantially the principal amount and with substantially the other terms as specified with respect
to such Ginnie Mae Security in the related Takeout Commitment.

 

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“Guarantor”
means Private National Mortgage Acceptance Company, LLC.

 

“HARP Mortgage
Loan” means any Mortgage Loan that has been modified under the U.S. Department of the Treasury’s Home Affordable
Refinance Program.

 

“High Cost Mortgage
Loan” means a Mortgage Loan that is (a) subject to, covered by or in violation of the provisions of the Homeownership
and Equity Protection Act of 1994, as amended, (b) a “high cost,” “covered,” “threshold,” “abusive,”
“predatory” or “high risk” mortgage loan under any federal, state or local law, or any similarly classified
loan using different terminology under any law imposing heightened regulation, scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees, or any other state or other regulation providing assignee liability
to holders of such mortgage loans, (c) subject to or in violation of any such or comparable federal, state or local statutes or
regulations, or (d) a “High Cost Loan” or “Covered Loan,” as applicable, as such terms are defined in the
current version of the Standard & Poor’s LEVELS® Glossary Revised, Appendix E.

 

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

 

“Indebtedness”
means, with respect to Seller: (a) obligations created, issued or incurred by Seller for borrowed money (whether by loan, the issuance
and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise,
to repurchase such property from such Person); (b) obligations of Seller to pay the deferred purchase or acquisition price of property
or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary
course of business so long as such trade accounts payable are payable within ninety (90) days of the date the respective goods
are delivered or the respective services are rendered; (c) indebtedness of others secured by a Lien on the property of Seller,
whether or not the respective Indebtedness so secured has been assumed by Seller; (d) obligations (contingent or otherwise) of
Seller in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for
account of Seller; (e) all obligations of Seller to pay rent or other amounts under a lease of (or other agreement conveying the
right to use) property to the extent such obligations are required to be classified and accounted for as a capital lease on its
balance sheet of Seller under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP; (f) payment obligations of Seller under repurchase agreements, single seller
financing facilities, warehouse facilities and other lines of credit; (g) indebtedness of others guaranteed by Seller on a recourse
or partial recourse basis; (h) all obligations of Seller incurred in connection with its acquisition or carrying of fixed assets
by Seller; (i) indebtedness of general partnerships of which Seller is a general partner; and (j) any other known or contingent
liabilities of Seller; less (k) the amount of any non-recourse debt, including any securitization
debt, and any intercompany debt eliminated in consolidation by the Guarantor.

 

“Initial Completion
Fee Installment” has the meaning assigned thereto in the Pricing Side Letter.

 

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“Initial Purchase
Price Installment” means, with respect to any Participation Certificate, the excess of the related Trade Principal over
the Discount.

 

“Issuance Date”
means, with respect to a Security, the first day of the month in which the Security is issued.

 

“LIBOR”
means the rate (adjusted for statutory reserve requirements for eurocurrency liabilities) for eurodollar deposits for a period
equal to one month appearing on Bloomberg Screen US 0001M Page or if such rate ceases to appear on Bloomberg Screen US 0001M Page,
or any other service providing comparable rate quotations at approximately 11:00 a.m., London time, on the applicable date of determination,
or such interpolated rate as determined by the Purchaser.

 

“Lien”
means any mortgage, deed of trust, lien, claim, pledge, charge, security interest or similar encumbrance.

 

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

 

“Loan Agreement”
means that certain Loan and Security Agreement, dated as of December 4, 2015, by and among the Seller, as borrower thereunder,
the Purchaser, as lender thereunder and Guarantor, as guarantor thereunder.

 

“Losses”
means any and all losses, claims, judgments, taxes, damages, liabilities, costs or expenses (including lost interest and reasonable
attorney’s fees) imposed on, incurred by or asserted against any Person specified.

 

“Master Netting
Agreement” means that certain Global Netting and Security Agreement, dated as of December 4, 2015, among Purchaser, Seller
and certain Affiliates and Subsidiaries of Purchaser and/or Seller, entered into in connection with this Agreement and the Master
Repurchase Agreement, as the same shall be amended, supplemented or otherwise modified from time to time.

 

“Master Repurchase
Agreement” means that certain Master Repurchase Agreement, dated as of December 4, 2015, by and among Purchaser, Seller
and Guarantor, as the same shall be amended, supplemented or otherwise modified from time to time.

 

“Material Adverse
Change” means, with respect to a Person, any material adverse change in the business, condition (financial or otherwise),
operations, performance, Property or prospects of such Person including the insolvency of such Person or its Parent Company, if
applicable.

 

“Material Adverse
Effect” means: (a) a Material Adverse Change with respect to Seller or Guarantor, as applicable, or any of their respective
Affiliates; (b) a material impairment of the ability of Seller, Guarantor or any of their respective Affiliates that is a party
to any Program Document to perform under any Program Document to which it is a party; (c) a material adverse effect upon the legality,
validity, binding effect or enforceability of any Program Document against Seller or Guarantor, as applicable, or any of their
respective Affiliates that is a party to any Program Document.

 

    	 	10
	 

     

    

 

“Maturity Date”
means December 2, 2016.

 

“Maximum Aggregate
Purchase Price” has the meaning assigned thereto in the Pricing Side Letter.

 

“MERS”
means Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or any successor in interest thereto.

 

“MERS Mortgage
Loan” means any Mortgage Loan as to which the related Mortgage or Assignment of Mortgage has been recorded in the name
of MERS, as agent for the holder from time to time of the Mortgage Note and which is identified as a MERS Mortgage Loan on the
related schedule attached to the Related Participation Certificate.

 

“MIN”
means the mortgage identification number of Mortgage Loans registered with MERS on the MERS System.

 

“Modified Loan”
means a Mortgage Loan that (a) is insured by FHA, (b) was purchased out of a Ginnie Mae Security solely as a result of modifications
to such Mortgage Loan and (c) is a Ginnie Mae Mortgage Loan.

 

“Monthly Payment”
means the scheduled monthly payment of principal and interest on a Mortgage Loan as adjusted in accordance with changes in the
Mortgage Interest Rate pursuant to the provisions of the Mortgage Note for an Adjustable Rate Mortgage Loan.

 

“Mortgage”
means a mortgage, deed of trust or other security instrument, securing a Mortgage Note.

 

“Mortgage File”
has the meaning assigned thereto in the Custodial Agreement.

 

“Mortgage Interest
Rate” means, with respect to each Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan from
time to time in accordance with the provisions of the related Mortgage Note.

 

“Mortgage Loan”
means a Ginnie Mae Mortgage Loan, a Fannie Mae Mortgage Loan, a Freddie Mac Mortgage Loan, a Modified Loan or a HARP Mortgage Loan.

 

“Mortgage Note”
means a promissory note or other evidence of indebtedness of the obligor thereunder, evidencing a Mortgage Loan, and secured by
the related Mortgage.

 

“Mortgaged Property”
means the real property (or leasehold estate, if applicable) securing repayment of the debt evidenced by a Mortgage Note.

 

    	 	11
	 

     

    

 

“Mortgagor”
means the obligor or obligors on a Mortgage Note, including any person who has assumed or guaranteed the obligations of the obligor
thereunder.

 

“MRA Collection
Account Control Agreement” means that certain Collection Account Control Agreement, dated as of December 4, 2015, among
Seller, Purchaser and City National Bank, N.A., entered into in connection with the Master Repurchase Agreement, as the same shall
be amended, supplemented or otherwise modified from time to time.

 

“MRA Pricing
Side Letter” means the Pricing Side Letter, dated as of December 4, 2015, among Seller, Purchaser and Guarantor entered
into in connection with the Master Repurchase Agreement, as the same shall be amended, supplemented or otherwise modified from
time to time.

 

“MRA Program
Documents” means the Master Repurchase Agreement, the MRA Pricing Side Letter, the MRA Collection Account Control Agreement
and all other agreements, documents and instruments entered into by Seller on the one hand, and Purchaser or one of its Affiliates
(or Custodian on its behalf) and/or Agent or one of its Affiliates on the other, in connection herewith or therewith with respect
to the transactions contemplated hereunder or thereunder and all amendments, restatements, modifications or supplements thereto.

 

“MSR Facility
Borrowed Amount” means the outstanding amount borrowed under the Loan Agreement, as of any date of determination.

 

“MSR Facility
Program Documents” means the Loan Agreement or any other agreement, notice, certificate, financing statement, or any
other document to be executed and delivered by Seller and/or Guarantor in connection therewith.

 

“Negative Amortization”
means the portion of interest accrued at the Mortgage Interest Rate in any month which, based on the Monthly Payment on the related
Mortgage Loan for such month, is not sufficient in order to fully amortize the Mortgage Loan by its maturity date and which, pursuant
to the terms of the Mortgage Note, is added to the principal balance of such Mortgage Loan.

 

“Net Carry Adjustment”
means an amount (which may be a negative number) equal to the difference obtained by subtracting (i) the product of (A) the Pass-Through
Rate of the related Security multiplied by the aggregate principal amount of the Related Mortgage Loans evidenced by the related
Participation Certificate, and (B) the number of days in the period from and including the Issuance Date of such Security through
but excluding the related Settlement Date, divided by 360, from (ii) the product of (A) the applicable Transaction Rate multiplied
by the initial principal amount of related Security, and (B) the number of days in the period from and including the date of the
purchase of the related Participation Certificate under this Agreement through but excluding the related Settlement Date, divided
by 360.

 

“Non-Utilization
Fee” has the meaning assigned thereto in the MRA Pricing Side Letter.

 

“Parent Company”
means PennyMac Financial Services, Inc.

 

    	 	12
	 

     

    

 

“Participation
Certificate” means a Ginnie Mae Participation Certificate, a Fannie Mae Participation Certificate or a Freddie Mac Participation
Certificate, as applicable.

 

“Pass Through
Rate” means with respect to a Security, the rate of interest to be borne by such Security, which rate or rates shall
be set forth in the related Confirmation.

 

“Person”
means any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust,
unincorporated association or government (or any agency, instrumentality or political subdivision thereof).

 

“Pricing Side
Letter” means the Pricing Side Letter, dated as of even date herewith, between Seller and Purchaser entered into in connection
with this Agreement, as amended, supplemented or otherwise modified from time to time.

 

“Program Documents”
means this Agreement, the Pricing Side Letter, the Custodial Agreement, the Electronic Tracking Agreement, the Custodial Account
Control Agreement, the Master Netting Agreement, any Agency Custodial Supplement, the Participation Certificates, the MRA Program
Documents, and all other agreements, documents and instruments entered into by Seller on the one hand, and Purchaser or one of
its Affiliates (or Custodian on its behalf) and/or Agent or one of its Affiliates on the other, in connection herewith or therewith
with respect to the transactions contemplated hereunder or thereunder and all amendments, restatements, modifications or supplements
thereto. For the avoidance of doubt, the Program Documents shall not include the MSR Facility Program Documents.

 

“Purchase Date”
means, with respect to a Participation Certificate, the date on which Purchaser elects to purchase such Participation Certificate.

 

“Purchase Price”
means, with respect to each Participation Certificate, the Trade Principal of the Security to be backed by the Related Mortgage
Loans. Such Purchase Price shall be payable (i) on the Purchase Date in an amount equal to the Initial Purchase Price Installment,
and (ii) on or prior to the Settlement Date in an amount equal to the Completion Fee. Accrued interest shall be allocated in accordance
with Section 4(d).

 

“Purchaser”
means Barclays Bank PLC and its successors in interest, including, but not limited to, any lender, designee or assignee to whom
a Participation Certificate or a Security shall be pledged or assigned.

 

“Refinanced
Mortgage Loan” means a Mortgage Loan the proceeds of which were not used to purchase the related Mortgaged Property.

 

“Related Mortgage
Loan” means a Mortgage Loan in which a Participation Certificate evidences the 100% undivided beneficial ownership interest.

 

“Related Participation
Certificate” means the Participation Certificate relating to a pool of Mortgage Loans.

 

“Request for
Release of Documents” means the Request for Release of Documents set forth as Annex 5 to the Custodial Agreement.

 

    	 	13
	 

     

    

 

“Restricted
Mortgage Loan” means (i) a “Growing Equity Loan,” “Graduated Payment Loan” or “Buydown
Loan,” each as defined in the applicable Agency Guide, (ii) a 30+ Day Delinquent Mortgage Loan, (iii) a Mortgage Loan for
which the related Escrow Payments have not been made by the next succeeding Due Date, (iv) a High Cost Mortgage Loan or (v) a Mortgage
Loan that could result in Negative Amortization.

 

“SEC”
means the Securities Exchange Commission or any successor thereto.

 

“Security”
means a Ginnie Mae Security, a Fannie Mae Security or a Freddie Mac Security, as applicable.

 

“Security Issuance
Failure” means failure of the Security to be issued for any reason whatsoever on or before the Anticipated Delivery Date.

 

“Security Settlement
Fee” has the meaning assigned thereto in the Pricing Side Letter.

 

“Selling System”
means the Freddie Mac automated system by which sellers and servicers of mortgage loans to Freddie Mac transfer mortgage summary
and record data or mortgage accounting and servicing information from their computer system or service bureau to Freddie Mac, as
more fully described in the Freddie Mac Guide.

 

“Servicer”
means Seller, or any other servicer approved in the sole discretion of Purchaser.

 

“Servicing File”
means, with respect to each Mortgage Loan, the file retained by Seller or its designee consisting of all documents that a prudent
originator and servicer would include (including copies of the Mortgage File), all documents necessary to document and service
the Mortgage Loans and any and all documents required to be delivered in connection with any transfer of servicing pursuant to
the Program Documents.

 

“Servicing Records”
means, with respect to a Related Mortgage Loan, the related servicing records, including but not limited to any and all servicing
agreements, files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance
policies, appraisals, other closing documentation, payment history records, and any other records relating to or evidencing the
servicing of such Related Mortgage Loan.

 

“Servicing Term”
has the meaning assigned thereto in Section 6(a).

 

“Servicing Termination
Events” has the meaning assigned thereto in Section 6(e).

 

“Settlement
Date” means the date specified in a Takeout Commitment upon which the related Security is scheduled to be delivered to
the specified Takeout Investor on a “delivery versus payment” basis.

 

“Streamline
Loan” has the meaning assigned thereto in Section 9(b)(xix)(C).

 

    	 	14
	 

     

    

 

“Strict Compliance”
means compliance of Seller and the Related Mortgage Loans with the requirements of the Agency Guide as amended by any agreements
between Seller and the Applicable Agency, sufficient to enable Seller to issue and Ginnie Mae to guarantee or Fannie Mae or Freddie
Mac to issue and guarantee a Security; provided, that until copies of any such agreements between Seller and the Applicable Agency
have been provided to Agent by Seller and approved by Agent, such agreements shall be deemed, as between Seller and Purchaser,
not to amend the requirements of the Agency Guide.

 

“Structuring
Fee” has the meaning assigned thereto in the Master Repurchase Agreement.

 

“Subordinated
Debt” means, with respect to any Person, Indebtedness of such Person to any other Person that is subordinated to the
obligations under this Agreement pursuant to a currently effective and irrevocable subordination agreement approved by Agent in
its sole discretion and the principal of which is not due and payable until ninety (90) days or more after the Termination Date.

 

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

 

“Successor Servicer”
means an entity with the necessary Approvals, as the circumstances may require, and designated by Purchaser, in conformity with
Section 6(f), to replace Seller as issuer and servicer, mortgagee or seller/servicer of the Related Mortgage Loans or the
Securities related thereto.

 

“Takeout Commitment”
means a fully executed trade confirmation from the related Takeout Investor to Seller confirming the details of a forward trade
between the Takeout Investor and Seller with respect to one or more Securities relating to a Participation Certificate, which trade
confirmation shall be enforceable and in full force and effect, and shall be validly and effectively assigned to BCI pursuant to
a Trade Assignment, and relate to pools of Related Mortgage Loans that satisfy the “good delivery standards” of the
Securities Industry and Financial Markets Association as set forth in the Securities Industry and Financial Markets Association
Uniform Practices Manual, as amended from time to time.

 

“Takeout Investor”
means either (i) Barclays Capital, Inc., or any successor thereto, (ii) any member of the Mortgage Backed Securities Division of
the Fixed Income Clearing Corporation listed in Exhibit F of the Master Repurchase Agreement or (iii) any other Person approved
by Agent in its sole discretion.

 

    	 	15
	 

     

    

 

“Tangible Net
Worth” means for any Person as of any date of determination, an amount equal to (i) such Person’s shareholder equity
calculated in accordance with GAAP, plus (ii) any Subordinated Debt issued by such Person with maturities greater than twelve (12)
months, minus (iii) the intangible assets of such Person.

 

“Termination
Date” means the earliest to occur of (i) the Maturity Date, (ii) the termination of the Master Repurchase Agreement,
(iii) the termination of the Loan Agreement and (iv) at the option of Agent, the occurrence of a Servicing Termination Event under
this Agreement after the expiration of any applicable grace period.

 

“Trade Assignment”
means a letter substantially in the form of Exhibit B.

 

“Trade Price”
means the price (expressed as a percentage of the initial principal amount of the Security), as specified in the related Takeout
Commitment at which the related Takeout Investor is obligated to purchase such Security as specified in such Takeout Commitment.

 

“Trade Principal”
means an amount equal to the product of (a) the Trade Price and (b) the initial principal amount of the related Security, as specified
in the related Takeout Commitment.

 

“Transaction
Rate” has the meaning assigned thereto in the Pricing Side Letter.

 

“Uncommitted
Amount” shall have the meaning assigned thereto in the Pricing Side Letter.

 

“VA”
means the United States Department of Veterans Affairs or any successor thereto.

 

“Warehouse Lender”
means any lender providing financing to Seller for the purpose of originating Mortgage Loans, which prior to the Purchase Date
has a security interest in such Mortgage Loans as collateral for the obligations of Seller to such lender.

 

“Warehouse Lender’s
Release” means a letter, in the form of Exhibit D, or as otherwise acceptable to Purchaser, from a Warehouse Lender
to Purchaser, unconditionally releasing all of Warehouse Lender’s right, title and interest in certain Mortgage Loans identified
therein upon payment to the Warehouse Lender.

 

Section
2.Procedures for Purchases of Participation Certificates.

 

(a)Purchaser
(x) shall, until the Termination Date, but subject to satisfaction of certain conditions precedent set forth herein purchase one
or more Participation Certificates from Seller with an aggregate Purchase Price not to exceed the Committed Amount, and (y) may,
in its sole discretion from time to time until the Termination Date, purchase one or more Participation Certificates from Seller
with an aggregate Purchase Price not to exceed the Uncommitted Amount; provided, that the sum of (i) the Aggregate
MRA Purchase Price, (ii) the MSR Facility Borrowed Amount and (iii) the Aggregate EPF Purchase Price shall not exceed, as of any
date of determination, the Maximum Aggregate Purchase Price. All purchases of Participation Certificates hereunder shall be first
deemed committed up to the Committed Amount and then the remainder, if any, shall be deemed uncommitted up to the Uncommitted Amount.
In connection with Purchaser’s purchase of any such Participation Certificate, Seller, on behalf of Purchaser, shall arrange
for the Delivery to BCI of a Security backed by the Related Mortgage Loans, which Security shall be subject to a Takeout Commitment.
The purchase of any Participation Certificate shall be subject to the receipt by Purchaser of the documents listed in Section
2(f) and (g) from Seller, in form and substance satisfactory to Agent, and the execution of the Custodial Agreement relating
to the Participation Certificate by Seller and Custodian and the Electronic Tracking Agreement relating to the Related Mortgage
Loans by Seller, MERS and Electronic Agent, and delivery thereof to Purchaser. In accordance with the provisions of the Electronic
Tracking Agreement, the Seller shall, at its sole cost and expense, (1) cause each Related Mortgage Loan with respect to which
a Participation Certificate is to be sold to the Purchaser on a Purchase Date, the Mortgage for which is recorded in the name of
MERS, to be designated a MERS Mortgage Loan and (2) cause the Purchaser to be designated an “associated member” (as
defined in the Electronic Tracking Agreement) with respect to each such MERS Mortgage Loan. Notwithstanding the satisfaction of
the conditions specified in this Section 2(a) or anything else herein or in any other Program Document to the contrary,
Purchaser is not obligated to purchase any Participation Certificate offered to it hereunder in respect of the Uncommitted Amount.

 

    	 	16
	 

     

    

 

(b)In
order to purchase any Participation Certificate, Purchaser shall deliver a completed Confirmation with respect to such Participation
Certificate to Seller reflecting the agreed-upon terms of the transaction, and shall pay to Seller, on the Purchase Date, the amount
of the Initial Purchase Price Installment for such Participation Certificate upon receipt of a duly executed and properly completed
original Participation Certificate. Effective upon execution and delivery of such Participation Certificate to Purchaser, Seller
hereby assigns to Purchaser all of Seller’s right, title and interest in and to such Participation Certificate and a 100%
undivided beneficial interest in the Related Mortgage Loans. In the event that Purchaser does not transmit the Initial Purchase
Price Installment, (i) any Participation Certificate delivered by Custodian to Purchaser in anticipation of such purchase shall
automatically be null and void, (ii) Purchaser will not consummate the transactions contemplated in the applicable Trade Assignment
and (iii) to the extent that Purchaser shall nevertheless receive the Security backed by the Related Mortgage Loans prior to the
Participation Certificate becoming null and void as provided in clause (i) above, Purchaser shall take all reasonable actions necessary
to ensure that such Security shall be delivered in accordance with delivery instructions provided by Seller.

 

(c)The
terms and conditions of the purchase of each Participation Certificate shall be as set forth in this Agreement. Each Participation
Certificate shall be deemed to incorporate, and Seller shall be deemed to make as of the applicable dates specified in Section 9,
for the benefit of Purchaser and each Assignee of such Participation Certificate, the representations and warranties set forth
in Section 9.

 

(d)Purchaser
shall provide a Confirmation to Seller on or before the Purchase Date or as soon as practicable after the Purchase Date. In the
event of any conflict between the terms of a Confirmation and this Agreement, the Confirmation shall prevail.

 

    	 	17
	 

     

    

 

(e)For
the avoidance of any doubt, it is hereby understood and agreed that Purchaser’s purchase of the beneficial ownership interest
in and to Related Mortgage Loans, as evidenced by a Participation Certificate, shall include a beneficial ownership interest in
and to all the servicing rights relating to such Mortgage Loans.

 

(f)Prior
to the Effective Date, Purchaser shall have received the following, in form and substance satisfactory to Purchaser and Agent and
duly executed by each party thereto (as applicable):

 

(i)Completed
and fully executed Program Documents containing indemnity provisions acceptable to Purchaser and in form and substance satisfactory
to Purchaser and Agent and duly executed by each party thereto (as applicable);

 

(ii)A
copy of an Officer’s Certificate of each of Seller and Guarantor in the form attached hereto as Exhibit G together with (1)
the articles of incorporation or formation, as applicable, and any amendments thereto, certified by the Secretary of State of Seller’s
state of incorporation or formation, as applicable, (2) a copy of by-laws or the operating agreement, as applicable, together with
any amendments thereto, (3) a copy of the resolutions adopted by Seller’s Board of Directors or the Guarantor’s Board
of Managers, as applicable, authorizing Seller or Guarantor, as applicable, to enter into this Agreement and the other Program
Documents to which it is a party, and authorizing one or more of Seller’s or Guarantor’s officers, as applicable, to
execute the documents related to this Agreement and the other Program Documents to which it is a party; 

 

(iii)An
opinion of Seller’s and Guarantor’s counsel as to such matters as Purchaser or Agent may reasonably request (including,
without limitation, with respect to Purchaser’s first priority lien on and perfected security interest in the Related Mortgage
Loans; a no material litigation opinion (which may be provided by internal counsel); a non-contravention, enforceability and corporate
opinion with respect to Seller and Guarantor; an opinion with respect to the inapplicability of the Investment Company Act of 1940
to Seller and Guarantor; an opinion that this Agreement constitutes a “securities contract” within the meaning of the
Bankruptcy Code and an opinion that no transaction constitutes an avoidable transfer under Section 546(f) of the Bankruptcy Code),
each in form and substance acceptable to Purchaser and Agent;

 

(iv)The
portion of the Structuring Fee then due and owing pursuant to Section 2 of the MRA Pricing Side Letter, in U.S. dollars, in immediately
available funds, without deduction, setoff or counterclaim; provided that Purchaser may, in its sole discretion, net such portion
of the Structuring Fee, from the proceeds of any Purchase Price paid by Purchaser to Seller; and

 

(v)Evidence
that all other actions necessary or, in the opinion of Agent, desirable to perfect and protect Purchaser’s interest in the
Related Mortgage Loans and other Collateral have been taken, including, without limitation, duly filed Uniform Commercial Code
financing statements on Form UCC1.

 

    	 	18
	 

     

    

 

(g)In
addition to those items listed in Section 2(a) and (b), prior to each Purchase Date, the following shall have occurred:

 

(i)Seller
shall have paid to Purchaser

 

(A)all
accrued fees and expenses, including, on the tenth (10th) Business Day of each month or Termination Date, the Non-Utilization
Fee if required under Section 2 of the MRA Pricing Side Letter in U.S. dollars, in immediately available funds, without deduction,
setoff or counterclaim; provided that Purchaser may, in its sole discretion, net any unpaid Non-Utilization Fee from the proceeds
of any Purchase Price paid by Purchaser to Seller; and

 

(B)the
Security Settlement Fee for the related Participation Certificate as required under Section 2 of the Pricing Side Letter in U.S.
dollars, in immediately available funds, without deduction, setoff or counterclaim; provided that Purchaser may, in its sole discretion,
net any unpaid Security Settlement Fee from the proceeds of any Purchase Price paid by Purchaser to Seller.

 

(ii)The
fully completed, executed and authenticated Participation Certificate together with the certifications of the Custodian provided
by Section 2 of the Custodial Agreement or, with respect to a Security, such Security, shall have been delivered to the Purchaser;

 

(iii)A
Trade Assignment (unless Purchaser is the Takeout Investor), fully completed and duly executed by Seller and the related Takeout
Investor, together with either (a) a copy of a Takeout Commitment with respect to the Security to be backed by the Mortgage Loans
evidenced by such Participation Certificate or (b) a letter from Seller confirming the details of such Takeout Commitment shall
have been delivered to Purchaser;

 

(iv)A
Warehouse Lender’s Release from each Warehouse Lender having a security interest in the Related Mortgage Loans, substantially
in the form of Exhibit D, or as otherwise acceptable to Purchaser, releasing any and all right, title and interest in such Mortgage
Loans shall have been delivered to Purchaser;

 

(v)All
representations and warranties made by Seller in this Agreement are true and correct in all material respects; and

 

(vi)No
Servicing Termination Event has occurred and is continuing.

 

Section
3.Takeout Commitments.

 

Seller hereby assigns
to BCI, free of any security interest, lien, claim or encumbrance of any kind, Seller’s rights under each Takeout Commitment
to deliver the Security specified therein to the related Takeout Investor and to receive the purchase price therefor from such
Takeout Investor. Subject to Purchaser’s rights hereunder, Purchaser agrees that it will cause BCI to satisfy the obligation
under the Takeout Commitment to deliver the Security to the Takeout Investor on the Settlement Date specified therein. Seller understands
that, as a result of this Section 3 and each Trade Assignment, BCI will succeed to the rights and obligations of Seller
with respect to each Takeout Commitment subject to a Trade Assignment, and that in satisfying each such Takeout Commitment, BCI
will stand in the shoes of Seller and, consequently, will be acting as a non-dealer in exercising its rights and fulfilling its
obligations assigned pursuant to this Section 3 and each Trade Assignment. Each Trade Assignment delivered by Seller
to Purchaser shall be delivered by Seller in a timely manner sufficient to enable BCI to facilitate the settlement of the related
trade on the trade date in accordance with Chapter 8 of the Securities Industry and Financial Markets Association’s Uniform
Practices for the Clearance and Settlement of Mortgage Backed Securities and other Related Securities, as amended from time to
time.

 

    	 	19
	 

     

    

 

Section
4.Completion Fee.

 

(a)Subject
to the terms of this Agreement, Purchaser shall pay to Seller the Completion Fee for each Participation Certificate that Purchaser
elects to purchase hereunder as follows: (i) the Initial Completion Fee Installment shall be paid on the date of Delivery of the
related Security and (ii) the Final Completion Fee Installment shall be paid on the latest to occur of (x) the Settlement Date
of the related Security, (y) the date of receipt by BCI of the Trade Price with respect to such related Security and (z) the satisfaction
by Seller of its obligations under this Agreement.

 

(b)Except
as otherwise provided in this Section 4 and in Section 5(b), and subject to Purchaser’s right of set-off set
forth in Section 12, the Completion Fee owed by Purchaser with respect to a Participation Certificate, if any, shall be
paid by Purchaser to Seller in full by not later than the Settlement Date of the related Security in accordance with the following
wire instructions:

 

Bank of America

100 West 33rd Street

New York, New York 10001

Attention: Jasmin Tabar

Phone: (888) 715-1000 x 57328

ABA 026009593

For Further Credit to: 12355-44258

Account Name: PennyMac Loan Services, LLC Operating Account

Notify Pamela Marsh/Kevin Chamberlain
@ (805) 330-6059/ (818) 746-2877

Email: pamela.marsh@pnmac.com; kevin.chamberlain@pnmac.com

With copies to: treasury@pnmac.com and whseops@pnmac.com

 

(c)Upon
exercise by Purchaser of its remedies under Section 6(f), Purchaser’s obligation to pay and Seller’s right to
receive any portion of the Completion Fee relating to such Mortgage Loans shall automatically be set off against any outstanding
obligations under Section 6(f); provided, that such set-off shall in no way relieve Seller or otherwise affect the
obligation of Seller to indemnify and hold Purchaser and Agent harmless as specified in Section 13. At no time shall
Seller have any beneficial interest in the servicing rights with respect to Related Mortgage Loans while the related Participation
Certificate is outstanding.

 

    	 	20
	 

     

    

 

(d)If
a Participation Certificate is purchased by Purchaser after the first day of the month in which the Settlement Date occurs, Purchaser
shall also pay to Seller on the date of Delivery to Purchaser of the Security backed by the related Mortgage Loans an amount equal
to the accrued interest on the related Security at the rate specified in the related Takeout Commitment from the first day of such
month to and including the day immediately preceding the date Purchaser purchased such Participation Certificate. If a Participation
Certificate is purchased by Purchaser in the month prior to the month in which the Settlement Date occurs, the Completion Fee shall
be reduced by an amount equal to all interest payments which accrue on such Participation Certificate during the period from the
date of purchase of such Participation Certificate through and including the last day of the month prior to the month in which
such Settlement Date occurs.

 

Section
5.Issuance of Securities.

 

(a)a)
In connection with the purchase of a Participation Certificate, Seller shall instruct (and, if Seller fails to instruct, then Agent
may instruct) Custodian to deliver to the Applicable Agency, the documents listed in Annex 19-A, 19-B or 19-C
of the Custodial Agreement, as applicable, in respect of the Related Mortgage Loans, in the manner and at the time set forth in
the Custodial Agreement. Seller shall thereafter promptly deliver to the Applicable Agency any and all additional documents requested
by the Applicable Agency to enable the Applicable Agency to make Delivery to Purchaser of a Security backed by such Mortgage Loans
on the related Anticipated Delivery Date. Seller shall not revoke such instructions to Custodian and shall not revoke its instructions
to the Applicable Agency to make Delivery to Purchaser or its designee of a Security backed by such Mortgage Loans. The Delivery
to Purchaser of a Security shall be made in accordance with the following delivery instructions

 

Fed Book Entry Securities (MBS)

ABA: 021000018

Bank of NYC/BCMBS

 

(ii)Seller
shall notify Purchaser, not later than 2:00 p.m., Eastern Time, on the applicable Settlement Date (a) of the amount of any change
in the principal amount of the Mortgage Loans backing each such Security related to such Settlement Date and (b) with respect to
Freddie Mac Securities, the Freddie Mac mortgage loan pool number applicable to each Security to which such Settlement Date relates.
Upon Delivery of such Security to BCI or its designee, Purchaser shall cease to have any interest under such Participation Certificate
and in exchange shall have a 100% ownership interest in the related Security. It is understood and agreed that for so long as Seller
is servicing Related Mortgage Loans, Seller shall retain only record title to the Mortgages (and not an equitable interest) in
all such Mortgage Loans (other than MERS Mortgage Loans) for the sole purpose of servicing such Mortgage Loans on a servicing-released
basis.

 

(b)If
Delivery of a Security backed by the Mortgage Loans evidenced by a Participation Certificate purchased hereunder has not occurred
by 2:00 p.m. (Eastern Time) on the related Settlement Date as a result of a Security Issuance Failure or otherwise, then subject
to the exercise by Purchaser of its rights set forth in Section 4(c), the Completion Fee relating to such Participation
Certificate shall be reduced on each day during the period from the Settlement Date to (but not including) the earlier of (x) the
date of Delivery of such Security, and (y) the date of satisfaction of the obligations of Seller pursuant to the exercise by Purchaser
of any remedial election authorized by this Section 5, by an amount equal to the Daily Completion Fee Reduction Amount.
The Completion Fee (reduced by the applicable Daily Completion Fee Reduction Amounts) relating to such Participation Certificate,
if any, shall not be payable until the end of the period specified in the preceding sentence.

