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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): August 4, 2023
PennyMac
Financial Services, Inc.
(Exact name of registrant as specified in
its charter)
Delaware |
001-35916 |
83-1098934 |
(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
3043 Townsgate Road, Westlake Village, California |
91361 |
(Address of principal executive offices) |
(Zip Code) |
(818) 224-7442
(Registrant’s telephone number, including
area code)
Not Applicable
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock, $0.0001 par value |
PFSI |
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01 Entry into a Material Definitive Agreement.
On August 4, 2023, PennyMac Financial Services, Inc. (the “Company”),
through two of its indirect, wholly owned subsidiaries, PNMAC GMSR ISSUER TRUST (“Issuer Trust”) and PennyMac Loan Services,
LLC (“PLS”), entered into two new variable funding note (“VFN”) repurchase agreements, as part of the structured
finance transaction that PLS uses to finance Ginnie Mae mortgage servicing rights and related excess servicing spread and servicing advance
receivables. The Company entered into (i) a Series 2023-MSRVF2 Master Repurchase Agreement by and among PLS, as seller, Nomura Corporate
Funding Americas, LLC, as administrative agent and as a buyer (“Nomura”) (the “Nomura Servicing Spread Agreement”),
related to the servicing spread, and (ii) a Series 2020-SPIADVF1 Master Repurchase Agreement by and among PLS, as seller, and Nomura,
as administrative agent and buyer (the “Nomura SAR Agreement”), related to the servicing advance receivables. The initial
terms of the Nomura Servicing Spread Agreement and Nomura SAR Agreement (collectively, the “Nomura Repurchase Agreements”)
are each set to expire on August 5, 2024. The Company’s direct, wholly owned subsidiary, Private National Mortgage Acceptance
Company, LLC (“PNMAC”) guarantees the obligations of PLS under the Nomura Repurchase Agreements,
The Nomura Servicing Spread Agreement provides additional financing
for Ginnie Mae mortgage servicing rights and related excess servicing spread in addition to (i) the Amended and Restated Series 2016-MSRVF1
Master Repurchase Agreement by and among PLS, as seller, Atlas Securitized Products, L.P., as administrative agent to the buyers (“Atlas”),
Nexera Holding LLC (“Nexera”), as a buyer, Citibank, N.A. (“Citibank”), as a buyer, and PNMAC, as guarantor, dated
July 30, 2021 (the “Syndicated GMSR Servicing Spread Agreement”), (ii) a Series 2023-MSRVF1 Master Repurchase Agreement by
and among PLS, as seller, Goldman Sachs Bank USA, as administrative agent and buyer (“GS”), and PNMAC, as guarantor (the “GS
Servicing Spread Agreement”), (iii) the Series 2023-GTL1 Loan issued February 28, 2023, and (iv) the previously issued term notes.
The Nomura SAR Agreement provides additional financing for the Ginnie Mae servicing advances in addition to (i) that certain Amended and
Restated Series 2020-MSRVF1 Master Repurchase Agreement by and among PLS, as seller, Atlas, as administrative agent to the buyers, Nexera,
as a buyer, Citibank, as a buyer, and PNMAC, as guarantor (the “Syndicated GMSR SAR Agreement”), and (ii) a Series 2020-SPIADVF1
Master Repurchase Agreement by and among PLS, as seller, and GS, as administrative agent and buyer, (the “GS SAR Agreement”).
The maximum purchase price available from Nomura under each of the
Nomura Servicing Spread Agreement and the Nomura SAR Agreement is $350 million, each of which may be reduced by amounts outstanding under
the other agreement. PLS is required to maintain a minimum of $50 million outstanding with Nomura in connection with the Nomura Servicing
Spread Agreement, in addition to the minimum of $50 million each required to be outstanding with both Atlas and Citibank under the Syndicated
GMSR Servicing Spread Agreement and GS under the GS Servicing Spread Agreement.
Common Terms of the Nomura Repurchase Agreements
The applicable VFNs pledged under the Nomura Servicing Spread Agreement
and the Nomura SAR Agreement also serve as cross-collateral for PLS’ obligations under the other repurchase agreements and credit
facilities between PNMAC and its subsidiaries and Nomura.
The principal amount paid by Nomura for the applicable VFN is based
upon a percentage of the market value of the applicable VFN. Upon PLS’ repurchase of the applicable VFN, PLS is required to repay
Nomura the principal amount relating thereto plus accrued interest (at a rate reflective of the current market based on a spread above
the Secured Overnight Financing Rate) to the date of such repurchase.
The Nomura Repurchase Agreements contain margin call provisions
that provide Nomura with certain rights in the event of a significant decline in the market value of the purchased VFN. Under these
provisions, Nomura may require PLS to transfer cash or additional eligible assets into the Issuer Trust for the benefit of Nomura
with an aggregate market value in an amount sufficient to eliminate any margin deficit resulting from a market value decline.
The Nomura Repurchase Agreements require that PLS make certain representations,
warranties and covenants customary for this type of transaction, including certain financial covenants consistent with PLS’ other
credit facilities.
The Nomura Repurchase Agreements contain events of default (subject
to certain materiality thresholds and grace periods), including payment defaults, breaches of covenants and/or certain representations
and warranties, cross-defaults, guarantor defaults, bankruptcy or insolvency proceedings and other events of default customary for this
type of transaction. The remedies for such events of default include the acceleration of the principal amount outstanding under the applicable
Nomura Repurchase Agreements, the liquidation by Nomura of the applicable VFN, and the right of Nomura to exercise certain of PLS’
rights related to the owner trust certificate.
Draws on the Syndicated GMSR SAR Agreement, GS SAR Agreement and the
Nomura SAR Agreement must be made on a pro rata basis. Draws on the Syndicated GMSR Servicing Spread Agreement, GS Servicing Spread
Agreement and the Nomura Servicing Spread Agreement need not be drawn pro rata relative to each other.
Series 2023-MSRVF2 and Series 2020-SPIADVF1 Guaranty
The obligations of PLS under the Nomura Servicing Spread Agreement
and the Nomura SAR Agreement are guaranteed in full by PNMAC under the Guaranty by Private National Mortgage Acceptance Company, LLC,
as guarantor, dated as of August 4, 2023 (“Nomura Guaranty”).
The foregoing descriptions do not purport to be complete and are qualified
in their entirety by reference to the other descriptions and the full text of the agreements and amendments in the following: (i)(a) the
Nomura Servicing Spread Agreement, (b) the Nomura SAR Agreement, and (c) the Nomura Guaranty, all of which have been filed with this Current
Report on Form 8-K as Exhibit 10.1 through Exhibit 10.3, respectively, (ii) the Series 2023-GTL1 Loan Agreement, which was filed on March
3, 2023 with the Company’s Current Report on Form 8-K as Exhibit 10.1, (iii) GS Servicing Spread Agreement and GS SAR Agreement
both of which were filed on February 13, 2023 with the Company’s Current Report on Form 8-K as Exhibit 10.1 and Exhibit 10.2, respectively,
(iv)(a) the Syndicated GMSR Servicing Spread Agreement, and (b) the Syndicated GMSR SAR Agreement, both of which were filed on August
5, 2021 with the Company’s Current Report on Form 8-K as Exhibit 10.1 and Exhibit 10.2, respectively, and (v) the full text of all
other amendments to the foregoing filed thereafter with the SEC.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this report is incorporated
herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
Description |
|
|
10.1 |
Series 2023-MSRVF2 Master Repurchase Agreement, dated as of August 4, 2023, by and among PennyMac Loan Services, LLC and Nomura Corporate Funding Americas, LLC |
10.2 |
Series 2020-SPIADVF1 Master Repurchase Agreement, dated as of August 4, 2023, by and among PennyMac Loan Services, LLC and Nomura Corporate Funding Americas, LLC |
10.3 |
Guaranty, by Private National Mortgage Acceptance Company, LLC, as guarantor, in favor of Nomura Corporate Funding Americas, LLC, dated as of August 4, 2023 |
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
PENNYMAC FINANCIAL SERVICES, INC. |
|
|
Dated: August 10, 2023 |
/s/ Daniel S. Perotti |
|
Daniel S. Perotti
Senior Managing Director and Chief Financial Officer |
EXHIBIT 10.1
EXECUTION VERSION
MASTER REPURCHASE AGREEMENT
among
NOMURA CORPORATE FUNDING AMERICAS, LLC, as administrative
agent (“Administrative Agent”)
and
NOMURA CORPORATE FUNDING AMERICAS, LLC, as buyer
(“Buyer”)
and
PENNYMAC LOAN SERVICES, LLC, as seller (“Seller”)
Dated as of August 4, 2023
PNMAC GMSR ISSUER TRUST
MSR COLLATERALIZED NOTES,
SERIES 2023-MSRVF2
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS |
1 |
Section 1.01 |
Certain Defined Terms |
1 |
Section 1.02 |
Other Defined Terms |
14 |
ARTICLE II GENERAL TERMS |
15 |
Section 2.01 |
Transactions |
15 |
Section 2.02 |