 

    	 	21
	 

     

    

 

(c)If
a breach by Seller of this Agreement results in any Related Mortgage Loan being a Defective Mortgage Loan on the Purchase Date
of the related Participation Certificate to Purchaser, Agent in its sole discretion may require that Seller, upon receipt of notice
from Purchaser or Agent of its exercise of such right, to either (x) immediately repurchase Purchaser’s beneficial ownership
interest in such Defective Mortgage Loan by remitting to Purchaser the allocable amount paid by Purchaser for such beneficial interest
plus accrued and unpaid interest at the rate specified in the related Mortgage Note on the principal amount thereof from the date
of Purchaser’s purchase of such Participation Certificate to the date of such repurchase together with any Losses suffered
by Purchaser relating to such repurchase (including, without limitation, any Losses incurred by Purchaser resulting from adjustments
to the trade required by the Takeout Investor), or (y) deliver to Custodian a Mortgage Loan eligible to back such Security in exchange
for such Defective Mortgage Loan, which newly delivered Mortgage Loan shall be in all respects acceptable to Agent in Agent’s
sole discretion, and such newly delivered Mortgage Loan will thereupon become one of the Related Mortgage Loans relating to the
Participation Certificate. If the aggregate principal balance of any Mortgage Loans that are accepted by Purchaser pursuant to
clause (y) of the immediately preceding sentence is less than the aggregate principal balance of any Defective Mortgage Loan that
is being replaced by such Mortgage Loan, Seller shall remit with such Mortgage Loan to Purchaser an amount equal to the difference
between the aggregate principal balance of the new Mortgage Loan accepted by Purchaser and the aggregate principal balance of the
Defective Mortgage Loan being replaced thereby plus accrued interest on such Defective Mortgage Loan at the rate specified in the
related Mortgage Note on the principal amount thereof from the Purchase Date of Purchaser’s purchase of such Participation
Certificate to the date of substitution.

 

(d)If
any Related Mortgage Loan (other than a Modified Loan) becomes thirty (30) or more days past due with respect to the first scheduled
monthly payment due Purchaser after the date on which such Related Mortgage Loan was originated and prior to the Anticipated Delivery
Date, Seller shall repurchase the beneficial interest in such Related Mortgage Loan as if it were a Defective Mortgage Loan upon
direction by Agent given no later than one hundred twenty (120) days after the Purchase Date.

 

(e)No
exercise by Purchaser or Agent of their respective rights under this Section 5 shall relieve Seller of responsibility
or liability for any breach of this Agreement.

 

Section
6.Servicing of the Mortgage Loans; Servicer Termination; Backup Servicer.

 

(a)Upon
payment of the Initial Purchase Price Installment (subject to Section 4), Purchaser shall own a 100% undivided beneficial
interest in the servicing rights related to the Related Mortgage Loans and all source files, documents, agreements and papers related
to servicing the Related Mortgage Loans and shall own all derivative information created by Servicer other third party used or
useful in servicing such Mortgage Loans. Seller and Purchaser each agrees and acknowledges that a 100% undivided beneficial interest
in Related Mortgage Loans shall be sold to Purchaser on a servicing released basis, and that Purchaser is engaging and hereby does
engage Servicer to provide servicing of each Related Mortgage Loan for the benefit of Purchaser (and any other registered holder
of the related Participation Certificate) for each transaction for a term of forty-five (45) days from the related Purchase Date
(subject to the termination rights provided in this Agreement, including, without limitation, Section 6(f) of this Agreement),
which term may be extended in writing by Purchaser, in its sole discretion, for an additional forty-five (45) day period (each,
a “Servicing Term”). If such Servicing Term is not extended by Purchaser or if Purchaser has terminated Servicer
as a result of a Servicing Termination Event, Servicer shall transfer such servicing to Purchaser or its designee at no cost or
expense to Purchaser as provided in Section 6(g) of this Agreement. Servicer shall hold or cause to be held all Escrow Payments
collected with respect to the Mortgage Loans in segregated accounts for the sole benefit of the Mortgagor and shall apply the same
for the purposes for which such funds were collected. If Servicer should discover that, for any reason whatsoever, it has failed
to perform fully its servicing obligations with respect to the Mortgage Loans, Servicer shall promptly notify Purchaser.

 

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For so long as a Participation
Certificate is outstanding, Servicer shall neither assign, encumber or pledge its obligation to service the Related Mortgage Loans
in whole or in part, nor delegate its rights or duties under this Agreement (to other than a subservicer) without the prior written
consent of Agent, the granting of which consent shall be in the sole discretion of Agent. Servicer hereby acknowledges and agrees
that (i) Purchaser is entering into this Agreement in reliance upon Servicer’s representations as to the adequacy of its
financial standing, servicing facilities, personnel, records, procedures, reputation and integrity, and the continuance thereof;
and (ii) Servicer’s engagement hereunder to provide mortgage servicing for the benefit of Purchaser (and any other registered
holder of the Participation Certificate) is intended by the parties to be a “personal service contract” and Servicer
is hereunder intended by the parties to be an “independent contractor.”

 

(b)b)
Servicer shall service and administer the Related Mortgage Loans relating to a Participation Certificate on behalf of Purchaser
in accordance with Accepted Servicing Practices. Servicer shall have no right to modify or alter the terms of any Related Mortgage
Loan or consent to the modification or alteration of the terms of any Related Mortgage Loan except in Strict Compliance with the
related Agency Program. Servicer shall at all times maintain accurate and complete records of its servicing of the Related Mortgage
Loans, and Agent may, at any time during Servicer’s business hours on reasonable notice, examine and make copies of such
Servicing Records. Servicer agrees that Purchaser is the 100% beneficial owner of all Servicing Records relating to the Related
Mortgage Loans. Servicer covenants to hold such Servicing Records for the benefit of Purchaser and to safeguard such Servicing
Records and to deliver them promptly to Agent or its designee (including the Custodian) at Agent’s request or otherwise as
required by operation of this Section 6.

 

(ii)If
Delivery of a Security is not made to Purchaser on or before the Anticipated Delivery Date, Servicer shall deliver to Purchaser
monthly reports regarding the status of those Related Mortgage Loans for which a Security has not yet been issued, which reports
shall include, but shall not be limited to, a description of those Related Mortgage Loans in default for more than thirty (30)
days, and such other circumstances with respect to any Related Mortgage Loans (whether or not such Related Mortgage Loans are included
in the foregoing list) that could materially adversely affect any of such Related Mortgage Loans, Purchaser’s beneficial
interest in such Related Mortgage Loans or the collateral securing any of such Related Mortgage Loans. Servicer shall deliver such
a report to Purchaser every thirty (30) days until (i) Delivery of the related Security to Purchaser or (ii) the exercise by Purchaser
of any remedial election pursuant to Section 5. In no event shall Servicer delegate any of its servicing duties hereunder
to any other Person without first obtaining the prior written consent of Purchaser.

 

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(iii)Within
three (3) Business Days after the end of each calendar month (or if such day is not a Business Day, the immediately following Business
Day), and as requested by Purchaser or Agent from time to time, Servicer shall furnish to Purchaser and Agent reports in form and
scope satisfactory to Agent, setting forth (i) data regarding the performance of the individual Mortgage Loans and (ii) any other
information reasonably requested by Purchaser or Agent.

 

(c)Servicer,
shall establish and maintain a separate custodial account (the “Custodial Account”) with Bank entitled “PennyMac
Loan Services, LLC as servicer, for the benefit of Barclays Bank PLC and its assignees, Custodial Account” and shall deposit
into such account in the form received within two (2) Business Days’ receipt thereof, with any necessary endorsements, all
collections received in respect of the Related Mortgage Loans relating to Participation Certificates purchased by Purchaser hereunder.
The Custodial Account shall be subject to the terms and conditions of the Custodial Account Control Agreement.

 

(d)Amounts
deposited in the Custodial Account with respect to any Related Mortgage Loan relating to Participation Certificates purchased by
Purchaser hereunder shall be held for the benefit of Purchaser and shall be released only in accordance with Agent’s written
instructions, including as follows:

 

(i)Except
as otherwise provided in Section 6(d)(ii), upon either (x) the Settlement Date (unless there is a Securities Issuance Failure)
or (y) if earlier, on the date required by the applicable Agency Guide, Agent shall cause amounts deposited in the Custodial Account
to be released to Seller. Notwithstanding the foregoing, all amounts relating to Participation Certificates purchased by Purchaser
hereunder and deposited in the Custodial Account shall be released to Seller at Agent’s direction upon the Settlement Date
of the related Security (unless there is a Securities Issuance Failure) only if, and to the extent that, the amounts due and payable
to Purchaser hereunder have been set-off against the Purchase Price for the Related Participation Certificate or the Completion
Fee. Seller shall be solely responsible for paying compensation to Servicer for its obligations as Servicer.

 

(ii)If
Successor Servicer takes delivery of such Mortgage Loans either under the circumstances set forth in Section 6(f) or
otherwise, all amounts deposited in the Custodial Account shall be paid to Purchaser promptly upon such delivery.

 

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(e)Purchaser
(or any other registered holder of the Related Participation Certificate) shall be entitled to effect termination of Servicer’s
servicing rights and obligations respecting the affected Related Mortgage Loans in the event any of the following circumstances
or events (“Servicing Termination Events”) occur and are continuing:

 

(i)any
failure by Seller or Servicer, as the case may be, to remit to Purchaser (or other registered holder of the Participation Certificate)
when due any payment required to be made under the terms of this Agreement or such Participation Certificate; or

 

(ii)failure
by Seller or Servicer, as the case may be, duly to observe or perform in any material respect any of Seller’s or Servicer’s,
as the case may be, other covenants or agreements set forth in this Agreement or in the Custodial Agreement which continues unremedied
for a period of two (2) Business Days of the earlier of (x) Seller’s or Servicer’s, as the case may be, receipt of
written notice from Purchaser, Agent or Custodian of such breach or (y) the date on which Seller or Servicer, as the case may be,
obtains notice or knowledge of the facts giving rise to such breach; or

 

(iii)any
representation, warranty or certification made or deemed made herein or in the Custodial Agreement by Seller or Servicer, as the
case may be, or any certificate furnished to Purchaser pursuant to the provisions thereof, shall prove to have been false or misleading
in any material respect as of the time made or furnished; or

 

(iv)an
Act of Insolvency with respect to Seller or Servicer, as the case may be, or any Parent Company; or

 

(v)Seller
or Servicer, as the case may be, ceases to meet the qualifications for maintaining all Approvals, such Approvals are revoked or
such Approvals are materially modified; or

 

(vi)Seller
or Servicer, as the case may be, attempts to assign its right to servicing compensation hereunder or to resell an ownership interest
in a Related Mortgage Loan in a manner inconsistent with the terms hereof, or Seller or Servicer, as the case may be, attempts
without the consent of Agent to sell or otherwise dispose of all or substantially all of its property or assets or to assign, encumber
or pledge its obligation to service the Related Mortgage Loans in whole or in part, or delegate its rights or duties under this
Agreement (to other than a subservicer) without the prior written consent of Agent, the granting of which consent shall be in the
sole discretion of Agent; or

 

(vii)Seller
or Servicer, as the case may be, or any of their Affiliates fail to operate or conduct its business operations or any material
portion thereof in the ordinary course, or Seller or Servicer, as the case may be, experiences any other material adverse change
in its business operations or financial condition, which, in Agent’s sole discretion, constitutes a material impairment of
Seller’s or Servicer’s, as the case may be, ability to perform its obligations under this Agreement or any other related
document; or

 

(viii)Seller’s
membership in MERS is terminated for any reason or Seller shall fail to enter into the Electronic Tracking Agreement with the Purchaser;
or

 

    	 	25
	 

     

    

 

(ix)Reserved;

 

(x)failure
by the Seller or Servicer to be in compliance in any material respect with the “doing business” or licensing laws of
any jurisdiction where a Mortgaged Property is located; or

 

(xi)in
the event of a Security Issuance Failure that continues unremedied for a period of two (2) Business Days; or

 

(xii)A
Change in Control of Seller, Servicer or Guarantor shall have occurred that has not been approved by Agent, or there shall have
occurred the resignation, removal or other substantial change in the management responsibilities of PNMAC Capital Management, LLC
which has not been approved by Agent; or

 

(xiii)Seller,
Servicer, Guarantor or any of their respective Affiliates or Subsidiaries shall be in default under, or fail to perform as requested
under, or shall otherwise breach the material terms of any agreement relating to, in each case beyond any applicable cure period,
(i) any Indebtedness between (x) Seller or any of its Affiliates, or Guarantor’s guarantee, (y) any Purchaser or any of Purchaser’s
Affiliates, (such amount in excess of $1,000,000) and (z) Servicer or any of its Affiliates, or (ii) any other agreement relating
to Indebtedness among Seller, Servicer or Guarantor or any of their respective Affiliates or Subsidiaries on the one hand, and
any Person, on the other hand (such amount in excess of $10,000,000); or Seller, Servicer or Guarantor any of their respective
Affiliates or Subsidiaries shall be in default under, or fail to perform as requested under, or shall otherwise breach, beyond
any applicable cure period, the terms of this Agreement or any other agreement (including, without limitation, the Program Documents
and the MSR Facility Program Documents) between Purchaser or any of its Affiliates or Subsidiaries and the Seller, Servicer or
Guarantor or any of their respective Affiliates or Subsidiaries; or

 

(xiv)Reserved.

 

(f)Purchaser,
in its sole discretion, may terminate Servicer’s rights and obligations as servicer of the affected Related Mortgage Loans
and require Servicer to deliver the related Servicing Records to Purchaser or its designee upon the occurrence of (i) a Servicing
Termination Event, (ii) Seller’s failure to comply with any of its obligations set forth in Section 5(c) or 5(d) or (iii)
Seller’s breach of Section 9(a)(xii) or 9(b), by delivering written notice to Seller requiring such termination. Such termination
shall be effective upon Seller’s or Servicer’s receipt of such written notice; provided, that Servicer’s
servicing rights shall be terminated immediately upon the occurrence of any event described in Section 6(e)(iv), regardless
of whether notice of such event shall have been given to or by Purchaser or Seller. Upon any such termination, all authority and
power of Servicer respecting its rights to service and duties under this Agreement relating thereto, shall pass to and be vested
in the Successor Servicer appointed by Purchaser and Purchaser is hereby authorized and empowered to transfer such rights to service
the Related Mortgage Loans for such price and on such terms and conditions as Purchaser shall reasonably determine; provided,
that to the extent the Applicable Agency proceeds to issue a Security with respect to the Related Mortgage Loans, Purchaser
shall convey the servicing rights and the rights to service such Mortgage Loans in accordance with such Applicable Agency’s
instructions. Servicer shall promptly take such actions and furnish to Purchaser such documents that Purchaser deems necessary
or appropriate to enable Purchaser to obtain a Security backed by such Mortgage Loans or to enforce such Mortgage Loans, as appropriate,
and shall perform all acts and take all actions so that the Related Mortgage Loans and all files and documents relating to such
Mortgage Loans held by Servicer, together with all escrow amounts relating to such Mortgage Loans, are delivered to Successor Servicer,
including but not limited to preparing, executing and delivering to the Successor Servicer any and all documents and other instruments,
placing in the Successor Servicer’s possession all Servicing Records pertaining to such Mortgage Loans and doing or causing
to be done, all at Seller’s sole expense. To the extent that the approval of the Applicable Agency is required for any such
sale or transfer, Seller or Servicer, shall fully cooperate with Purchaser to obtain such approval. All amounts paid by any purchaser
of such rights to service the Related Mortgage Loans shall be the property of Purchaser. The servicing rights required to be delivered
to Successor Servicer in accordance with this Section 6(f) shall be delivered free of any servicing rights in favor of Seller
or Servicer or any third party (other than Purchaser) and free of any title, interest, lien, encumbrance or claim of any kind of
Seller or Servicer other than record title to the Mortgages relating to the Related Mortgage Loans. No exercise by Purchaser of
its rights under this Section 6(f) shall relieve Seller or Servicer of responsibility or liability for any breach of
this Agreement.

 

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(g)With
respect to the Servicing Files and the physical and contractual servicing of each Mortgage Loan to the extent in the possession
of Servicer, Servicer shall deliver such Servicing Files and the physical and contractual servicing to Purchaser or its designee
upon the expiration of the Servicing Term (unless such Servicing Term is renewed by Purchaser) or the termination of the Servicer
as servicer pursuant to this Section 6. Servicer’s transfer of the servicing rights, Servicing Files and the physical
and contractual servicing under this Section 6(g) shall be in accordance with customary standards in the industry including
the transfer of the gross amount of all escrows held for the related Mortgagors (without reduction for unreimbursed advances or
“negative escrows”).

 

(h)The
Agent, in its sole discretion, may appoint a backup servicer at any time during the term of this Agreement. In such event, Servicer
shall commence monthly delivery to such backup servicer of the servicing information required to be delivered to Purchaser pursuant
to Section 6(b)(ii) and any other information reasonably requested by backup servicer, all in a format that is reasonably
acceptable to such backup servicer. Seller or Servicer shall pay all costs and expenses of such backup servicer, including, but
not limited to all fees of such backup servicer in connection with the processing of such information and the maintenance of a
servicing file with respect to the Related Mortgage Loans. Servicer shall cooperate fully with such backup servicer in the event
of a transfer of servicing hereunder and will provide such backup servicer with all documents and information necessary for such
backup servicer to assume the servicing of the Related Mortgage Loans.

 

Section
7.Transfers of Participation Certificates and Securities by Purchaser. Purchaser
may, in its sole discretion and without the consent of Seller, sell, assign or otherwise transfer all of its right, title and interest
or grant a security interest in any Participation Certificate, any Mortgage Note, Mortgage and Assignment of Mortgage and the related
servicing rights, each Security in respect thereof of which Delivery is made to Purchaser and all rights of Purchaser under this
Agreement (including, but not limited to, the Custodial Account) in respect of such Participation Certificate, any Mortgage Note,
Mortgage, Assignment of Mortgage and such Security, to any person (an “Assignee”), subject only to an obligation
on the part of the Assignee to deliver each such Security to the Takeout Investor or to Purchaser to permit Purchaser or its designee
to make delivery thereof to the Takeout Investor. Assignment by Purchaser of a Participation Certificate and the related servicing
rights as provided in this Section 7 will not release Purchaser from its obligations otherwise under this Agreement.

 

    	 	27
	 

     

    

 

Without limitation of
the foregoing, an assignment of a Participation Certificate and the related servicing rights to an Assignee, as described in this
Section 7, shall be effective upon delivery of the Participation Certificate to the Assignee or its designee, together
with a duly executed Assignment substantially in the form of Exhibit E (with a copy to Seller).

 

Section
8.Record Title to Mortgage Loans; Intent of Parties; Security Interest.

 

(a)From
and after the issuance and delivery of the Related Participation Certificate, and subject to the remedies of Purchaser in Section 5,
Seller as servicer shall remain the last named payee or endorsee of each Mortgage Note and the mortgagee or assignee of record
of each Mortgage (except with respect to any MERS Mortgage Loan) and shall retain only record title to the Mortgages (and not an
equitable interest) in the Related Mortgage Loan, all for the benefit of Purchaser for the sole purpose of facilitating the servicing
of such Mortgage Loan and the issuance of a Security backed by such Mortgage Loan. Where Seller has appointed Freddie Mac as Custodian,
the parties hereto acknowledge that the Mortgage Notes acquired hereunder have been deposited with Freddie Mac to facilitate the
issuance of Freddie Mac Securities with respect thereto and that prior to such issuance Freddie Mac is holding such Mortgage Notes
as Custodian for Purchaser.

 

(b)Seller
shall maintain a complete set of books and records for each Related Mortgage Loan which shall be clearly marked to reflect the
beneficial ownership interest in each Related Mortgage Loan of the holder of the Related Participation Certificate. Seller shall
notify MERS of the beneficial ownership interest of Purchaser in each MERS Mortgage Loan through the MORNET system or any other
comparable system acceptable to MERS.

 

(c)Purchaser
and Seller confirm that the transactions contemplated herein are intended to be sales of the Participation Certificates by Seller
to Purchaser rather than borrowings secured by the Participation Certificates. In the event, for any reason, any transaction is
construed by any court or regulatory authority as a borrowing rather than as a sale, Seller and Purchaser intend that Purchaser
or its Assignee, as the case may be, shall have a perfected first priority security interest in the Participation Certificates,
and all of Seller’s interest in all of the servicing rights with respect to the Related Mortgage Loans, the Custodial Account
and all amounts on deposit therein, the Related Mortgage Loans subject to each Participation Certificate, all documents, records
(including Servicing Records), instruments and data evidencing the Related Mortgage Loans and the servicing thereof, the Securities
to be issued as contemplated hereunder, all principal and interest collected thereon and all proceeds thereof, the Takeout Commitments
and the proceeds of any and all of the foregoing (collectively, the “Collateral”), free and clear of adverse
claims. In such case, Seller shall be deemed to have hereby granted to Purchaser or its Assignee, as the case may be, a first priority
security interest in and lien upon the Collateral, free and clear of adverse claims. In such event, this Agreement shall constitute
a security agreement, the Custodian shall be deemed to be an independent custodian for purposes of perfection of the security interest
herein granted to Purchaser, and Purchaser or each such Assignee shall have all of the rights of a secured party under applicable
law.

 

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Upon request of Purchaser,
Seller shall prepare and deliver to MERS an Assignment of Mortgage from MERS to Purchaser or its designee. Upon due execution by
MERS, Seller shall cause such Assignment of Mortgage to be recorded in the public land records upon request of Purchaser.

 

Section
9.Representations and Warranties.

 

(a)Seller
hereby represents and warrants to Purchaser and Agent as of the date hereof and with respect to the Related Mortgage Loans as of
the date of each issuance and delivery of a Participation Certificate that:

 

(i)Seller
is solvent and will not be rendered insolvent by any transaction contemplated by this Agreement and, after giving effect to each
such transaction, Seller will not be left with an unreasonably small amount of capital with which to engage in its business. Seller
does not intend to incur, nor believes that it has incurred, debts beyond its ability to pay such debts as they mature. Seller
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 Seller or any of its assets;

 

(ii)The
consideration received by Seller upon the sale of each Participation Certificate will constitute reasonably equivalent value and
fair consideration for the beneficial ownership interest in the Mortgage Loans evidenced by that Participation Certificate;

 

(iii)Seller
is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and it has qualified
to do business in each jurisdiction in which it is legally required to do so. Seller has the power and authority under its certificate
of formation, limited liability company agreement and applicable law to enter into this Agreement and the Custodial Agreement and
to perform all acts contemplated hereby and thereby or in connection herewith and therewith; this Agreement, the Custodial Agreement,
the Pricing Side Letter, the Custodial Account Control Agreement and the transactions contemplated hereby and thereby have been
duly authorized by all necessary action and do not require any additional approvals or consents or other action by, or any notice
to or filing with, any Person other than any that have heretofore been obtained, given or made;

 

(iv)The
consummation of the transactions contemplated by this Agreement and the Custodial Agreement are in the ordinary course of business
of Seller and will not conflict with, result in the breach of or violate any provision of the charter or by-laws of Seller or result
in the breach of any provision of, or conflict with or constitute a default under or result in the acceleration of any obligation
under, any material agreement, indenture, loan or credit agreement or other instrument to which Seller, the Related Mortgage Loans
or any of Seller’s property is subject, or result in the violation of any law, rule, regulation, order, judgment or decree
to which Seller, the Related Mortgage Loans or Seller’s property is or may be subject to. Without limiting the generality
of the foregoing, the consummation of the transactions contemplated herein or therein will not violate any policy, regulation or
guideline of the FHA or VA or result in the voiding or reduction of the FHA insurance, VA guarantee or any other insurance or guarantee
in respect of any Mortgage Loan, or otherwise render such Mortgage Loans, individually or in the aggregate, ineligible (pursuant
to the applicable Agency Guide or otherwise) for inclusion in a pool of mortgages supporting a Security, and such FHA insurance
or VA guarantee is in full force and effect or shall be in full force and effect as required by the applicable Agency Guide;

 

    	 	29
	 

     

    

 

(v)No
practice, procedure or policy employed or proposed to be employed by Seller in the conduct of its businesses violates any law,
regulation, judgment, agreement, regulatory consent, order or decree applicable to it which, if enforced, would result in a Material
Adverse Effect;

 

(vi)This
Agreement, the Custodial Agreement and every other Program Document to be executed by Seller is and will be legal, valid, binding
and subsisting obligations of Seller, enforceable in accordance with their respective terms, except that (A) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’
rights generally and (B) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any proceeding therefor may be brought;

 

(vii)No
consent, license, approval or authorization from, or registration, filing or declaration with, any regulatory body, administrative
agency or other governmental instrumentality, nor any consent, approval, waiver or notification of any creditor, lessor or other
non-governmental Person, is required in connection with the execution, delivery and performance by Seller or its Parent Company,
if any, of this Agreement or any other Program Document, other than any that have heretofore been obtained, given or made;

 

(viii)Seller
has not sold, assigned, transferred, pledged or hypothecated any interest in any Participation Certificate or Related Mortgage
Loan to any person other than any sale, assignment, transfer, pledge or hypothecation that is released in conjunction with the
sale to Purchaser pursuant to the Master Repurchase Agreement or hereunder, and upon delivery of a Participation Certificate to
Purchaser, Purchaser will be the sole owner thereof, free and clear of any lien, claim or encumbrance other than those arising
under this Agreement;

 

(ix)Neither
this Agreement nor any representations and warranties or information relating to Seller that Seller has delivered or caused to
be delivered to Purchaser, including, but not limited to, all documents related to this Agreement, the Custodial Agreement or Seller’s
financial statements, contains any untrue statement of a material fact or omits to state a material fact necessary to make the
statements made therein or herein in light of the circumstances under which they were made, not misleading. Since the furnishing
of such documents or information, there has been no change, nor any development or event involving a prospective change that would
render any of such documents or information untrue or misleading in any material respect;

 

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(x)There
is no action, suit, proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body
pending or, to Seller’s knowledge, threatened against or affecting Seller (or, to Seller’s knowledge, any basis therefor)
wherein an unfavorable decision, ruling or finding would adversely affect the validity or enforceability of this Agreement, any
other Program Document to be executed by Seller or any agreement or instrument to which Seller is a party and which is used or
contemplated for use in the consummation of the transactions contemplated hereby, would adversely affect the proceedings of Seller
in connection herewith or would or could materially and adversely affect Seller’s ability to carry out its obligations hereunder;

 

(xi)Seller,
Guarantor and Servicer have all requisite Approvals;

 

(xii)The
Custodian is an eligible custodian under each Agency Guide and each Agency Program, and is not an Affiliate of Seller;

 

(xiii)The
Bank is not an Affiliate of Seller;

 

(xiv)The
Agreement and the other Program Documents, any other document contemplated hereby or thereby and each transaction have not been
entered into fraudulently by Seller hereunder or the Custodian, or with the intent to hinder, delay or defraud any creditor or
Purchaser;

 

(xv)Seller
satisfies the financial covenants set forth in Section 10(m) of this Agreement.

 

(xvi)Seller
shall have paid to Purchaser and Purchaser shall have received all accrued and unpaid fees and expenses owed to Purchaser in accordance
with the Program Documents, including without limitation, the Structuring Fee in immediately available funds, and without deduction,
set-off or counterclaim; and

 

(xvii)Seller
has not received from any Applicable Agency a notice of extinguishment or a notice indicating material breach, default or material
non-compliance which the Agent reasonably determines may entitle an Applicable Agency to terminate, suspend, sanction or levy penalties
against the Seller, or a notice from any Applicable Agency, HUD, FHA or VA indicating any adverse fact or circumstance in respect
of Seller which the Agent reasonably determines may entitle such Applicable Agency, HUD, FHA or VA, as the case may be, to revoke
any Approval or otherwise terminate, suspend Seller as an Applicable Agency approved issuer or servicer, or with respect to which
such adverse fact or circumstance has caused any Applicable Agency, HUD, FHA or VA, as the case may be, to terminate Seller, without
any subsequent rescission thereof in such notice.

 

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(b)Seller
hereby represents and warrants to Purchaser and Agent with respect to each Related Mortgage Loan as of the Purchase Date for the
Related Participation Certificate that:

 

(i)Such
Mortgage Loan was, immediately prior to the sale to Purchaser of the Related Participation Certificate, owned solely by Seller,
and, upon Purchaser’s receipt of a duly executed Warehouse Lender’s Release with respect thereto and its compliance
with the terms set forth therein, such Mortgage Loan will not be subject to any lien, claim or encumbrance, including, without
limitation, any such interest pursuant to a loan or credit agreement for warehousing mortgage loans, and was originated, underwritten
and serviced in Strict Compliance and at all times remains in compliance with all applicable laws and regulations, including without
limitation the Federal Truth-in-Lending Act, the Real Estate Settlement Procedures Act, regulations issued pursuant to any of the
aforesaid, and any and all rules, requirements, guidelines and announcements of the Applicable Agency, and, as applicable, the
FHA and VA, as the same may be amended from time to time;

 

(ii)The
improvements on the land securing such Mortgage Loan are and will be kept insured at all times by responsible insurance companies
reasonably acceptable to Purchaser and the Applicable Agency against fire and extended coverage hazards under policies, binders
or certificates of insurance with a standard mortgagee clause in favor of Seller and its assigns, providing that such policy may
not be canceled without prior notice to Seller. Any proceeds of such insurance shall be held in trust for the benefit of Purchaser.
The scope and amount of such insurance shall satisfy the rules, requirements, guidelines and announcements of the Applicable Agency,
and shall in all cases be at least equal to the lesser of (A) the principal amount of such Mortgage Loan or (B) the maximum amount
permitted by applicable law, and shall not be subject to reduction below such amount through the operation of a coinsurance, reduced
rate contribution or similar clause;

 

(iii)The
related Mortgage is a First Mortgage Loan and is covered by an attorney’s opinion of title acceptable to the Applicable Agency
or by a policy of title insurance on a standard ALTA or similar lender’s form in favor of Seller and its assigns, subject
only to exceptions permitted by the applicable Agency Program. Seller shall hold for the benefit of Purchaser such policy of title
insurance, and, upon request of Purchaser, shall immediately deliver such policy to Purchaser or to the Custodian on behalf of
Purchaser;

 

(iv)Such
Mortgage Loan is or will be either insured by the FHA under the National Housing Act, guaranteed by the VA under the Servicemen’s
Readjustment Act of 1944 or is or will be otherwise insured or guaranteed in accordance with the requirements of the applicable
Agency Program and is not subject to any defect that would prevent recovery in full or in part against the FHA, VA or other insurer
or guarantor, as the case may be;

 

    	 	32
	 

     

    

 

(v)Such
Mortgage Loan is in Strict Compliance with the requirements and specifications (including, without limitation, all representations
and warranties required in respect thereof) set forth in the applicable Agency Guide;

 

(vi)Such
Mortgage Loan conforms in all respects with all requirements of the Takeout Commitment applicable to the Security to be backed
by such Mortgage Loan and such Takeout Commitment is subject to a Trade Assignment in favor of BCI. Each Takeout Commitment is
valid and enforceable as against the related Takeout Investor and Seller has no knowledge that Takeout Investor will not be able
to perform under the terms of such Takeout Commitment;

 

(vii)With
respect to Mortgage Loans other than Modified Loans, such Mortgage Loan is a MERS Designated Mortgage Loan;

 

(viii)If
such Mortgage Loan is not a Modified Loan, a MIN has been assigned by MERS and such MIN is accurately provided on the schedule
of Mortgage Loans attached to the Related Participation Certificate. If such Mortgage Loan is not a Modified Loan, either the Mortgage
is in favor of MERS or an Assignment of Mortgage to MERS has been duly and properly recorded or sent for recording;

 

(ix)Seller
has not received any notice of liens or legal actions with respect to such Mortgage Loan and no such notices have been electronically
posted by MERS;

 

(x)[Reserved];

 

(xi)Such
Mortgage Loan is eligible for sale to, securitization by or guarantee by the Applicable Agency, and fully complies with all of
the terms and conditions, including any covenants, representations and warranties, in the applicable Agency Guide;

 

(xii)No
servicing agreement has been entered into with respect to the Mortgage Loan, or any such servicing agreement has been terminated
and there are no contractual restrictions which would impair the ability of Purchaser or Purchaser’s designees from servicing
the Mortgage Loans;

 

(xiii)The
Purchase Price of the Participation Certificate to which such Mortgage Loan relates, when added to the Aggregate MRA Purchase Price
and the Aggregate EPF Purchase Price, does not exceed the Maximum Aggregate Purchase Price;

 

(xiv)Except
with respect to Modified Loans, the related Mortgagor in respect of such Mortgage Loan shall not have been thirty (30) or more
days Delinquent in respect of such Mortgage Loan at any time during the twenty four (24) month period prior to the related Purchase
Date;

 

(xv)Such
Mortgage Loan is not a Restricted Mortgage Loan;

 

    	 	33
	 

     

    

 

(xvi)At
origination the related Mortgagor’s FICO Score was equal to or greater than 600 (where no available FICO Score is deemed
a zero score) unless it is a part of (i) an FHA and VA streamlined program for which a current FICO Score is not required for credit
purposes, or (ii) the U.S. Department of the Treasury’s Home Affordable Refinance Program;

 

(xvii)No
Mortgage Loan shall be a Mortgage Loan of a loan type deemed an unacceptable risk for any reason at the Purchaser’s discretion,
provided that no Mortgage Loan that meets the requirements in the Agency Guides shall be deemed an unacceptable risk;

 

(xviii)Each
Mortgage Loan has been fully disbursed and is a “closed-end” Mortgage Loan with no further disbursements required by
any party;

 

(xix)No
Mortgage Loan:

 

(A) that is a First Mortgage Loan insured
by the FHA or guaranteed by the VA (other than a HARP Mortgage Loan), has a Loan-to-Value Ratio on First Mortgage Loans
over 97.5%;

 

(B) that is any other Mortgage Loan
(other than a HARP Mortgage Loan or a Mortgage Loan originated as part of an FHA or VA streamlined program) has a Loan-to-Value
Ratio over 95%; provided that up to 1% of the Mortgage Loans subject to this Agreement (other than a HARP Mortgage Loan
or a Mortgage Loan originated as part of an FHA or VA streamlined program) may have a Loan-to-Value Ratio that exceed 95%
but are equal to or less than 97%; 

 

(C) that was originated under an FHA
and VA streamlined program has a Loan-to-Value Ratio more than that permitted under such streamlined program (together,
“Streamline Loans”); provided, that Streamline Loans that require compliance with representations
and warranties include an Agency waiver for any exceptions; and

 

(D) that is a HARP Mortgage Loan has
a Loan-to-Value Ratio other than that permitted under the U.S. Department of the Treasury’s Home Affordable Refinance
Program.

 

(xx)The
Mortgage Loan is not secured by property located in (a) a state where the Seller is not licensed as a lender/mortgage banker or
otherwise exempt from any licensing requirement, or (b) a state that Purchaser determines, and provides one (1) Business Day’s
notice to Seller of such determination, to be unacceptable because of a predatory lending or other consumer protection law in such
state; 

 

(xxi)The
Mortgage Loan has not been converted to an ownership interest in real property through foreclosure or deed-in-lieu of foreclosure;
and

 

    	 	34
	 

     

    

 

(xxii)The
original Mortgage in respect of each Mortgage Loan has been sent for recordation in the appropriate public recording office in
the applicable jurisdictions wherein such recordation is necessary to perfect the lien thereof as against creditors of the applicable
Mortgagor.

 

The representations and
warranties of Seller in this Section 9 are unaffected by and supersede any provision in any endorsement of any Related
Mortgage Loan or in any assignment with respect to such Mortgage Loan to the effect that such endorsement or assignment is without
recourse or without representation or warranty.

 

Section
10.Covenants of Seller. Seller hereby covenants and agrees with Purchaser and Agent
as of the date hereof and for so long as any Participation Certificate remains outstanding as follows:

 

(a)Seller
shall keep or cause to be kept in reasonable detail books and records setting forth an account of its assets and business and,
as applicable, shall clearly reflect therein the transfer of Seller’s beneficial right, title and interest in and to the
Related Mortgage Loans.

 

(b)Seller
shall deliver to Purchaser and Agent:

 

(i)As
soon as practicable, but in any event within ninety (90) days after the end of each fiscal year of each of Seller and Guarantor,
the consolidated audited balance sheets of each of Seller and Guarantor and their respective consolidated Subsidiaries, which will
be in conformity with GAAP, and the related consolidated audited statements of income and change in equity showing the financial
condition of Seller and Guarantor and their consolidated Subsidiaries as of the close of such fiscal year and the results of operations
during such year, and a consolidated audited statement of cash flows, as of the close of such fiscal year, setting forth, in each
case, in comparative form the corresponding figures for the preceding year. The foregoing consolidated financial statements are
to be reported on by, and to carry the unqualified report (acceptable in form and content to Purchaser and Agent) of, an independent
public accountant of national standing acceptable to Purchaser and Agent and are to be accompanied by a letter of management in
form and substance acceptable to Purchaser and Agent;

 

(ii)As
soon as practicable, but in any event within forty-five (45) days after the end of each of the first three fiscal quarters of each
fiscal year of Seller and Guarantor, unaudited consolidated balance sheets and consolidated statements of income and changes in
equity and unaudited statement of cash flows, all to be in a form acceptable to Purchaser and Agent, showing the financial condition
and results of operations of Seller and Guarantor, respectively, and their respective consolidated Subsidiaries on a consolidated
basis as of the end of each such quarter and for the then elapsed portion of the fiscal year, certified by a financial officer
of Seller or Guarantor, as applicable (acceptable to Purchaser and Agent) as presenting fairly the financial position and results
of operations of Seller and Guarantor, respectively, and their respective consolidated Subsidiaries and as having been prepared
in accordance with GAAP consistently applied, in each case, subject to normal year-end audit adjustments;

 

    	 	35
	 

     

    

 

(iii)As
soon as practicable, but in any event within forty-five (45) days after the end of each of the first two months of a fiscal quarter,
consolidated unaudited balance sheets and consolidated statements of income and changes in equity, all to be in a form acceptable
to Purchaser and Agent, showing the financial condition and results of operations of Seller or Guarantor, as applicable, and their
respective consolidated Subsidiaries on a consolidated basis as of the end of each such month and for the then elapsed portion
of the fiscal year, certified by a financial officer of Seller or Guarantor, as applicable (acceptable to Purchaser and Agent)
as presenting fairly the financial position and results of operations of Seller or Guarantor, as applicable, and their respective
consolidated Subsidiaries and as having been prepared in accordance with GAAP consistently applied, in each case, subject to normal
year-end audit adjustments;

 

(iv)Promptly
upon receipt thereof, a copy of each other report submitted to Seller and Guarantor by its independent public accountants in connection
with any annual, interim or special audit of Seller or Guarantor, as applicable;

 

(v)Promptly
upon becoming aware thereof, notice of (i) the commencement of, or any determination in, any legal, judicial or regulatory proceedings,
(ii) any dispute between Seller, Guarantor or its Parent Company and any governmental or regulatory body, or (iii) any other event
or condition, in each case which, if adversely determined, would constitute a Material Adverse Effect;

 

(vi)Except
to the extent publicly filed, promptly upon becoming available, copies of all financial statements, reports, notices and proxy
statements sent by its Parent Company, Seller or any of Seller’s or Guarantor’s or any of their respective consolidated
Subsidiaries in a general mailing to their respective stockholders;

 

(vii)Except
to the extent publicly filed, promptly upon becoming available, copies of any press releases issued by its Parent Company, Guarantor
or Seller and copies of any annual and quarterly financial reports and any reports on Form H-(b)12 which its Parent Company, Guarantor
or Seller may be required to file with the SEC, or any federal banking agency, or any report which a Parent Company, Guarantor
or Seller may be required to file with the SEC, or any federal banking agency containing such financial statements and other information
concerning such Parent Company’s, Guarantor’s or Seller’s business and affairs as is required to be included
in such reports in accordance with the rules and regulations of the SEC, or such federal banking agency, as may be promulgated
from time to time; and

 

(viii)Such
supplements to the aforementioned documents and such other information regarding the operations, business, affairs and financial
condition of its Parent Company, Guarantor, Seller or any of Seller’s or Guarantor’s respective consolidated Subsidiaries
as Purchaser or Agent may request.

 

(c)Neither
Seller nor any Affiliate thereof will acquire at any time any Participation Certificate or any other economic interest in or obligation
with respect to any Related Mortgage Loan except for the servicing rights relating thereto and record title to the Mortgage relating
to any Related Mortgage Loan.

 

    	 	36
	 

     

    

 

(d)Reserved.

 

(e)Seller
will be solvent at all relevant times prior to, and will not be rendered insolvent by, any sale of a Participation Certificate
to Purchaser.

 

(f)Seller
will not sell any Participation Certificate to Purchaser with any intent to hinder, delay or defraud any of Seller’s creditors.

 

(g)Seller
shall take all necessary actions to maintain its Approvals (including any obtained after the date of this Agreement) at all times
during the term of this Agreement. If, for any reason, Seller ceases to maintain such Approvals, Seller shall so notify Purchaser
immediately.

 

(h)Seller
shall (i) maintain all licenses, permits or other approvals necessary for Seller to conduct its business and to perform its obligations
under the Program Documents, (ii) remain in good standing under, and comply in all material respects with, all laws of each state
in which it conducts business or where any Mortgaged Property is located, and (iii) conduct its business in accordance with applicable
law.

 

(i)Seller
shall, upon request of Purchaser or Agent, promptly execute and deliver to Purchaser all such other and further documents and instruments
of transfer, conveyance and assignment, and shall take such other action as Purchaser or Agent may require more effectively to
transfer, convey, assign to and vest in Purchaser and to put Purchaser in possession of the property to be transferred, conveyed,
assigned and delivered hereunder and otherwise to carry out more effectively the intent of the provisions under this Agreement.

 

(j)The
Seller is a member of MERS in good standing and current in the payment of all fees and assessments imposed by MERS, and has complied
with all rules and procedures of MERS. In connection with the assignment of any Related Mortgage Loan registered on the MERS System,
the Seller agrees that at the request of the Purchaser or Agent it will, at the Seller’s own cost and expense, cause the
MERS System to indicate that a beneficial interest in such Mortgage Loan has been transferred to the Purchaser in accordance with
the terms of this Agreement by including in MERS’ computer files (a) the code in the field which identifies the specific
owner of the Related Mortgage Loans and (b) the code in the field “Pool Field” which identifies the series in which
such Mortgage Loans were sold. The Seller further agrees that it will not alter codes referenced in this paragraph with respect
to any Related Mortgage Loan at any time that such Mortgage Loan is subject to this Agreement, and the Seller shall retain its
membership in MERS at all times during the term of this Agreement.

 

(k)Seller
will permit Purchaser, Agent or their respective agents or designees to perform due diligence reviews on the Related Mortgage Loans
subject to each Participation Certificate purchased hereunder within the thirty (30) days following the related Purchase Date,
at which point up to 5% of all such Related Mortgage Loans shall have completed such due diligence review. Seller shall cooperate
in all respects with such diligence and shall provide Purchaser, Agent or their respective agents or designees with all loan files
and other information reasonably requested by Purchaser, Agent or their respective agents or designees and shall bear all costs
and expenses associated with such due diligence.

 

    	 	37
	 

     

    

 

(l)Reserved.

 

(m)Seller
shall comply with the financial covenants set forth in Section 14(g)(ii) of the Master Repurchase Agreement. 

 

(n)Seller
shall (i) at all times maintain copies of relevant portions of all final written Applicable Agency audits, examinations, evaluations,
monitoring reviews and reports of its origination and servicing operations (including those prepared on a contract basis for any
such agency) in which there are material adverse findings, 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, and all necessary approvals from each Applicable Agency, and (ii) if permitted by the Applicable Agency,
provide Agent with a description (and, upon request copies ) of any such audits, examinations, evaluations,
monitoring reviews and reports (to the extent they are non-routine) promptly upon receipt from any Applicable Agency
or agent of any Applicable Agency and shall be available to discuss such non-routine matters. In addition, upon request of
Purchaser, Seller will make itself available on a quarterly basis to discuss any routine audits, examinations, evaluations,
monitoring reviews and reports with Purchaser. Seller shall take all actions necessary to maintain its respective Approvals.

 

(o)Seller
shall timely pay to Purchaser all fees and actual out of pocket expenses required to be paid by Seller hereunder and under any
other Program Document to Purchaser in immediately available funds, and without deduction, set-off or counterclaim in accordance
with the following wire instructions:

 

	 	Bank:	Bank of New York Mellon
	 	Address:	New York, NY
	 	ABA:	021 000
018
	 	DDA:	GLA111569
BHQ
	 	Ref:	PennyMac
	 	Attention: 	Whole Loan Operations/Brian Kevil 302-286-1951/Dan
Ossolinski 302-286-1990

 

Section
11.Term. This Agreement shall continue in effect until terminated as to future
transactions on the Termination Date; provided, that no termination will affect the obligations hereunder as to any
of the Participation Certificates then outstanding hereunder or any Security not yet delivered to the related Takeout Investor.
Seller’s obligations to indemnify Purchaser and Agent pursuant to this Agreement and the other Program Documents shall survive
the termination hereof.

 

Section
12.Set-Off. In addition to any rights and remedies of Purchaser provided by this
Agreement and by law, Purchaser and its Affiliates shall have the right, without prior notice to Seller, any such notice being
expressly waived by Seller to the extent permitted by applicable law, upon any amount becoming due and payable (whether at the
stated maturity, by acceleration or otherwise) by Seller hereunder or under any other agreement (including, without limitation,
the Master Repurchase Agreement) entered into between Seller or any of its Affiliates on the one hand, and Purchaser or any of
its Affiliates on the other hand, to set-off and appropriate and apply against such amount (subject to any existing limitations
on recourse in connection with this Agreement) any and all property and deposits (general or special, time or demand, provisional
or final), in any currency, or any other credits, indebtedness or claims, in any currency, or any other collateral (in the case
of collateral not in the form of cash or such other marketable or negotiable form, by selling such collateral in a recognized market
therefor or as otherwise permitted by law or as may be in accordance with custom, usage or trade practice), in each case, whether
direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Purchaser or any Affiliate thereof
to or for the credit or the account of Seller or any of its Affiliates (including, without limitation, the amount of any accrued
and unpaid Completion Fees). Purchaser may also, subject to any existing limitations on recourse in connection with this Agreement,
set-off cash and all other sums or obligations owed by Purchaser or its Affiliates to Seller or its Affiliates (whether under this
Agreement or under any other agreement between the parties (including, without limitation, the Master Repurchase Agreement) or
between Seller or any of its Affiliates, on the one hand, and Purchaser or any of its Affiliates, on the other) against all of
Seller’s obligations to Purchaser or its Affiliates (whether under this Agreement or under any other agreement between the
parties (including, without limitation, the Master Repurchase Agreement) or between Seller or any of its Affiliates, on the one
hand, and Purchaser or any of its Affiliates, on the other), whether or not such obligations are then due. The exercise of any
such right of set-off shall be without prejudice to Purchaser’s or its Affiliate’s right to recover any deficiency.
Purchaser agrees to promptly notify Seller after any such set-off and application made by Purchaser; provided that the failure
to give such notice shall not affect the validity of such set-off and application.

 

    	 	38
	 

     

    

 

Section
13.Indemnification. Seller shall indemnify and hold Purchaser and Agent harmless
against any and all Losses (including, without limitation, Losses incurred by Purchaser on account of fees paid by Purchaser to
the Applicable Agency to cause the Securities to be issued or any Losses in connection with any indemnification by Purchaser of
the Applicable Agency) resulting from, relating to or otherwise arising in connection with the breach or failure of Seller to perform
any representation, warranty, covenant, term or condition made or obligation to be performed by Seller under this Agreement (including,
without limitation, any failure to perform servicing obligations) in strict compliance with the terms of this Agreement. Without
prejudice to the survival of any other agreement of Seller hereunder, the covenants and obligations of Seller contained in this
Section 13 shall survive the termination of this Agreement.

 

Section
14.Exclusive Benefit of Parties; Assignment. This Agreement is for the exclusive
benefit of the parties hereto and their respective successors and assigns and shall not be deemed to give any legal or equitable
right to any other person, including any Takeout Investor or the Custodian. In addition to the rights of Purchaser as provided
in Section 7, without any requirement for further consent of the Seller and at no cost or expense to the Seller, each of
Purchaser and Agent may, in its sole election, assign or participate all or a portion of its rights and obligations under this
Agreement and the Program Documents with a counterparty of Purchaser’s or Agent’s choice. Purchaser or Agent shall
notify Seller of any such assignment and participation and shall maintain, for review by Seller upon written request, a register
of assignees and participants and a copy of any executed assignment and acceptance by Purchaser or Agent and assignee (“Assignment
and Acceptance”), specifying the percentage or portion of such rights and obligations assigned. The Seller agrees that, for
any such permitted assignment, Seller will cooperate with the prompt execution and delivery of documents reasonably necessary for
such assignment process to the extent that Seller incurs no cost or expense that is not paid by the Purchaser or Agent, as applicable.
Upon such assignment, (a) such assignee shall be a party hereto and to each Program Document to the extent of the percentage or
portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of Purchaser or
Agent hereunder, and (b) Purchaser or Agent shall, to the extent that such rights and obligations have been so assigned by it to
either (i) an Affiliate of Purchaser or Agent which assumes the obligations of Purchaser or Agent hereunder or (ii) to another
Person which assumes the obligations of Purchaser or Agent hereunder, be released from their obligations hereunder accruing thereafter
and under the Program Documents.

 

The Program Documents
and the Seller’s rights and obligations thereunder are not assignable by Seller without the prior written consent of Purchaser
and Agent. Any Person into which Seller may be merged or consolidated, or any corporation resulting from any merger, conversion
or consolidation to which Seller shall be a party, or any Person succeeding to the business of Seller, shall be the successor of
Seller hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.

 

    	 	39
	 

     

    

 

Section
15.Amendments; Waivers; Cumulative Rights. This Agreement may be amended from time
to time only by written agreement of Seller, Purchaser and Agent. Any forbearance, failure or delay by either party in exercising
any right, power or remedy hereunder shall not be deemed to be a waiver thereof, and any single or partial exercise by either party
of any right, power or remedy hereunder shall not preclude the further exercise thereof. Every right, power and remedy of either
party shall continue in full force and effect until specifically waived by such party in writing. No right, power or remedy shall
be exclusive, and each such right, power or remedy shall be cumulative and in addition to any other right, power or remedy, whether
conferred hereby or hereafter available at law or in equity or by statute or otherwise.

 

Section
16.Execution in Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which shall constitute one and the same instrument. The parties agree that
this Agreement, any documents to be delivered pursuant to this Agreement and any notices hereunder may be transmitted between them
by email and/or by facsimile. The parties intend that faxed signatures and electronically imaged signatures such as .pdf files
shall constitute original signatures and are binding on all parties. The original documents shall be promptly delivered, if requested.

 

Section
17.Effect of Invalidity of Provisions. In case any one or more of the provisions
contained in this Agreement should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability
of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.

 

Section
18.Governing Law. THE AGREEMENT AND ANY MATTERS ARISING OUT OF OR RELATING TO THE
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISIONS
(EXCEPT FOR SECTION 5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT PREEMPTED
BY FEDERAL LAW.

 

    	 	40
	 

     

    

 

EACH PARTY HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY:

 

(A) SUBMITS FOR ITSELF
AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT
IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

 

(B) CONSENTS THAT
ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT
IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

 

(C) AGREES THAT SERVICE
OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY
SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 19; AND

 

(D) AGREES THAT NOTHING
HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE
IN ANY OTHER JURISDICTION.

 

Section
19.Notices. Any notices, consents, elections, directions and other communications
given under this Agreement shall be in writing and shall be deemed to have been duly given when telecopied or delivered by overnight
courier to, personally delivered to, or on the third day following the placing thereof in the mail, first class postage prepaid
to, the parties hereto at the related address set forth in Annex B or to such other address as either party shall give notice
to the other party pursuant to this Section. Notices to any Assignee shall be given to such address as the Assignee shall provide
to Seller in writing.

 

Section
20.Entire Agreement. This Agreement, the Participation Certificates and the Custodial
Agreement contain the entire agreement between the parties hereto with respect to the subject matter hereof, and supersede all
prior and contemporaneous agreements between them, oral or written, of any nature whatsoever with respect to the subject matter
hereof.

 

Section
21.Costs of Enforcement. 2) In addition to any other indemnity specified in this
Agreement, Seller agrees to pay as and when billed by Purchaser or Agent all of the out-of pocket costs and expenses incurred by
Purchaser and Agent in connection with the development, preparation, and execution of, and any amendment, supplement or modification
to, and enforcement of this Agreement, any other related document or any other documents prepared in connection herewith or therewith.
Seller agrees to pay as and when billed by Purchaser or Agent all of the out-of-pocket costs and expenses incurred in connection
with the consummation, monitoring and administration of the transactions contemplated hereby and thereby including, without limitation,
(i) all the fees, disbursements and expenses of counsel to Purchaser and Agent and (ii) all the due diligence, inspection, testing
and review costs and expenses incurred by Purchaser and Agent with respect to the Related Mortgage Loans under this Agreement.
Notwithstanding the foregoing, and for the avoidance of doubt, Seller shall be responsible for 100% of the Purchaser’s legal
fees associated with the initial preparation of the Program Documents up to the first $50,000.

 

    	 	41
	 

     

    

 

(b)If
Seller fails to pay when due any costs, expenses or other amounts payable by it under this Agreement, including, without limitation,
reasonable fees and expenses of counsel and indemnities, such amount may be paid on behalf of Seller by Purchaser or Agent, in
its sole discretion and Seller shall remain liable for any such payments by Purchaser or Agent, as applicable. No such payment
by Purchaser or Agent shall be deemed a waiver of any of Purchaser’s or Agent’s respective rights under this Agreement.

 

(c)In
addition to any other indemnity specified in this Agreement, in the event of a breach by Seller of this Agreement, the Custodial
Agreement, a Participation Certificate or a Takeout Commitment, Seller agrees to pay the reasonable attorneys’ fees and expenses
of Purchaser, Agent and/or any Assignee incurred as a consequence of such breach.

 

Section
22.Securities Contract; Netting Agreement.

 

(a)Seller,
Purchaser and Agent recognize that each sale of a Participation Certificate (including the related servicing rights) under this
Agreement is a “securities contract” and a “master netting agreement” as those terms are defined in Section
741 and Section 101(38A)(A) of the Bankruptcy Code, respectively, and a “qualified financial contract” as that term
is defined in the FDIA. Seller and Purchaser further recognize that the beneficial interest in the Related Mortgage Loans evidenced
by a Participation Certificate shall constitute an “interest in a mortgage loan” as that term is used in Section and
741(7)(A)(i) of Bankruptcy Code.

 

(b)It
is understood that the Purchaser shall have the right to liquidate, terminate and accelerate, or exercise any other remedies
permitted upon the occurrence of any Servicing Termination Event, and that such liquidation, termination and acceleration rights
constitute contractual rights to liquidate, terminate and accelerate the transactions under a “securities contract”
and a “master netting agreement” as described in Section 555 and Section 561 of the Bankruptcy Code, respectively,
and a “qualified financial contract” as described Section 1821(e)(8)(A)(i) of the FDIA.

 

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

 

(d)It
is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal
Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation
hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation,”
respectively, as defined in and subject to FDICIA.

 

    	 	42
	 

     

    

 

Section
23.Consent to Service. Each party irrevocably consents to the service of process
by registered or certified mail, postage prepaid, to it at its address provided pursuant to Section 19.

 

Section
24.Construction. The headings in this Agreement are for convenience only and are
not intended to influence its construction. References to Sections, Exhibits and Annexes in this Agreement are to the Sections
of and Exhibits and Annexes to this Agreement. The Exhibits and Annexes are part of this Agreement. In this Agreement, the singular
includes the plural, the plural the singular, and the words “and” and “or” are used in the conjunctive
or disjunctive as the sense and circumstances may require.

 

Section
25.Further Assurances. Seller, Purchaser and Agent each agree to execute and deliver
to the other such reasonable and appropriate additional documents, instruments or agreements as may be necessary or appropriate
to effectuate the purposes of this Agreement.

 

Section
26.Due Diligence. Purchaser, Agent or any of their respective agents, representatives
or permitted assigns shall have the right, upon reasonable prior notice and during normal business hours, to conduct inspection
and perform continuing due diligence reviews of (x) Seller and Guarantor and their respective financial condition and performance
of their obligations under the Program Documents, including the right to gain reasonable access to any significant officers (including
the CEO, CFO, President, Treasurer and any other officers deemed by the Purchaser to be crucial to the business relating to this
Agreement) and (y) the Servicing File and the Related Mortgage Loans. Seller agrees promptly to provide Purchaser, Agent and their
respective agents with access to, copies of and extracts from any and all documents, records, agreements, instruments or information
(including, without limitation, any of the foregoing in computer data banks and computer software systems) relating to Seller’s
respective business, operations, servicing, financial condition, performance of their obligations under the Program Documents,
the documents contained in the Servicing Files or the Related Mortgage Loans or assets proposed to be sold hereunder in the possession,
or under the control, of Seller. In addition, Seller shall also make available to Purchaser and/or Agent, upon reasonable prior
notice and during normal business hours, a knowledgeable financial or accounting officer of Seller for the purpose of answering
questions respecting the Related Mortgage Loans. Without limiting the generality of the foregoing, Seller acknowledges that Purchaser
shall enter into transactions with Seller based solely upon the information provided by Seller to Purchaser and/or Agent and the
representations, warranties and covenants contained herein, and that Purchaser and/or Agent, at its option, shall have the right
at any time to conduct itself or through its agents, or require Seller to conduct quality reviews and underwriting compliance reviews
of the individual Related Mortgage Loans at the expense of Seller. Any such diligence conducted by Purchaser and/or Agent shall
not reduce or limit the Seller’s representations, warranties and covenants set forth herein. Seller agrees to reimburse Purchaser
and/or Agent for all reasonable out-of-pocket due diligence costs and expenses incurred pursuant to this Section 26.

 

    	 	43
	 

     

    

 

Section
27.Confidentiality. Seller, Purchaser and Agent each hereby acknowledge and agree
that all written or computer-readable information provided by one party to the other in connection with the Program Documents or
the Transactions contemplated thereby, including without limitation, Seller’s Mortgagor information in the possession of
Purchaser shall be kept confidential and shall not be divulged to any party without the prior written consent of such other party
except for (i) disclosure to Seller’s direct and indirect parent companies, directors, attorneys, agents or accountants,
provided that such attorneys or accountants likewise agree to be bound by this covenant of confidentiality, or are otherwise subject
to confidentiality restrictions or (ii) with prior (if feasible) written notice to Purchaser, disclosure required by law, rule,
regulation or order of a court or other regulatory body or (iii) with prior (if feasible) written notice to Purchaser, any disclosures
or filing required under SEC or state securities’ laws; provided that in the case of clause (iii), Seller shall not file
the Pricing Side Letter. Notwithstanding anything herein to the contrary, except as reasonably necessary to comply with applicable
securities laws, each party (and each employee, representative, or other agent of each party) may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including
opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure. For this purpose, tax
treatment and tax structure shall not include (i) the identity of any existing or future party (or any Affiliate of such party)
to this Agreement or (ii) any specific pricing information or other commercial terms, including the amount of any fees, expenses,
rates or payments arising in connection with the transactions contemplated by this Agreement.

 

[signature page follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	44
	 

     

    

 

IN WITNESS WHEREOF, Purchaser,
Agent and Seller have duly executed this Agreement as of the date and year set forth on the cover page hereof.

BARCLAYS BANK PLC

 

 

By:  /s/ Ellen Kiernan                                            

Name: Ellen Kiernan

Title: Director

 

 

 

PENNYMAC LOAN SERVICES, LLC

 

 

By: /s/ Pamela Marsh                                            

Name: Pamela Marsh

Title: Executive Vice President, Treasurer

 

 

Acknowledged and Agreed with respect to
Section 3:

 

 

BARCLAYS CAPITAL INC.

 

By: /s/ Joseph O’Doherty                                             

Name: Joseph O’Doherty

Title: Managing Director

 

 

    	 	45
	 

     

    

 

Exhibit A

 

PARTICIPATION
CERTIFICATE

 

POOL NO. (or Freddie Mac CONTRACT NO.):

 

This Participation
Certificate evidences a one hundred percent (100%) undivided beneficial ownership interest in (including the right to receive the
payments of principal of and interest on) the Mortgage Loans (the “Participation”) identified:

 

(Check Box)

 

	 ̈	(a)	Form HUD 11706 (Schedule of Pooled Mortgages);
	 	 	 
	 ̈	(b)	Fannie Mae Form 2005 (Schedule of Mortgages); or
	 	 	 
	 ̈	(c)	Freddie Mac Form 1034 (Fixed-Rate Custodial Certification Schedule) or Selling System computer tape.

 

The Participation has
been sold to Purchaser pursuant to the terms of that certain Mortgage Loan Participation Purchase and Sale Agreement, dated December
4, 2015 (the “Agreement”) between PennyMac Loan Services, LLC, as Seller and Servicer and Barclays Bank PLC,
as Purchaser and Agent. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement, the terms
of which are hereby incorporated by reference and made a part of this Participation Certificate.

 

Upon Delivery of the
related Security to Purchaser or its Assignee, Purchaser’s beneficial ownership interest in the Mortgage Loans evidenced
in this Participation Certificate shall terminate in exchange for such Security, and this Participation Certificate shall be void
and of no further effect.

 

This Participation
Certificate may be amended only by a written agreement between Seller, Purchaser and Agent.

 

PENNYMAC LOAN SERVICES, LLC

 

By:                                                                              

Its:
 Date:

 

 

    	 	A-1
	 

     

    

 

AGGREGATE PRINCIPAL BALANCES OF THE MORTGAGE
LOANS (GIVING EFFECT TO PAYMENTS MADE AS OF _______, ____): $_____________________

 

 

 

	Hereby authenticated by Deutsche Bank National Trust Company pursuant to the Custodial Agreement (May not be applicable for Freddie Mac)

 

 

By:                                                                              

Its:

Date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	A-2
	 

     

    

 

Exhibit B

 

TRADE
ASSIGNMENT

 

__________ (“Takeout Investor”)

(Address)

 

Attention:

Fax No.:

 

Ladies and Gentlemen:

 

Attached hereto is
a correct and complete copy of your confirmation of commitment (the “Commitment”), trade-dated _________ __,
____, to purchase $______ of __% ___ year,

 

Stip:

 

(Check Box)

 

	 ̈	Government National Mortgage Association;
	 	 
	 ̈	Federal National Mortgage Association; or
	 	 
	 ̈	Federal Home Loan Mortgage Corporation.

 

mortgage-backed pass-through securities
(“Securities”) at a purchase price of ___________ from _________ on (insert Settlement Date). Our intention
is to assign $_____ of this Commitment’s full amount, which assignment shall be effective and shall be fully enforceable
by the assignee on the Settlement Date. This is to confirm that (i) the form of this assignment conforms to the SIFMA guidelines,
(ii) the Commitment is in full force and effect, (iii) effective as of the Settlement Date, the Commitment is hereby assigned to
Barclays Capital Inc. (“BCI”), whose acceptance of such assignment is indicated below, (iv) you will accept
delivery of such Securities directly from BCI, (v) you will pay BCI for such Securities, (vi) effective as of the Settlement Date
and provided the Securities have been issued, BCI is obligated to make delivery of such Securities to you in accordance with the
attached Commitment and (vii) effective as of the Settlement Date and provided the Securities have been issued, you have released
Seller from its obligation to deliver the Securities to you under the Commitment. Payment will be made “delivery versus payment
(DVP)” to BCI in immediately available funds.

 

Please acknowledge
your acceptance of the foregoing by countersigning below and delivering an executed copy of this Trade Assignment to _______________
at fax # (___) ___-____. Notification of incorrect information or rejection of this Trade Assignment or any questions regarding
this Trade Assignment should be immediately made to [_____].

 

 

    	 	B-1
	 

     

    

 

Very truly yours,

 

PENNYMAC LOAN SERVICES, LLC

 By: 
                                                                            

Title:
 Date:

 

 

Acknowledged and agreed to:

 

BARCLAYS CAPITAL INC.

 

By:________________________

Title:______________________

Date:______________________

 

Provided the Securities have been issued,
notice of delivery and confirmation of receipt will be the obligations of Barclays.

 

Acknowledged and agreed to:

 

[TAKEOUT INVESTOR

 

By:________________________

Title:______________________

Date:______________________

 

 

 

 

 

 

 

 

    	 	B-2
	 

     

    

 

Exhibit C

 

[RESERVED]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	C-1
	 

     

    

 

Exhibit D

 

WAREHOUSE
LENDER’S RELEASE

(Date)

 

Barclays Bank PLC

745 Seventh Avenue, 4th Floor

New York, New York 10019

Attention:

 

Ladies and Gentlemen:

 

Capitalized terms used
herein but not defined herein shall have the meanings ascribed to such terms in the Custodial Agreement, dated as of December 4,
2015, among Barclays Bank PLC, PennyMac Loan Services, LLC and Deutsche Bank National Trust Company.

 

Upon receipt of payment, in immediately
available funds, of $__________________, representing a loan count of __________ and unpaid principal balance of _________________,
to the account shown on the attached, from Barclays Bank PLC, we hereby release all right, interest or claim of any kind, including
any security interest or lien, with respect to the mortgage loans referenced in the attached schedule (Ginnie Mae/Fannie Mae/Freddie
Mac Pool/Contract #__________), such release to be effective automatically without any further action by any party.