Procedure for Entering into Transactions |
15 |
Section 2.03 |
Repurchase; Payment of Repurchase Price |
16 |
Section 2.04 |
Price Differential |
16 |
Section 2.05 |
Margin Maintenance |
16 |
Section 2.06 |
Payment Procedure |
17 |
Section 2.07 |
Application of Payments |
17 |
Section 2.08 |
Use of Purchase Price and Transaction Requests |
18 |
Section 2.09 |
Recourse |
18 |
Section 2.10 |
Requirements of Law |
18 |
Section 2.11 |
Taxes |
19 |
Section 2.12 |
Indemnity |
20 |
Section 2.13 |
Additional Balance |
20 |
Section 2.14 |
Fees |
21 |
Section 2.15 |
Termination |
21 |
ARTICLE III REPRESENTATIONS AND WARRANTIES
|
21 |
Section 3.01 |
Seller Existence |
21 |
Section 3.02 |
Licenses |
21 |
Section 3.03 |
Power |
22 |
Section 3.04 |
Due Authorization |
22 |
Section 3.05 |
Financial Statements |
22 |
Section 3.06 |
No Event of Default |
23 |
Section 3.07 |
Solvency |
23 |
Section 3.08 |
No Conflicts |
23 |
Section 3.09 |
True and Complete Disclosure |
23 |
Section 3.10 |
Approvals |
24 |
Section 3.11 |
Litigation |
24 |
Section 3.12 |
Material Adverse Change |
24 |
Section 3.13 |
Ownership |
24 |
Section 3.14 |
The Note |
25 |
Section 3.15 |
Taxes |
25 |
Section 3.16 |
Investment Company |
25 |
Section 3.17 |
Chief Executive Office; Jurisdiction of Organization |
26 |
Section 3.18 |
Location of Books and Records |
26 |
Section 3.19 |
ERISA |
26 |
Section 3.20 |
Financing of Note and Additional Balances |
26 |
Section 3.21 |
Agreements |
26 |
Section 3.22 |
Other Indebtedness |
27 |
Section 3.23 |
No Reliance |
27 |
Section 3.24 |
Plan Assets |
27 |
Section 3.25 |
Anti-Money Laundering Laws |
27 |
Section 3.26 |
Anti-Corruption Laws |
27 |
Section 3.27 |
Compliance with 1933 Act |
28 |
Section 3.28 |
Compliance with Laws |
28 |
Section 3.29 |
The Ginnie Mae Contract |
28 |
Section 3.30 |
Ginnie Mae Approvals |
28 |
Section 3.31 |
No Adverse Actions |
29 |
Section 3.32 |
Use of Proceeds |
29 |
Section 3.33 |
Reserved. |
29 |
Section 3.34 |
Sanctions Compliance. |
29 |
ARTICLE IV CONVEYANCE; REPURCHASE ASSETS; SECURITY
INTEREST |
30 |
Section 4.01 |
Ownership |
30 |
Section 4.02 |
Security Interest |
30 |
Section 4.03 |
Further Documentation |
31 |
Section 4.04 |
Changes in Locations, Name, etc. |
31 |
Section 4.05 |
Performance by Buyer of Seller’s Obligations |
31 |
Section 4.06 |
Proceeds |
31 |
Section 4.07 |
Remedies |
32 |
Section 4.08 |
Limitation on Duties Regarding Preservation of Repurchase Assets |
33 |
Section 4.09 |
Powers Coupled with an Interest |
33 |
Section 4.10 |
Release of Security Interest |
33 |
Section 4.11 |
Reinstatement |
33 |
Section 4.12 |
Subordination |
33 |
ARTICLE V CONDITIONS PRECEDENT |
33 |
Section 5.01 |
Initial Transaction |
33 |
Section 5.02 |
All Transactions |
34 |
Section 5.03 |
Closing Subject to Conditions Precedent |
35 |
ARTICLE VI COVENANTS |
38 |
Section 6.01 |
Litigation |
38 |
Section 6.02 |
Prohibition of Fundamental Changes |
38 |
Section 6.03 |
[Reserved] |
38 |
Section 6.04 |
No Adverse Claims |
38 |
Section 6.05 |
Assignment |
38 |
Section 6.06 |
Security Interest |
38 |
Section 6.07 |
Records |
39 |
Section 6.08 |
Books |
39 |
Section 6.09 |
Approvals |
39 |
Section 6.10 |
Insurance |
39 |
Section 6.11 |
Distributions |
39 |
Section 6.12 |
Applicable Law |
40 |
Section 6.13 |
Existence; Ginnie Mae Approvals |
40 |
Section 6.14 |
Change in Organizational Documents |
40 |
Section 6.15 |
Taxes |
41 |
Section 6.16 |
Transactions with Affiliates |
41 |
Section 6.17 |
Guarantees |
41 |
Section 6.18 |
Indebtedness |
41 |
Section 6.19 |
True and Correct Information |
41 |
Section 6.20 |
No Pledge |
41 |
Section 6.21 |
Plan Assets |
41 |
Section 6.22 |
Sharing of Information |
42 |
Section 6.23 |
Modification of the Base Indenture and Series 2023-MSRVF2 Indenture Supplement |
42 |
Section 6.24 |
Reporting Requirements |
42 |
Section 6.25 |
Liens on Substantially All Assets |
46 |
Section 6.26 |
Litigation Summary |
46 |
Section 6.27 |
Material Change in Business |
46 |
Section 6.28 |
MSR Valuation. |
47 |
Section 6.29 |
Ginnie Mae Contract |
47 |
Section 6.30 |
Trigger Event MSR Asset Sale |
47 |
Section 6.31 |
Termination of Servicing Notice |
47 |
Section 6.32 |
[Reserved]. |
47 |
Section 6.33 |
Ginnie Mae Audit and Approval Maintenance |
47 |
Section 6.34 |
Sale and Lease-Backs |
48 |
Section 6.35 |
Fiscal Year |
48 |
Section 6.36 |
Most Favored Status |
48 |
Section 6.37 |
Quality Control. |
48 |
ARTICLE VII DEFAULTS/RIGHTS AND REMEDIES OF BUYER
UPON DEFAULT |
49 |
Section 7.01 |
Events of Default |
49 |
Section 7.02 |
No Waiver |
52 |
Section 7.03 |
Due and Payable |
52 |
Section 7.04 |
Fees |
52 |
Section 7.05 |
Default Rate |
52 |
ARTICLE VIII ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS;
SEPARATE ACTIONS BY BUYER |
52 |
Section 8.01 |
Entire Agreement; Amendments |
52 |
Section 8.02 |
Waivers, Separate Actions by Buyer |
53 |
ARTICLE IX SUCCESSORS AND ASSIGNS |
53 |
Section 9.01 |
Successors and Assigns |
53 |
Section 9.02 |
Participations and Transfers |
53 |
Section 9.03 |
Buyer and Participant Register |
55 |
ARTICLE X AGENT PROVISIONS |
55 |
Section 10.01 |
Appointment of Administrative Agent |
55 |
Section 10.02 |
Powers and Duties |
56 |
Section 10.03 |
General Immunity |
56 |
Section 10.04 |
Administrative Agent to Act as Buyer |
57 |
Section 10.05 |
Buyer’s Representations, Warranties and Acknowledgment |
57 |
Section 10.06 |
Right to Indemnity |
58 |
Section 10.07 |
Successor Administrative Agent |
58 |
Section 10.08 |
Delegation of Duties |
59 |
Section 10.09 |
Right to Realize on Collateral |
59 |
Section 10.10 |
Erroneous Payments |
60 |
ARTICLE XI MISCELLANEOUS |
61 |
Section 11.01 |
Survival |
61 |
Section 11.02 |
Indemnification |
61 |
Section 11.03 |
Nonliability of Buyer |
62 |
Section 11.04 |
Governing Law; Submission to Jurisdiction; Waivers |
63 |
Section 11.05 |
Notices |
64 |
Section 11.06 |
Severability |
65 |
Section 11.07 |
Section Headings |
65 |
Section 11.08 |
Counterparts |
65 |
Section 11.09 |
Periodic Due Diligence Review |
66 |
Section 11.10 |
Hypothecation or Pledge of Repurchase Assets |
66 |
Section 11.11 |
Non-Confidentiality of Tax Treatment |
66 |
Section 11.12 |
Set-off; Netting |
67 |
Section 11.13 |
Intent |
68 |
Schedule 1 |
– |
Responsible
Officers of Seller |
Schedule 2 |
– |
Asset Schedule |
Schedule 3 |
– |
Buyer Account |
Schedule 4 |
– |
Restricted Participants |
Exhibit A |
– |
Form of Transaction
Notice |
Exhibit B |
– |
Existing Indebtedness |
MASTER REPURCHASE AGREEMENT
This
Master Repurchase Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time, this “Agreement”)
is made as of August 4, 2023, among NOMURA CORPORATE FUNDING AMERICAS, LLC (“Nomura”), as administrative agent
(in such capacity, the “Administrative Agent”), Nomura, as buyer, and PENNYMAC LOAN SERVICES, LLC, as seller (“Seller”
or “PLS”).
W I T N E S S E T H:
WHEREAS,
from time to time the parties hereto may enter into transactions in which Seller agrees to transfer to Buyer (as defined below)
a certain Note (as defined below) against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller
such Note at a date certain or on demand, against the transfer of funds by Seller. Each such transaction shall be referred to herein
as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental
terms or conditions contained in any annexes identified herein, as applicable hereunder;
WHEREAS,
pursuant to the Base Indenture (as defined below) and the Series 2023-MSRVF2 Indenture Supplement (as defined below), PNMAC GMSR
ISSUER TRUST (the “Issuer”) has duly authorized the issuance of a Series of Notes, as a single Class of
Variable Funding Note, known as the “PNMAC GMSR ISSUER TRUST MSR Collateralized Notes, Series 2023-MSRVF2” (the “Note”);
WHEREAS,
Seller is the owner of the Note; and
WHEREAS,
Seller wishes to sell the Note to Buyer, which will be held by the Administrative agent on behalf of the Buyer, pursuant to
the terms of this Agreement;
NOW,
THEREFORE, in consideration of the mutual agreements set forth herein, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Buyer and Seller hereby agree as follows.
ARTICLE I
DEFINITIONS
Section 1.01 Certain
Defined Terms. Capitalized terms used herein shall have the indicated meanings:
“1933
Act” means the Securities Act of 1933, as amended from time to time.
“1934
Act” means the Securities Exchange Act of 1934, as amended from time to time.
“Accepted
Servicing Practices” means (a) with respect to any Mortgage Loan, the customary and usual standards of mortgage servicing
practices of prudent mortgage banking institutions in the business servicing mortgage loans for itself or for other third-party portfolios
of mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related mortgaged property is located; and (b) with
respect to all MSRs, those practices required by Ginnie Mae; provided, however, that in all cases the accepted servicing
practices must (i) comply with the terms of applicable laws and the related loan documents and (ii) meet a standard of care
not less than customary, reasonable and usual standards of practice for institutions that service loans that are similar to the Mortgage
Loans.
“Act
of Insolvency” means, with respect to any Person,
(a) such
Person shall become insolvent or generally fail to pay, or admit in writing its inability to pay, its debts as they become due, or shall
voluntarily commence any proceeding or file any petition under any bankruptcy, insolvency or similar Law, which proceeding or petition
seeks dissolution, liquidation or reorganization or the appointment of a receiver, trustee, custodian, conservator or liquidator for
itself or a substantial portion of its property, assets or business or to effect a plan or other arrangement with its creditors, or shall
file any answer admitting the jurisdiction of the court and the material allegations of an involuntary petition filed against it in any
bankruptcy, insolvency or similar proceeding, or shall be adjudicated bankrupt, or shall make a general assignment for the benefit of
creditors, or such Person, or a substantial part of its property, assets or business, shall be subject to, consent to or acquiesce in
the appointment of a receiver, trustee, custodian, conservator or liquidator for itself or a substantial property, assets or business;
(b) corporate
action shall be taken by such Person for the purpose of effectuating any of the foregoing;
(c) an
order for relief shall be entered in a case under the Bankruptcy Code in which such Person is a debtor; or
(d) involuntary
proceedings or an involuntary petition shall be commenced or filed against such Person under any bankruptcy, insolvency or similar Law,
which proceeding or petition seeks dissolution, liquidation or reorganization of such Person or the appointment of a receiver, trustee,
custodian, conservator or liquidator for such Person or of a substantial part of the property, assets or business of such Person, or
any writ, order, judgment, warrant of attachment, execution or similar process shall be issued or levied against a substantial part of
the property, assets or business of such Person.
“Additional
Balance” has the meaning set forth in Section 2.13.
“Additional
Repurchase Assets” has the meaning set forth in Section 4.02(b).
“Administrative
Agent” has the meaning given to such term in the preamble to this Agreement.
“Affiliate”
means, with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code; provided,
however, that in respect of Seller the term “Affiliate” shall include only PNMAC and its wholly owned subsidiaries.
“Agreement”
has the meaning given to such term in the preamble to this Agreement.
“Applicable
Lending Office” means the “lending office” of Buyer (or of an Affiliate of Buyer) designated in Section 11.05
hereof or such other office of Buyer (or of an Affiliate of Buyer) as Buyer may from time to time specify to Seller in writing as
the office by which the Transactions are to be made and/or maintained.
“Anti-Corruption Laws”
means any applicable U.S. law, regulation, or rule related to combating corruption or bribery, including, but not limited to, the
United States Foreign Corrupt Practices Act of 1977, as amended.
“Anti-Money
Laundering Laws” means any applicable U.S. law, regulation, or rule related to combating money laundering, suspicious
transactions or terrorist financing, including, but not limited to, the U.S. Bank Secrecy Act of 1986 (31 U.S.C. Sections 5301
et seq.) and all regulations issued pursuant to it, and the USA Patriot Act (in each case to the extent applicable to the parties and
to this Agreement).
“Applicable Law”
means all applicable U.S. federal, state and local provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations,
permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts
and arbitrators including, without limitation, the Anti-Corruption Laws and the Anti-Money Laundering Laws.
“Asset
Schedule” means Schedule 2 attached hereto, which lists the Note and the terms thereof, as such schedule shall be updated
from time to time in accordance with Section 2.02 hereof, including without limitation, in connection with Buyer’s
approval of any Additional Balances pursuant to Section 2.13.
“Asset
Value” has the meaning assigned to such term in the Pricing Side Letter.
“Bankruptcy
Code” means the United States Bankruptcy Code of 1978, as amended from time to time.
“Base
Indenture” means the Third Amended and Restated Base Indenture, dated as of April 1, 2020, among Buyer, Citibank, N.A.,
as indenture trustee, as calculation agent, as paying agent and as securities intermediary, Seller, as administrator and as servicer,
Atlas Securitized Products, L.P., as administrative agent, and the Credit Manager, including the schedules and exhibits thereto, as amended
by Amendment No. 1 dated as of June 8, 2022, as further amended by Amendment No. 2, dated as of June 9, 2022,
as further amended by Amendment No. 3, dated as of February 7, 2023 and as may be further amended, restated, supplemented
or otherwise modified from time to time.
“Base
Rate” has the meaning assigned to the term in the Pricing Side Letter.
“Business
Day” means any day excluding Saturday, Sunday, any day which is a legal holiday under the laws of the State of New York, any
day on which banking institutions located in any such state are authorized or required by law or other governmental action to close,
and any day on which the New York Stock Exchange or the Federal Reserve Bank of New York is authorized or obligated by law or executive
order to be closed.
“Buyer”
means Nomura Corporate Funding Americas, LLC, together with its successors, and any assignee of and Participant (subject to the restrictions
in Section 9.02) or Buyer Counterparty in the Transaction.
“Buyer
Account” means the account identified on Schedule 3 hereto.
“Buyer Counterparty”
has the meaning set forth in Section 9.02(b).
“Capital
Lease Obligations” means, for any Person, all obligations of such Person 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 a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall
be the capitalized amount thereof, determined in accordance with GAAP.
“Change
in Control” means any of the following shall occur without the prior written consent of the Administrative Agent:
(i) any
transaction or event as a result of which PNMAC ceases to own, beneficially or of record, more than 50% of the Equity Interests of Seller
or ceases to have the power to vote, directly, voting securities of Seller representing more than 50% of the voting power of the total
outstanding voting securities of Seller;
(ii) the
sale, transfer, or other disposition of all or substantially all of Seller’s or PNMAC’s assets (excluding any such action
taken in connection with any securitization transaction);
(iii) the
consummation of a merger or consolidation of Seller or PNMAC with or into another entity or any other corporate reorganization or series
of related transactions, if after giving effect thereto, more than 50% of the combined voting power of the voting securities or majority
voting control interest of the continuing or surviving entity’s stock outstanding immediately after such merger, consolidation
or such other reorganization is owned by Persons who were not stockholders of Seller or PNMAC immediately prior to such merger, consolidation
or other reorganization;
(iv) any
transaction or event as a result of which PennyMac Financial Services, Inc. ceases to (a) be a public company or (b) own,
directly or indirectly, 10% of the stock of PNMAC; or
(v) any
transaction or series of related transactions that has the effect of any one or more of the foregoing.
“Closing
Date” means August 4, 2023.
“Code”
means the Internal Revenue Code of 1986, as amended from time to time.
“Commitment”
means the obligation of Buyer to enter into Transactions with Seller with an aggregate outstanding Purchase Price at any one time not
to exceed the Maximum Purchase Price.
“Commitment
Fee” has the meaning assigned to the term in the Pricing Side Letter.
“Commitment
Period” means the period from and including the Closing Date to but not including the Termination Date or such earlier date
on which the Commitment shall have terminated pursuant to this Agreement.
“Confidential
Information” has the meaning set forth in Section 11.11(b).
“Control”,
“Controlling” or “Controlled” means the possession of the power to direct or cause the direction
of the management or policies of a Person through the right to exercise voting power or by contract, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.
“Credit Manager”
means Pentalpha Surveillance LLC and any successor thereto in such capacity.
“Default”
means an event, condition or default that, with the giving of notice, the passage of time, or both, would constitute an Event of Default.
“Division”
means, with respect to any Person that is a limited liability company organized under the laws of the State of Delaware, that any such
Person (a) divides into two or more Persons (whether or not the original Person or Subsidiary thereof survives such division) or
(b) creates, or reorganizes into, one or more series, in each case, as contemplated under the laws of the State of Delaware, including
Section 18-217 of the Delaware Limited Liability Company Act.
“Dollars”
and “$” means dollars in lawful currency of the United States of America.
“Equity
Interests” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of
a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and
membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
“ERISA
Affiliate” means any person (as defined in Section 3(9) of ERISA) that together with Seller or PNMAC would be a
member of the same “controlled group” or is treated as a single employer under Section 414(b) or (c) of
the Code or solely for purposes of Section 302 of ERISA and Section 412 of the Code is treated as single employer described
in Section 414 of the Code.
“ERISA
Event” has the meaning assigned to such term in Section 6.24(a)(6).
“Event
of Default” has the meaning assigned to such term in Section 7.01.
“Existing
Indebtedness” has the meaning specified in Section 3.22.
“Expenses”
means all present and future expenses reasonably incurred by or on behalf of Buyer in connection with the negotiation, execution or enforcement
of this Agreement or any of the other Program Agreements and any amendment, supplement or other modification or waiver related hereto
or thereto, whether incurred heretofore or hereafter, which expenses shall include the reasonable and documented cost of title, lien,
judgment and other record searches; reasonable and documented attorneys’ fees; any ongoing audits or due diligence costs in connection
with valuation, entering into Transactions or determining whether a Margin Deficit may exist; and costs of preparing and recording any
UCC financing statements or other filings necessary to perfect the security interest created hereby.
“FATCA”
Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantially
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any
agreement entered into pursuant to Section 1471(b) of the Code, or any U.S. or non-U.S. fiscal or regulatory legislation,
guidance, notes, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code.
“FHA”
means the Federal Housing Administration, an agency within HUD, or any successor thereto, and including the Federal Housing Commissioner
and the Secretary of HUD where appropriate.
“Fidelity
Insurance” means insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and
destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount acceptable
to Seller’s regulators.
“Financial
Statements” means the consolidated financial statements of Seller prepared in accordance with GAAP for the year or other period
then ended.
“GAAP”
means U.S. generally accepted accounting principles that are (i) consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its successors, as in effect from time to time, and (ii) applied consistently with principles applied
to past financial statements of Seller and its subsidiaries; provided, that a certified public accountant would, insofar
as the use of such accounting principles is pertinent, be in a position to deliver an unqualified opinion (other than a qualification
regarding changes in generally accepted accounting principles) that such principles have been properly applied in preparing such financial
statements.
“Ginnie Mae”
means the Government National Mortgage Association, its successors and assigns.
“Ginnie Mae Contract”
means (i) 12 U.S.C. § 1721(g) and the implementing regulations governing the MBS Program, 24 C.F.R. Part 300;
(ii) applicable Guaranty Agreements and contractual agreements between Ginnie Mae and Seller; and (iii) the Ginnie Mae Guide
and other applicable guides.
“Ginnie Mae Guide”
means the Ginnie Mae Mortgage-Backed Securities Guide, Handbook 5500.3, Rev. 1, as amended from time to time, and any related announcements,
directives and correspondence issued by Ginnie Mae.
“Ginnie Mae Requirements”
means all rights, powers, interests and prerogatives of Ginnie Mae in and to the MSRs arising under the Ginnie Mae Contract, the Acknowledgment
Agreement or any other agreement between Seller and Ginnie Mae.
“GLB Act”
has the meaning set forth in Section 11.11(b).
“Governmental
Actions” means any and all consents, approvals, permits, orders, authorizations, waivers, exceptions, variances, exemptions
or licenses of, or registrations, declarations or filings with, any Governmental Authority required under any Governmental Rules.
“Governmental
Authority” means any nation or government, any state or other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions over Seller or Buyer, as applicable.