 

 

Very truly yours,

[WAREHOUSE LENDER]

 

 

 

 

 

 

 

    	 	D-1
	 

     

    

 

Exhibit E

 

ASSIGNMENT

 

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

 

 

 

(Please print or typewrite name and address,
including postal zip code of assignee)

 

an undivided Participation Interest Equal
to [__] % of the beneficial interest in the Mortgage Loans relating to the within Participation Certificate, Pool No. (Freddie
Mac Contract No.), Pass-Through Rate , Discount and hereby authorize(s) the transfer of registration of such interest to assignee.

 

 

[Assignor]

By:                                                                              

Name:

Title:

 

 

Dated:________________

 

 

 

 

 

 

 

    	 	E-1
	 

     

    

 

Exhibit F

 

FORM
OF CONFIRMATION

 

	TO:	PENNYMAC LOAN SERVICES, LLC
	 	6101 Condor Drive

Moorpark, CA 93021

Attention: Brian Stack

 

DATE:

 

	RE:	Confirmation of Purchase of a beneficial
interest in Mortgage Loans relating to a Participation Certificate

 

Barclays Bank
PLC (“Purchaser” and “Agent”) is pleased to confirm its agreement to purchase and your agreement
to sell a 100% undivided, beneficial interest in the Mortgage Loans relating to a Participation Certificate relating to the pool
number (or Freddie Mac Contract Number) referred to herein, pursuant to the Mortgage Loan Participation Purchase and Sale Agreement,
dated as of December 4, 2015 (the “Agreement”), between Purchaser, Agent and PennyMac Loan Services, LLC, under
the terms and conditions in Schedule I attached hereto.

 

Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed in the Agreement.

 

Very truly yours,

BARCLAYS BANK PLC

By:                                                                              

Name:

Title:

 

 

 

 

 

 

    	 	F-1
	 

     

    

 

Exhibit G

 

SELLER’S
OFFICER’S CERTIFICATE

 

I, ___________, hereby
certify that I am the duly elected ______________ of PennyMac Loan Services, LLC, a ________ [entity type] (“Seller”),
and further certify, on behalf of Seller as follows:

 

		1.	Attached hereto as Attachment I is a true and correct copy of the
articles of formation and limited liability company agreement of Seller as are in full force and effect on the date hereof.

 

		2.	Attached hereto as Attachment II is a Certificate of Good Standing
of Seller, issued by the Secretary of the State of ________ dated _______, ____. No event has occurred since _______, ____ which
has affected the good standing of Seller under the laws of the State of _______.

 

		3.	Each person who, as an officer or attorney-in-fact of Seller, signed
(a) the Mortgage Loan Participation Purchase and Sale Agreement (the “Purchase Agreement”), dated as of December
4, 2015, by and between Seller, and Barclays Bank PLC (“Purchaser” and “Agent”); (b) the
Custodial Agreement (the “Custodial Agreement”), dated as of December 4, 2015, by and among Seller, the Purchaser
and Deutsche Bank National Trust Company; and (c) any other document delivered prior hereto or on the date hereof in connection
with transactions contemplated in the Purchase Agreement was, at the respective times of such signing and delivery, and is as of
the date hereof, duly elected or appointed, qualified and acting as such officer or attorney-in-fact, and the signatures of such
persons appearing on such documents are their genuine signatures.

 

		4.	Attached hereto as Attachment III is a true and correct copy of the
resolutions duly adopted by the board of directors of Seller on __________, ____ (the “Resolutions”) with respect
to the authorization and approval of the transactions contemplated in the Purchase Agreement; said Resolutions have not been amended,
modified, annulled or revoked and are in full force and effect on the date hereof.

 

		5.	All of the representations and warranties of Seller contained in
the Purchase Agreement were true and correct in all material respects as of the date of the Purchase Agreement and are true and
correct in all material respects as of the date hereof.

 

		6.	Seller has performed all of its duties and has satisfied all the
material conditions on its part to be performed or satisfied pursuant to the Purchase Agreement on or prior to the date hereof.

 

    	 	G-1
	 

     

    

 

		7.	There are no actions, suits or proceedings pending or, to my knowledge,
threatened, against or affecting Seller which, if adversely determined either individually or in the aggregate, would adversely
affect Seller’s obligations under the Purchase Agreement or the Custodial Agreement.

 

		8.	No proceedings that could result in the liquidation or dissolution
of Seller are pending or contemplated.

 

		9.	Incumbency of Officers. The below named persons have been
duly elected or appointed, and have been duly qualified as officers of Seller holding the respective office below set opposite
his or her name, and the signature below set opposite his or her name is his or her genuine signature.

  

	
        Name
	 	
        Office
	 	
        Signature

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

All capitalized terms
used herein and not otherwise defined shall have the meaning assigned to them in the Purchase Agreement.

 

IN WITNESS WHEREOF, I
have hereunto signed my name and affixed the seal of Seller.

 

Dated: _________ __, ____

[Seal]

 

By:                                                                              

Name:

Title:

 

I, ___________________,
_________ of ______________, hereby certify that ________________ is the duly elected, qualified and acting _______________ of
__________ and that the signature appearing above is the genuine signature of such person.

 

IN WITNESS WHEREOF, I have hereunto signed
my name.

 

Dated: ____________ __, ____

 

[Seal]

 

By:________________________________

Name:

Title:

 

    	 	G-2
	 

     

    

 

 

Annex A

 

[RESERVED]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	Annex A-1
	 

     

    

 

Annex B

 

PURCHASER
NOTICES

 

	Name:	Barclays Bank PLC
	 	 
	Address:	
        745 Seventh Avenue, 4th Floor

        New York, New York 10019

	 	 
	Telephone:	(212) 412-3266
	 	 
	Telecopy:	(212) 412-6846
	 	 

 

Agent
NOTICES

 

	Name:	Barclays Bank PLC
	 	 
	Address:	
        745 Seventh Avenue, 4th Floor

        New York, New York 10019

	 	 
	Telephone:	(212) 412-3266
	 	 
	Telecopy:	(212) 412-6846
	 	 

 

    	 	Annex B-1
	 

     

    

 

SELLER
NOTICES

 

	Name:	PENNYMAC LOAN SERVICES, LLC 
	 	 
	Address:	
        6101 Condor Drive

        Moorpark, CA 93021

        Attn: Pamela Marsh/Kevin Chamberlain

	 	 
	Telephone:	(805) 330-6059/ (818) 746-2877
	 	 
	E-mail:	pamela.marsh@pnmac.com; kevin.chamberlain@pnmac.com
	 	 

 

 

	Name:	PENNYMAC LOAN SERVICES, LLC
	 	 
	Address:	
        6101 Condor Drive

        Moorpark, CA 93021

        Attn: Pamela Marsh/Kevin Chamberlain

	 	 
	Telephone:	(805) 330-6059/ (818) 746-2877
	 	 
	E-mail:	pamela.marsh@pnmac.com; kevin.chamberlain@pnmac.com
	 	 

 

 

 

    	 	Annex B-2LOAN AND SECURITY AGREEMENT

 

dated as of December 4, 2015

 

 

among

 

 

PennyMac
Loan Services, LLC,

as Borrower,

 

PRIVATE NATIONAL MORTGAGE ACCEPTANCE COMPANY,
LLC,

as Guarantor,

 

and

 

 

BARCLAYS BANK PLC,

as Lender

 

    	 	 	 

     

    

 

Table of Contents

	 	Page
	ARTICLE I   DEFINITIONS AND ACCOUNTING MATTERS	1
	Section 1.01.   Definitions; Construction.	1
	Section 1.02.   Accounting Matters	2
	ARTICLE II   LOANS, BORROWING, PREPAYMENT	2
	Section 2.01.   Loans	2
	Section 2.02.   Note.	2
	Section 2.03.   Borrower Electronic Files and Funding Requests.	2
	Section 2.04.   Borrowing Base Reports	3
	Section 2.05.   Interest	3
	Section 2.06.   Increased Capital Costs	4
	Section 2.07.   Alternate Rate of Interest	4
	Section 2.08.   Mandatory Repayment of Loans.	4
	Section 2.09.   Optional Prepayment	5
	ARTICLE III   PAYMENTS; COMPUTATIONS; TAXES; FEES	5
	Section 3.01.   Payments and Computations, Etc.	5
	Section 3.02.   Taxes.	6
	Section 3.03.   Fees and Expenses	7
	ARTICLE IV   SECURITY INTEREST	7
	Section 4.01.   Security Interest	7
	Section 4.02.   Provisions Regarding Pledge of Servicing Rights to Be Included In Financing Statements	8
	Section 4.03.   Authorization of Financing Statements	8
	Section 4.04.   Lender’s Appointment as Attorney In Fact.	8
	Section 4.05.   Release of Security Interest	9
	ARTICLE V   CONDITIONS PRECEDENT	10
	Section 5.01.   Conditions Precedent	10
	Section 5.02.   Further Conditions Precedent	10
	ARTICLE VI   REPRESENTATIONS AND WARRANTIES	10
	Section 6.01.   Representations and Warranties of the Borrower	10
	Section 6.02.   Representations Concerning the Collateral	14
	ARTICLE VII   COVENANTS	15
	Section 7.01.   Affirmative Covenants of Borrower	15
	Section 7.02.   Negative Covenants of the Borrower	21
	Section 7.03.   Notice of Certain Occurrences	22
	ARTICLE VIII   EVENTS OF DEFAULT	24
	Section 8.01.   Events of Default	24
	Section 8.02.   Remedies.	27
	Section 8.03.   Collection Account; Application of Proceeds.	28

 

 

 

 

 

    	 	i	 

     

    

	ARTICLE IX   ASSIGNMENT	29
	Section 9.01.   Restrictions on Assignments	29
	Section 9.02.   Evidence of Assignment; Endorsement on Note	29
	Section 9.03.   Rights of Assignee	29
	Section 9.04.   Permitted Participants; Effect	29
	Section 9.05.   Voting Rights of Participants	29
	ARTICLE X   INDEMNIFICATION	30
	Section 10.01.   Indemnities by the Borrower	30
	Section 10.02.   General Provisions	30
	ARTICLE XI   MISCELLANEOUS	30
	Section 11.01.   Amendments, Etc	30
	Section 11.02.   Notices, Etc	30
	Section 11.03.   No Waiver; Remedies	30
	Section 11.04.   Binding Effect; Assignability	30
	Section 11.05.   GOVERNING LAW; SUBMISSION TO JURISDICTION	31
	Section 11.06.   Entire Agreement	32
	Section 11.07.   Acknowledgement	32
	Section 11.08.   Captions and Cross References	32
	Section 11.09.   Execution in Counterparts	32
	Section 11.10.   Confidentiality	32
	Section 11.11.   Survival	32
	Section 11.12.   Set-Off	32
	Section 11.13.   Guaranty.	33

 

 

 

 

 

    	 	ii	 

     

    

 

Schedules

	Schedule I	Definitions	 
	Schedule 5.01	Conditions Precedent to the Effectiveness of this Agreement	 
	Schedule 5.02	Conditions Precedent to each Loan	 
	Schedule 6.01(r) 	Borrower’s Existing Financing Facilities	 
	Schedule 6.02	Eligibility Criteria with respect to the Mortgage Loans	 
	Schedule 7.01(s)	Barclays Bank PLC Required Investor Reports	 
	Schedule 11.02	Notices	 

 

Exhibits

	Exhibit 2.02(a)	Form of Note	 
	Exhibit 2.03	Form of Borrower Funding Request	 
	Exhibit 2.08(a)	Form of Repayment Notice	 
	Exhibit 2.08(b)	Form of Prepayment Notice	 
	Exhibit 7.01	Form of Compliance Certificate	 

 

 

 

 

 

    	 	iii	 

     

    

 

This LOAN AND SECURITY AGREEMENT (as amended
or supplemented from time to time, this “Agreement”) dated as of December 4, 2015, is among PennyMac
Loan Services, LLC (the “Borrower” or the “Servicer”), PRIVATE NATIONAL MORTGAGE
ACCEPTANCE COMPANY, LLC (the “Guarantor”) and BARCLAYS BANK PLC (the “Lender”).

 

BACKGROUND

 

The Borrower wishes
to obtain financing from time to time to provide funding for the origination or acquisition of certain Eligible Servicing Rights
(as defined herein), which Eligible Servicing Rights shall secure Loans (as defined herein) to be made by the Lender hereunder.

 

The Lender has
agreed, subject to the terms and conditions of this Agreement, to provide such financing to the Borrower.

 

Accordingly, for good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE
I

DEFINITIONS AND ACCOUNTING MATTERS

 

Section 1.01.    
Definitions; Construction.

(a)            
Capitalized terms used herein and not otherwise defined herein shall have the meanings specified in Schedule I.

 

(b)            
All terms used in Article 9 of the UCC, and not specifically defined herein, are used herein as defined in such Article
9.

 

(c)            
Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified
date, the word “from” means “from and including” and the words “to” and “until”
each means “to but excluding”.

 

(d)            
The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.

 

(e)            
Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.

 

(f)              The
words “include”, “includes” and “including” shall be deemed to be followed by the phrase
“without limitation”. The word “will” shall be construed to have the same meaning and effect as the
word “shall”.

 

(g)            
Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented
or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any
reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, (iv) all references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, and (v) the words
“asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

 

 

 

 

    	 	1	 

     

    

 

Section 1.02.    
Accounting Matters. Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted,
and all financial statements and certificates and reports as to financial matters required to be delivered to the Lender hereunder
shall be prepared in accordance with GAAP.

ARTICLE
II

LOANS, BORROWING, PREPAYMENT

 

Section 2.01.    
Loans. On the terms and subject to the conditions set forth in this Agreement, the Lender shall make loans in an
aggregate amount not to exceed the Available Facility Amount (each such loan, a “Loan”) to the Borrower from
time to time. The Lender shall distribute the proceeds of such Loan to the Borrower no later than 1:00 p.m. (New York City
time) on the related Funding Date in accordance with Section 2.03.

 

Section 2.02.    
Note.

 

(a)            
The Loans made by the Lender shall be evidenced by a single promissory note of the Borrower substantially in the form of
Exhibit 2.02(a) hereto (the “Note”), dated the date hereof, payable to the Lender in a principal amount not
to exceed an amount equal to the Available Facility Amount as originally in effect and otherwise duly completed.

 

(b)            
The date, amount, and interest rate of each Loan made by the Lender to the Borrower, and each payment made on account of
the principal thereof, shall be recorded by the Lender on its books and, prior to any transfer of the Note, noted by the Lender
on the grid attached to the Note or any continuation thereof, provided, that failure of the Lender to make any such recordation
or notation shall not affect the obligations of the Borrower to make a payment when due of any amount hereunder or under the Note
in respect of the Loans.

 

Section 2.03.    
Borrower Electronic Files and Funding Requests.

 

(a)             On
any Funding Notice Date prior to the Wind Down Date, the Borrower may request the Lender to make a Loan on the Funding Date
specified in the related Borrower Funding Request by delivering to the Lender an irrevocable Borrower Funding Request no
later than 3:00 p.m. (New York City time) on such Funding Notice Date. The amount of any Loan requested pursuant to a
Borrower Funding Request shall be not greater than the related Available Loan Amount and, with respect to the Initial
Borrower Funding request, shall not be less than $5 million. The Borrower may request a Funding Date on any Business Day;
provided, however, a Funding Date that involves the addition of new Collateral may not fall on any of the five (5) last
Business Days in any calendar month unless otherwise agreed by Lender. Any Borrower Funding Request that relates to the
addition of new Collateral shall include an Electronic File describing all Eligible Servicing Rights that constitute the
Collateral hereunder.

 

 

 

 

 

    	 	2	 

     

    

 

(b)            
Regardless whether the Borrower intends to deliver a Borrower Funding Request during any calendar month, the Borrower shall
deliver to the Lender on the fifteenth (15th) calendar day of each month (or, if such day is not a Business Day, the
following Business Day) (any such day, a “Collateral Reporting Date”), an Electronic File with respect to all
Eligible Servicing Rights that constitute the Collateral hereunder, which shall include all updates to the Collateral since the
date of the preceding Electronic File.

 

(c)            
In Lender’s determination of Collateral Value for any of the Servicing Rights hereunder, it shall apply the MSR Value
of the Servicing Rights in a related Borrowing Base Report. Any excess of the amount funded on such Loan over the Collateral Value
shall result in a Borrowing Base Deficiency as set forth in Section 2.08(b). Notwithstanding anything to the contrary
contained in this Section 2.03, the Lender shall have the right to determine MSR Value at any time in its sole good
faith discretion.

 

(d)            
By delivering a Borrower Funding Request, the Borrower represents and warrants to the Lender that, after taking into account
the amount of the requested Loan, all conditions precedent to such Loan specified in Section 5.02 have been satisfied.

 

Section 2.04.    
Borrowing Base Reports. With respect to each Funding Date, the Lender shall determine the MSR Value of the Eligible
Servicing Rights to be pledged as security for a Loan on such Funding Date and shall communicate such determination by providing
Borrower with a Borrowing Base Report prior to such Funding Date. For purposes of preparing each Borrowing Base Report, the Lender
shall calculate the Collateral Value of the Eligible Servicing Rights described in the Relevant Electronic File.

 

Section 2.05.    
Interest. Interest shall accrue on each Loan for each day during a related Interest Period at a per annum rate equal
to the product of (x) the outstanding principal balance of such Loan on such day, multiplied by (y) the sum of (i) the
applicable LIBOR Rate for such day and (ii) the Applicable Margin. Interest shall be payable on each Monthly Settlement Date
in arrears with respect to each Loan through the final day of each Interest Period (regardless whether such day is a Business Day),
such amount to be payable on each Monthly Settlement Date. The Lender shall determine the LIBOR Rate for each Loan, which may be
reset on a daily basis, as set forth in the definition of “LIBOR Rate” and provide notice of such determination to
the Borrower. The Lender shall also calculate the amount of interest or other amounts due to be paid by the Borrower from time
to time hereunder (including in connection with any prepayment or repayment of Loans permitted hereunder) and shall provide a written
statement thereof to the Borrower at least two Business Days prior to the due date of such payments (or the relevant repayment
or prepayment after having received a notice thereof); provided, that failure to provide such statements on a timely basis
shall not relieve the Borrower of the obligation to pay any interest and principal due on the applicable payment date (based upon
its good faith calculation of the amount due, such amount to be promptly reconciled after receipt of a subsequent statement from
the Lender) and other such amounts hereunder promptly upon receipt of such statement.

 

 

 

 

 

    	 	3	 

     

    

 

Section 2.06.    
Increased Capital Costs. If Lender determines in its sole discretion that any Change in Law or any change in accounting
rules regarding capital requirements has the effect of reducing the rate of return on Lender’s capital under this Agreement
as a consequence of such Change in Law or change in accounting rules, then from time to time Borrower will compensate Lender for
such reduced rate of return suffered as a consequence of such Change in Law or change in accounting rules on terms similar to those
imposed by Lender. Further, if due to the introduction of, any change in, or the compliance by Lender with (i) any eurocurrency
reserve requirement, or (ii) the interpretation of any law, regulation or any guideline or request from any central bank or
other Governmental Authority whether or not having the force of law, there shall be an increase in the cost to Lender as a consequence
of the Loans or other advances of funds made by Lender pursuant to this Agreement or any of the Facility Documents relating to
fundings or commitments under this Agreement, then Borrower shall, from time to time and upon demand by Lender, compensate Lender
for such increased costs, and such amounts shall be deemed a part of the Obligations hereunder. Lender shall provide Borrower with
notice as to any such Change in Law, change in accounting rules or change in compliance promptly following Lender’s receipt
of actual knowledge thereof.

 

Section 2.07.    
Alternate Rate of Interest. If on any Business Day, the Lender determines (which determination shall be conclusive
absent manifest error) (a) that adequate and reasonable means do not exist for ascertaining the LIBOR Rate; or (b) that
the LIBOR Rate will not adequately and fairly reflect the cost to the Lender of making or maintaining its Loan; or (c) that
it has become unlawful for it to honor its obligation to make or maintain Loans hereunder using the LIBOR Rate, or maintaining
its Loans (or its Loan) included in any advance, then the Lender shall give notice thereof to the Borrower by telephone, facsimile,
or other electronic means as promptly as practicable thereafter and, until the Lender notifies the Borrower that the circumstances
giving rise to such notice no longer exist, any Borrower Funding Request that requests that Lender
make a new Loan, subject to the timely approval of the Borrower after receipt of notice of such revised rate, at a rate
per annum that the Lender determines in its reasonable discretion adequately reflects the cost to the Lender of making or maintaining
the Loan.

 

Section 2.08.    
Mandatory Repayment of Loans.

 

(a)            
On each Loan Repayment Date (or, if such day is not a Business Day, the following Business Day) from and after the Wind
Down Date, and continuing until the Outstanding Aggregate Loan Amount shall be reduced to zero, the Borrower shall repay an amount
equal to at least one-twelfth (1/12) of the Outstanding Aggregate Loan Amount as of the Wind Down Date with respect to all Loans
and all other amounts due under this Agreement. Loans may be prepaid in accordance with the terms of Section 2.09 hereof
and, to the extent prepaid, provided the Wind Down Date shall not have occurred, may be re-borrowed hereunder in accordance with
the terms hereof (including satisfaction of all conditions precedent contained in Section 5.02). Notwithstanding the
foregoing, all amounts owing under the Facility shall be immediately due and payable on the Termination Date.

 

(b)            
If, on any Business Day (a “Borrowing Base Shortfall Day”), the Lender provides written notice to the
Borrower that the Lender has determined in its sole reasonable discretion based on the Borrowing Base Report most recently delivered
by the Lender pursuant to Section 2.04 that the Outstanding Aggregate Loan Amount on such day exceeds the lesser of
(i) the Borrowing Base and (ii) the Available Facility Amount on such day (such circumstance, a “Borrowing Base
Deficiency”), the Borrower (i) on the same day if the Lender notifies Borrower by 11:00 a.m. (New York time)
of such Borrowing Base Deficiency, or (ii) if the notice is received later than 11:00 a.m. (New York time), then within
one (1) Business Day after the Borrowing Base Shortfall Day, shall repay outstanding Loans (including accrued Interest thereon),
in an amount equal to the amount of the Borrowing Base Deficiency specified in the notice provided to the Borrower by the Lender
(such requirement a “Margin Call”).

 

 

 

 

 

    	 	4	 

     

    

 

Section
2.09.     Optional Prepayment. The
Borrower may, at its option, prepay any Loan advanced hereunder in full or in part on any date, but not more than once per
month; provided, however, that the Borrower shall be permitted at any time, without limitation, to prepay any Loan in
connection with a Margin Call (any such date, an “Optional Prepayment Date”). Any such prepayment received
by the Lender by 3:00 p.m. (New York City time) on such Optional Prepayment Date shall be applied by the Lender on such
Business Day. Any such prepayment received by the Lender after 3:00 p.m. (New York City time) on such Optional Prepayment
Date shall be applied by the Lender on the following Business Day. For the avoidance of doubt, any optional prepayment in
full shall not result in the termination of this Agreement unless such termination is declared in writing by the Borrower,
acting in its discretion.

 

ARTICLE
III

PAYMENTS; COMPUTATIONS; TAXES; FEES

 

Section 3.01.    
Payments and Computations, Etc.

 

(a)            
Unless otherwise expressly stated herein, all amounts to be paid or deposited hereunder shall be paid or deposited in accordance
with the terms hereof no later than 4:00 p.m. (New York City time) on the day when due in lawful money of the United States
of America in same day funds.

 

(b)            
The Borrower shall, to the extent permitted by law, pay interest on all amounts (including principal, interest and fees)
due but not paid on the date such payment is due hereunder as provided herein, for the period from, and including, such due date
until, but excluding, the date paid, at the applicable Default Rate, payable on demand; provided, however that such
interest rate shall not at any time exceed the maximum rate permitted by applicable law.

 

(c)            
All computations of interest and fees hereunder shall be made on the basis of a year of 360 days for the actual number of
days elapsed (including the first day but excluding the last day) occurring in the period for which payable.

 

(d)            
The Borrower agrees that the principal of and interest on the Loans shall be recourse obligations of the Borrower.

 

(e)            
All payments made by the Borrower under this Agreement shall be made without set-off or counterclaim.

 

 

 

 

 

    	 	5	 

     

    

 

Section 3.02.    
Taxes.

 

(a)            
All payments made by Borrower under this Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities (including
penalties, interest and additions to tax) with respect thereto imposed by any Governmental Authority therewith or thereon, excluding
income taxes, branch profits taxes, franchise taxes or any other tax imposed on net income by the United States, a state or a foreign
jurisdiction under the laws of which the Lender is organized or of its applicable lending office, or a state or foreign jurisdiction
with respect to which Lender has a present or former connection (other than any connection arising from executing, delivering,
being party to, engaging in any transaction pursuant to, performing its obligations under or enforcing any Facility Document),
or any political subdivision thereof (collectively, such non-excluded taxes are hereinafter called “Taxes”),
all of which shall be paid by Borrower for its own account not later than the date when due. If Borrower is required by law or
regulation to deduct or withhold any Taxes from or in respect of any amount payable hereunder, it shall: (a) make such deduction
or withholding, (b) pay the amount so deducted or withheld to the appropriate Governmental Authority not later than the date
when due, (c) deliver to the Lender, promptly, original tax receipts and other evidence satisfactory to Lender of the payment
when due of the full amount of such Taxes; and (d) except as otherwise expressly provided in Section 3(d) below, pay
to the Lender such additional amounts (including all taxes imposed by any Governmental Authority on such additional amounts) as
may be necessary so that the Lender receives, free and clear of all Taxes, a net amount equal to the amount it would have received
under this Agreement, as if no such deduction or withholding had been made.

 

(b)            
In addition, Borrower agrees to pay to the relevant Governmental Authority in accordance with applicable law any current
or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (including, without limitation,
mortgage recording taxes, transfer taxes and similar fees) imposed by any taxing authority that arise from any payment made hereunder
or from the execution, delivery or registration of, or otherwise with respect to, this Agreement (“Other Taxes”).

 

(c)            
Borrower agrees to indemnify Lender for the full amount of Taxes (including additional amounts with respect thereto) and
Other Taxes, and the full amount of taxes of any kind imposed by any jurisdiction on amounts payable under this Section 3,
and any liability (including penalties, interest and expenses arising thereon or with respect thereto) arising therefrom or with
respect thereto, provided that Lender shall have provided Borrower with evidence, reasonably satisfactory to Borrower, of payment
of Taxes or Other Taxes, as the case may be.

 

(d)            
Any Lender that either (i) is not incorporated under the laws of the United States, any State thereof, or the District
of Columbia or (ii) whose name does not include “Incorporated,” “inc.,” “Corporation,”
“Corp.,” “P.C.,” “insurance company,” or “assurance company” (a “Foreign
Purchaser”) shall provide Borrower with original properly completed and duly executed United States Internal Revenue
Service (“IRS”) Forms W-8BEN or W-8ECI or any successor form prescribed by the IRS, certifying that such Person
is either (1) entitled to benefits under an income tax treaty to which the United States is a party which eliminates or (2) otherwise
fully exempt from (2) United States withholding tax under Sections 1441 through 1442 of the Code on payments to it or certifying
that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United
States in either case, on or prior to the date upon which each such Foreign Lender becomes a Lender. Each Foreign Lender will resubmit
the appropriate form eliminating withholding tax on payments to it on the earliest of (A) the third anniversary of the prior
submission, or (B) on or before the expiration of thirty (30) days after there is a “change in circumstances”
with respect to such Person as defined in Treas. Reg. Section 1.1441-1(e)(4)(ii)(D). For any period with respect to which
the Foreign Lender has failed to provide Borrower with the appropriate form or other relevant document (x) as expressly required
under this Section 3(d) (unless such failure is due to a change in treaty, law, or regulation occurring subsequent to the
date on which a form originally was required to be provided under the first sentence of this Section 3(d)) or (y) otherwise
as required to establish exemption from United States withholding under Sections 1471 through 1474 of the Code, such Person shall
not be entitled to “gross-up” of Taxes under Section 3(d) or indemnification under Section 3(c) with respect
to Taxes imposed by the United States which are imposed because of such failure; provided, however that should a Foreign Lender,
which is otherwise exempt from a withholding tax, become subject to Taxes because of its failure to deliver a form required hereunder,
Borrower shall take such steps as such Foreign Lender shall reasonably request to assist such Foreign Lender to recover such Taxes.

 

 

 

 

 

    	 	6	 

     

    

 

(e)            
Without prejudice to the survival or any other agreement of Borrower hereunder, the agreements and obligations of Borrower
contained in this Section 3 shall survive the termination of this Agreement. Nothing contained in this Section 3
shall require Lender to make available any of their tax returns or other information that it deems to be confidential or proprietary.

 

(f)             
The Lender shall (A) promptly notify the Borrower of any change in circumstances which would modify or render invalid
any claimed exemption or reduction, and (B) cooperate, in its reasonable discretion and at Borrower’s expense, with
Borrower to mitigate any requirement of Applicable Law of any jurisdiction in which the Borrower may be required to withhold or
deduct any taxes from amounts payable to Lender hereunder.

 

Section 3.03.    
Fees and Expenses. The Borrower agrees to pay to the Lender all reasonable and documented out-of-pocket costs and
expenses (including reasonable and documented fees and expenses of Lender’s counsel not to exceed $50,000) incurred in connection
with the execution of this Agreement (and any amendments thereto) and the Facility Documents; provided that such limitation on
fees and expenses of Lender’s counsel shall not apply to (i) any amendment or renewal of, or waiver of any provision of,
this Agreement or any other Facility Document or (ii) any document executed after the Closing Date in connection with the transactions
contemplated by this Agreement.

 

ARTICLE
IV

SECURITY INTEREST

 

Section 4.01.    
Security Interest. As security for the prompt payment and performance of all of its Obligations, the Borrower hereby
assigns and pledges to the Lender, and grants a security interest, subject to the interests of the Agencies as set forth in Section 4.02
and in the related Acknowledgement Agreement, to the Lender, all of the Borrower’s right, title and interest, in, to, and
under, whether now owned or hereafter acquired, in all of the following, whether now or hereafter existing and wherever located:
(i) the Pledged Servicing Rights whether or not yet accrued, earned due or payable as well as all other present and future
rights and interests of Borrower in such Pledged Servicing Rights, (ii) the Servicing Contracts and all rights and claims
thereunder, (iii) the Collection Account, (iv) each Acknowledgement Agreement and all rights and claims thereunder, (v) all
books and records, including computer disks and other records or physical or virtual data or information, related to the foregoing
(but excluding computer programs) and (vi) all monies due or to become due with respect to the foregoing and all proceeds
of the foregoing, but with respect to items (i) - (vi) above specifically excluding the Excluded Collateral (collectively,
the “Collateral”); provided that Borrower does not assign or pledge to the Lender, or grant a security interest
in any of Borrower’s right, title and interest, in, to or under Borrower’s rights to reimbursement for any Advances
related to mortgage servicing rights subject to any Servicing Contract.

 

Notwithstanding anything
herein to the contrary, the term “Collateral” shall not include, and the Borrower is not pledging, nor granting a security
interest hereunder in any Freddie Mac Servicing Rights and the Freddie Mac Servicing Contracts until execution and delivery of
a Freddie Mac Acknowledgment Agreement with respect to such Freddie Mac Servicing Rights; provided, that notwithstanding the foregoing,
such security interest shall attach immediately, without any further action on the part of any party hereto, at such time as the
applicable Freddie Mac Acknowledgment Agreement is executed by Freddie Mac, the Borrower and the Lender and delivered to the Lender.

 

 

 

 

 

    	 	7	 

     

    

 

Section 4.02.    
Provisions Regarding Pledge of Servicing Rights to Be Included In Financing Statements.

 

(a)            
Notwithstanding anything to the contrary in the Agreement or any of the other Facility Documents, the security interest
of the Lender created hereby with respect to the Fannie Mae Servicing Rights is subject to the following provisions to be included
in each financing statement filed in respect hereof (or any variation required by Fannie Mae):

 

“The security
interest described in this financing statement is subject and subordinate to all rights, powers, and prerogatives of Fannie Mae
under and in connection with (i) the terms and conditions of that certain Acknowledgment Agreement, with respect to the Security
Interest, by and among Fannie Mae, PennyMac Loan Services, LLC (the “Debtor”), and Barclays Bank PLC, and (ii) the
Mortgage Selling and Servicing Contract, the Fannie Mae Selling Guide, the Fannie Mae Servicing Guide and any supplemental servicing
instructions or directives provided by Fannie Mae, all applicable master agreements (including applicable MBS pool purchase contracts
and variances), recourse agreements, repurchase agreements, indemnification agreements, loss-sharing agreements, and any other
agreements between Fannie Mae and the Debtor, and all as amended, modified, restated or supplemented from time to time (collectively,
the “Fannie Mae Lender Contract”), which rights, powers, and prerogatives include, without limitation, the right of
Fannie Mae to terminate the Fannie Mae Lender Contract with or without cause and the right to sell, or have transferred, the Servicing
Rights as therein provided.”