“Governmental
Rules” means any and all laws, statutes, codes, rules, regulations, ordinances, orders, writs, decrees and injunctions, of
any Governmental Authority and any and all legally binding conditions, standards, prohibitions, requirements and judgments of any Governmental
Authority.
“Guarantee”
means, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in
any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness
against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services,
or to take-or-pay or otherwise); provided that the term “Guarantee” shall not include (i) endorsements for collection
or deposit in the ordinary course of business, or (ii) obligations to make servicing advances for delinquent taxes and insurance
or other obligations in respect of a mortgaged property. The amount of any Guarantee of a Person shall be deemed to be an amount equal
to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “Guarantee”
and “Guaranteed” used as verbs shall have correlative meanings.
“Indebtedness”
means, for any Person: (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 of such Person 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 such
Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise)
of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for
the account of such Person; (e) Capital Lease Obligations of such Person; (f) obligations of such Person under repurchase
agreements, sale/buy-back agreements or like arrangements, including, without limitation, any Indebtedness arising hereunder; (g) Indebtedness
of others Guaranteed by such Person; (h) all obligations of such Person incurred in connection with the acquisition or carrying
of fixed assets by such Person; (i) Indebtedness of general partnerships of which such Person is a general partner and (j) with
respect to clauses (a)-(i) above both on and off balance sheet.
“Indenture”
means the Base Indenture, together with the Series 2023-MSRVF2 Indenture Supplement thereto.
“Indenture
Trustee” means Citibank, N.A., its permitted successors and assigns.
“Issuer”
has the meaning given to such term in the recitals to this Agreement.
“Laws”
means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Governmental Authority.
“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.
“Margin”
has the meaning assigned to the term in the Pricing Side Letter.
“Margin
Call” has the meaning set forth in Section 2.05(a).
“Margin
Deadlines” has the meaning set forth in Section 2.05(b).
“Margin
Deficit” has the meaning set forth in Section 2.05(a).
“Material
Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business,
properties, assets, condition (financial or otherwise) or prospects of Seller or any Affiliate that is a party to any Program Agreement;
(b) a material impairment of the ability of Seller or any Affiliate that is a party to any Program Agreement to perform under any
Program Agreement and to avoid any Event of Default; (c) a material adverse effect upon the legality, validity, binding effect
or enforceability of any Program Agreement against Seller or any Affiliate that is a party to any Program Agreement or (d) a material
adverse effect upon the existence, perfection, priority or enforceability of Buyer’s security interest in a material portion of
the Repurchase Assets.
“Maximum
Purchase Price” has the meaning assigned to the term in the Pricing Side Letter.
“Monthly
Report Date” has the meaning set forth in Section 6.24(c).
“Multiemployer
Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which Seller or any
of its ERISA Affiliates has contributed, or has been obligated to contribute.
“Nomura Indebtedness”
means Indebtedness (other than hereunder), entered into between (i) Buyer or one of its Affiliates, and (ii) any one or more
of the VFN Guarantor or any of its Subsidiaries.
“Non-Excluded
Taxes” has the meaning set forth in Section 2.11(a).
“Non-Usage Fees”:
has the meaning given to such term in the Pricing Side Letter.
“Note”
has the meaning given to such term in the recitals to this Agreement.
“Notice”
or “Notices” means all requests, demands and other communications, in writing (including facsimile transmissions and
e-mails), sent by overnight delivery service, facsimile transmission, electronic transmission or hand-delivery to the intended recipient
at the address specified in Section 11.05 or, as to any party, at such other address as shall be designated by such party
in a written notice to the other party.
“Obligations”
means (a) all of Seller’s indebtedness, obligations to pay the outstanding principal balance of the Purchase Price, together
with interest thereon on the Termination Date, outstanding interest due on each Price Differential Payment Date, and other obligations
and liabilities, to Administrative Agent, Buyer or their respective Affiliates arising under, or in connection with, the Program Agreements,
whether on account of principal, interest, reimbursement obligations, fees, indemnities, out-of-pocket costs, and expenses (including
all fees, charges and disbursements of counsel to the Administrative Agent or Buyer that are required to be paid by seller pursuant hereto
or under any other Program Agreement) or otherwise, whether now existing or hereafter arising; (b) any and all sums reasonably
incurred and paid by Buyer or on behalf of Buyer in order to preserve any Repurchase Asset or its interest therein; (c) all Servicing
Diligence Agent Fees; (d) in the event of any proceeding for the collection or enforcement of any of Seller’s indebtedness,
obligations or liabilities referred to in this definition, the reasonable expenses of retaking, holding, collecting, preparing for sale,
selling or otherwise disposing of or realizing on any Repurchase Asset, or of any exercise by Buyer of its rights under the Program Agreements,
including, without limitation, reasonable attorneys’ fees and disbursements and court costs’ and (e) all of Seller’s
indemnity obligations to Buyer pursuant to the Program Agreements.
“OFAC”
means the United States Treasury Department’s Office of Foreign Assets Control.
“Officer’s
Compliance Certificate” has the meaning assigned to such term in the Pricing Side Letter.
“Organizational
Documents” means the corporate charter and by-laws, the articles of organization and operating agreement and the partnership
certificate and partnership agreement, as applicable of a Person.
“Other
Taxes” has the meaning set forth in Section 2.11(b).
“Participant”
has the meaning set forth in Section 9.02(a).
“PBGC”
means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Pension
Protection Act” means the Pension Protection Act of 2006, as amended from time to time.
“Person”
means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political subdivision or agency thereof.
“Plan”
means any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA that is subject to Title
IV of ERISA or Section 412 of the Code (other than a Multiemployer Plan) and that is maintained and contributed to by (or to which
there is an obligation to contribute), or at any time during the five (5) calendar years preceding the date of this Agreement was
maintained or contributed to by (or to which there was an obligation to contribute), Seller or any Subsidiary thereof or any of their
respective ERISA Affiliates.
“PLS”
has the meaning given to such term in the preamble to this Agreement.
“PNMAC”
means Private National Mortgage Acceptance Company, LLC, its permitted successors and assigns.
“Price
Differential” means with respect to any Transaction as of any date of determination, an amount equal to the product of (A) the
Pricing Rate for such Transaction and (B) the Purchase Price for such Transaction, calculated daily on the basis of a 360 day year
for the actual number of days during the Price Differential Period.
“Price
Differential Payment Date” means, for as long as any Obligations shall remain owing by Seller to Buyer, each Payment Date (as
defined in the Indenture).
“Price
Differential Period” means, the period from and including a Price Differential Payment Date, up to but excluding the next Price
Differential Payment Date.
“Price
Differential Statement Date” has the meaning set forth in Section 2.04.
“Pricing
Rate” means Base Rate plus the applicable Margin.
“Pricing
Side Letter” means the letter agreement captioned “Pricing Side Letter” dated as of August 4, 2023, among
Administrative Agent, Buyer, Seller and the VFN Guarantor, as amended, restated, supplemented or otherwise modified from time to time.
“Proceeds”
means “proceeds” as defined in Section 9-102(a)(64) of the UCC.
“Program
Agreements” means this Agreement, the Pricing Side Letter, the VFN Guaranty, the Base Indenture and the Series 2023-MSRVF2
Indenture Supplement, as each of the same may hereafter be amended, restated, supplemented or otherwise modified from time to time; provided,
however, that the Program Agreements shall not include any rights created pursuant to an Indenture Supplement other than the Series 2023-MSRVF2
Indenture Supplement, or any rights under the Base Indenture or any other Program Agreements relating to such other Indenture Supplements.
“Property”
means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Purchase
Date” means, subject to the satisfaction of the conditions precedent set forth in Article V hereof, each Funding
Date (as defined in the Indenture) on which a Transaction is entered into by Buyer pursuant to Section 2.02 or such other
mutually agreed upon date as more particularly set forth on Exhibit A hereto.
“Purchase
Price” means on any date of determination:
(i) the
price at which each Purchased Asset (or portion thereof) is transferred by Seller to Buyer, which shall equal the Asset Value of such
Purchased Asset on the related Purchase Date, minus
(ii) the
sum of (a) any Purchase Price paid with respect to such Purchased Asset pursuant to Section 2.03, plus (b) any
Additional Note Payment made with respect to such Purchased Asset pursuant to Section 4.4(b) or Section 4.5(e) of
the Indenture, plus (c) any Redemption Amount paid pursuant to Section 13.1 of the Indenture, plus (d) any
amounts paid or applied with respect to such Purchased Asset pursuant to Section 2.05.
“Purchase
Price Percentage” has the meaning assigned to the term in the Pricing Side Letter.
“Purchased
Assets” means, collectively, the Note and all outstanding Additional Balances together with the Repurchase Assets related to
such Note and Additional Balances transferred by Seller to Buyer in a Transaction hereunder, as listed on the related Asset Schedule
attached to the related Transaction Notice.
“Records”
means all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information
maintained by Seller, or any other person or entity with respect to the Purchased Assets.
“Reportable
Event” means a reportable event as defined in Section 4043 of ERISA with respect to a Plan as to which the PBGC has not
waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of
such event.
“Repurchase
Assets” has the meaning set forth in Section 4.02(a).
“Repurchase
Date” means the earlier of (i) the Termination Date or (ii) the date requested by Seller on which the Repurchase
Price is paid pursuant to Section 2.03.
“Repurchase
Price” means the price at which Purchased Assets are to be transferred from Buyer to Seller upon termination of a Transaction,
which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price, the accrued but
unpaid Price Differential and Obligations payable to the Buyer under any Transaction Document as of the date of such determination.
“Repurchase
Rights” has the meaning set forth in Section 4.02(b).
“Requirement
of Law” means, with respect to any Person, any law, treaty, rule or regulation or determination of an arbitrator, a court
or other Governmental Authority, applicable to or binding upon such Person or any of its property or to which such Person or any of its
property is subject.
“Responsible
Officer” means as to any Person, the chief executive officer or, with respect to financial matters, the chief financial officer
or treasurer of such Person. The Responsible Officers of Seller as of the Closing Date are listed on Schedule 1 hereto.
“Restricted Participant”
shall mean a direct competitor of Seller and its affiliates set forth in Schedule 4 attached hereto (and updated in good faith
by Seller through a written notice delivered to Buyer by Seller from time to time).
“Sanctions”
shall have the meaning set forth in Section 3.34.
“Sanctioned Jurisdiction”
shall have the meaning set forth in Section 3.34.
“SEC”
means the Securities and Exchange Commission, or any successor thereto.
“Seller”
has the meaning assigned to such term in the preamble to this Agreement and includes PLS’ permitted successors and assigns.
“Seller
Termination Option” means (a) Buyer has or shall incur material costs in connection with those matters provided for in
Section 2.10 or 2.11 and (b) Buyer requests that Seller pay to Buyer those costs in connection therewith.
“Series 2020-SPIADVF1
GS Repurchase Agreement” means the Series 2020-SPIADVF1 Repurchase Agreement, dated as of February 7, 2023, among
the PLS, as seller, Nomura Corporate Funding Americas, LLC, as administrative agent and Nomura Corporate Funding Americas, LLC, as buyer,
as amended, restated, supplemented or otherwise modified from time to time.
“Series 2023-MBSADV2
Indenture Supplement” means the Series 2023-MBSADV2 Indenture Supplement, dated as of August 4, 2023, among the
Issuer, Citibank, N.A., as indenture trustee, as calculation agent, as paying agent and as securities intermediary, PLS, as administrator
and as servicer, and Nomura Corporate Funding Americas, LLC, as administrative agent, as amended, restated, supplemented or otherwise
modified from time to time.
“Series 2023-MBSADV2
Note Purchase Agreement” means the Series 2023-MBSADV1 Note Purchase Agreement, dated as of August 4, 2023, among
the Issuer, Nomura Corporate Funding Americas, LLC, as administrative agent and Nomura Corporate Funding Americas, LLC, as purchaser,
as amended, restated, supplemented or otherwise modified from time to time.
“Series 2023-MSRVF2
Indenture Supplement” means the Series 2023-MSRVF2 Indenture Supplement, dated as of August 4, 2023, among the
Issuer, Citibank, N.A., as indenture trustee, as calculation agent, as paying agent and as securities intermediary, PLS, as administrator
and as servicer, and Nomura Corporate Funding Americas, LLC, as administrative agent, as amended, restated, supplemented or otherwise
modified from time to time.
“Specified
Governmental Entity” means The Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Ginnie Mae, HUD,
the FHA, the VA or the United States Department of Agriculture Rural Development and, in each case any successor thereto.
“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.
“Taxes”
has the meaning assigned to such term in Section 2.11(a).
“Termination
Date” has the meaning assigned to such term in the Pricing Side Letter.
“Transaction”
has the meaning assigned to such term in the recitals to this Agreement.
“Transaction
Documents” means, collectively, (i) this Agreement, the Indenture, the Note Purchase Agreement, the PC Repurchase Agreement,
the Series 2023-MSRVF2 Repurchase Agreement, the Series 2020-SPIADVF1 Nomura Repurchase Agreement, the Participation Agreements,
the PC Guaranty, the PMT Guaranty, the Acknowledgment and Subordination Agreement, the Pricing Side Letter, the Participation Certificate
Schedule, all Notes, the Trust Agreement, the Administration Agreement, the Series 2023-MSRVF2 Indenture Supplement, the Amended
and Restated Series 2020-SPIADVF1 Indenture Supplement, the Series 2023-MBSADV2 Indenture Supplement, the Credit Management
Agreement, the Advance Verification Agent Agreement, and the MSR Valuation Agent Agreement and, (ii) each of the other documents,
instruments and agreements entered into on the date hereof and thereafter in connection with any of the foregoing or the transactions
contemplated thereby, each as amended, supplemented, restated, or otherwise modified from time to time; provided, that clause (ii) shall
not be deemed to include (a) any repurchase agreement or financing arrangement relating to any variable funding note or any Indenture
Supplement where Nomura Corporate Funding Americas, LLC is not the applicable administrative agent, or (b) any related rights pursuant
to any document referenced in part (i) stemming therefrom.
“Transaction
Notice” has the meaning assigned to such term in Section 2.02(a).
“Transaction
Register” has the meaning assigned to such term in Section 9.03(b).
“Uniform
Commercial Code” or “UCC” means the Uniform Commercial Code as in effect on the Closing Date in the State
of New York or the Uniform Commercial Code as in effect in the applicable jurisdiction.
“VA” means
the U.S. Department of Veterans Affairs, an agency of the United States of America, or any successor thereto including the Secretary
of Veterans Affairs.
“VFN
Guarantor” means Private National Mortgage Acceptance Company, LLC, in its capacity as guarantor under the VFN Guaranty.
“VFN
Guaranty” means the Guaranty, dated as of August 4, 2023, as amended, restated, supplemented or otherwise modified from
time to time, pursuant to which VFN Guarantor fully and unconditionally guarantees the obligations of Seller hereunder.
Section 1.02 Other
Defined Terms.
(a) Any
capitalized terms used and not defined herein shall have the meaning set forth in the Base Indenture or the Series 2023-MSRVF2
Indenture Supplement, as applicable.
(b) The
words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise specified herein, the
term “or” has the inclusive meaning represented by the term “and/or” and the term “including” is
not limiting. All references to Sections, subsections, Articles and Exhibits shall be to Sections, subsections, and Articles of, and
Exhibits to, this Agreement unless otherwise specifically provided.
(c) Reference
to and the definition of any document (including this Agreement) shall be deemed a reference to such document as it may be amended, restated,
supplement or otherwise modified from time to time.
(d) In
the computation of periods of time from a specified date to a later specified date, unless otherwise specified herein the words “commencing
on” mean “commencing on and including,” the word “from” means “from and including” and the
words “to” and “until” each means “to but excluding.”
ARTICLE II
GENERAL
TERMS
Section 2.01 Transactions.
Subject to the terms and conditions hereof, Buyer agrees to enter into Transactions with Seller for a Purchase Price outstanding at any
one time not to exceed the Maximum Purchase Price. During the Commitment Period, Seller may utilize the Commitment by requesting Transactions,
Seller may pay the Repurchase Price in whole or in part at any time during such period without penalty, and additional Transactions may
be entered into in accordance with the terms and conditions hereof. Buyer’s obligation to enter into Transactions pursuant to the
terms of this Agreement shall terminate on the Termination Date. Notwithstanding the foregoing, Buyer shall have no commitment or obligation
to enter into Transactions in connection with the Note to the extent the aggregate outstanding Purchase Price of all Transactions exceeds
the Maximum Purchase Price.
Section 2.02 Procedure
for Entering into Transactions.
(a) Seller
may enter into Transactions with Buyer under this Agreement during the Commitment Period on any Purchase Date; provided, that
Seller shall have given Buyer irrevocable notice (each, a “Transaction Notice”), which notice (i) shall be substantially
in the form of Exhibit A, (ii) shall be signed by a Responsible Officer of Seller and be received by Buyer prior to
1:00 p.m. (New York time) one (1) Business Day prior to the related Purchase Date on a Purchase Date that shall not
occur more than twice per calendar week without consent of the Administrative Agent, and (iii) shall specify: (A) (i) the
Maximum VFN Principal Balance of the Note, (ii) with respect to the first Purchase Date, the Initial Note Balance of the Note,
and, with respect to any other Purchase Date, the Additional Balance and (iii) after taking into account the Additional Balance
being requested on such Purchase Date, the outstanding VFN Principal Balance of the Note; (B) the Dollar amount of the requested
Purchase Price; (C) the requested Purchase Date; (D) the Repurchase Date; (E) the Pricing Rate and Repurchase Price
applicable to the Transaction; and (F) any additional terms or conditions of the Transaction not inconsistent with this Agreement.
Each Transaction Notice on any Purchase Date shall be in an amount equal to at least $250,000.
(b) If
Seller shall deliver to Buyer a Transaction Notice that satisfies the requirements of Section 2.02(a), Buyer will notify
Seller of its intent to remit the requested Purchase Price one (1) Business Day prior to the requested Purchase Date. If all applicable
conditions precedent set forth in Article V have been satisfied on or prior to the Purchase Date, then subject to
the foregoing, on the Purchase Date, Buyer shall remit the amount of the requested Purchase Price in U.S. Dollars and in immediately
available funds to the account of Seller specified in Schedule 5 to the Base Indenture (or such other account designated by Seller in
the Transaction Notice).
(c) Upon
entering into each Transaction hereunder, the Asset Schedule shall be automatically updated and replaced with the Asset Schedule attached
to the related Transaction Notice.
Section 2.03 Repurchase;
Payment of Repurchase Price.
(a) Seller
hereby promises to repurchase the Purchased Assets and pay all outstanding Obligations on the Termination Date.
(b) By
notifying Buyer in writing at least one (1) Business Day in advance, Seller shall be permitted, at its option, to prepay, subject
to Section 2.12, the Purchase Price in whole or in part at any time and accrued and unpaid interest on the amount so prepaid.
(c) To
the extent an Event of Default shall not have occurred and be continuing, the aggregate amount of payments of the Purchase Price by the
Seller over the term of this Agreement, including, without limitation, Margin Calls, that are paid from Collections on the Participation
Certificates shall not exceed 10% of the Purchase Price as of the date of any such payment. For the avoidance of doubt, nothing stated
in this Section 2.03(c), limits the Seller’s obligations to pay Repurchase Price, any Margin Calls or other obligations
as set forth in this Agreement from funds other than Collections on the Participation Certificates.
Section 2.04 Price
Differential. On each Price Differential Payment Date, Seller hereby promises to pay to Buyer all accrued and unpaid Price Differential
on the Transactions, as invoiced by Buyer to Seller three (3) Business Days prior to the related Price Differential Payment
Date (the “Price Differential Statement Date”); provided, that on each Price Differential Payment Date prior
to the occurrence and continuation of an Event of Default, the estimated Price Differential owed hereunder shall be subject to a true-up
of the amount determined by Buyer and agreed by Seller one (1) Business Day prior to the related Price Differential Payment Date.
If Buyer fails to deliver such invoice on the Price Differential Statement Date, on such Price Differential Payment Date Seller shall
pay the amount which Seller calculates as the Price Differential due and upon delivery of the statement, Seller shall remit to Buyer
any shortfall, or Buyer shall refund to Seller any excess, in the Price Differential paid. Price Differential shall accrue each day on
the Purchase Price at a rate per annum equal to the Pricing Rate. The Price Differential shall be computed on the basis of the actual
number of days in each Price Differential Period and a 360-day year.
Section 2.05 Margin
Maintenance.