 

(b)            
Notwithstanding anything to the contrary in the Agreement or any of the other Facility Documents, the security interest
of the Lender created hereby with respect to the Freddie Mac Servicing Rights is subject to the following provisions to be included
in each financing statement filed in respect hereof (or any variation required by Freddie Mac):

 

“The security
interest publicized or perfected by this financing statement is subject and subordinate in each and every respect (a) to all rights,
powers and prerogatives of the Federal Home Loan Mortgage Corporation (“Freddie Mac”) under and in connection
with the Purchase Documents, as that term is defined in the Freddie Mac Single-Family Seller/Servicer Guide, which rights include,
without limitation, the right of Freddie Mac to disqualify (in whole or in part) the debtor named herein as an approved Freddie
Mac Seller/Servicer, with or without cause, and the right to terminate (in whole or in part) the unitary, indivisible master servicing
contract and to transfer and sell all or any portion of said servicing contract rights, as provided in the Purchase Documents;
and (b) to all claims of Freddie Mac arising out of or relating to any and all breaches, defaults and outstanding obligations of
the debtor to Freddie Mac.”

 

Section 4.03.    
Authorization of Financing Statements. The Borrower hereby authorizes the Lender to file any financing or continuation
statements required to perfect, protect, or more fully evidence the Lender’s security interest in the Collateral granted
hereunder. The Lender will notify the Borrower of any such filing (but the failure to deliver such notice shall not prejudice any
rights of the Lender under this Section 4.03).

 

Section 4.04.    
Lender’s Appointment as Attorney In Fact.

 

(a)            
The Borrower hereby irrevocably constitutes and appoints the 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 the Borrower
and in the name of the Borrower or in its own name, from time to time in the Lender’s discretion, if an Event of Default
shall have occurred and be continuing, for the limited purpose of carrying out the terms of this Agreement (or any Servicing Contracts),
to take any action on behalf of the Borrower pursuant to the Acknowledgement Agreements and 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
(or any Servicing Contracts) to the extent such actions are permitted to be taken by the Lender under the Acknowledgement Agreements,
and, without limiting the generality of the foregoing, the Borrower hereby gives the Lender the power and right, on behalf of the
Borrower, without assent by, but with notice to, the Borrower, if an Event of Default shall have occurred and be continuing, to
do the following (subject to limitations contained in each Acknowledgement Agreement):

 

 

 

 

 

    	 	8	 

     

    

 

(i)             
in the name of the Borrower 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 under any mortgage insurance or with respect to any other
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 the Lender for the purpose of collecting any and all such moneys due under any such mortgage insurance or with respect to any
other Collateral whenever payable;

 

(ii)           
(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 the Lender or as the 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 part thereof and to enforce any other right in respect of any Collateral;
(E) in connection with the above, to give such discharges or releases as the Lender may deem appropriate; and (F) 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 the Lender were the absolute owner thereof for all purposes, and to do, at the Lender’s option and the Borrower’s
expense, at any time, or from time to time, all acts and things which the Lender deems necessary to protect, preserve or realize
upon the Collateral and the Lender’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively
as the Borrower might do;

 

(iii)         
perform or cause to be performed, the Borrower’s obligations under any Servicing Contract to the extent permitted
by the related Acknowledgement Agreement.

The Borrower hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof. The power of attorney is a power coupled with an interest and
shall be irrevocable but shall terminate upon release of the Lender’s security interest as provided in Section 4.05.

 

(b)            
The Borrower also authorizes the Lender, at any time and from time to time, to execute, in connection with the sale provided
for in Section 8.02(c) hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect
to the Collateral; provided that the exercise of such powers are in accordance with the Acknowledgement Agreements.

 

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

 

Section 4.05.    
Release of Security Interest. Upon termination of this Agreement and repayment to the Lender of all Obligations and
the performance of all obligations under the Facility Documents, the Lender shall release its security interest in any remaining
Collateral; provided that if any payment, or any part thereof, of any of the Obligations is rescinded or must otherwise
be restored or returned by the Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower,
or upon or as a result of the appointment of a receiver, intervener or conservator of, or a trustee or similar officer for the
Borrower or any substantial part of its Property, or otherwise, this Agreement, all rights hereunder and the Liens created hereby
shall continue to be effective, or be reinstated, until such payments have been made.

 

 

 

 

 

    	 	9	 

     

    

 

ARTICLE
V

CONDITIONS PRECEDENT

 

Section 5.01.    
Conditions Precedent. The effectiveness of this Agreement is subject to the condition precedent that the Lender shall
have received each of the items set forth in Schedule 5.01 (unless otherwise indicated) dated such date, and in such form
and substance, as is satisfactory to the Lender.

 

Section 5.02.    
Further Conditions Precedent. The funding of each Loan hereunder, shall in all events be subject to satisfaction
of the further conditions precedent set forth in Schedule 5.02 as of the making of such Loan.

 

ARTICLE
VI

REPRESENTATIONS AND WARRANTIES

 

Section 6.01.    
Representations and Warranties of the Borrower. The Borrower represents and warrants to the Lender that throughout
the term of this Agreement (except to the extent any such representation or warranty is stated to relate solely to an earlier date,
in which case, such representation or warranty shall have been true or correct as of such date):

 

(a)            
Due Organization, Qualification, Power, Authority and Due Authorization.
The Borrower is a limited liability company and the Guarantor is a limited liability company. Each Borrower Party is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its formation and it has qualified to do business in
each jurisdiction in which it is legally required to do so. Each Borrower Party has the power and authority under its limited liability
agreements or declaration of trust, bylaws and applicable law to enter into this Agreement and the Facility Documents and to perform
all acts contemplated hereby and thereby or in connection herewith and therewith; this Agreement and the Facility Documents and
the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action and do not require
any additional approvals or consents or other action by, or any notice to or filing with, any Person other than any that have heretofore
been obtained, given or made.

 

(b)            
Valid and Binding Obligations. This Agreement, the Facility
Documents and every other document to be executed by a Borrower Party in connection with this Agreement is and will be legal, valid,
binding and subsisting obligations of such Borrower Party, enforceable in accordance with their respective terms, except that (A) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’
rights generally and (B) the remedy of specific performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

 

 

 

 

 

    	 	10	 

     

    

 

(c)            
Noncontravention. The consummation of the transactions contemplated
by this Agreement and Facility Documents are in the ordinary course of business of each Borrower Party and will not conflict with,
result in the breach of or violate any provision of the charter or by-laws of the related Borrower Party or result in the breach
of any provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under, any
agreement, indenture, loan or credit agreement or other instrument to which a Borrower Party, the Collateral or any of a Borrower
Party’s Property is or may be subject to, or result in the violation of any law, rule, regulation, order, judgment or decree
to which a Borrower Party, the Collateral or a Borrower Party’s Property is subject.

 

(d)            
Legal Proceeding. There is no action, suit, proceeding,
inquiry or investigation, at law or in equity, or before or by any court, public board or body pending or, to a Borrower Party’s
knowledge, threatened against or affecting any Borrower Party (or, to Borrower’s knowledge, any basis therefor) wherein an
unfavorable decision, ruling or finding would adversely affect the validity of the Collateral or the validity or enforceability
of this Agreement, the Facility Documents or any agreement or instrument
to which a Borrower Party is a party and which is used or contemplated for use in the consummation of the transactions contemplated
hereby, would adversely affect the proceedings of a Borrower Party in connection herewith, or would or could materially and adversely
affect any Borrower Party’s ability to carry out its obligations hereunder. 

 

(e)            
Government and Agency Approvals. No authorization, consent, approval, or other action by, and no notice to or filing
with, any court, governmental authority or regulatory body or other Person domestic or foreign, including Fannie Mae, Freddie Mac
or HUD, is required for any Borrower Party’s due execution, delivery or performance of any Facility Document to which it
is a party except for (i) consents that have been obtained in connection with transactions contemplated by the Facility Documents,
(ii) filings to perfect the security interest created by this Agreement, and (iii) authorizations, consents, approvals,
filings, notices, or other actions the failure to make could not reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect.

 

(f)             
Solvency. Each Borrower Party is solvent and will not be
rendered insolvent by any Loan hereunder and, after giving effect
to each such Loan, each Borrower Party will not be left with an unreasonably small amount of capital with which to engage in its
business. Each Borrower Party does not intend to incur, nor believes that it has incurred, debts beyond its ability to pay such
debts as they mature. Neither Borrower Party is 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 any Borrower Property
or any of its assets.

 

(g)            
Fraudulent Conveyance. The amount of consideration being received by Borrower after giving effect to each Loan by
the Lender constitutes reasonably equivalent value and fair consideration for such Loan. Borrower is not pledging any Collateral
with any intent to hinder, delay or defraud any of its creditors. The Agreement and the Facility Documents, any other document
contemplated hereby or thereby and each transaction have not been entered into fraudulently by any Borrower Party hereunder, or
with the intent to hinder, delay or defraud any creditor or Lender.

 

 

 

 

 

    	 	11	 

     

    

 

(h)            
Margin Regulations. The use of funds acquired by Borrower under this Agreement
will not conflict with or contravene, to the extent applicable, Regulations T, U or X promulgated by the Board, as the same may
from time to time be amended, supplemented or otherwise modified.

 

(i)             
Accuracy of Information. Neither this Agreement nor any representations and warranties or information relating to
any Borrower Party that any Borrower Party has delivered or caused to be delivered to Lender, including, but not limited to, all
documents related to this Agreement, the Facility Documents or each Borrower Party’s financial statements, contains any untrue
statement of a material fact or omits to state a material fact necessary to make the statements made therein or herein in light
of the circumstances under which they were made, not misleading. Since the furnishing of such documents or information, there has
been no change, nor any development or event involving a prospective change that would render any of such documents or information
untrue or misleading in any material respect.

 

(j)             
Investment Company Act. Neither Borrower, the Guarantor nor any of its Subsidiaries is required to be registered
as an “investment company” as defined under the Investment Company Act or is an entity “controlled by”
an entity required to be registered as an “investment company” as defined under the Investment Company Act.

 

(k)            
Taxes. Each Borrower Party has timely filed all federal and state tax returns that are required to be filed by it
and has paid all taxes, including any assessments received by it, to the extent that such taxes have become due (other than for
taxes that are being contested in good faith and for which it has established adequate reserves).

 

(l)             
No Adverse Actions. No Borrower Party has received a notice from any Agency indicating any adverse fact or circumstance
in respect of the Borrower which adverse fact or circumstance may reasonably be expected to entitle such Agency, as the case may
be, to terminate the Borrower with cause or with respect to which such adverse fact or circumstance has caused such Agency to threaten
to terminate, or consider the termination of, the Borrower in such notice.

 

(m)          
Financial Statements. The financial statements of each Borrower Party, copies of which have been furnished to Lender,
(i) are, as of the dates and for the periods referred to therein, complete and correct in all material respects, (ii) present
fairly the financial condition and results of operations of the related Borrower Party as of the dates and for the periods indicated
and (iii) have been prepared in accordance with GAAP consistently applied, except as noted therein (subject as to interim
statements to normal year-end adjustments). Since the date of the most recent financial statements, there has been no Material
Adverse Change with respect to any Borrower Party. Except as disclosed in such financial statements or pursuant to Section 7.01
hereof, no Borrower Party is subject to any contingent liabilities or commitments that, individually or in the aggregate, have
a material possibility of causing a Material Adverse Change with respect to any Borrower Party.

 

 

 

 

 

 

    	 	12	 

     

    

 

(n)            
Agency Set Off Rights. No Borrower Party has actual notice, including any notice received from any Agency, or any
reason to believe, that, other than in the normal course of any Borrower Party’s business, any circumstances exist that would
result in any Borrower Party’s being liable to any Agency for any amount due by reason of: (i) any breach of servicing
or subservicing obligations or breach of mortgage selling warranties to the Agency under the related Servicing Contract or any
other similar contracts relating to the Borrower’s entire Agency servicing or subservicing portfolio (including without limitation
any unmet mortgage repurchase obligation), (ii) any unperformed obligation with respect to mortgages in an MBS pool that the
Borrower is servicing for any Agency pursuant to a recourse agreement, (iii) any loss or damage to any Agency by reason of
any inability to transfer to a purchaser of the Servicing Rights the Borrower’s selling and servicing representations, warranties
and obligations, as well as any existing MBS recourse obligations, or other recourse obligations, and (iv) any other unmet
obligations to any Agency under the related Servicing Contract or any other similar contracts relating to the Borrower’s
entire Agency servicing portfolio.

 

(o)            
Use of Subservicers. Borrower shall not use a subservicer with respect to any Mortgage Loan without Lender's prior
written consent, which consent shall not be unreasonably withheld.

 

(p)            
Leverage Ratio; Liquidity; Tangible Net Worth; Profitability. Each Borrower Party is in compliance with each of the
financial covenants set forth in the Repo Agreement.

 

(q)            
Fannie Mae/Freddie Mac/Ginnie Mae/HUD. Servicer is a seller/servicer approved by Fannie Mae and Freddie Mac, an issuer
approved by Ginnie Mae and a lender approved by HUD. Servicer is in good standing to service mortgages for Fannie Mae, Ginnie Mae,
HUD and Freddie Mac, as applicable. Servicer has not been suspended as a seller/servicer by Fannie Mae, Freddie Mac, Ginnie Mae
or HUD on and after the date on which Borrower first obtained such approval from Fannie Mae, Ginnie Mae, HUD or Freddie Mac, as
applicable. No Borrower Party is under review or investigation outside of due course and does not have knowledge of imminent or
future investigation outside of due course, by Fannie Mae, Ginnie Mae, HUD or Freddie Mac on and after the date on which such Borrower
Party became a Fannie Mae, Ginnie Mae, HUD or Freddie Mac approved seller/servicer or lender, as the context may require.

 

(r)             
Borrower’s Existing Financing Facilities. As of the date hereof, each of the Borrower’s financing facilities
currently in place for the financing of any mortgage servicing rights or servicing advances owned by the Borrower is listed in
detail in Schedule 6.01(r) attached hereto. Borrower shall provide any updates to Schedule 6.01(r) to the Lender
at the time it delivers each monthly Compliance Certificate hereunder.

 

(s)            
Servicer Power and Authority. The Servicer (a) is a limited liability company, duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it was formed, (b) has all necessary power and authority and legal
right to service the Mortgage Loans subject to this Agreement, and (c) is qualified to do business and is in good standing in all
other jurisdictions in which the nature of the business conducted by it makes such qualification necessary.

 

 

 

 

 

    	 	13	 

     

    

 

(t)             
Chief Executive Office. Borrower’s chief executive office and chief operating office on the date hereof is
located at 6101 Condor Drive, Moorpark, California 93021.

 

Section 6.02.    
Representations Concerning the Collateral. The Borrower represents and warrants to the Lender that as of each day
that a Loan is outstanding pursuant to this Agreement:

 

(a)            
Borrower has not assigned, pledged, conveyed, or encumbered any Collateral to any other Person or any right to any Collateral
to any Person (including without limitation any right to control or transfer or otherwise effectuate any remedy relating to any
Collateral), and immediately prior to the pledge of any such Collateral, the Borrower was the sole owner of such Collateral and
had good and marketable title thereto (subject to the rights of Fannie Mae and Freddie Mac with respect to the related Servicing
Rights), free and clear of all Liens, and no Person, other than the Lender has any Lien on any Collateral. No Eligible Servicing
Rights are related to Mortgage Loans owned or financed by a third-party (including without limitation any Affiliate of Borrower)
other than Fannie Mae pursuant to the Fannie Mae Acknowledgment Agreement and Freddie Mac pursuant to the Freddie Mac Acknowledgment
Agreement, and no Person has any interest in any Eligible Servicing Rights or any related Mortgage Loans, other than Lender, Borrower,
Fannie Mae pursuant to the Fannie Mae Acknowledgment Agreement, or Freddie Mac pursuant to the Freddie Mac Acknowledgment Agreement
(including without limitation any right to control or transfer or otherwise effectuate any remedy relating to any Eligible Servicing
Rights).

 

(b)            
The provisions of this Agreement are effective to create in favor of the Lender a valid security interest in all right,
title, and interest of the Borrower in, to and under the Collateral, subject only to the interests of the related Agency.

 

(c)            
All Recourse Servicing Obligations as of the applicable date of the most recent Electronic File have been identified as
such in a monthly summary report delivered to the Lender. All information concerning all Servicing Rights set forth on the Electronic
File pursuant to which such Servicing Rights were, are or will be (as applicable) pledged to the Lender will not contain any material
misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading as of the date of such Electronic File.

 

(d)            
Upon the filing of financing statements on Form UCC-1 naming the Lender as “Secured Party” and the Borrower
as “Debtor”, and describing the Collateral, in the appropriate jurisdictions, the Lender has a duly perfected first
priority security interest under the UCC in all right, title, and interest of Borrower in, to and under, subject to the interests
of any applicable Agency, the Servicing Rights.

 

(e)            
All filings and other actions (including the execution of an account control agreement) necessary to perfect the security
interest in the Collection Account created under this Agreement have been duly made or taken and are in full force and effect,
and the Facility Documents create in favor of the Lender a valid and, together with such filings and other actions, perfected first
priority security interest in the Collateral, securing the payment of the Obligations, and all filings and other actions necessary
to perfect such security interest have been duly taken. Subject to the rights of the related Agency as set forth in Section 4.02
and in the related Acknowledgement Agreement, the Borrower is the legal and beneficial owner of the Collateral free and clear of
any Lien, except for the Liens created or permitted under the Facility Documents.

 

 

 

 

 

    	 	14	 

     

    

 

(f)             
Subject only to the terms of the related Acknowledgement Agreement, the Borrower has and will continue to have the full
right, power and authority, to pledge the Servicing Rights, and the pledge of such Servicing Rights may be further assigned without
any requirement, except as may be specified in the related Agency Guides.

 

(g)            
In connection with any repurchase agreement, loan and security agreement or similar credit facility or agreement for borrowed
funds entered into by the Borrower or any of its Affiliates on the one hand and any third party (including an Affiliate of the
Borrower or any of its Affiliates but excluding the Lender or any Affiliate of Lender) on the other, including without limitation,
any other facility for the funding of Advances, no such third party has the right pursuant to the terms of such repurchase agreement,
loan and security agreement or similar credit facility or agreement, to cause the Borrower to terminate, rescind, cancel, pledge,
hypothecate, liquidate or transfer any of the Collateral.

 

ARTICLE
VII

COVENANTS

 

Section 7.01.    
Affirmative Covenants of Borrower. The Borrower covenants and agrees with the Lender that, so long as any Loan is
outstanding and until all Obligations have been paid in full:

 

(a)            
Compliance with Laws, Existence, Etc. Each Borrower Party will:

 

(i)             
comply with all applicable Requirements of Law if the failure to comply with such Requirements of Law could reasonably be
expected to have a Material Adverse Effect;

 

(ii)           
(A) preserve and maintain its legal existence and all of its material rights, privileges, franchises; (B) maintain all licenses,
permits or other approvals necessary to conduct its business and to perform its obligations under the Facility Documents; (C) except
as would not be reasonably likely to have a Material Adverse Effect or would have a material adverse effect on the Collateral or
Lender’s interest therein, remain in good standing under the laws of each state in which it conducts business or the related
Mortgaged Property of any Mortgage Loan is located; and (D) not change its tax identification number or fiscal year without prior
written notice to the Lender;

 

(iii)         
keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently
applied;

 

 

 

 

 

    	 	15	 

     

    

 

(iv)          
 not move its chief executive office or chief operating office from the addresses referred to in Section 6.01(r) unless
it shall have provided Lender thirty (30) days prior written notice of such change; provided, however, that no additional notice
is required that such addresses shall change on or about November or December of 2015 to 3043 Townsgate Road, Westlake Village,
California 91361;

 

(v)            
pay and discharge or cause to be paid and discharged promptly when due all Taxes, assessments and governmental charges or
levies imposed on it or on its income or profits or on any of its Property which, if unpaid, might become a Lien, unless and to
the extent the same are being contested in good faith and by proper proceedings and against which adequate reserves shall, to the
extent required by GAAP, have been set aside; and

 

(vi)          
not directly or indirectly enter into any agreement that would be violated or breached by any Loan or the performance by
such Borrower Party of any Facility Document.

 

(b)            
Performance and Compliance with Servicing Contracts. Each Borrower Party will comply with all terms, provisions,
covenants and other promises required to be observed by it under each of the Facility Documents to which it is a party, maintain
the Facility Documents to which it is a party in full force and effect in all material respects and enforce the Servicing Contracts
in all material respects in accordance with the terms thereof. Borrower shall not amend or permit the amendment of any sections
of a Subservicing Agreement which would materially affect the Servicing Contracts referenced herein or a subservicer's servicing
of the Mortgage Loans subject to this Agreement, without Lender's prior written consent. Borrower shall diligently enforce its
rights under a Subservicing Agreement, including all rights to terminate and replace or cause the termination and replacement of
a subservicer upon the occurrence of a Subservicer Termination Event. Borrower shall not waive any material default or other material
failure to perform under or breach of the Servicing Contracts or Subservicing Agreement without Lender's prior written consent.
For the avoidance of doubt, any default, failure or breach by a subservicer that would permit the termination and replacement of
the subservicer under the Subservicing Agreement shall be deemed "material" and shall not be waived by Borrower or its
Affiliates without Lender's prior written consent.

 

(c)            
Reserved.

 

(d)            
Due Diligence. The Borrower will permit Lender and its respective agents or designees, upon reasonable notice during
normal business hours, to perform reasonable continuing due diligence reviews with respect to the Servicing Rights, any Borrower
Party and the other Collateral, for purposes of verifying compliance with the representations, warranties, and specifications made
hereunder and under the other Facility Documents, or otherwise. Borrower shall cooperate in all respects with such diligence and,
upon reasonable notice during normal business hours, shall provide Lender and its respective agents or designees all documents,
records, agreements, instruments or information relating to the Collateral in the possession of the Borrower; provided, however,
the foregoing shall not apply with respect to any information that the Borrower is required by an Agency to keep confidential.
Notwithstanding anything to the contrary herein, the Borrower shall reimburse the Lender for any and all reasonable and documented
costs and expenses incurred by the Lender’s third party diligence firm in connection with any ongoing due diligence or auditing
activities, subject to an annual cap of $20,000; provided, however, that such annual cap shall not apply if a Default has occurred.

 

 

 

 

 

    	 	16	 

     

    

 

(e)            
Changes in Servicing Contracts. The Borrower shall provide written notice to the Lender of any changes in any Servicing
Contracts that may materially affect the Servicing Rights within three (3) Business Days after the Borrower receives notice thereof.

 

(f)             
Quarterly Third Party Valuation Reports. As soon as possible and in any event no later than forty-five (45) days
after the last Business Day of each fiscal quarter of Borrower, Borrower shall provide to Lender a report provided by a third party
valuation agent acceptable to the Lender setting forth such agent’s determination of the value of all of Borrower’s
servicing rights (including servicing rights not subject to this Agreement) and cash flows, along with the appropriate certificate
required under Section 7.01(h)(3).

 

(g)            
Publicly Traded Company. Guarantor’s parent, PennyMac Financial Services, Inc. (“PFSI”),
shall at all times maintain its status as a publicly traded company.

 

(h)            
Financial Statements. The Borrower shall deliver to the Lender, in each case, to the extent not publicly filed:

 

(1)            
Within forty-five (45) days after the end of each month, consolidated unaudited balance sheets and consolidated statements
of income and changes in equity and unaudited statement of cash flows, all to be in a form acceptable to Lender, showing the financial
condition and results of operations of Borrower and its consolidated Subsidiaries on a consolidated basis as of the end of each
such month and for the then elapsed portion of the fiscal year, setting forth, certified by a financial officer of Borrower (acceptable
to Lender) as presenting fairly the financial position and results of operations of Borrower and its consolidated Subsidiaries
and as having been prepared in accordance with GAAP consistently applied, in each case, subject to normal year-end audit adjustments;

 

(2)            
Within ninety (90) days after the end of each fiscal year of Borrower, the consolidated audited balance sheets of Borrower
and its consolidated Subsidiaries, which will be in conformity with GAAP, and the related consolidated audited statements of income
and changes in equity showing the financial condition of Borrower and its consolidated Subsidiaries as of the close of such fiscal
year and the results of operations during such year, and consolidated audited statements of cash flows, as of the close of such
fiscal year, setting forth, in each case, in comparative form the corresponding figures for the preceding year. The foregoing consolidated
financial statements are to be reported on by, and to carry the unqualified report (acceptable in form and content to Lender) of,
an independent public accountant of national standing acceptable to Lender and are to be accompanied by a letter of management
in form and substance acceptable to Lender; and

 

 

 

 

 

    	 	17	 

     

    

 

(3)            
Together with each set of the financial statements delivered pursuant to clause (1) above, a certificate of a Responsible
Officer of Borrower in the form of Exhibit 7.01 attached hereto.

 

(i)             
Agency Approval. Each Borrower Party shall at all times maintain copies of relevant portions of all final written
Fannie Mae, Freddie Mac, HUD and Ginnie Mae audits, examinations, evaluations, monitoring reviews and reports of its origination
and servicing and subservicing operations (including those prepared on a contract basis for any such agency) in which there are
material adverse findings, 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,
and all necessary approvals from each of Fannie Mae, Freddie Mac, HUD and Ginnie Mae. The Borrower shall not take any action, or
fail to take any action, that would permit Fannie Mae, Freddie Mac, HUD or Ginnie Mae to terminate or threaten to terminate its
right to service loans for Fannie Mae, Freddie Mac, HUD or Ginnie Mae with cause.

 

(j)             
Financial Covenants. Each Borrower Party at all times shall satisfy its respective requirements with respect to the
financial covenants set forth in the Repo Agreement.

 

(k)            
Quality Control. Borrower shall conduct quality control reviews of Borrower’s servicing operations in accordance
with industry standards and Agency requirements. Borrower shall report to Lender material quality control findings in a monthly
summary report included with the certificate required under Section 7.01(h)(3).

 

(l)             
Special Affirmative Covenants Concerning Servicing Rights.

 

(i)             
The Borrower warrants and shall defend the right, title and interest of the Lender in and to the Servicing Rights pledged
to the Lender against the claims and demands of all Persons whomsoever, subject to the restrictions imposed by the Acknowledgement
Agreements to the extent that such restrictions are valid and enforceable under the applicable UCC and other Requirements of Law.

 

(ii)           
The Borrower shall preserve the security interests granted hereunder and upon request by the Lender undertake all actions
which are necessary or appropriate, in the reasonable judgment of the Lender, to (x) maintain the Lender’s security
interest (including the priority thereof) in the Collateral in full force and effect at all times prior to the satisfaction of
all obligations under this Agreement and the release of the Lender’s lien in accordance with the terms and provisions of
this Agreement, and (y) preserve and protect the Collateral and protect and enforce the rights of the Lender to the Collateral,
including the making or delivery of all filings and recordings (of financing or continuation statements), or amendments thereto
or assignments thereof, and such other instruments or notices, as may be necessary or appropriate, cause to be marked conspicuously
its master data processing records with a legend, acceptable to the Lender, evidencing that such security interest has been granted
in accordance with this Agreement.

 

 

 

 

 

    	 	18	 

     

    

 

(iii)         
Each Borrower Party shall diligently fulfill its duties and obligations under the Servicing Contracts in all material respects
and shall not default in any material respect under any of the Servicing Contracts or the Acknowledgement Agreements; provided
that it shall not be a breach of this covenant if: (a) an Agency shall terminate the Borrower’s rights under any Servicing
Contract and the Borrower shall repay (without duplication of payment) to the Lender an amount equal to the excess of the sum of
the Loans then outstanding over the sum of the Borrowing Base of all the Servicing Rights then pledged to the Lender within the
time periods set forth in Section 2.08(b) or (b) any such Servicing Contract expires in accordance with its terms
and without renewal or (c) a default declared by an Agency in respect of a Servicing Contract arose from a failure of the
portfolio of serviced Mortgage Loans to perform as required by the related Servicing Contract and such Agency has elected in writing
to continue to use the Borrower as servicer of both that portfolio and other pools of Mortgage Loans and individual Mortgage Loans
and such Agency has not rescinded or revoked such election.

 

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

 

(n)            
Use of Proceeds. The Borrower shall not use the proceeds of the Loans in contravention of the requirements, if any,
of the Agencies.

 

(o)            
Reserved.

 

(p)            
Reserved.

 

(q)            
Notice of Disposal of Servicing Rights. In the event that the Borrower sells or otherwise disposes of any of the
Pledged Servicing Rights, it shall give the Lender ten (10) Business Days’ prior written notice of such sale or disposition
(together with a list of the affected loans and other information helpful to the Lender in assessing the related Collateral Value),
during which time the Lender shall recalculate the Collateral Value for the Collateral remaining after such sale or disposition.

 

(r)             
Requests for Information. The Borrower shall furnish to the Lender within five (5) Business Days after the Lender’s
request, any information, documents, records or reports with respect to the servicing or subservicing of the Collateral, any Borrower
Party’s business or its relationship with any Agency, as the Lender may from time to time reasonably request.

 

(s)            
Monthly Reports. No later than the time set forth in Section 7.01(h)(1), Borrower shall provide to Lender (i) reports
of information related to (x) any claims or compensatory fees actually paid by Borrower or Guarantor to each Agency related to
enforcement by such Agency of its rights under the related Agency Guide (or to trusts under non-agency securitizations) that are
not reimbursed from a predecessor originator/servicer, (y) a summary report of claims for repurchases or indemnity made by Agencies,
insurers or trusts in non-agency securitizations, including the current status or resolution of such repurchase and indemnification
demands; (z) the MSR Collateral as detailed in Schedule 7.01(s); (ii) a report provided by Borrower setting forth Borrower’s
determination of the value of all of Borrower’s servicing rights (including servicing rights not subject to this Agreement)
and cash flows, along with the appropriate certificate required under Section 7.01(h)(3); and (iii) copies of all notices
it receives from any Agency that materially affect the Eligible Servicing Rights, including any notice received with respect to
the events set forth in Section 6.01(n)(i) through (iv).

 

 

 

 

 

    	 	19	 

     

    

 

(t)             
Reserved.

 

(u)            
Agency Collateral Account. To the extent applicable, within five (5) Business Days after the end of each month (beginning
December 2015), the Borrower shall deliver a notice to the Lender setting forth the amount on deposit in the applicable Agency
Collateral Account, provided that if any such date is not a Business Day, such notice shall be delivered to the Lender on the next
succeeding Business Day. To the extent not prohibited by an Agency, the Borrower shall promptly (and in any event within five (5)
Business Days thereof) notify the Lender (and provide a copy of any written request) of any request it receives from such Agency
indicating either (i) that the Borrower must deposit additional amounts in the applicable Agency Collateral Account or (ii) that
the Borrower is entitled to withdraw amounts from the applicable Agency Collateral Account and such notice shall include the amount
required to be deposited or entitled to be withdrawn, as applicable.

 

(v)            
Agency Information. The Borrower and the Guarantor shall make available the Chief Executive Officer, the President,
the Chief Financial Officer, and/or any other appropriate officer of the Borrower or Guarantor, as applicable, to participate in
discussions with Lender and provide information with respect to the following: (i) a projection of the obligations of the
Borrower in connection with (A) repurchase obligations to Agencies and (B) amounts that may have been required to be
deposited or entitled to be withdrawn from the applicable Agency Collateral Account (the “Agency Obligations”),
(ii) a projection of the impact the Agency Obligations may have on the operations of the Borrower, including but not limited
to, the net impact on liquidity, statements of income, retained earnings and cash flows, (iii) the projected date of resolution
of the Agency Obligations, and (iv) such other information as may be reasonably requested by the Lender, in all cases to the
extent the Borrower is not prohibited from disclosing such information.

 

(w)          
Reserved.

 

(x)            
Subservicer Acknowledgment Letter. Subject to the rights and interests of the Agencies, if the Lender approves the
use of a subservicer, the Borrower shall cause such subservicer to acknowledge the Lender’s rights hereunder and agree to
follow all instructions of Lender upon the occurrence of a default hereunder, which side letter shall be acceptable to Lender in
form and substance (such side letter, a “Subservicer Acknowledgment Letter”) and prior to permitting any other
subservicer to service any Mortgage Loans related to the Eligible Servicing Rights pledged hereunder, the Borrower shall cause
such subservicer to become a party to a Subservicer Acknowledgment Letter.

 

 

 

 

 

    	 	20	 

     

    

 

Section 7.02.    
Negative Covenants of the Borrower. The Borrower covenants and agrees with the Lender that, so long as any Loan is
outstanding and until all Obligations have been paid in full, the Borrower shall not:

 

(a)            
other than in accordance with Section 7.02(c), take any action that would directly or indirectly materially
impair or materially adversely affect the Borrower’s title to, or the value of, the Collateral;

 

(b)            
create, incur or permit or allow a subservicer to create, incur or permit to exist any Lien in or on the Collateral, or,
unless otherwise permitted by the Lender, in or on any mortgage loans or servicing rights subject to any Fannie Mae Acknowledgment
Agreement or Freddie Mac Acknowledgment Agreement, except (x) the security interest granted hereunder in favor of the Lender and
(y) the rights of Fannie Mae and Freddie Mac under the Servicing Contracts and the applicable Agency Guide, nor assign any right
to receive income in respect thereof except as permitted under Section 7.02(c);

 

(c)            
sell, lease or otherwise dispose of or allow a subservicer to sell lease, or otherwise dispose of any Collateral (other
than sales or dispositions of Servicing Rights (i) resulting from the payoff of the related Mortgage Loans or the repurchase
of the related Mortgage Loans by the Borrower, (ii) as required by an Agency or (iii) in the ordinary course of the Borrower’s
servicing business) except as expressly permitted by this Agreement;

 

(d)            
engage to any substantial extent in any line or lines of business activity other than the businesses related to residential
and commercial mortgage origination, acquisition and servicing carried on by it as of the Closing Date;

 

(e)            
(i) cancel or terminate or allow a subservicer to cancel or terminate any Facility Documents to which it is a party or consent
to or accept any cancellation or termination thereof without Lender’s prior consent, (ii) amend, amend and restate,
supplement or otherwise modify any Facility Document without Lender’s prior consent; provided that if an amendment to the
Servicing Contracts does not relate to and would not affect Servicer’s servicing of the Mortgage Loans subject to this Agreement
or the value or marketability of the Collateral, the prior written consent of the Lender is not required, (iii) consent to
or allow a subservicer to consent to any amendment, modification or waiver of any term or condition of any Facility Document, without
the prior written consent of the Lender, which consent shall not be unreasonably withheld, provided that if the amendment of a
Servicing Contract is done unilaterally by an Agency, the prior written consent of the Lender is not required; provided further,
that if an amendment to the Servicing Contracts does not relate to and would not affect Servicer’s servicing of the Mortgage
Loans subject to this Agreement or the value or marketability of the Collateral, the prior written consent of the Lender is not
required, (iv) waive or allow a subservicer to waive any material default under or breach of any Servicing Contracts, or (v) take
any other action or allow a subservicer to take any other action in connection with any such Facility Documents that would impair
in any material respect the value of the interests or rights of the Borrower thereunder or that would impair in any material respect
the interests or rights of the Lender;

 

 

 

 

 

    	 	21	 

     

    

 

(f)             
change its name or the state of its organization unless the Borrower shall have given the Lender at least thirty (30) days’
prior written notice thereof and unless, prior to any such change, the Borrower shall have filed, or caused to be filed, such financing
statements or amendments as the Lender determines may be reasonably necessary to continue the perfection of the Lender’s
interest in the Collateral;

 

(g)            
appoint any subservicer with respect to any Servicing Rights pledged to the Lender pursuant to this Agreement without the
consent of the Lender, which consent shall not be unreasonably withheld, subject to the rights and interests of the Agencies;

 

(h)            
take any action or allow a subservicer to take any action that would directly or indirectly materially impair or materially
adversely affect the Borrower’s title to, or the value, of the Eligible Servicing Rights or materially increase the duties,
responsibilities or obligations of the Borrower, subject to the rights and interests of the Agencies;

 

(i)             
make any Restricted Payments following any Event of Default that has not been waived by the Lender in accordance herewith;

 

(j)             
directly or indirectly, sell, lease or otherwise transfer any Property or assets to, or otherwise acquire any Property or
assets from, or otherwise engage in any transactions with, any of its Affiliates (other than any wholly-owned Subsidiary) unless
the terms thereof are no less favorable to Lender, than those that could be obtained at the time of such transaction in an arm’s
length transaction with a Person who is not such an Affiliate; and

 

(k)            
enter into any other financing facility with a lender other than the Lender to provide for the financing of Fannie Mae Servicing
Rights and Freddie Mac Servicing Rights.

 

Section 7.03.    
Notice of Certain Occurrences. The Borrower covenants and agrees with the Lender that, so long as any Loan is outstanding
and until all Obligations have been paid in full:

 

(a)            
Defaults. Borrower shall promptly, and in any event within one (1) Business Day of knowledge thereof by a Responsible
Officer of Borrower, inform Lender in writing of any Default, Event of Default by Borrower or any other Person (other than Lender
or Lender’s Affiliates) of any material obligation under any Facility Document, or the occurrence or existence of any event
or circumstance that Borrower reasonably expects will with the passage of time become a Default, Event of Default by Borrower or
any other Person.

 

(b)            
Litigation. Borrower shall promptly inform Lender in writing of the commencement of, or any determination in, any
dispute, litigation, investigation, proceeding, sanctions or suspension between Borrower, on the one hand, and any Governmental
Authority (or any other Person, on the other, with an amount in controversy equal to or greater than $10,000,000).

 

 

 

 

 

    	 	22	 

     

    

 

(c)            
Material Adverse Effect on Collateral. As soon as possible, Borrower shall inform Lender in writing upon the Borrower
becoming aware of any default related to any Collateral which should reasonably be expected to have a Material Adverse Effect.

 

(d)            
Reserved. 

 

(e)            
Credit Default. Unless otherwise disclosed by Guarantor on Form 8-K with separate notice by Borrower to Lender of
the filing of such Form 8-K, upon, and in any event within five (5) Business Days after, Borrower shall furnish the Lender notice
of the involuntary termination, acceleration, maturity of or reduction in the amount available for borrowing under any repurchase
agreement, loan and security agreement or similar credit facility or agreement for borrowed funds entered into by a Borrower Party
and any third party to the extent that such agreement or facility, prior to the effectiveness of such termination, acceleration,
maturity or reduction in the amount available for borrowing, provides for a minimum amount available
for borrowing by such Borrower Party equal to or greater than $10,000,000.

 

(f)             
Servicing Contract Transfer. As soon as possible, Borrower shall inform Lender in
writing of the transfer, expiration without renewal, termination or other loss of all or any part of any Servicing Contract (or
the termination or replacement of the Borrower thereunder), the reason for such transfer, loss or replacement, if known to it and
the effects that such transfer, loss or replacement will have (or will likely have) on the prospects for full and timely collection
of all amounts owing to the Borrower under or in respect of the Borrower’s Servicing Contracts.

 

(g)            
Agency Notices. The Borrower shall promptly furnish the Lender copies of all notices
it receives from Fannie Mae, Freddie Mac, HUD or Ginnie Mae indicating any adverse fact or circumstance in respect of the Borrower
with respect to which adverse fact or circumstance Fannie Mae, Freddie Mac, HUD or Ginnie Mae, respectively, announces its intention
to terminate or threatens to terminate the Borrower with cause or with respect to which Fannie Mae, Freddie Mac, HUD or Ginnie
Mae, announces its intention to conduct any inspection or investigation of Borrower, or their files or facilities outside of the
ordinary course.

 

(h)            
Servicing Rights Notices. Borrower shall provide copies of (i) all notices it receives
from any Agency that materially affect the Eligible Servicing Rights, including any notice received with respect to the events
set forth in Section 6.01(n)(i) through (iv), and (ii) any demand by an Agency or an insurer for the repurchase
of or indemnification with respect to a mortgage loan and the reason for such repurchase or indemnification within three (3) Business
Days after Borrower receives notice thereof, if such demand would likely cause a Material Adverse Effect. 

 

(i)             
Servicer Rating. Borrower shall provide written notice to the Lender within two (2)
Business Days of receipt of notice of any decrease in any servicer rating of the Servicer below (i) “SQ3”, as rated
by Moody’s or (ii) “Average”, as rated by S&P.

 

(j)             
Other. Borrower shall furnish, or cause to be furnished, upon the request of Lender, such other information or reports
as the Lender may from time to time reasonably request.

 

 

 

 

 

    	 	23	 

     

    

 

(k)            
Agency Requirements. Borrower shall provide written notice of any change in any Agency’s requirements regarding
the Borrower’s or Servicer’s minimum consolidated tangible net worth or any
change in such Agency’s requirements regarding Borrower’s or Servicer’s
consolidated liquidity within five (5) Business Days after Borrower receives notice thereof.

 

(l)             
Amendment to any Servicing Contract or the Subservicing Agreement. The Borrower shall provide written notice to the
Lender within five (5) Business Days after Borrower enters into any amendment to the terms of any Servicing Contract. The Borrower
shall not allow a subservicer to enter into any amendment of the Servicing Contracts or a Subservicing Agreement that would affect
such subservicer’s servicing of the Mortgage Loans subject to this Agreement without the prior written consent of Lender
and subject to the rights and interests of the Agencies.

 

(m)          
Subservicer Termination. Borrower shall provide written notice to Lender within one (1) Business Day following the
occurrence of a Subservicer Termination Event.

 

ARTICLE
VIII

EVENTS OF DEFAULT

 

Section 8.01.    
Events of Default. The following events shall be “Events of Default”:

 

(a)            
The Borrower or Guarantor shall fail to (a) make any payment or deposit to be made by it under Article II, Section 3.01
or Section 8.02(d) when due (whether of principal or interest at stated maturity, upon acceleration, or at mandatory
prepayments due to Borrowing Base Deficiencies or otherwise) or (b) make any other payment or deposit to be made by it hereunder
when due and, solely with respect to this clause (b), such failure (other than with respect to payment of principal) shall continue
unremedied for a period of three (3) Business Days;

 

(b)            
A Borrower Party shall fail to comply with the requirements of Sections 7.01(a)(ii)(A), 7.01(a)(iii),
7.02(c), or 7.03(f) and such default shall continue unremedied for a period of one (1) Business Day; or a Borrower
Party shall otherwise fail to observe or perform any other agreement contained in this Agreement or any other Facility Document
and such failure to observe or perform shall continue unremedied for a period of five (5) Business Days following a Borrower Party
obtaining knowledge thereof;

 

(c)            
Any representation, warranty or certification made or deemed made herein or in any other Facility Document by a Borrower
Party or any certificate furnished to Lender pursuant to the provisions thereof, shall prove to have been false or misleading in
any material respect as of the time made or furnished (other than the representations and warranties set forth in Section 6.02
which shall be considered solely for the purpose of determining the MSR Value of the Eligible Servicing Rights; unless (i) Borrower
Party shall have made any such representations and warranties with knowledge that they were materially false or misleading at the
time made or (ii) any such representations and warranties have been determined by Lender in its reasonable discretion to be
materially false or misleading on a regular basis);

 

 

 

 

 

    	 	24	 

     

    

 

(d)            
(1) The failure of the Borrower to be an approved servicer under the guidelines of an Agency
with respect to which any Eligible Servicing Rights pledged under this Agreement relate, (2) the Borrower fails to service
or subservice, as applicable, in accordance with the Agency Guides and the Lender determines in its good faith discretion that
such failure may have a Material Adverse Effect, (3) the Borrower is terminated as servicer or subservicer, as applicable,
with respect to any Eligible Servicing Rights by an Agency (except if the provisions of Section 7.01(l)(iii)(a)-(c)
are met), (4) the Borrower shall at any time be terminated, revoked or suspended as servicer or subservicer, as applicable,
with respect to any whole loan servicing or subservicing rights that make up a material portion of Borrower’s servicing portfolio,
(5) Borrower shall cease to be approved by or its approval shall be revoked, suspended, rescinded, halted, eliminated, withdrawn,
annulled, repealed, voided or terminated by an Agency as an approved seller/servicer or lender, (6) all or a portion of a
Borrower Party’s or Servicer’s servicing or subservicing portfolio consisting of Agency loans is seized, (7) any
Agency shall at any time cease to accept delivery of any loan or loans from the Borrower under any program or notifies the Borrower
that the Agency shall cease accepting loan deliveries from the Borrower and (8) receipt by a Borrower Party of a notice from any
Agency indicating material breach, default or material non-compliance by such Borrower Party which the Lender reasonably determines
may entitle such Agency to terminate such Borrower Party which notice has not been rescinded or nullified within three (3) Business
Days of its receipt by such Borrower Party or such lesser time as Lender believes is necessary to protect its interest and provides
Borrower with written notice thereof, as the case may be;

 

(e)            
Any “event of default” or other material breach or failure to perform by Borrower or any of its Affiliates shall
have occurred and shall be continuing beyond the expiration of any applicable grace period under the terms of any repurchase agreement,
loan and security agreement or similar credit facility or agreement for borrowed funds entered into by the Borrower or any of its
Affiliates on the one hand and any third party (including an Affiliate of the Borrower but excluding the Lender or any Affiliate
of Lender), which relates to the Indebtedness of the Borrower or any of its Affiliates in an amount individually or in the aggregate
greater than $10,000,000;

 

(f)             
The Lender does not, or ceases to, have a first priority perfected security interest in the Collateral or any material part
thereof, subject only to the interests of the Agency with respect to the related Agency Servicing Rights and other Collateral,
other than as a result of a release of such security interest by the Lender and such default continues unremedied for a period
of one (1) Business Day after the earlier of (i) a Responsible Officer of the Borrower or the Guarantor having actual knowledge
thereof and (ii) written notice of such default from the Lender;

 

(g)            
A Change of Control of the Borrower or the Guarantor occurs;

 

(h)            
(A) Borrower ceases to be (1) a HUD approved mortgagee pursuant to Section 203 of the National Housing Act or
(2) a Fannie Mae or Freddie Mac approved servicer or HUD, Fannie Mae or Freddie Mac, as applicable, suspends, rescinds, halts,
eliminates, withdraws, annuls, repeals, voids or terminates the status of the Borrower as either (1) a HUD approved mortgagee
pursuant to Section 203 of the National Housing Act or (2) a Fannie Mae or Freddie Mac approved servicer or (B) the
Borrower receives notice that HUD, Fannie Mae or Freddie Mac may take such action set forth in clause (A);

 

 

 

 

 

    	 	25	 

     

    

 

(i)             
Any “event of default” or other material breach or failure to perform shall have occurred and shall be continuing
beyond the expiration of any applicable grace period under any instrument, agreement or contract between the Borrower or any of
its Affiliates, on the one hand, and the Lender or any of Lender’s Affiliates on the other, including, without limitation,
the Repo Agreement;

 

(j)             
Reserved;

 

(k)            
A Borrower Party shall fail to comply with the financial covenants set forth in the Repo Agreement;

 

(l)             
The failure of Borrower to maintain any Agency’s net worth requirements;

 

(m)          
Any judgment or order for the payment of money in excess of $5,000,000 shall be rendered against the Borrower or any of
its Affiliates, by a court, administrative tribunal or other body having jurisdiction over them and the same shall not be satisfied
or discharged (or provisions shall not be made for such discharge) or bonded, or a stay of execution thereof shall not be procured,
within sixty (60) days from the date of entry thereof or, if a stay of execution is procured, sixty (60) days from the date such
stay is lifted;

 

(n)            
(1) The Borrower or any of its Affiliates files a voluntary petition in bankruptcy, seeks relief under any provision of
any Insolvency Law or consents to the filing of any petition against it under any such law; (2) a proceeding shall have been
instituted by any Affiliate of the Borrower in a court having jurisdiction in the premises seeking a decree or order for relief
in respect of the Borrower or such Affiliate in an involuntary case under any applicable Insolvency Law, or for the appointment
of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of the Borrower or
such Affiliate, or for any substantial part of its Property, or for the winding-up or liquidation of its affairs, (3) a proceeding
shall have been instituted by any Person (other than an Affiliate of the Borrower) in a court having jurisdiction in the premises
seeking a decree or order for relief in respect of the Borrower or any of its Affiliates in an involuntary case under any applicable
Insolvency Law, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other
similar official of the Borrower or such Affiliate, or for any substantial part of its Property, or for the winding-up or liquidation
of its affairs and the Borrower or such Affiliate shall have failed to obtain a relief (including, without limitation, a dismissal)
or a stay of such involuntary proceeding within sixty (60) days, (4) the admission in writing by the Borrower or any of its
Affiliates of its inability to pay its debts as they become due, (5) the Borrower or any of its Affiliates consents to the
appointment of or taking possession by a custodian, receiver, conservator, trustee, liquidator, sequestrator or similar official,
of all or any part of its Property or any custodian, receiver, conservator, trustee, liquidator, sequestrator or similar official
takes possession of all or any part of the Property of the Borrower or any of its Affiliates; (6) the Borrower or any of its
Affiliates makes an assignment for the benefit of any of its creditors; or (7) the Borrower or any of its Affiliates generally
fails to pay its debts as they become due;

 

 

 

 

 

    	 	26	 

     

    

 

(o)            
Any Governmental Authority or any Person, agency or entity acting or purporting to act under Governmental Authority (including
any Agency) shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial
part of the Property of the Borrower or any of its Affiliates, or shall have taken any action to displace the management of any
of the Borrower or any of its Affiliates or to curtail the Borrower’s, or any of its Affiliates’ authority in the conduct
of its business; or

 

(p)            
The Guarantor repudiates, revokes or attempts to revoke in writing the guaranty of the Guarantor set forth in Section 11.13
of this Agreement, in whole or in part.

 

Section 8.02.    
Remedies.

 

(a)            
Optional Acceleration. Upon the occurrence of an Event of Default (other than an Event of Default described in Section 8.01(n),
the Lender may by written notice to the Borrower, terminate the Facility and declare all Loans and all other Obligations to be
immediately due and payable.

 

(b)            
Automatic Acceleration. Upon the occurrence of an Event of Default described in Section 8.01(n) the Facility
shall be automatically terminated and the Loans and all other Obligations shall be immediately due and payable upon the occurrence
of such event, without demand or notice of any kind.

 

(c)            
Remedies. Upon any acceleration of the Loans pursuant to this Section 8.02, the Lender, in addition to
all other rights and remedies under this Agreement or otherwise, shall have all other rights and remedies provided under the UCC
of each applicable jurisdiction and other applicable laws, which rights shall be cumulative. The Borrower agrees, upon the occurrence
of an Event of Default and notice from the Lender, to assemble, at its expense, all of the Collateral that is in its possession
(whether by return, repossession, or otherwise) at a place designated by the Lender. All out-of-pocket costs incurred by the Lender
in the collection of all Obligations, and the enforcement of its rights hereunder, including reasonable attorneys’ fees and
legal expenses, shall be paid out of the Collateral. Without limiting the foregoing, upon the occurrence of an Event of Default
and the acceleration of the Loans pursuant to this Section 8.02, the Lender may, to the fullest extent permitted by
applicable law, without notice, advertisement, hearing or process of law of any kind, (i) enter upon any premises where any
of the Collateral which is in the possession of the Borrower (whether by return, repossession, or otherwise) may be located and
take possession of and remove such Collateral, (ii) sell any or all of such Collateral, free of all rights and claims of the
Borrower therein and thereto, at any public or private sale, and (iii) bid for and purchase any or all of such Collateral
at any such sale. Any such sale shall be conducted in a commercially reasonable manner and in accordance with applicable law. The
Borrower hereby expressly waives, to the fullest extent permitted by applicable law, any and all notices, advertisements, hearings
or process of law in connection with the exercise by the Lender of any of its rights and remedies upon the occurrence of an Event
of Default. Each of the Lender and the Borrower shall have the right (but not the obligation) to bid for and purchase any or all
Collateral at any public or private sale. The Borrower hereby agrees that in any sale of any of the Collateral, the Lender is hereby
authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary
in order to avoid any violation of applicable law (including, without limitation, compliance with such procedures as may restrict
the number of prospective bidders and purchasers, require that such prospective bidders and purchasers have certain qualifications,
and restrict such prospective bidders and purchasers to Persons who will represent and agree that they are purchasing for their
own account for investment and not with a view to the distribution or resale of such Collateral), or in order to obtain any required
approval of the sale or of the purchaser by any Governmental Authority, and the Borrower further agrees that such compliance shall
not result in such sale being considered or deemed not to have been made in a commercially reasonable manner. The Lender shall
not be liable for any sale, private or public, conducted in accordance with this Section 8.02(c). If an Event of Default
occurs, and upon acceleration of the Loans hereunder, the Loans and all other Obligations shall be immediately due and payable,
and collections on the Eligible Servicing Rights and proceeds of sales and securitizations of Eligible Servicing Rights, and other
Collateral will be used to pay the Obligations.

 

 

 

 

 

    	 	27	 

     

    

 

(d)            
In the event that Borrower receives a notice from an Agency indicating a material breach, material default or material non-compliance
by the Borrower that the Lender reasonably determines may entitle such Agency to terminate the Borrower, which breach, default
or non-compliance has not been satisfactorily cured or remedied within ten (10) Business Days of the receipt by the Borrower of
such notice, or such lesser time as Lender believes is necessary to protect its interest and provides Borrower with written notice
thereof, as the case may be, the Lender may by written notice to the Borrower, terminate the Facility and declare all Loans and
all other Obligations to be immediately due and payable.

 

Section 8.03.    
Collection Account; Application of Proceeds.

 

(a)            
Collection Account. Prior to the Closing Date, the Borrower and the Lender shall have established at Bank, in the
name of the Lender a non-interest bearing segregated special purpose trust account (such account being herein called the “Collection
Account”). The Lender will maintain the Collection Account only with a bank acceptable to the Lender. The Borrower shall
or shall cause the Servicer to deposit all Collections received by it into the Collection
Account within two (2) Business Days of receipt thereof.

 

(b)            
Distributions Prior to an Event of Default. So long as no Event of Default has occurred and is continuing hereunder,
the Borrower may withdraw amounts on deposit in the Collection Account at any time.

 

(c)            
Distributions After an Event of Default. The Lender may, at any time and without notice to, or consent from, the
Borrower, transfer, or direct the transfer of, funds from the Collection Account to satisfy the Borrower’s obligations under
the Facility Documents if an Event of Default shall have occurred and be continuing.

 

(d)            
On each Business Day during which an Event of Default has occurred and is continuing hereunder, the Lender shall apply Collections
in the following order to pay:

 

(i)             
to the Lender, any fees due pursuant to the terms hereof;

 

(ii)           
to the Lender or any Indemnified Party an amount equal to any other amounts (including the Outstanding Aggregate Loan Amount)
then due to such Persons pursuant to this Agreement that have not been paid by the Borrower (and to the extent that there are insufficient
funds to pay all of the foregoing amounts, such amount shall be distributed to the foregoing parties, pro rata in accordance with
the amounts due to such parties); and

 

(iii)         
any remaining amounts to the Borrower by transferring such amount to the account specified in writing by the Borrower.

 

 

 

 

 

    	 	28	 

     

    

 

ARTICLE
IX

ASSIGNMENT

 

Section 9.01.    
Restrictions on Assignments. The Borrower shall not assign its rights hereunder or any interest herein without the
prior written consent of the Lender. The Lender may assign any or all of its rights and, with the Borrower’s prior written
consent (not to be unreasonably withheld or delayed), its obligations, under this Agreement, under any Loan pursuant to this Agreement
or under the other Facility Documents, to any other entity; provided that notwithstanding anything herein to the contrary,
Borrower shall not be subject to any increased costs or expenses as a result of such assignment made without Borrower’s
consent.

 

Section 9.02.    
Evidence of Assignment; Endorsement on Note. The Lender hereby agrees that it shall endorse the Note to reflect any
assignments made pursuant to this Article IX or otherwise.

 

Section 9.03.    
Rights of Assignee. Upon the assignment the Lender of all of its rights and obligations hereunder, under the Note
and under the other Facility Documents to an assignee in accordance with Section 9.01, such assignee shall have all
such rights and obligations of the Lender as set forth in such assignment or delegation, as applicable, and all references to the
Lender in this Agreement or any Facility Document shall be deemed to apply to such assignee to the extent of such interest. If
any interest in any Facility Document is transferred to any assignee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause such assignee, concurrently with the effectiveness
of such transfer, to comply with the provisions of Section 3.02.

 

Section 9.04.    
Permitted Participants; Effect. The Lender may, in the ordinary course of its business and in accordance with applicable
law, at any time (and from time to time) sell to one or more banks or other entities (each a “Participant”)
participating interests in any Loan owing to the Lender, any Note held by the Lender, any Available Facility Amount of the Lender,
or any other interest of the Lender under this Agreement or the other Facility Documents. In the event of any such sale by the
Lender of a participating interest to a Participant, (i) the Lender’s obligations hereunder and under the other Facility
Documents shall remain unchanged; (ii) the Lender shall remain solely responsible to the Borrower for the performance of such
obligations; and (iii) the Lender shall remain the owner of its Loans and the holder of any Note issued to it in evidence
thereof for the purposes under the Loan Documents. All amounts payable by the Borrower under this Agreement shall be determined
as if the Lender had not sold such participating interests. The Borrower and the Lender shall continue to deal solely and directly
with each other in connection with the Lender’s rights and obligations under the Facility Documents.

 

Section 9.05.    
Voting Rights of Participants. The Lender shall retain the sole right to approve, without the consent of any Participant,
any amendment, modification or waiver of any provision of the Facility Documents other than any amendment, modification, or waiver
with respect to any Loan or Available Facility Amount in which such Participant has an interest which forgives principal, interest,
or fees or reduces the interest rate or fees payable with respect to any such Loan or Available Facility Amount, extends the Wind
Down Date, postpones any date fixed for any regularly scheduled payment of principal of, or interest or fees on, any such Loan
or Available Facility Amount or releases all or substantially all of the Collateral (other than as expressly permitted pursuant
to the Facility Documents).

 

 

 

 

 

    	 	29	 

     

    

 

ARTICLE
X

INDEMNIFICATION

 

Section 10.01. 
Indemnities by the Borrower. Without limiting any other rights which any such Person may have hereunder or under
applicable law, the Borrower hereby agrees to indemnify, the Lender, its Affiliates, successors, permitted transferees and assigns
and all officers, directors, shareholders, controlling persons, employees and agents of any of the foregoing (each an “Indemnified
Party”), forthwith on demand, from and against any and all damages, losses, claims, liabilities and related costs and
expenses, including attorneys’ fees and disbursements (all of the foregoing being collectively referred to as “Indemnified
Amounts”) awarded against or incurred by any of them arising out of or as a result of this Agreement, the other Facility
Documents, or any transaction contemplated hereby or thereby excluding, however, (a) Indemnified Amounts to the extent a court
of competent jurisdiction determines that they resulted from gross negligence, bad faith or willful misconduct on the part of such
Indemnified Party, (b) in the event that the Lender has assigned its rights or delegated its obligations in respect of this
Agreement, and the Indemnified Amounts with respect to such assignee exceed the Indemnified Amounts that would otherwise have been
payable by the Borrower to the Lender, the amount of such excess, (c) taxes expressly excluded from Taxes in Section 3.02(a)
above (other than any such Taxes that are incremental and arise solely by reason of a breach by the Borrower of its obligations
under this Agreement), and (d) any lost profits or indirect, exemplary, punitive or consequential damages of any Indemnified
Party. In any suit, proceeding or action brought by the Lender in connection with any Collateral for any sum owing thereunder,
or to enforce any provisions of any Collateral, the Borrower will save, indemnify and hold the Lender harmless from and against
all expense, loss or damage suffered by reason of any defense, set-off, counterclaim, recoupment or reduction or liability whatsoever
of the account debtor or obligor thereunder, arising out of a breach by the Borrower of any obligation thereunder or arising out
of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors
from the Borrower. The Borrower also agrees to reimburse the Lender as and when billed by the Lender for all the Lender’s
out-of-pocket costs and expenses incurred in connection with the enforcement or the preservation of the Lender’s rights under
this Agreement, the Note, any other Facility Document or any transaction contemplated hereby or thereby, including without limitation
the fees and disbursements of its counsel. The Borrower hereby acknowledges that, notwithstanding the fact that the Note is secured
by the Collateral, the obligation of the Borrower under the Note is a recourse obligation of the Borrower. Under no circumstances
shall any Indemnified Party be liable to the Borrower for any lost profits or indirect, exemplary, punitive or consequential damages.

 

Section 10.02. 
General Provisions. If for any reason the indemnification provided above in Section 10.01 (and subject
to the limitations on indemnification contained therein) is unavailable to an Indemnified Party or is insufficient to hold an Indemnified
Party harmless on the basis of public policy, then the Borrower shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative
benefits received by such Indemnified Party on the one hand and the Borrower on the other hand but also the relative fault of such
Indemnified Party as well as any other relevant equitable considerations.

 

The provisions of this
Article X shall survive the termination of this Agreement and the payment of the Obligations.

 

ARTICLE
XI

MISCELLANEOUS

 

Section 11.01. 
Amendments, Etc. Neither this Agreement nor any provision hereof may be amended, supplemented, or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower and the Lender.

 

Section 11.02. 
Notices, Etc. Except as provided herein, all notices required or permitted by this Agreement shall be in writing
(including without limitation by Electronic Transmission, email or facsimile) and shall be effective and deemed delivered only
when received by the party to which it is sent; provided that notices of Events of Default and exercise of remedies or under Section 8.02
shall be sent via overnight mail and by electronic transmission. Any such notice shall be sent to a party at the address, electronic
mail or facsimile transmission number set forth on Schedule 11.02 or to such other address, e-mail address or facsimile
number as either party may notify to the others in writing from time to time.

 

Section 11.03. 
No Waiver; Remedies. No failure on the part of the Lender to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

 

Section 11.04. 
Binding Effect; Assignability. This Agreement shall be binding upon and inure to the benefit of the Borrower and
the Lender, and their respective successors and assigns, provided, however, that nothing in the foregoing shall be
deemed to authorize any assignment not permitted in Section 9.01.

 

    	 	30	 

     

    

 

Section 11.05. 
GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, WHICH BY ITS TERMS APPLIES TO THIS AGREEMENT). EACH PARTY HERETO HEREBY SUBMITS TO THE NON-EXCLUSIVE GENERAL JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT
IN SUCH A COURT IN THE BOROUGH OF MANHATTAN AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM. EACH PARTY HERETO HEREBY CONSENTS TO PROCESS BEING SERVED IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT, OR ANY DOCUMENT DELIVERED PURSUANT HERETO BY THE MAILING OF A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO ITS RESPECTIVE ADDRESS SPECIFIED AT THE TIME FOR NOTICES UNDER THIS AGREEMENT OR
TO ANY OTHER ADDRESS OF WHICH IT SHALL HAVE GIVEN WRITTEN OR ELECTRONIC NOTICE TO THE OTHER PARTIES. THE FOREGOING SHALL NOT LIMIT
THE ABILITY OF ANY PARTY HERETO TO BRING SUIT IN THE COURTS OF ANY OTHER JURISDICTION.

 

EACH OF THE PARTIES
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT.

 

Section 11.06. 
Entire Agreement. This Agreement and the Facility Documents embodies the entire agreement and understanding of the
parties hereto and supersedes any and all prior agreements, arrangements and understanding relating to the matters provided for
herein.

 

Section 11.07. 
Acknowledgement. The Borrower hereby acknowledges that:

 

(a)            
it has been advised by counsel in the negotiation, execution and delivery of this Agreement, the Note and the other Facility
Documents to which it is a party;

 

(b)            
the Lender has no fiduciary relationship to the Borrower, and the relationship between the Borrower and the Lender is solely
that of debtor and creditor; and

 

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

 

 

 

 

 

    	 	31	 

     

    

 

Section 11.08. 
Captions and Cross References. The various captions (including, without limitation, the table of contents) in this
Agreement are included for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement.
References in this Agreement to any underscored Section or Exhibit are to such Section or Exhibit of this Agreement,
as the case may be.

 

Section 11.09. 
Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement.

 

Section 11.10. 
Confidentiality. Each party hereto agrees for the benefit of the other party that it will hold any confidential information
received from the other party pursuant to this Agreement or any other Facility Document in strict confidence, as long as such information
remains confidential except for disclosure to (i) its Affiliates, (ii) its legal counsel, accountants, and other professional
advisors or to a permitted assignee or participant, (iii) regulatory officials, (iv) any Person as requested pursuant
to or as required by law, regulation, legal process, or the rules and regulations of any Governmental Authority or stock exchange,
(v) any Person in connection with any legal proceeding to which it is a party, (vi) rating agencies if requested or required
by such agencies in connection with a rating, and (vii) any Agency. The parties agree that this Agreement is confidential
information of the Lender. The Lender also agrees that it will comply with all applicable securities laws with respect to any non-public
information of the type referenced in the preceding sentence in its possession. This Section 11.10 shall survive termination
of this Agreement.

 

Section 11.11. 
Survival. This Agreement shall remain in effect until the Termination Date; provided, however, that no such termination
shall affect Borrower’s Obligations to Lender at the time of such termination. The obligations of the Borrower under Sections
3.02, 10.01 and 11.10 hereof shall survive the repayment of the Loans and the termination of this Agreement.
In addition, each representation and warranty made, or deemed to be made by a request for a borrowing, herein or pursuant hereto
shall survive the making of such representation and warranty, and the Lender shall not be deemed to have waived, by reason of making
any Loan, any Default that may arise by reason of such representation or warranty proving to have been false or misleading, notwithstanding
that the Lender may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading
at the time such Loan was made

 

Section 11.12. 
 Set-Off. In addition to any rights and remedies of the Lender provided by this Agreement and by law, the Lender
shall have the right, without prior notice to Borrower, any such notice being expressly waived by Borrower to the extent permitted
by applicable law, upon any amount becoming due and payable by Borrower hereunder (whether at the stated maturity, by acceleration
or otherwise) to set-off and appropriate and apply against such amount any and all Property and 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 the Lender or any Affiliate
thereof to or for the credit or the account of Borrower. Lender may set-off cash, the proceeds of the liquidation of any Collateral
and all other sums or obligations owed by the Lender or its Affiliates to Borrower against all of Borrower’s or any Repurchase
Party's obligations to the Lender or its Affiliates under this Loan Agreement with respect to Borrower or the Repo Agreement with
respect to such Repurchase Party or under any other agreement between the parties or between Borrower or any Repurchase Party and
any affiliate of the Lender, or otherwise whether or not such obligations are then due, without prejudice to the Lender’s
or its Affiliate’s right to recover any deficiency. Lender agrees promptly to notify Borrower and each Repurchase Party after
any such set-off and application made by the Lender; provided that the failure to give such notice shall not affect the validity
of such set-off and application.