(a) If
at any time the aggregate outstanding amount of the Purchase Price of the Note is greater than the related Asset Value or the Maximum
Purchase Price (such excess, a “Margin Deficit”) by $250,000 or more, then Buyer may by notice to Seller require Seller
to transfer to Buyer cash in an amount at least equal to the Margin Deficit (such requirement, a “Margin Call”).
(b) Notice
delivered pursuant to Section 2.05(a) may be given by any written or electronic means. With respect to a Margin Call,
any notice given before 10:00 a.m. (New York City time) on a Business Day shall be met, and the related Margin Call satisfied,
no later than 4:00 p.m. (New York City time) on the following Business Day. With respect to a Margin Call, any notice given after
10:00 a.m. (New York City time) on a Business Day shall be met, and the related Margin Call satisfied, no later than 3:00 p.m. (New
York City time) on the second (2nd) Business Day following the date of such notice. The foregoing time requirements for satisfaction
of a Margin Call are referred to as the “Margin Deadlines”. The failure of Buyer, on any one or more occasions, to
exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right
of Buyer to do so at a later date. Seller and Buyer each agree that a failure or delay by Buyer to exercise its rights hereunder shall
not limit or waive Buyer’s rights under this Agreement or otherwise existing by law or in any way create additional rights for
Seller.
(c) In
the event that a Margin Deficit exists, Buyer may retain any funds received by it to which Seller would otherwise be entitled hereunder,
which funds (i) may be held by Buyer against the related Margin Deficit or (ii) may be applied by Buyer against the Purchase
Price. Notwithstanding the foregoing, Buyer retains the right, in its sole discretion, to make a Margin Call in accordance with the provisions
of this Section 2.05.
Section 2.06 Payment
Procedure. Seller absolutely, unconditionally, and irrevocably, shall make, or cause to be made, all payments required to be made
by Seller hereunder. Seller shall deposit or cause to be deposited all amounts constituting collection, payments and proceeds of the
Note (including, without limitation, all fees and proceeds of sale) to Buyer Account.
Section 2.07 Application
of Payments.
(a) On
each Price Differential Payment Date prior to the occurrence of an Event of Default, all amounts deposited into Buyer Account (including
in accordance with Section 4.5 of the Base Indenture) from and after the immediately preceding Price Differential Payment Date
(or the Closing Date in connection with the initial Price Differential Payment Date) shall be applied as follows:
(i) first,
to the payment of any accrued and unpaid Price Differential owing;
(ii) second,
to the payment of Purchase Price outstanding to satisfy any Margin Deficit owing;
(iii) third,
ratably, to payment of all other costs and fees payable to Buyer or any other Person pursuant to this Agreement; and
(iv) fourth,
any remainder to Seller.
(b) Notwithstanding
the preceding provisions, if an Event of Default shall have occurred hereunder, all funds related to the Note shall be applied as follows:
(i) first,
to the payment of any accrued and unpaid Price Differential owing;
(ii) second,
to the payment of Purchase Price until reduced to zero;
(iii) third,
ratably, to payment of all other costs and fees payable to Buyer or any other Person pursuant to this Agreement;
(iv) fourth,
to the payment of any other Obligations; and
(v) fifth,
any remainder to Seller.
(c) To
the extent any Collections (as defined in the Base Indenture) are paid to reduce the outstanding purchase price under any other repurchase
transaction relating to MSR VFNs (as defined in the Base Indenture), Seller shall ensure that Collections are paid to reduce the outstanding
Purchase Price hereunder concurrently on a pro rata basis with such outstanding purchase price under such other repurchase transaction.
Section 2.08 Use
of Purchase Price and Transaction Requests. The Purchase Price shall be used by Seller for general corporate purposes.
Section 2.09 Recourse.
Notwithstanding anything else to the contrary contained or implied herein or in any other Program Agreement, Buyer shall have full, unlimited
recourse against Seller and its assets in order to satisfy the Obligations.
Section 2.10 Requirements
of Law.
(a) If
any Requirement of Law (other than with respect to any amendment made to Buyer’s certificate of trust and trust agreement or other
organizational or governing documents) or any change in the interpretation or application thereof or compliance by Buyer with any request
or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the Closing
Date:
(i) shall
subject Buyer to any tax of any kind whatsoever with respect to this Agreement or the Transactions (excluding income taxes, branch profits
taxes, franchise taxes or similar taxes imposed on Buyer as a result of any present or former connection between Buyer and the United
States, other than any such connection arising solely from Buyer having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement) or change the basis of taxation of payments to Buyer in respect thereof;
(ii) shall
impose, modify or hold any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of
Buyer which is not otherwise included in the determination of the Price Differential hereunder; or
(iii) shall
impose on Buyer any other condition;
and the result of any of the foregoing is to
increase the cost to Buyer, by an amount which Buyer deems to be material, of entering, continuing or maintaining this Agreement or any
other Program Agreement, the Transactions or to reduce any amount due or owing hereunder in respect thereof, then, in any such case,
Seller shall promptly pay Buyer such additional amount or amounts as calculated by Buyer in good faith as will compensate Buyer for such
increased cost or reduced amount receivable.
(b) If
Buyer shall have determined that the adoption of or any change in any Requirement of Law (other than with respect to any amendment made
to Buyer’s certificate of incorporation and by-laws or other organizational or governing documents) regarding capital adequacy
or in the interpretation or application thereof or compliance by Buyer or any corporation Controlling Buyer with any request or directive
regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the Closing Date
shall have the effect of reducing the rate of return on Buyer’s or such corporation’s capital as a consequence of its obligations
hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking
into consideration Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by Buyer
to be material, then from time to time, Seller shall promptly pay to Buyer such additional amount or amounts as will compensate Buyer
for such reduction.
(c) If
Buyer becomes entitled to claim any additional amounts pursuant to this Section 2.10, it shall promptly notify Seller of
the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this Section 2.10
submitted by Buyer to Seller shall be conclusive in the absence of manifest error.
Section 2.11 Taxes.
(a) Any
and all payments by or on behalf of Seller under or in respect of this Agreement or any other Program Agreements to which Seller is a
party shall be made free and clear of, and without deduction or withholding for or on account of, any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities (including penalties, interest and additions to tax) with respect
thereto, whether now or hereafter imposed, levied, collected, withheld or assessed by any taxation authority or other Governmental Authority
(collectively, “Taxes”), unless required by law. If Seller shall be required under any applicable Requirement of Law
to deduct or withhold any Taxes from or in respect of any sum payable under or in respect of this Agreement or any of the other Program
Agreements to Buyer (including for purposes of Section 2.10 and this Section 2.11, any assignee, successor
or participant), (i) Seller shall make all such deductions and withholdings in respect of Taxes, (ii) Seller shall pay the
full amount deducted or withheld in respect of Taxes to the relevant taxation authority or other Governmental Authority in accordance
with any applicable Requirement of Law, and (iii) the sum payable by Seller shall be increased as may be necessary so that after
Seller has made all required deductions and withholdings (including deductions and withholdings applicable to additional amounts payable
under this Section 2.11) Buyer receives an amount equal to the sum it would have received had no such deductions or withholdings
been made in respect of Non-Excluded Taxes. For purposes of this Agreement the term “Non-Excluded Taxes” are Taxes
other than, in the case of Buyer, Taxes that are (i) imposed on its overall net income (and franchise taxes imposed in lieu thereof)
by the jurisdiction under the laws of which Buyer is organized or of its Applicable Lending Office, or any political subdivision thereof,
unless such Taxes are imposed as a result of Buyer having executed, delivered or performed its obligations or received payments under,
or enforced, this Agreement or any of the other Program Agreements (in which case such Taxes will be treated as Non-Excluded Taxes) and
(ii) imposed pursuant to FATCA.
(b) In
addition, Seller hereby agrees to pay any present or future stamp, recording, documentary, excise, property or value-added taxes, or
similar taxes, charges or levies that arise from any payment made under or in respect of this Agreement or any other Program Agreement
or from the execution, delivery or registration of, any performance under, or otherwise with respect to, this Agreement or any other
Program Agreement (collectively, “Other Taxes”).
(c) Seller
hereby agrees to indemnify Buyer for, and to hold it harmless against, the full amount of Non-Excluded Taxes and Other Taxes, and the
full amount of Taxes of any kind imposed by any jurisdiction on amounts payable by Seller under this Section 2.11 imposed
on or paid by Buyer and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect
thereto. The indemnity by Seller provided for in this Section 2.11 shall apply and be made whether or not the Non-Excluded
Taxes or Other Taxes for which indemnification hereunder is sought have been correctly or legally asserted. Amounts payable by Seller
under the indemnity set forth in this Section 2.11(c) shall be paid within ten (10) days from the date
on which Buyer makes written demand therefor.
(d) Without
prejudice to the survival of any other agreement of Seller hereunder, the agreements and obligations of Seller contained in this Section 2.11
shall survive the termination of this Agreement and the other Program Agreements. Nothing contained in Section 2.10
or this Section 2.11 shall require any Buyer to make available any of its tax returns or any other information that it deems
to be confidential or proprietary.
(e) Buyer
will timely furnish Seller, or any agent of Seller, any tax forms or certifications (such as an applicable IRS Form W-8, IRS
Form W-9 or any successors to such IRS forms) that it is legally entitled to provide and that Seller or its agents may reasonably
request (A) to permit Seller or its agents to make payments to it without, or at a reduced rate of, deduction or withholding, (B) to
enable Seller or its agents to qualify for a reduced rate of withholding or deduction in any jurisdiction from or through which Seller
or its agents receive payments and (C) to enable Seller or its agents to satisfy reporting and other obligations under the Code
and Treasury Regulations and under any other applicable laws, and shall update or replace such tax forms or certifications as appropriate
or in accordance with their terms or subsequent amendments, and acknowledges that the failure to provide, update or replace any such
tax forms or certifications may result in the imposition of withholding or back-up withholding upon payments to Buyer.
Section 2.12 Indemnity.
Without limiting, and in addition to, the provisions of Section 11.02, Seller agrees to indemnify Buyer and to hold Buyer
harmless from any loss or expense that Buyer may sustain or incur as a consequence of (i) a default by Seller in payment when due
of the Repurchase Price or Price Differential or (ii) a default by Seller in making any prepayment of Repurchase Price after Seller
has given a notice thereof in accordance with Section 2.03.
Section 2.13 Additional
Balance. Subject to Section 2.01, in the event that Seller wishes an increase in the VFN Principal Balance, Seller shall
deliver to Administrative Agent a copy of the VFN Note Balance Adjustment Request that is delivered under the Indenture. If all the Funding
Conditions required pursuant to Section 5.02 hereof and the Indenture have been satisfied, then upon approval in writing
by Administrative Agent of such increase in the VFN Principal Balance (such increase, upon such approval, an “Additional Balance”),
the outstanding VFN Principal Balance set forth in the Asset Schedule hereof shall be automatically updated as set forth in the related
Transaction Notice in accordance with Section 2.02.
Section 2.14 Fees.
Seller shall pay the Commitment Fee and Non-Usage Fees as specified in (and in accordance with) the Pricing Side Letter. Such payment
shall be made in Dollars, in immediately available funds, without deduction, set off or counterclaim, to Buyer at such account designated
in writing by Buyer.
Section 2.15 Termination.
(a) Notwithstanding
anything to the contrary set forth herein, if a Seller Termination Option occurs, Seller may, upon five (5) Business Days’
prior written notice of such event, upon payment of the applicable Repurchase Price and satisfaction of the other termination conditions
set forth in the Indenture, terminate this Agreement and the Termination Date shall be deemed to have occurred (upon the expiration of
such five (5) Business Day period).
(b) In
the event that a Seller Termination Option as described in clause (a) of the definition thereof has occurred and Seller has
notified Buyer in writing of its option to terminate this Agreement, Buyer shall have the right to withdraw such request for payment
within three (3) Business Days of Seller’s notice of its exercise of Seller Termination Option and Seller shall no longer
have the right to terminate this Agreement.
(c) For
the avoidance of doubt, Seller shall remain responsible for all costs actually incurred by Buyer pursuant to Sections 2.10
and 2.11 in connection with any related prepayment.
ARTICLE III
REPRESENTATIONS
AND WARRANTIES
Seller represents and warrants
to Buyer as of the Closing Date and as of each Purchase Date for any Transaction that:
Section 3.01 Seller
Existence. Seller has been duly organized and is validly existing as a limited liability company in good standing under the laws
of the State of Delaware and in each other jurisdiction in which the transaction of its business makes such qualification necessary.
Section 3.02 Licenses.
Seller is duly licensed or is otherwise qualified in each jurisdiction in which it transacts business for the business which it conducts
and is not in default of any applicable federal, state or local laws, rules and regulations unless, in either instance, the failure
to take such action is not reasonably likely (either individually or in the aggregate) to cause a Material Adverse Effect and is not
in default of such state’s applicable laws, rules and regulations. Seller has the requisite power and authority and legal
right to own, sell and grant a lien on all of its right, title and interest in and to the Note. Seller has the requisite power and authority
and legal right to execute and deliver, engage in the transactions contemplated by, and perform and observe the terms and conditions
of, this Agreement, each Program Agreement and any Transaction Notice.
Section 3.03 Power.
Seller has all requisite corporate or other power and authority, and has all governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses,
authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect.
Section 3.04 Due
Authorization. Seller has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations
under each of the Program Agreements, as applicable. This Agreement, any Transaction Notice and the Program Agreements have been (or,
in the case of Program Agreements and any Transaction Notice not yet executed, will be, at the time of such execution) duly authorized,
executed and delivered by Seller, all requisite or other corporate action having been taken, and each is valid, binding and enforceable
against Seller in accordance with its terms except as such enforcement may be affected by bankruptcy, by other insolvency laws, or other
similar laws affecting the enforcement of creditor’s rights.
Section 3.05 Financial
Statements. (A) Seller has heretofore furnished to Buyer a copy of (a) its balance sheet for the fiscal year of Seller
ended December 31, 2022 and the related statements of income for Seller for such fiscal year, with the opinion thereon of Deloitte &
Touche LLP and (b) its balance sheet for the quarterly fiscal period of Seller ended December 31, 2022 and the related statements
of income for Seller for such quarterly fiscal period. All such financial statements are accurate, complete and correct and fairly present,
in all material respects, the financial condition of Seller (subject to normal year-end adjustments) and the results of its operations
as at such dates and for such fiscal periods, all in accordance with GAAP applied on a consistent basis, and to the best of Seller’s
knowledge, do not omit any material fact as of the date(s) thereof. Since December 31, 2022, there has been no material adverse
change in the consolidated business, operations or financial condition of Seller from that set forth in said financial statements nor
is Seller aware of any state of facts which (with notice or the lapse of time) would or could result in any such material adverse change.
Seller has no liabilities, direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or liabilities for taxes,
long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said balance sheet and related
statements, and at the present time there are no material unrealized or anticipated losses from any loans, advances or other commitments
of Seller except as heretofore disclosed to Buyer in writing.
(B) Seller
has heretofore caused VFN Guarantor to furnish to Buyer a copy of (a) its balance sheet for the fiscal year of VFN Guarantor ended
December 31, 2022 and the related statements of income for VFN Guarantor for such fiscal year, with the opinion thereon of Deloitte &
Touche LLP and (b) its balance sheet for the quarterly fiscal period of VFN Guarantor ended December 31, 2022 and the related
statements of income for VFN Guarantor for such quarterly fiscal period. All such financial statements are accurate, complete and correct
and fairly present, in all material respects, the financial condition of VFN Guarantor (subject to normal year-end adjustments) and the
results of its operations as at such dates and for such fiscal periods, all in accordance with GAAP applied on a consistent basis, and
to the best of Seller’s knowledge, do not omit any material fact as of the date(s) thereof. Since December 31, 2022,
there has been no material adverse change in the consolidated business, operations or financial condition of VFN Guarantor from that
set forth in said financial statements nor is Seller aware of any state of facts which (with notice or the lapse of time) would or could
result in any such material adverse change. VFN Guarantor has no liabilities, direct or indirect, fixed or contingent, matured or unmatured,
known or unknown, or liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved
against in, said balance sheet and related statements, and at the present time there are no material unrealized or anticipated losses
from any loans, advances or other commitments of VFN Guarantor except as heretofore disclosed to Buyer in writing.
Section 3.06 No
Event of Default. There exists no (a) Event of Default under Section 7.01 hereof or (b) default under any
mortgage, borrowing agreement or other instrument or agreement pertaining to indebtedness for borrowed money or to the repurchase of
mortgage loans or securities or other instrument or contractual or legal obligation to which it is a party or by which it is bound in
any respect that could reasonably be expected to result in a Material Adverse Effect.
Section 3.07 Solvency.
As of the date hereof and immediately after giving effect to each Transaction, the fair value of its assets is greater than the fair
value of its liabilities (including, without limitation, contingent liabilities if and to the extent required to be recorded as a liability
on the financial statements of it in accordance with GAAP) and Seller is solvent and will not be rendered insolvent by any Transaction
and, after giving effect to such Transaction, 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
and is not contemplating the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a
receiver, liquidator, conservator, trustee or similar official in respect of such entity or any of its assets. Seller is not selling
and/or pledging any Repurchase Assets with any intent to hinder, delay or defraud any of its creditors.
Section 3.08 No
Conflicts. The execution, delivery and performance by of Seller of this Agreement, any Transaction Notice hereunder and the Program
Agreements do not constitute or will not result in (a) any breach of any term or provision of the organizational documents of Seller,
(b) a breach of any indenture, loan agreement, warehouse line of credit, repurchase agreement, mortgage, deed of trust, Ginnie
Mae Contract or any other material contractual obligation of it; (c) a material default or an acceleration under any of the foregoing;
(d) the violation of any law, rule, regulation, order, judgment, writ, injunction or decree applicable to Seller or its property,
which conflict would have a Material Adverse Effect; (e) require the creation or imposition of any Lien upon any of the properties
or assets of Seller (other than any Liens created under any of this Agreement, any Transaction Notice and the Program Agreements in favor
of Buyer), or (f) or require any approval of stockholders, members or partners or any approval or consent of any Person under any
material contractual obligation of the it, except for such approvals or consents which have been obtained on or before the Closing Date.
Section 3.09 True
and Complete Disclosure. All information, reports, exhibits, schedules, financial statements or certificates of Seller or any Affiliate
thereof or any of their officers furnished or to be furnished to Buyer in connection with the initial or any ongoing due diligence of
Seller or any Affiliate or officer thereof, negotiation, preparation, or delivery of this Agreement or the other Program Agreements,
included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, are true and complete in all material respects
and do not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which
they are made, not misleading. All financial statements have been prepared in accordance with GAAP. There is no fact known to it that,
after due inquiry, could reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Program
Agreements or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished in writing to Buyer for
use in connection with the transactions contemplated hereby or thereby.
Section 3.10 Approvals.
No consent, approval, authorization or order of, registration or filing with, or notice to any governmental authority, court or other
Person is required under applicable law in connection with the execution, delivery and performance by Seller of this Agreement, any Transaction
Notice and the Program Agreements.
Section 3.11 Litigation.
There is no action, proceeding or investigation pending with respect to which Seller has received service of process or, to the best
of Seller’s knowledge threatened or affecting it or any of its property against it before any court, administrative agency or other
tribunal (A) asserting the invalidity of this Agreement, any Transaction, Transaction Notice or any Program Agreement, (B) seeking
to prevent the consummation of any of the transactions contemplated by this Agreement, any Transaction Notice or any Program Agreement,
(C) makes a claim individually or in the aggregate in an amount greater than 5% of VFN Guarantor’s Adjusted Tangible Net
Worth, (D) which requires filing with the SEC in accordance with the 1934 Act or any rules thereunder, (E) which has
resulted in the voluntary or involuntary suspension of a license, a cease and desist order, or such other action as could adversely impact
Seller’s business, or (F) which might materially and adversely affect the validity of the Purchased Assets or the performance
by it of its obligations under, or the validity or enforceability of, this Agreement, any Transaction Notice or any Program Agreement
which could be reasonably likely to have a Material Adverse Effect.
Section 3.12 Material
Adverse Change. There has been no event or circumstance since March 31, 2023, which is reasonably likely to have a Material
Adverse Effect on Seller.
Section 3.13 Ownership.
(a) Seller
has good, valid, insurable (in the case of real property) and marketable title to all of its properties and other assets, whether real
or personal, tangible or intangible, reflected on the financial statements delivered to Buyer, except for such properties and other assets
that have been disposed of in the ordinary course of business of its business, and all such properties and other assets are free and
clear of all liens except as disclosed in such financial statements.
(b) Seller
has good title to all of the Repurchase Assets, free and clear of all mortgages, security interests, restrictions, Liens and encumbrances
of any kind other than the Liens created hereby or contemplated herein, and any Transaction shall convey all of Seller’s right,
title and interest in and to the related Purchased Assets to Buyer.