 

 

 

 

 

    	 	32	 

     

    

 

Section 11.13. 
Guaranty.

 

(a)            
Subject to Section 11.13(h) below, Guarantor hereby unconditionally and irrevocably guarantees to Lender the prompt payment
of the Guaranteed Obligations in full when due (whether at the stated maturity, by acceleration or otherwise). Any such payment
shall be made at such place and in the same currency as such relevant Guaranteed Obligation is payable. This guaranty is a guaranty
of payment and not solely of collection and is a continuing guaranty and shall apply to all Guaranteed Obligations whenever arising.

 

(b)            
The obligations of the Guarantor hereunder are absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of this Agreement, or any other agreement or instrument referred to herein, to the fullest extent
permitted by Applicable Law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor. Guarantor agrees that this guaranty may be enforced by Lender without the necessity
at any time of resorting to or exhausting any security or collateral and without the necessity at any time of having recourse to
this Agreement or any other Facility Document or any collateral, if any, hereafter securing the Guaranteed Obligations or otherwise
and Guarantor hereby waives the right to require Lender to proceed against any other Person or to require the Lender to pursue
any other remedy or enforce any other right. Guarantor further agrees that nothing contained herein shall prevent Lender from suing
in any jurisdiction on this Agreement or any other Facility Document or foreclosing its security interest in or Lien on any collateral,
if any, securing the Guaranteed Obligations or from exercising any other rights available to it under this Agreement or any instrument
of security, if any, and the exercise of any of the aforesaid rights and the completion of any foreclosure proceedings shall not
constitute a discharge of Guarantor’s obligations hereunder; it being the purpose and intent of Guarantor that its obligations
hereunder shall be absolute, independent and unconditional under any and all circumstances. Neither Guarantor’s obligations
under this guaranty nor any remedy for the enforcement thereof shall be impaired, modified, changed or released in any manner whatsoever
by reason of the application of the laws of any foreign jurisdiction. Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance of by Lender upon this guaranty or
acceptance of this guaranty. The Guaranteed 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. All dealings between Borrower and Guarantor,
on the one hand, and Lender, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance
upon this guaranty.

 

(c)            
Guarantor agrees that (a) all or any part of the security which hereafter may be held for the Guaranteed Obligations, if
any, may be exchanged, compromised or surrendered from time to time; (b) the Lender shall not have any obligation to protect, perfect,
secure or insure any such security interests or Liens which hereafter may be held, if any, for the Guaranteed Obligations or the
properties subject thereto; (c) the time or place of payment of the Guaranteed Obligations may be changed or extended, in whole
or in part, to a time certain or otherwise, and may be renewed, increased or accelerated, in whole or in part; (d) Borrower and
any other party liable for payment under this Agreement may be granted indulgences generally; (e) any of the provisions of this
Agreement or any other Facility Document may be modified, amended or waived; and (f) any deposit balance for the credit of Borrower
or any other party liable for the payment of the Guaranteed Obligations or liable upon any security therefor may be released, in
whole or in part, at, before or after the stated, extended or accelerated maturity of the Guaranteed Obligations, all without notice
to or further assent by Guarantor, which shall remain bound thereon, notwithstanding any such exchange, compromise, surrender,
extension, renewal, acceleration, modification, indulgence or release.

 

 

 

 

 

    	 	33	 

     

    

 

(d)            
Guarantor expressly waives to the fullest extent permitted by Applicable Law: (a) notice of acceptance of this guaranty
by the Lender and of all transfers of funds to Borrower by Lender; (b) presentment and demand for payment or performance of any
of the Guaranteed Obligations; (c) protest and notice of dishonor or of default (except as specifically required in this Agreement)
with respect to the Guaranteed Obligations or with respect to any security therefor; (d) notice of Lender obtaining, amending,
substituting for, releasing, waiving or modifying any Lien, if any, hereafter securing the Guaranteed Obligations, or Lender’s
subordinating, compromising, discharging or releasing such Liens, if any; (e) all other notices to which Borrower might otherwise
be entitled in connection with the guaranty evidenced by this Section 11.13; and (f) demand for payment under this guaranty.

 

(e)            
The obligations of Guarantor under this Section 11.13 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Person in respect of the Guaranteed Obligations is rescinded or must be otherwise restored
by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise,
and Guarantor agrees that it will indemnify Lender on demand for all reasonable and documented costs and out-of-pocket expenses
(including, without limitation, reasonable and documented fees and expenses of counsel) incurred by Lender in connection with such
rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.

 

(f)             
Guarantor agrees that, as between Guarantor, on the one hand, and Lender, on the other hand, the Guaranteed Obligations
may be declared to be forthwith due and payable as provided in Section 8.02 (and shall be deemed to have become automatically due
and payable in the circumstances provided in Section 8.02) notwithstanding any stay, injunction or other prohibition preventing
such declaration (or preventing such Guaranteed Obligations from becoming automatically due and payable) as against any other Person
and that, in the event of such declaration (or such Guaranteed Obligations being deemed to have become automatically due and payable),
such Guaranteed Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by Guarantor.

 

(g)            
Guarantor hereby agrees that until the payment and satisfaction in full of all Guaranteed Obligations and the expiration
and termination of the this Agreement it shall not exercise any right or remedy arising by reason of any performance by it of its
guarantee in Section 11.13(a), whether by subrogation or otherwise, against Borrower or any security for any of the Guaranteed
Obligations.

 

(h)            
Notwithstanding any provision to the contrary contained herein, to the extent the obligations of Guarantor shall be adjudicated
to be invalid or unenforceable for any reason (including, without limitation, because of any Applicable Law relating to fraudulent
conveyances or transfers) then the obligations of Guarantor hereunder shall be limited to the maximum amount that is permissible
under Applicable Law (as now or hereinafter in effect).

 

 

 

 

 

    	 	34	 

     

    

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	35	 

     

    

 

IN WITNESS WHEREOF,
the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first
above written.

 

	 	PennyMac Loan Services, LLC, as

                    Borrower and Servicer

	 	 
	 	By:	/s/ Pamela Marsh
	 	Name:

        Title:
	Pamela Marsh
Executive Vice President,
Treasurer

 

 

	 	PRIVATE NATIONAL MORTGAGE

                    ACCEPTANCE COMPANY, LLC, as Guarantor

	 	 
	 	By:	/s/ Pamela Marsh
	 	Name:

        Title:
	Pamela Marsh
Executive Vice President,
Treasurer

 

 

	 	BARCLAYS BANK PLC, as Lender

	 	 
	 	By:	/s/ Ellen Kiernan
	 	Name:

        Title:
	Ellen Kiernan
Director

 

 

 

 

 

 

    	 	36	 

     

    

 

SCHEDULE I

 

DEFINITIONS

 

1.1Definitions.
As used in this Agreement the following terms have the meanings as indicated:

 

“Acknowledgement
Agreement” means an Acknowledgement Agreement, by and among an Agency, the Borrower and the Lender as secured party,
pursuant to which the Agency acknowledges the security interest granted pursuant to this Agreement of the Lender in the Servicing
Rights related to pools of mortgage loans securitized with such Agency, together with any amendments and addenda thereto.

 

“Advance”
means any P&I Advance, T&I Advance or Corporate Advance.

 

“Advance Rate”
has the meaning assigned to it in the Pricing Side Letter.

 

“Affiliate”
means, with respect to any Person, any other Person which, directly or indirectly, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, “control” (together with the correlative meanings of “controlled
by” and “under common control with”) means possession, directly or indirectly, of the power (a) to vote
20% or more of the securities (on a fully diluted basis) having ordinary voting power for the directors or managing general partners
(or their equivalent) of such Person, or (b) to direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by contract, or otherwise; provided, however, that in respect of Borrower,
Servicer, or Guarantor the term “Affiliate” shall include only Private National Mortgage Acceptance Company, LLC and
its wholly owned subsidiaries.

 

“Agreement”
has the meaning set forth in the preamble.

 

“Agency”
means Fannie Mae, Freddie Mac or Ginnie Mae.

 

“Agency Collateral
Account” means the account established by the Borrower for the benefit of Fannie Mae or Freddie Mac, as applicable with
a bank specified by Fannie Mae or Freddie Mac, as applicable.

 

“Agency Guide”
with respect to (1) Fannie Mae, the Fannie Mae Selling Guide and the Fannie Mae Servicing Guide, as may be amended from time
to time, (2) Freddie Mac, the Freddie Mac Seller/Servicer Guide, as may be amended or modified from time to time and (3) with
respect to Ginnie Mae, the Ginnie Mae MBS Guide, as may be amended from time to time, and in all cases, any other applicable guides
published by such Agency and any related announcements, directives and correspondence issued by such Agency.

 

“Agency Servicing
Rights” means all Servicing Rights with respect to the Agencies.

 

“Ancillary
Income” means all money which is due and payable in connection with each Mortgage Loan other than the Servicing Fee and
specifically including, without limitation, late charge fees, assignment transfer fees, insufficient funds check charges, amortization
schedule fees, interest from escrow accounts and all other incidental fees and charges and any Float Benefit, in each case, to
the extent such amounts are allocable to a Mortgage Loan, specifically excluding Excluded Collateral.

 

 

 

 

 

    	 	Schedule I - 1	 

     

    

 

“Applicable
Law” means as to any Person, any law, treaty, rule or regulation (including the Investment Company Act of 1940, as amended)
or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject.

 

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

 

“Available
Facility Amount” means $20,000,000; provided however that at no time may the Outstanding Aggregate Loan Amount exceed:

 

(A) the Borrowing
Base; or

 

(B) the amount
that, when added to the aggregate principal amounts outstanding under the Repo Agreement, would equal the Maximum Aggregate Purchase
Price (as such term is defined in the Repo Agreement).

 

“Available
Loan Amount” means, on any Business Day, an amount equal to the lesser of (a) (i) the then current Available
Facility Amount minus (ii) the Outstanding Aggregate Loan Amount, and (b) the Borrowing Base (giving effect to all Collateral
to be pledged hereunder on such Business Day).

 

“Bank”
means City National Bank.

 

“Board”
means the Board of Governors of the Federal Reserve System of the United States of America.

 

“Borrower”
has the meaning set forth in the preamble.

 

“Borrower
Funding Request” means the request to fund a Loan on any Funding Date, substantially in the form of Exhibit 2.03,
delivered in accordance with Section 2.03(a).

 

“Borrower
Party” means each of Borrower and Guarantor.

 

“Borrowing
Base” means, as of any date of determination, an amount equal to the aggregate Collateral Value of all Collateral for
Loans that have been and remain pledged to the Lender hereunder.

 

“Borrowing
Base Deficiency” has the meaning set forth in Section 2.08(b).

 

“Borrowing
Base Report” means the borrowing base report, substantially in a format agreed upon between Borrower and Lender, delivered
by the Lender in accordance with Section 2.04(b).

 

“Borrowing
Base Shortfall Day” has the meaning set forth in Section 2.08(b).

 

 

 

 

 

    	 	Schedule I - 2	 

     

    

 

“Business
Day” means any day other than (i) a Saturday or Sunday or (ii) a day upon which the New York Stock Exchange
or the Federal Reserve Bank of New York is closed.

 

“Capital Stock”
means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests, including, without limitation, limited and general partnership interests, in a person
(other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

 

“Change in
Law” means a change in any Applicable Law applicable to the Facility Documents that would have an adverse effect, as
determined by Lender in its sole discretion, on Lender’s exercise of remedies following an Event of Default.

 

“Change of
Control” (i) for the Borrower (a) any transaction or event as a result of which the Guarantor ceases to own, beneficially
or of record, more than 50% of the stock of Borrower, (b) the sale, transfer, or other disposition of all or substantially all
of Borrower’s assets (excluding any such action taken in connection with any securitization transaction or routine sales
of Mortgage Loans), or (c) the consummation of a merger or consolidation of Borrower 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 equity outstanding
immediately after such merger, consolidation or such other reorganization is owned by persons who were not equityholders of the
Borrower immediately prior to such merger, consolidation or other reorganization and (ii) for the Guarantor (a) the sale, transfer,
or other disposition of all or substantially all of Guarantor’s assets (excluding any such action taken in connection with
any securitization transaction or routine sales of Mortgage Loans) or (b) the consummation of a merger or consolidation of Guarantor
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 equity outstanding immediately after such merger, consolidation or such other reorganization is owned
by persons who were not equityholders of the Guarantor immediately prior to such merger, consolidation or other reorganization.

 

“Closing Date”
means the date on which all of the conditions set out in Section 5.01 are satisfied.

 

“Collateral”
has the meaning set forth in Section 4.01.

 

“Collateral
Reporting Date” has the meaning set forth in Section 2.03(b).

 

“Collateral
Value” means, for purposes of determining the value of the Borrowing Base from time to time, with respect to the Eligible
Servicing Rights, (a) (i) the Advance Rate for Eligible Servicing Rights, multiplied by (ii) the MSR Value of the Eligible
Servicing Rights as determined by the Lender in good faith, minus (b) any outstanding repurchase and indemnity obligations
under the related Servicing Contract that are due and payable by the Borrower, but have not yet been paid by the Borrower.

 

“Collection
Account” means the account established by Borrower in accordance with Section 8.03(a).

 

 

 

 

 

    	 	Schedule I - 3	 

     

    

 

“Collection
Account Control Agreement” means that certain Collection Account Control Agreement, to be entered into by and among the
Borrower, the Lender and Bank, with respect to the Collection Account, in form and substance acceptable to the Lender, as the same
may be amended, modified or supplemented from time to time.

 

“Collections”
means any Servicing Fees, any excess servicing or subservicing rights or retained yield, and any Ancillary Income that the Borrower
as servicer is entitled to receive pursuant to the Servicing Contracts.

 

“Compliance
Certificate” means a certificate substantially in the form of Exhibit 7.01 hereto or other form reasonably acceptable
to the Lender.

 

“Corporate
Advance” means, collectively, (a) any advance (other than those described in clause (b) below) made by the
Borrower as servicer pursuant to the Servicing Contracts to inspect, protect, preserve or repair properties that secure defaulted
Mortgage Loans or that have been acquired through foreclosure or deed in lieu of foreclosure or other similar action pending disposition
thereof, or for similar or related purposes, including, but not limited to, necessary legal fees and costs expended or incurred
by the Borrower as servicer in connection with foreclosure, bankruptcy, eviction or litigation actions with or involving Mortgagors
on defaulted Mortgage Loans, as well as costs to obtain clear title to such a property, to protect the priority of the lien created
by a Mortgage Loan on such a property, and to dispose of properties taken through foreclosure or by deed in lieu thereof or other
similar action, (b) any advance made by the Borrower as servicer pursuant to the Servicing Contracts to foreclose or undertake
similar action with respect to a Mortgage Loan, and (c) any other out of pocket expenses incurred by the Borrower as servicer
pursuant to the Servicing Contracts (including, for example, costs and expenses incurred in loss mitigation efforts and in processing
assumptions of Mortgage Loans), to the extent such advances are reimbursable pursuant to the Servicing Contracts.

 

“Custodial
File” means with respect to any Mortgage Loan, a file pertaining to such Mortgage Loan being held by the Custodian that
contains the mortgage documents pertaining to such Mortgage Loan.

 

“Custodian”
means any financial institution that holds documents for any of the Mortgage Loans on behalf of an Agency.

 

“Default”
means an Event of Default or an Unmatured Event of Default.

 

“Default Rate”
means, with respect to any Loan for any Interest Period, and any late payment of fees or other amounts due hereunder, the LIBOR
Rate for the related Interest Period (or for all successive Interest Periods during which such fees or other amounts were delinquent),
plus 5.0% per annum.

 

“Disposition”
means, with respect to any Person, any sale or other whole or partial conveyance of all or any portion of such Person’s Property,
or any direct or indirect interest therein to a third party, including the granting of any purchase options, rights of first refusal,
rights of first offer or similar rights in respect of any portion of such assets or the subjecting of any portion of such assets
to restrictions on transfer.

 

 

 

 

 

    	 	Schedule I - 4	 

     

    

 

“Dollars”
or “$” means dollars in lawful money of the United States of America.

 

“Electronic
File” means any electronic file, in form and substance reasonably acceptable to the Lender and containing the information
agreed to between the Borrower and the Lender; delivered by the Borrower to the Lender on a Funding Notice Date or Collateral Reporting
Date pursuant to Section 2.03(a) or 2.03(b) and reflecting those Mortgage Loans related to Pledged Servicing
Rights as of the close of business on such Funding Notice Date; provided, however, that with regard to the Electronic
File delivered in connection with a Collateral Reporting Date, such Electronic File shall reflect information as of the close of
business on the last Business Day of the preceding calendar month.

 

“Eligible
Seller” means a Person who sold Mortgage Loans to the Borrower, which Mortgage Loans the Borrower subsequently resold
to another party or securitized, and retained the servicing rights and obligations with respect thereto under the Servicing Contracts.

 

“Eligible
Servicing Rights” means, mortgage servicing rights owned by Borrower that are not subject to the Fannie Mae Subordination
of Interest Agreement or the Freddie Mac Acknowledgment Agreement for Excess Spread Amounts and are either (i) appurtenant
to mortgage loans that have been sold to Fannie Mae or Freddie Mac or otherwise delivered to Fannie Mae or Freddie Mac for inclusion
in a securitization by Fannie Mae or Freddie Mac, and are serviced by Borrower, (ii) appurtenant to mortgage loans (1) which
were, but are no longer, pooled in securitizations by Fannie Mae or Freddie Mac, (2) which are currently owned by Fannie Mae
or Freddie Mac in portfolio and (3) for which Borrower is acting as the servicer, (iii) appurtenant to mortgage loans
owned by Borrower and not subject to any lien or other encumbrance, which mortgage loans are eligible for pooling with Fannie Mae
or Freddie Mac, or (iv) appurtenant to mortgage loans that are serviced by the Borrower and are either securitized in a non-agency
securitization with respect to which the Lender has approved the related PSA or held in whole loan format and either owned by the
Borrower or servicing pursuant to a servicing agreement approved by the Lender; provided that all such mortgage loans shall be
“qualified mortgages” or otherwise approved by the Lender for inclusion. In addition, all Eligible Servicing Rights
must comply with the eligibility criteria set out in Schedule 6.02.

 

“Event of
Default” has the meaning set forth in Section 8.01.

 

“Excluded
Collateral” means (i) all right, title and interest of the Borrower, whether now owned or hereafter acquired, in, to
and under its rights to reimbursement for all Advances made under the Servicing Contracts and (ii) mortgage servicing rights owned
by Borrower that are subject to the terms of the Fannie Mae Subordination of Interest Agreement and the Freddie Mac Acknowledgment
Agreement for Excess Spread Amounts.

 

“Facility”
means the loan facility provided to the Borrower by the Lender pursuant to this Agreement.

 

“Facility
Documents” means this Agreement, the Note, the Collection Account Control Agreement, the Pricing Side Letter, the Servicing
Contracts, each Acknowledgement Agreement, the Subservicer Acknowledgment Letter, any Subservicing Agreement, the Master Netting
Agreement and all notices, certificates, financing statements and other documents to be executed and delivered by the Borrower
in connection with the transactions contemplated by this Agreement. For the avoidance of doubt, the Program Documents (as defined
in the Repo Agreement) shall not be deemed Facility Documents.

 

 

 

 

 

    	 	Schedule I - 5	 

     

    

 

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

 

“Fannie Mae
Acknowledgment Agreement” means any Acknowledgment Agreement in respect of any Fannie Mae Servicing Rights.

 

“Fannie Mae
Servicing Contract” means the Fannie Mae Mortgage Selling and Servicing Contract, the Fannie Mae Servicing Guide and
the related supplemental servicing instructions or directives provided by Fannie Mae and the related master agreements (including
applicable MBS pool purchase contracts and variances) between Fannie Mae and the Borrower.

 

“Fannie Mae
Servicing Rights” means all Servicing Rights with respect to mortgage loans serviced by the Borrower for Fannie Mae.

 

“Fannie Mae
Subordination of Interest Agreement” means the Amended and Restated Subordination of Interest Agreement dated as of March
28, 2014 by and among the Borrower, PennyMac Operating Partnership L.P., PennyMac Holdings, LLC and Fannie Mae.

 

“Float Benefit”
means the net economic benefit resulting from investments of funds representing escrow and custodial deposits held for the account
of the servicer or subservicer, or the related Agency relating to the Mortgage Loans.

 

“Foreign Lender”
means any successor or assignee of Lender that is organized under the laws of a jurisdiction other than that in which the Borrower
is resident for tax purposes. For purposes of this definition, the United States of America, each State and Commonwealth thereof
and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

“Freddie Mac”
means The Federal Home Loan Mortgage Corporation, also known as Freddie Mac, or any successor thereto.

 

“Freddie Mac
Acknowledgment Agreement” means any Acknowledgment Agreement in respect of any Freddie Mac Servicing Rights, which shall
initially include single family mortgages which are serviced by the Borrower for Freddie Mac under the Freddie Mac Servicing Contract
with respect to the following Seller/Servicer Number: 153780, and for the avoidance of doubt, shall not include the Freddie Mac
Acknowledgment Agreement for Excess Spread Amounts.

 

“Freddie Mac
Acknowledgment Agreement for Excess Spread Amounts” means the Acknowledgment Agreement dated as of December 19, 2014
by and among Freddie Mac, the Borrower, PennyMac Operating Partnership, L.P. and PennyMac Holdings, LLC.

 

“Freddie Mac
Servicing Contract” means the unitary indivisible master servicing contract described in the Freddie Mac Single-Family
Seller/Servicer Guide and entered into by and between Freddie Mac and the Borrower.

 

 

 

 

 

    	 	Schedule I - 6	 

     

    

 

“Freddie Mac
Servicing Rights” means all Servicing Rights with respect to mortgage loans serviced by the Borrower for Freddie Mac.

 

“Funding Date”
means the date of any Loan advance hereunder as provided in Section 2.03 hereof.

 

“Funding Notice
Date” means the date on which the Borrower shall deliver a Borrower Funding Request, which shall be (i) at least
two (2) Business Days prior to the date which the Borrower has requested as a Funding Date as provided therein, or (ii) if
a Borrower Funding Request relates to new Collateral, at least five (5) Business Days prior to the date which the Borrower
has requested as a Funding Date as provided therein.

 

“GAAP”
means United States Generally Accepted Accounting Principles inclusive of, but not limited to, applicable statements of Financial
Accounting Standards issued by the Financial Accounting Standards Board, its predecessors and successors and SEC Staff Accounting
Guidance as in effect from time to time applied on a consistent basis.

 

“Ginnie Mae”
means The Government National Mortgage Association, also known as Ginnie Mae, or any successor thereto.

 

“Governmental
Action” means all permits, authorizations, registrations, consents, approvals, waivers, exceptions, variances, orders,
decrees, licenses, exemptions, publications, filings, notices to and declarations of or with, or required by, any Governmental
Authority, or required by any Legal Requirement.

 

“Governmental
Authority” means any nation or government, any state or other political subdivision thereof, any municipality and any
entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

“Guarantor”
shall mean Private National Mortgage Acceptance Company, LLC, its successors and permitted assigns.

 

“Guaranteed
Obligations” means, without duplication, all of the Obligations of Borrower to Lender, whenever arising, under this Agreement
or any other Facility Document (including, but not limited to, obligations with respect to principal, interest and fees).

 

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

 

“Indebtedness”
means, with respect to any Person as of any date of determination: (a) obligations created, issued or incurred by such Person
for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject
to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations
to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed
money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable
and paid within ninety (90) days of the date the respective goods are delivered or the respective services are rendered; (c) indebtedness
of others secured by a Lien on the Property of such Person, whether or not the respective indebtedness so secured has been assumed
by such Person; (d) obligations (contingent or otherwise) in respect of letters of credit or similar instruments issued for
account of such Person; (e) capital lease obligations; (f) payment obligations under repurchase agreements, single seller
financing facilities, warehouse facilities and other lines of credit; (g) indebtedness of others guaranteed on a recourse
or partial recourse basis by such Person; (h) all obligations incurred in connection with the acquisition or carrying of fixed
assets; (i) indebtedness of general partnerships of which such Person is a general partner; and (j) any other known or
contingent liabilities of such Person.

 

 

 

 

 

    	 	Schedule I - 7	 

     

    

 

“Indemnified
Amounts” has the meaning set forth in Section 10.01.

 

“Indemnified
Party” has the meaning set forth in Section 10.01.

 

“Initial Borrower
Funding Request” means the request to fund the Loan on the Initial Funding Date, substantially in the form of Exhibit
2.03, delivered in accordance with Section 2.03(a), that is current as of the end of the previous calendar month.

 

“Initial Borrowing
Base Report” means the borrowing base report, substantially in the form agreed to between the Borrower and the Lender,
delivered by the Lender in accordance with Section 2.04(a) based on the initial Electronic File.

 

“Initial Funding
Date” means the Funding Date on which the first Loan is made pursuant to this Agreement, as specified in the Initial
Borrower Funding Request.

 

“Insolvency
Law” means any bankruptcy, reorganization, moratorium, delinquency, arrangement, insolvency, readjustment of debt, dissolution
or liquidation law of any jurisdiction in effect at any time during the term of this Agreement.”

 

“Interest
Period” means, for any Loan, (i) an initial period beginning on the Funding Date for such Loan and ending on the
last day of the calendar month in which such Funding Date occurs; and (ii) subsequent consecutive periods thereafter, beginning
on the first day of each subsequent calendar month and ending on the earlier of (x) the last day of the same calendar month
in which such Interest Period began and (y) the Wind Down Date; and (iii) subsequent consecutive periods thereafter,
beginning on the first day following, initially, the Wind Down Date, and thereafter, each Loan Repayment Date, and ending on the
earlier of (x) the next following Loan Repayment Date and (y) the date on which the amount of all Obligations have been
reduced to zero.

 

“Interest
Rate” means, with respect to all Loans, the LIBOR Rate plus the Applicable Margin.

 

“Investment
Company Act” means the Investment Company Act of 1940, as amended, together with the rules and regulations promulgated
thereunder.

 

“Lender”
means Barclays Bank PLC.

 

“LIBOR Rate”
means for each day, the rate (adjusted for statutory reserve requirements for eurocurrency liabilities) for eurodollar deposits
for a period equal to one month appearing on Bloomberg Screen US 0001M Page or if such rate ceases to appear on Bloomberg
Screen US 0001M Page, or any other service providing comparable rate quotations at approximately 11:00 a.m., London time,
on the applicable date of determination, or such interpolated rate as determined by the Lender.

 

 

 

 

 

    	 	Schedule I - 8	 

     

    

 

“Lien”
means with respect to any property or asset of any Person (a) any mortgage, lien, pledge, charge or other security interest
or encumbrance of any kind in respect of such property or asset or (b) the interest of a vendor or lessor arising out of the
acquisition of or agreement to acquire such property or asset under any conditional sale agreement, lease purchase agreement or
other title retention agreement, and in each case, other than an Agency’s rights and interests in the related Agency Servicing
Rights.

 

“Loan Repayment
Date” means, (i) initially, the date that is thirty (30) days after the Wind Down Date, and (ii) thereafter,
each date that is thirty (30) days after the immediately preceding Loan Repayment Date.

 

“Loans”
has the meaning set forth in Section 2.01.

 

“Margin Call”
has the meaning set forth in Section 2.08.

 

“Master Netting
Agreement” means that certain Master Netting Agreement, dated as of December 4, 2015 by and among the Borrower, the Guarantor,
Barclays Capital Inc. and the Lender, as amended.

 

“Material
Adverse Effect” means a material adverse effect on (a) the property, business, operations, or financial condition
of Borrower or Guarantor, (b) the ability of Borrower or Guarantor to perform its obligations under any of the Facility Documents
to which it is a party, (c) the validity or enforceability of any of the Facility Documents, (d) the rights and remedies
of Lender under any of the Facility Documents, (e) the Collateral, or (f) the validity, perfection, priority or enforceability
of Lender’s security interest in the Collateral.

 

“Maturity
Date” means December 2, 2016.

 

“MBS”
means mortgage backed securities.

 

“MBS Trust”
means any of the trusts or trust estates in which the Mortgage Loans being serviced by the Borrower pursuant to the Servicing Contracts
are held by the related MBS Trustee.

 

“MBS Trustee”
means a trustee or indenture trustee for an MBS Trust.

 

“Monthly Settlement
Date” means, (i) initially, the earliest to occur of (a) the fifth (5th) Business Day of each calendar
month, commencing January 2016, and (b) the Wind Down Date, and (ii) following the occurrence of the Wind Down Date,
each Loan Repayment Date (or, if such day is not a Business Day, the following Business Day).

 

“Moody’s”
means Moody’s Investors Service, Inc. or its successor in interest.

 

 

 

 

 

    	 	Schedule I - 9	 

     

    

 

“Mortgage”
means a mortgage, mortgage deed, deed of trust, or other instrument creating a first lien on or first priority security interest
in an estate in fee simple in real property securing a Mortgage Note including any riders, assumption agreements or modifications
relating thereto.

 

“Mortgage
File” means, with respect to any Mortgage Loan, a file or files pertaining to such Mortgage Loan that contains the mortgage
documents pertaining to such Mortgage Loan including any mortgage documents pertaining to such Mortgage Loan required by the Agency
Guides.

 

“Mortgage
Loan” means the mortgage loans listed on the Relevant Electronic File (as provided to the Lender pursuant to Section 2.03(a)
or 2.03(b)).

 

“Mortgage
Note” means the note or other evidence of indebtedness of a Mortgagor secured by a Mortgage pertaining to a Mortgage
Loan.

 

“Mortgage
Selling and Servicing Contract” means that certain Mortgage Selling and Servicing Contract, dated as of September 23,
2010, as amended, supplemented and assigned, by and between Borrower and Fannie Mae.

 

“Mortgagor”
means the obligor on a Mortgage Note.

 

“MSR Value”
means, with respect to (i) any Eligible Servicing Right included in the Borrowing Base the fair value ascribed to such asset
by the Lender in its sole good faith discretion, taking into account any outstanding obligations owed by Borrower to an Agency,
as applicable, as marked to market as often as daily, (ii) a Servicing Right which is not an Eligible Servicing Right included
in the Borrowing Base, zero. The Lender’s good faith determination of MSR Value shall be conclusive upon the parties, absent
manifest error on the part of the Lender. The Borrower acknowledges that the Lender’s determination of MSR Value is for the
limited purpose of determining Collateral Value for lending purposes hereunder without the ability to perform customary purchaser’s
due diligence and is not necessarily equivalent to a determination of the fair market value of the Eligible Servicing Rights achieved
by obtaining competing bids. For the purpose of determining the related MSR Value, the Lender shall have the right to use either
the Borrower’s valuation of the Eligible Servicing Rights delivered pursuant to Section 2.04 herein or the Lender’s
valuation, or both. Subsequently, Lender shall have the right to reasonably request at any time from Borrower, an updated valuation
for each Eligible Servicing Right, in a form acceptable to Lender in its sole discretion; provided that the Lender shall not be
obligated to rely on either valuation and shall have the right to determine the MSR Value of the Eligible Servicing Rights at any
time in its sole discretion. The MSR Value shall be deemed to be zero with respect to each Loan for which such valuation is not
provided within a reasonable time.

 

“Note”
means the promissory note of the Borrower issued to the Lender, in substantially the form of Exhibit 2.02(a), as amended
from time to time, and any replacement thereof or substitution therefor.

 

“Obligations”
means the Outstanding Aggregate Loan Amount, all accrued and unpaid interest thereon and all other amounts payable by the Borrower
to the Lender pursuant to this Agreement, the Note or any other Facility Document.

 

 

 

 

 

    	 	Schedule I - 10	 

     

    

 

“Opinion of
Counsel” means a written opinion of counsel, reasonably acceptable to each Person to whom such opinion is addressed.

 

“Other Taxes”
has the meaning set forth in Section 3.02.

 

“Outstanding
Aggregate Loan Amount” means, at any time, the aggregate principal amount of the Loans funded by the Lender, minus the
aggregate amount of payments received by the Lender prior to such time and applied to reduce the principal amount of the Loans.

 

“P&I Advance”
means any advance disbursed by the Borrower as servicer pursuant to any Servicing Contract of delinquent interest and/or principal
on the related Mortgage Loans.

 

“Participant”
has the meaning set forth in Section 9.04.

 

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

 

“Pledged Servicing
Rights” means any Eligible Servicing Rights a security interest in which has been granted to the Lender pursuant to this
Agreement (it being understood that the Servicing Rights pledged will be identified by pool number in the Electronic Files).

 

“Pool”
means a group of Mortgage Loans, which are the security for a mortgage-backed security issued or guaranteed by an Agency.

 

“Prepayment
Notice” means a notice substantially in the form of Exhibit 2.08(b).

 

“Pricing Side
Letter” means that certain Loan and Security Agreement Pricing Side Letter, dated as of December 4, 2015, among the Borrower,
the Guarantor and the Lender, entered into in connection with this Agreement, as the same may be amended, modified or supplemented
from time to time.

 

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

 

“PSA”
means a pooling and servicing agreement or similar agreement related to a non-agency securitization.

 

“Recourse
Servicing Obligations” means with respect to any mortgage loan, (a) any obligation or liability (actual or contingent)
of the servicer or subservicer in respect of such Mortgage Loan to indemnify the relevant Agency for any losses incurred in respect
of any Mortgage Loan that was determined at the time of sale to have been ineligible for sale to the applicable Agency due to a
breach of one or more representations and warranties but accepted for purchase subject to any waiver and indemnity obligations,
or (b) any other obligations described from time to time as being sold “with recourse” as such term (or terms
of similar meaning) are defined in the relevant Agency Guide, as amended or supplemented from time to time, and any successor publications
thereto having the same general contents and purpose.

 

 

 

 

 

    	 	Schedule I - 11	 

     

    

 

“Related Escrow
Account Balances” means the balance, on the related Funding Date, of any escrow or impound accounts maintained by the
Borrower which relate to any Mortgage Loan, including, without limitation, items escrowed for mortgage insurance, property taxes
(either real or personal), hazard insurance, flood insurance, ground rents, or any other escrow or impound items required by any
Mortgage Note or Mortgage, reduced by any unpaid real estate taxes or insurance premiums required to be paid by the Borrower, with
respect to which amounts have been escrowed by the related Mortgagor.

 

“Related Principal
and Interest Custodial Accounts” means all principal and interest custodial accounts maintained by the Borrower that
relate to any Mortgage Loan or Pool.

 

“Relevant
Electronic File” means, on any Business Day, the most recently delivered Electronic File that was delivered in accordance
with Section 2.03(a) or 2.03(b) and relates to Eligible Servicing Rights that constitute Collateral hereunder.

 

“Repayment
Notice” means a notice substantially in the form of Exhibit 2.08(a).

 

“Repo Agreement”
means the Master Repurchase Agreement, among the Guarantor, Borrower and Lender, dated December 4, 2015, as amended.

 

“Repurchase
Party” means any of Borrower or the Guarantor.

 

“Requirements
of Law” means, with respect to any Person or any of its property, the certificate of incorporation or articles of association
and by-laws, certificate of limited partnership, limited partnership agreement or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or determination of any arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject, whether
Federal, state or local (including, without limitation, usury laws, the Federal Truth in Lending Act and retail installment sales
acts).

 

“Responsible
Officer” means (a) with respect to the Borrower, the chief executive officer, president, chief financial officer,
treasurer, assistant vice president, assistant treasurer, secretary or assistant secretary of the Borrower, or any other officer
having substantially the same authority and responsibility; provided, that with respect specifically to the obligations
of the Borrower set forth in Section 7.01(h) hereof, only the chief financial officer, treasurer, assistant treasurer,
or comptroller of the Borrower shall be deemed to be a Responsible Officer; and (b) with respect to the Lender, a lending
officer charged with responsibility for the day to day management of the relationship of such institution with the Borrower.

 

“Restricted
Payment” means with respect to any Person, collectively, all dividends or other distributions of any nature (cash, securities,
assets or otherwise), and all payments, by virtue of redemption or otherwise, on any class of equity securities (including, warrants,
options or rights therefor) issued by such Person, which may hereafter be authorized or outstanding and any distribution in respect
of any of the foregoing, whether directly or indirectly other than payments made in the ordinary course solely for the purpose
of originating, servicing, subservicing and/or administrating Mortgage Loans.

 

 

 

 

 

    	 	Schedule I - 12	 

     

    

 

“S&P”
means Standard & Poor’s, a division of The McGraw Hill Companies, Inc.

 

“Schedules
of Mortgages” has the meaning provided in the Agency Guides.

 

“Servicer”
has the meaning set forth in the preamble.

 

“Servicing
Contracts” means the Fannie Mae Servicing Contract and the Freddie Mac Servicing Contract, in each case as such agreements
may be amended, amended and restated, supplemented or otherwise modified from time to time.

 

“Servicing
Fee” means the total amount of the fee payable to the Servicer as compensation for subservicing and administering the
Mortgage Loans.

 

“Servicing
Rights” means with respect to each Mortgage Loan, all the Borrower’s right, title and interest in, to and under
the related Servicing Contracts, whether now or hereafter existing, acquired or created, whether or not yet accrued, earned, due
or payable, as well as all other present and future right and interest under such Servicing Contracts, including, without limitation,
the right (i) to receive the Servicing Fee income payable after the related Funding Date (including without limitation, any
Uncollected Fees), (ii) any and all Ancillary Income received after the related Funding Date, (iii) to hold and administer
the Related Escrow Account Balances, (iv) to hold and administer, in accordance with the applicable Agency Guides, the Related
Principal and Interest Custodial Account, the Custodial File, and the Mortgage File arising from or connected to the servicing
or subservicing of such Mortgage Loan under this Agreement and (v) all proceeds, income, profits, rents and products of any
of the foregoing including, without limitation, all of the Borrower’s rights to proceeds of any sale or other disposition
of the Servicing Rights, but with respect to clauses (i) - (iv) above, specifically excluding any Excluded Collateral.

 

“Subservicer
Termination Event" means an event that entitles the Borrower to terminate a subservicer for cause under a Subservicing
Agreement.

 

“Subservicing
Agreement” means any subservicing agreement entered into between the Borrower and a subservicer, subject to the consent
of the Lender.

 

“Subsidiary”
means a corporation of which a Person and/or its other Subsidiaries own, directly or indirectly, such number of outstanding shares
as have more than 50% of the ordinary voting power for the election of directors.

 

“T&I Advance”
means an advance made by the Borrower as servicer with respect to a Mortgage Loan pursuant to the servicer’s obligation to
do so under any Servicing Contract of real estate taxes and assessments, or of hazard, flood or primary mortgage insurance premiums,
required to be paid by the related Mortgagor under the terms of the related Mortgage Loan.

 

“Taxes”
has the meaning set forth in Section 3.02.

 

“Termination
Date” means the earlier of (i) the day on which the Facility is terminated pursuant to Section 8.02(a)
or Section 8.02(b), (ii) the Loan Repayment Date on which the final amounts owing under the Facility are required
to be paid as provided for in the first sentence of Section 2.08(a) hereof, or (iii) the termination of the Repo Agreement.

 

 

 

 

 

    	 	Schedule I - 13	 

     

    

 

“UCC”
means the Uniform Commercial Code as in effect on the date hereof in the State of New York; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection of the security interest in any Purchased Items
is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code”
means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.

 

“Uncollected
Fees” means with respect to any Mortgage Loan, any accrued late charges, NSF fees, assumption fees, and other fees charged
to Mortgagors in connection with the servicing or subservicing of such Mortgage Loan which have not been collected by the Borrower
as of the related Funding Date.

 

“Unmatured
Event of Default” means any event that, with the giving of notice or lapse of time, or both, would become an Event of
Default.

 

“Wind Down
Date” means the earliest to occur of (i) the Maturity Date, (ii) the date on which the Repo Agreement terminates, or
if such day is not a Business Day, the immediately preceding Business Day, or (iii) the Business Day specified by the Lender upon
ten (10) Business Days’ prior written notice to the Borrower.

 

 

 

 

 

    	 	Schedule I - 14	 

     

    

 

SCHEDULE 5.01

CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT

 

(a)            
This Agreement duly executed by the parties hereto;

 

(b)            
The Note duly executed by the Borrower;

 

(c)            
The Collection Account Control Agreement duly executed by the Borrower, the Lender and Bank;

 

(d)            
The Master Netting Agreement duly executed by the related parties;

 

(e)            
All other Facility Documents and all Program Documents (as defined in the Repo Agreement) duly executed by the related parties;

 

(f)             
A filed UCC1 financing statement;

 

(g)            
A certificate of a secretary or assistant secretary of the Borrower and Guarantor, certifying the names and true signatures
of the persons authorized on the Borrower’s and Guarantor’s behalf to sign, as applicable, this Agreement, the Note
and the other Facility Documents to be delivered by the Borrower and Guarantor in connection herewith;

 

(h)            
A certificate of a Responsible Officer of the Borrower and Guarantor, each certifying as to the accuracy and completeness
of each of the representations and warranties contained in each Facility Document to which the Borrower and the Guarantor is a
party (except for representations and warranties made in respect of specific mortgage loans) and as to the absence of Default under
such Facility Documents to which the Borrower and Guarantor is a party as of the Closing Date;

 

(i)             
Completion of all reasonable legal finance, business, accounting and tax due diligence and provision of copies of all servicing
and sub-servicing agreements; financials, MSR valuations and electronic files;

 

(j)             
Resolutions, good standing certificate, certificate of incorporation or formation, bylaws and incumbency certificate of
the Borrower and the Guarantor, all certified by the secretary of the Borrower and the Guarantor;

 

(k)            
An Opinion of Counsel, delivered by outside counsel acceptable to the Lender in its reasonable discretion, opining as to:
New York enforceability, corporate matters and non-contravention, no material litigation, security interest, and the Investment
Company Act of 1940; provided that opinions as to corporate matters, non-contravention and no material litigation may be given
by the in-house counsel of the Borrower;

 

(l)             
An executed Fannie Mae Acknowledgment Agreement and an opinion of counsel with respect to such Fannie Mae Acknowledgment
Agreement;

 

(m)          
A separate power of attorney of Borrower with respect to the powers described in Section 4.04.

 

 

 

 

 

    	 	Schedule 5.01 - 1	 

     

    

 

SCHEDULE 5.02

CONDITIONS PRECEDENT TO EACH LOAN

 

(a)            
The Lender shall have received a duly executed copy of the Borrower Funding Request for such Loan in accordance with Section 2.03;

 

(b)            
Delivery of all reasonable due diligence (to the extent supplemental due diligence is conducted by Lender with respect to
such Loan);

 

(c)            
The making of such Loan, and the application of the proceeds thereof, shall not result in the Outstanding Aggregate Loan
Amount exceeding the Available Facility Amount;

 

(d)            
The making of such Loan, and the application of the proceeds thereof, shall not result in a Borrowing Base Deficiency;

 

(e)            
On the applicable Funding Date, the following statements shall be true (and the Borrower by delivering such Borrower Funding
Request shall be deemed to have certified that):

 

                                           
(i)          the
representations and warranties set forth in Article VI are true and correct in all material respects (except for on the
Closing Date, in which case the representations and warranties are true and correct on the Closing Date) on and as of such day
as though made on and as of such day and shall be deemed to have been made on such day (except to the extent any such representation
or warranty is stated to relate solely to an earlier date, in which case, such representation or warranty shall have been true
and correct as of such date);

                                            
(ii)          the Borrower
is in compliance with all covenants set forth in Article VII

 

                                           
(iii)           all
conditions precedent to the making of such Loan have been satisfied;

 

                                           
(iv)           no
Default or Event of Default has occurred and is continuing, or would result from such Loans;

 

                                           
(v)          all of the Servicing Rights included in the most recently delivered Electronic File are Eligible Servicing Rights, except for any
non-qualifying Servicing Rights listed as such therein, and all Recourse Servicing Obligations have been identified as such in
a schedule attached to such Electronic File;

 

(f)             
The Lender shall have received (i) with respect to the Initial Borrower Funding Request, the initial Electronic File;
and (ii) with respect to any subsequent Borrower Funding Request, a subsequent Electronic File on or prior to time required
by Section 2.03;

 

(g)            
With respect to any Borrower Funding Request, an Acknowledgement Agreement from each Agency with respect to which the related
Servicing Rights will be pledged under the Agreement and consents from all third parties, including warehouse lenders, as needed,
except to the extent the foregoing have already been received;

 

 

 

 

 

    	 	Schedule 5.02 - 1	 

     

    

 

(h)            
With respect to the Initial Borrower Funding Request, an Opinion of Counsel, delivered by outside counsel acceptable to
the Lender in its reasonable discretion, opining as to: security interest creation, perfection and priority;

 

(i)             
With respect to the Initial Borrower Funding Request, the Guarantor shall have obtained a published corporate rating.

 

(j)             
With respect to the first Borrower Funding Request for the financing of Freddie Mac Servicing Rights, an executed Freddie
Mac Acknowledgment Agreement and an Opinion of Counsel delivered by outside counsel acceptable to the Lender in its reasonable
discretion, opining as to the enforceability of the Freddie Mac Acknowledgment Agreement, security interest creation, perfection
and priority; and

 

(k)            
All Facility Documents shall continue to be in full force and effect in all material respects.

 

    	 	Schedule 5.02 - 2	 

     

    

 

SCHEDULE 6.01(r)

BORROWER’S EXISTING FINANCING FACILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	Schedule 6.01(r) - 1	 

     

    

 

SCHEDULE 6.02

 

ELIGIBILITY
CRITERIA WITH RESPECT TO THE SERVICING RIGHTS

 

		1.	All owned Servicing Rights for Mortgage Loans serviced by the Borrower on behalf of Fannie Mae,
provided that such Servicing Rights are free and clear of any Liens, subject to Fannie Mae’s interest in such Servicing Rights
pursuant to an Acknowledgment Agreement acceptable in form and substance to the Lender.

 

		2.	All owned Servicing Rights for Mortgage Loans serviced by the Borrower on behalf of Freddie Mac,
provided that such Servicing Rights are free and clear of any Liens, subject to Freddie Mac’s interest in such Servicing
Rights pursuant to an Acknowledgment Agreement acceptable in form and substance to the Lender.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	Schedule 6.02 - 1	 

     

    

 

SCHEDULE 7.01(s)

Monthly MSR Collateral REPORT

 

Information to be provided:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	Schedule 7.01(s) - 1	 

     

    

 

SCHEDULE 11.02

NOTICES

 

If to the Borrower:

PennyMac Loan Services, LLC

6101 Condor Drive

Moorpark, California
93021

Attention: Pamela
Marsh/Kevin Chamberlain

Telephone: (805)
330-6059/ (818) 746-2877

Facsimile: (818) 936-0145

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

kevin.chamberlain@pnmac.com

 

With copies to:

PennyMac Loan Services, LLC

6101 Condor Drive

Moorpark, California 93021

Attention: Jeff Grogin

Telephone: (818) 224-7050

Facsimile: (818) 936-0231

E-mail: jeff.grogin@pnmac.com

 

If to the Guarantor:

Private National Mortgage Acceptance
Company, LLC

6101 Condor Drive

Moorpark, California 93021

Attention: Pamela Marsh/Kevin Chamberlain

Telephone: (805) 330-6059/ (818) 746-2877

Facsimile: (818) 936-0145

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

kevin.chamberlain@pnmac.com

 

With copies to:

Private National Mortgage Acceptance
Company, LLC

6101 Condor Drive

Moorpark, California 93021

Attention: Jeff Grogin

Telephone: (818) 224-7050

Facsimile: (818) 936-0231

E-mail: jeff.grogin@pnmac.com

 

 

 

 

 

    	 	Schedule 11.02 - 1	 

     

    

 

if to Lender:

Barclays Bank PLC – Mortgage
Finance

745 Seventh Avenue, 4th Floor

New York, NY 10019

Attention: Joseph O’Doherty

Telephone: (212) 412-5517

Facsimile: (212) 412-7333

E-mail: Joseph.o’doherty@barclays.com

 

With copies to:

Barclays Bank PLC – Legal
Department

745 Seventh Avenue, 20th Floor

New York, NY 10019

Telephone: (212) 412-1494

Facsimile: (212) 412-1288

Barclays Capital – Operations

700 Prides Crossing

Newark, Delaware 19713

Attention: Brian Kevil

Telephone: (302) 286-1951

Facsimile: (646) 845-6464

Email: brian.kevil@barclays.com

 

 

 

 

 

    	 	Schedule 11.02 - 2	 

     

    

 

EXHIBIT 2.02(a)

 

FORM OF PROMISSORY
NOTE

 

THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES
LAWS. THIS NOTE IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS AND PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.

 

[___], 2015

 

$_____________

 

 

New York, New York

 

FOR VALUE RECEIVED,
PennyMac Loan Services, LLC, a Delaware limited liability company (the “Borrower”),
hereby promises to pay to the order of BARCLAYS BANK PLC (the “Lender”), at the principal office of the Lender at 745
Seventh Avenue, 4th Floor, New York, New York 10019, in lawful money of the United States, and in immediately available funds,
the principal sum of [ ] ($[ ]) (or such lesser amount as shall equal the aggregate unpaid principal amount of the Loans made by
the Lender to the Borrower under the Loan Agreement), on the dates and in the principal amounts provided in the Loan Agreement,
and to pay interest on the unpaid principal amount of each such Loan, at such office, in like money and funds, for the period commencing
on the date of such Loan until such Loan shall be paid in full, at the rates per annum and on the dates provided in the Loan Agreement.

 

The date, amount and
interest rate of each Loan made by the Lender to the Borrower, and each payment made on account of the principal thereof, shall
be recorded by the Lender on its books and, prior to any transfer of this Note, endorsed by the Lender on the schedule attached
hereto or any continuation thereof; provided, that the failure of the Lender to make any such recordation or endorsement shall
not affect the obligations of the Borrower to make a payment when due of any amount owing under the Loan Agreement or hereunder
in respect of the Loans made by the Lender.

 

This Note is the Note
referred to in the Loan and Security Agreement dated as of December 4, 2015 (as amended, supplemented or otherwise modified and
in effect from time to time, the “Loan Agreement”) among Borrower, Private National Mortgage Acceptance Company, LLC,
as guarantor and the Lender, and evidences Loans made by the Lender thereunder. Terms used but not defined in this Note have the
respective meanings assigned to them in the Loan Agreement.

 

The Borrower agrees
to pay all the Lender’s reasonable out-of-pocket costs of collection and enforcement (including reasonable attorneys’
fees and disbursements of Lender’s counsel) in respect of this Note when incurred as required by Section 10.01
of the Loan Agreement.

 

 

 

 

 

    	 	Schedule 2.02(a) - 1	 

     

    

 

Notwithstanding the
pledge of the Collateral, the Borrower hereby acknowledges, admits and agrees that the Borrower’s obligations under this
Note are recourse obligations of the Borrower to which the Borrower pledges its full faith and credit.

 

The Borrower, and any
endorsers or guarantors hereof, (a) severally waive diligence, presentment, protest and demand and also notice of protest,
demand, dishonor and nonpayments of this Note, (b) expressly agree that this Note, or any payment hereunder, may be extended
from time to time, and consent to the acceptance of further Collateral, the release of any Collateral for this Note, the release
of any party primarily or secondarily liable hereon, and (c) expressly agree that it will not be necessary for the Lender,
in order to enforce payment of this Note, to first institute or exhaust the Lender’s remedies against the Borrower or any
other party liable hereon or against any Collateral for this Note. No extension of time for the payment of this Note, or any installment
hereof, made by agreement by the Lender with any person now or hereafter liable for the payment of this Note, shall affect the
liability under this Note of the Borrower, even if the Borrower is not a party to such agreement; provided, however, that the Lender
and the Borrower, by written agreement between them, may affect the liability of the Borrower.

 

Any reference herein
to the Lender shall be deemed to include and apply to every subsequent holder of this Note. Reference is made to the Loan Agreement
for provisions concerning optional and mandatory prepayments, Collateral, acceleration and other material terms affecting this
Note.

 

Any enforcement action
relating to this Note may be brought by motion for summary judgment in lieu of a complaint pursuant to Section 3213 of the
New York Civil Practice Law and Rules.

 

THIS NOTE SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
(OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH BY ITS TERMS APPLIES TO THIS NOTE). THE BORROWER HEREBY
SUBMITS TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN, THE
FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE BORROWER
HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT IN THE BOROUGH OF MANHATTAN AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE BORROWER HERETO HEREBY CONSENTS TO PROCESS BEING SERVED
IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS NOTE, OR ANY DOCUMENT DELIVERED PURSUANT HERETO BY THE MAILING OF A COPY
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO ITS RESPECTIVE ADDRESS SPECIFIED AT THE
TIME FOR NOTICES UNDER THE LOAN AGREEMENT OR TO ANY OTHER ADDRESS OF WHICH IT SHALL HAVE GIVEN WRITTEN OR ELECTRONIC NOTICE TO
THE LENDER. THE FOREGOING SHALL NOT LIMIT THE ABILITY OF ANY PARTY HERETO TO BRING SUIT IN THE COURTS OF ANY OTHER JURISDICTION.

 

 

 

 

 

    	 	Schedule 2.02(a) - 2	 

     

    

 

THE BORROWER HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
NOTE.

 

	 	PENNYMAC LOAN SERVICES, LLC
	 	 
	 	By:	/s/
	 	Name:

        Title:
	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	Schedule 2.02(a) - 3	 

     

    

SCHEDULE OF LOANS

 

This Note evidences
Loans made under the within-described Loan Agreement to the Borrower, on the dates, in the principal amounts and bearing interest
at the rates set forth below, and subject to the payments and prepayments of principal set forth below:

 

	Date Made	
        Principal Amount

        of Loan
	
        Amount Paid

        or Prepaid
	
        Amount of

        Additional Draws
	
        Unpaid Principal

        Amount
	
        Notation

        Made by

	 	 	 	 	 	 
	 	 	 	 	 	 

 

 

 

 

 

    	 	Schedule 2.02(a) - 4	 

     

    

 

EXHIBIT 2.03

to Loan and Security Agreement

 

 

FORM OF BORROWER
FUNDING REQUEST

 

[DATE]

 

Barclays Bank PLC

745 Seventh Avenue, 4th Floor

New York, New York 10019

Attention: Joseph O’Doherty

 

 

Attention: [_]

 

Ladies and Gentlemen:

 

This [Initial] Borrower
Funding Request is delivered to you pursuant to Section 2.03 of the Loan and Security Agreement, dated as of December
4, 2015 (as amended, supplemented, restated or otherwise modified from time to time, the “Loan Agreement”),
among PennyMac Loan Services, LLC, as the Borrower (the “Borrower”), Private National Mortgage Acceptance Company,
LLC (the “Guarantor”) and Barclays Bank PLC, as lender (the “Lender”). Unless otherwise defined
herein or as the context otherwise requires, terms used herein have the meaning assigned thereto under Schedule I of the
Loan Agreement.

 

The undersigned hereby
requests that a Loan be made in the aggregate principal amount of $____ on _________, 20__ to be secured by the Servicing Rights.

 

An updated Electronic
File, revised to reflect the acquisition of any additional Servicing Rights purchased by the Borrower since the most recently delivered
Electronic File, has been delivered pursuant to Section 2.03 of the Loan Agreement. Such Electronic File reflects all
Eligible Servicing Rights that constitute Collateral under the terms and conditions of the Agreement and a hyperlink to such Electronic
File is attached hereto as Schedule One.

 

[TO BE USED FOR ALL
FUNDINGS THAT INVOLVE NEW COLLATERAL] [The Borrower hereby acknowledges and agrees that (other than with respect to the Agreement)
(i) the Servicing Rights currently pledged as Collateral under the Agreement and (ii) any of the Servicing Rights identified
on Schedule One attached hereto, are not currently assigned, pledged, conveyed or encumbered under any credit, warehouse
or financing facility. The Borrower further acknowledges and agrees that (other than under the Agreement) it shall not assign,
pledge, convey or encumber such Servicing Rights under any credit, warehouse or financing facility in the future, except with prior
notice to, and consent from, the Lender.]

 

The undersigned hereby
acknowledges that the delivery of this [Initial] Borrower Funding Request and the acceptance by the undersigned of the proceeds
of the Loan requested hereby constitute a representation and warranty by the undersigned that all conditions precedent to such
Loan specified in Article V of the Loan Agreement have been satisfied and will continue to be satisfied after giving effect
to such Loan.

 

 

 

 

 

    	 	Schedule 2.03 - 1	 

     

    

 

The undersigned further
represents and warrants that either (a) the Agency Guides and the Servicing Contracts have not been materially modified since
the last date the undersigned delivered a Borrower Funding Request or (b) attached hereto is a true and complete description
of any changes to the applicable Servicing Contracts since the last date the undersigned delivered a Borrower Funding Request.

 

Please wire transfer
the proceeds of the Loan to the following account pursuant to the following instructions:

 

[______________]

 

The undersigned has
caused this [Initial] Borrower Funding Request to be executed and delivered, and the certification and warranties contained herein
to be made, by its duly authorized officer this ____ day of _________, 20__.

 

 

	 	PENNYMAC LOAN SERVICES, LLC, as the Borrower
	 	 
	 	By:	/s/
	 	Name:

        Title:
	 

 

 

Acknowledged and agreed:

 

BARCLAYS BANK PLC

 

By: ______________________________

Name:

Title:

 

 

 

 

 

    	 	Schedule 2.03 - 2	 

     

    

 

SCHEDULE ONE

 

ELECTRONIC
FILE

 

[To be provided by Borrower.]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	Schedule 2.03 - 3	 

     

    

 

EXHIBIT 2.08(a)

 

FORM OF REPAYMENT
NOTICE

 

[_], 20__

 

TO:         The Lender as defined in the
Loan Agreement referred to below

 

Reference is hereby
made to the Loan and Security Agreement, dated as of December 4, 2015 (as heretofore amended, the “Loan Agreement”),
among PennyMac Loan Services, LLC, as the Borrower (the “Borrower”), Private National Mortgage Acceptance Company,
LLC (the “Guarantor”) and Barclays Bank PLC, as lender (the “Lender”). Capitalized terms
not otherwise defined herein are used herein as defined in the Loan Agreement.

 

The Borrower hereby
notifies you that, pursuant to Section 2.08[(a)/(b)] of the Loan Agreement, it shall make a repayment of the Loans
outstanding under the Loan Agreement to the Lender on [ ], 20__ in the amount of $_____.

 

Also included in the
repayment amount shall be accrued and unpaid interest, in the amount of $__________________.

 

    	 	Schedule 2.08(a) - 1	 

     

    

 

The undersigned has
caused this Repayment Notice to be executed and delivered by its duly authorized officer this_________ day of ____________, 20__.

 

	 	PENNYMAC LOAN SERVICES, LLC, as the Borrower
	 	 
	 	By:	/s/
	 	Name:

        Title:
	

 

 

 

 

 

 

 

 

 

 

 

    	 	Schedule 2.08(a) - 2	 

     

    

 

EXHIBIT 2.08(b)

 

FORM OF PREPAYMENT
NOTICE

 

[__], 20__

 

TO:         The Lender as defined in the Loan
Agreement referred to below

 

Reference is hereby
made to the Loan and Security Agreement, dated as of December 4, 2015 (as heretofore amended, the “Loan Agreement”),
among PennyMac Loan Services, LLC, as the Borrower (the “Borrower”), Private National Mortgage Acceptance Company,
LLC (the “Guarantor”) and Barclays Bank PLC, as lender (the “Lender”). Capitalized terms
not otherwise defined herein are used herein as defined in the Loan Agreement.

 

The Borrower hereby
notifies you that pursuant to and in compliance with Section 2.09 of the Loan Agreement, it shall make a prepayment
of Loans outstanding under the Loan Agreement on [ ], 20__ in the amount of $________.

 

Also included in the
prepayment amount shall be accrued and unpaid interest, in the amount of $____________.

 

The undersigned has
caused this Prepayment Notice to be executed and delivered by its duly authorized officer this_________ day of ___________, 20__.

 

 

	 	PENNYMAC LOAN SERVICES, LLC, as the Borrower
	 	 
	 	By:	/s/
	 	Name:

        Title:
	

 

 

 

 

 

    	 	Schedule 2.08(b) - 1	 

     

    

 

EXHIBIT 7.01

 

FORM OF COMPLIANCE
CERTIFICATE

 

Barclays Bank PLC

745 Seventh Avenue, 4th Floor

New York, New York 10019

Attention: Joseph O’Doherty

 

 

Re:Reporting Date

 

Reference is made to
the Loan and Security Agreement (the “Loan Agreement”) dated as of December 4, 2015, as amended, and now in
effect among PennyMac Loan Services, LLC, as the Borrower (the “Borrower”), Private National Mortgage Acceptance
Company, LLC (the “Guarantor”) and Barclays Bank PLC, as Lender. Terms defined in the Loan Agreement and not
otherwise defined herein are used herein as defined in the Loan Agreement.

 

Pursuant to Section 7.01(h)(4)
of the Loan Agreement, the Borrower is furnishing to you herewith the Officer’s Certificate regarding outstanding repurchase
and indemnity demands by the Agencies and any MBS Trust.

 

Each of the undersigned
Responsible Officers of the Borrower has caused the provisions of the Loan Agreement to be reviewed and certifies to the Lender
that: (a) the undersigned has no knowledge of any Default or Event of Default, (b) attached hereto as Schedule 1,
Schedule 2, Schedule 3 and Schedule 4 are the representations of the Borrower and computations necessary to
determine that the Borrower is in compliance with the provisions of the Loan Agreement as of the Reporting Date referenced thereon,
and (c) to the best of the undersigned’s knowledge no event has occurred since the date of the most recent financial
statements upon which such covenant compliance was calculated that would cause the Borrower, to no longer be in compliance with
said provisions.

 

The statements made
herein (and in the Schedules attached hereto) shall be deemed to be representations and warranties made in a document for the purposes
of Section 6.01(i) of the Loan Agreement.

 

 

 

 

 

    	 	Schedule 7.01 - 1	 

     

    

 

SCHEDULE 1

To form of Compliance Certificate

 

1.Financial Covenants:

 

Attached as Schedule
2 to this Compliance Certificate are the calculations demonstrating the Borrower’s and Guarantor’s compliance with
the financial covenants set forth in Section 7.01(j) of the Agreement.

 

2.Fannie Mae:

 

		(i)	Compliance:

 

(a)As of
the close of business for the calendar month ended _________, the [Borrower/Guarantor] was in compliance with the minimum consolidated
tangible net worth requirement of Fannie Mae.

 

(b)[Borrower/Guarantor]]
has, at all times, complied with the minimum consolidated liquidity requirement of Fannie Mae.

 

		(ii)	The [Borrower/Guarantor]’s minimum consolidated tangible net worth requirement of Fannie
Mae is as follows: [_______________].

 

		(iii)	The [Borrower/Guarantor]’s minimum consolidated liquidity requirement of Fannie Mae is as
follows: [_______________].

 

		(iv)	Attached as Schedule 3 to this Compliance Certificate are the calculations demonstrating
the [Borrower/Guarantor]’s compliance with the Fannie Mae covenants listed in clauses (ii) and (iii) above.

 

Freddie Mac:

 

		(i)	Compliance:

 

(a)As of
the close of business for the calendar month ended _________, the [Borrower/Guarantor] was in compliance with the minimum consolidated
tangible net worth requirement of Freddie Mac.

 

(b)[Borrower/Guarantor]
has, at all times, complied with the minimum consolidated liquidity requirement of Freddie Mac.

 

		(ii)	The [Borrower/Guarantor]’s minimum consolidated tangible net worth requirement of Freddie
Mac is as follows: [_______________].

 

		(iii)	The [Borrower/Guarantor]’s minimum consolidated liquidity requirement of Freddie Mac is as
follows: [_______________].

 

		(iv)	Attached as Schedule 3 to this Compliance Certificate are the calculations demonstrating
the [Borrower/Guarantor]’s compliance with the Freddie Mac covenants listed in clauses (ii) and (iii) above.

 

 

 

 

 

    	 	Schedule 7.01 - 2	 

     

    

 

3.         Additional Financing Facilities:

 

[There have been no
changes to any Borrower Party’s existing financing facilities for mortgage servicing rights and servicing advances owned
by such Borrower Party, since the previously delivered list as specified on Schedule 6.01(r) to the Agreement, or as subsequently
updated by the Borrower by providing an updated schedule to the Lender.] [Attached as Schedule 4 to this Compliance Certificate
is an updated schedule of each Borrower Party’s other financing facilities, delivered pursuant to Section 6.01(r) of the
Agreement. The attached schedule hereby updates and replaces the previously delivered schedule of financing facilities.]

 

 

 

 

 

 

 

 

 

 

 

    	 	Schedule 7.01 - 3	 

     

    

 

SCHEDULE 2

To form of Compliance Certificate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	Schedule 7.01 - 4	 

     

    

 

SCHEDULE 3

To form of Compliance Certificate

 

		1.	Description of all outstanding repurchase and indemnity claims with respect to the Pledged
Servicing Rights:

 

[________]

 

		2.	Outstanding amounts owed to Agencies but not yet paid pursuant to any outstanding repurchase
and indemnity claims:

 

[________]

 

		3.	Claims or compensatory fees paid by [Borrower/ Guarantor] to Agency that are not reimbursed
from a predecessor originator/servicer:

 

[________]

 

 

 

 

 

 

 

 

 

 

    	 	Schedule 7.01 - 5	 

     

    

 

SCHEDULE 4

To form of Compliance Certificate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	Schedule 7.01 - 6

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