(c) Each
item of the Repurchase Assets was acquired by Seller in the ordinary course of its business, in good faith, for value and without notice
of any defense against or claim to it on the part of any Person.
(d) There
are no agreements or understandings between Seller and any other party which would modify, release, terminate or delay the attachment
of the security interests granted to Buyer under this Agreement.
(e) The
provisions of this Agreement are effective to create in favor of Buyer a valid security interest in all right, title and interest of
Seller in, to and under the Repurchase Assets.
(f) Upon
the filing of financing statements on Form UCC-1 naming Buyer as “Secured Party” and Seller as “Debtor”,
and describing the Repurchase Assets, in the recording offices of the Secretary of State of Delaware the security interests granted hereunder
in the Repurchase Assets will constitute fully perfected first priority security interests under the Uniform Commercial Code in all right,
title and interest of Seller in, to and under such Repurchase Assets which can be perfected by filing under the Uniform Commercial Code.
Section 3.14 The
Note. Seller has (i) delivered the Note, (ii) duly endorsed the Note to Buyer or Buyer’s designee, (iii) notified
the Indenture Trustee of such transfer and (iv) completed all documents required to effect such transfer in the Note Register,
including, without limitation, receipt by the Note Registrar of the Rule 144A Note Transfer Certificate and such other information
and documents that may be required pursuant to the terms of the Indenture. In addition, Buyer has received all other Program Agreements
(including, without limitation, all exhibits and schedules referred to therein or delivered pursuant thereto), all amendments thereto,
waivers relating thereto and other side letters or agreements affecting the terms thereof and all agreements and other material documents
relating thereto, and Seller hereby certifies that the copies delivered to Buyer by Seller are true and complete. None of such documents
has been amended, supplemented or otherwise modified (including waivers) since the respective dates thereof, except by amendments, copies
of which have been delivered to Buyer. Each such document to which Seller is a party has been duly executed and delivered by Seller and
is in full force and effect, and no default or material breach has occurred and is continuing thereunder.
Section 3.15 Taxes.
Seller and its Subsidiaries have timely filed all tax returns that are required to be filed by them and have paid all taxes, assessments,
fees and other governmental charges levied upon it or its property or income (whether or not shown on such tax returns) that are due
and payable, including interest and penalties, except for any such taxes, assessments, fees and other governmental charges as are being
appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have
been provided. The charges, accruals and reserves on the books of Seller and its Subsidiaries in respect of taxes and other governmental
charges are, in the opinion of Seller, adequate. Any taxes, fees and other governmental charges payable by it in connection with a Transaction
and the execution and delivery of this Agreement, any Transaction Notice and the Program Agreements have been paid.
Section 3.16 Investment
Company. Neither Seller nor any of its Subsidiaries are required to register, nor will Seller or any of its Subsidiaries be required
to register as a result of the transactions contemplated hereby, as an “investment company” under the Investment Company
Act of 1940 and although there may be additional exclusions or exemptions available to Seller, Seller will rely on Section 3(c)(5)(C) under
the Investment Company Act for its exclusion from the definition of “investment company”; no one acting on Seller’s
behalf has taken any action that would require registration of Seller or any of its Subsidiaries under the Investment Company Act, and
no one acting on Seller’s behalf has authorized or will authorize any Person to act in such manner; provided, however, that any
entity that is under the management of PNMAC Capital Management LLC in its capacity as an “investment adviser” within the
meaning of the Investment Advisers Act of 1940 and is otherwise not directly or indirectly owned or controlled by Seller shall not be
deemed a “Subsidiary” for the purposes of this Section 3.16. No Transaction represents an “ownership interest”
in Seller for purposes of the “Volcker Rule” (Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection
Act). Seller is structured so as not to constitute a “covered fund” as defined in the final regulations issued December 10,
2013, implementing the “Volcker Rule” (Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act).
Section 3.17 Chief
Executive Office; Jurisdiction of Organization. On the Closing Date, Seller’s chief executive office, is, and has been, located
at 3043 Townsgate Road, Westlake Village, CA 91361. On the Closing Date, Seller’s jurisdiction of organization is the State of
Delaware. Seller has no trade name. During the preceding five (5) years, Seller has not been known by or done business under any
other name, corporate or fictitious, and has not filed or had filed against it any bankruptcy receivership or similar petitions nor has
it made any assignments for the benefit of creditors.
Section 3.18 Location
of Books and Records. The location where Seller keeps its books and records, including all computer tapes and records relating to
the Repurchase Assets is its chief executive office.
Section 3.19 ERISA.
Except as could not reasonably be expected to result in a Material Adverse Effect (i) Seller, its ERISA Affiliates, and each Plan
are in compliance in all respects with the requirements of ERISA and the Code, (ii) no Reportable Event has occurred with respect
to any Plan, (iii) no Plan is considered to be an “at-risk” plan within the meaning of Section 430 of the Code
or Section 303 of ERISA, (iv) Seller and its Subsidiaries and their respective ERISA Affiliates do not provide any material
medical or health benefits to former employees other than as required by the Consolidated Omnibus Budget Reconciliation Act, as amended,
or similar state or local law (collectively, “COBRA”), (v) Seller and its Subsidiaries and their
respective ERISA Affiliates have made all required contributions to each Plan, and to each Multiemployer Plan to which it is obligated
to contribute, and (vi) no event or condition described in Section 6.24(a)(6) has occurred or exists, other
than an event or condition with respect to which notice has been provided in accordance with Section 6.24(a)(6).
Section 3.20 Financing
of Note and Additional Balances. Each Transaction will be used to purchase the Note and one or more Additional Balances relating
thereto, which Note will be conveyed and/or sold by Seller to Buyer.
Section 3.21 Agreements.
Neither Seller nor any Subsidiary of Seller is a party to any agreement, instrument, or indenture or subject to any restriction materially
and adversely affecting its business, operations, assets or financial condition, except as disclosed in the financial statements described
in Section 3.05 hereof. Neither Seller nor any Subsidiary of Seller is in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any agreement, instrument, or indenture which default could have a material
adverse effect on the business, operations, properties, or financial condition of Seller. No holder of any indebtedness of Seller or
of any of its Subsidiaries has given notice of any asserted default thereunder.
Section 3.22 Other
Indebtedness. All Indebtedness (other than Indebtedness evidenced by this Agreement) of Seller existing on the Closing Date is listed
on Exhibit B hereto (the “Existing Indebtedness”).
Section 3.23 No
Reliance. Seller has made its own independent decisions to enter into the Program Agreements and each Transaction and as to whether
such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation,
legal counsel and accountants) as it has deemed necessary. Seller is not relying upon any advice from Buyer as to any aspect of the Transactions,
including without limitation, the legal, accounting or tax treatment of such Transactions.
Section 3.24 Plan
Assets. Seller is not an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of
the Code, and the Purchased Assets are not “plan assets” within the meaning of 29 CFR § 2510.3 101 as amended
by Section 3(42) of ERISA, in Seller’s hands, and transactions by or with Seller are not subject to any state or local statute
regulating investments or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA.
Section 3.25 Anti-Money
Laundering Laws. The Seller has complied in all material respects with all Anti-Money Laundering Laws and has established an anti-money
laundering compliance program, and such other procedures and controls to remain in material compliance with all applicable Anti-Money
Laundering Laws.
Section 3.26 Anti-Corruption
Laws.
(a) Seller
is and will remain in compliance with all applicable Anti-Corruption Laws, and agrees that no part of the proceeds of the Purchase Price
will be used, directly or to its knowledge indirectly, by any Person for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain,
retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977,
as amended.
(b) Seller
acknowledges by executing this Agreement and the other Program Agreements to which Seller is a party that Buyer has notified it that,
pursuant to the requirements of the Patriot Act, Buyer is required to obtain, verify and record such information as may be necessary
to identify Seller, and confirm that the administrator of Seller (or the administrator of the applicable direct or indirect owner of
Equity Interests of it) has obtained, verified and recorded such information as may be necessary to identify any Person owning twenty-five
percent (25%) or more of the direct Equity Interests of it (including, without limitation, the name and address of such Person), in each
case, in accordance with the Patriot Act.
(c) None
of Seller or any director, officer, agent or employee of Seller, has used or to its knowledge indirectly used any of the proceeds of
any Transaction (i) for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity,
(ii) to make any direct or indirect unlawful payment to any government official or employee from corporate funds, (iii) to
violate any provision of the U.S. Foreign Corrupt Practices Act of 1977 or similar law of a jurisdiction in which Seller conducts its
business and to which they are lawfully subject or (iv) to make any unlawful bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
Section 3.27 Compliance
with 1933 Act. Neither Seller nor anyone acting on its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Note, any interest in the Note or any other similar security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Note, any interest in the Note or any other similar security from, or otherwise approached or negotiated with respect
to the Note, any interest in the Note or any other similar security with, any person in any manner, or made any general solicitation
by means of general advertising or in any other manner, or taken any other action which would constitute a distribution of the Note under
the 1933 Act or which would render the disposition of the Note a violation of Section 5 of the 1933 Act or require registration
pursuant thereto.
Section 3.28 Compliance
with Laws. Seller is not in violation of any of its certificate of formation or operating agreement (or corresponding organizational
documents if it is not a limited liability company), of any provision of any applicable law, or of any judgment, award, rule, regulation,
order, decree, writ or injunction of any court or public regulatory body or authority that could reasonably be expected to result in
a Material Adverse Effect.
Section 3.29 The
Ginnie Mae Contract. Seller has delivered to Buyer a copy of the Ginnie Mae Contract which was executed on Ginnie Mae’s standard
forms, and Seller hereby represents and warrants that there has been no amendment to such Ginnie Mae Contract that would grant additional
or more favorable rights to terminate the servicer from those rights specified in the Ginnie Mae Guide) and copies delivered to Buyer
by Seller are true, correct and complete. Each such document to which Seller is a party has been duly executed and delivered by Seller
and is in full force and effect, and no default or event of default (howsoever defined) has occurred and is continuing thereunder, except
where the occurrence and continuance of such default or event of default would not reasonably be expected to result in a Material Adverse
Effect. The Ginnie Mae Contract is in full force and effect, and Seller has not been terminated as the servicer under the Ginnie Mae
Contract.
Section 3.30 Ginnie
Mae Approvals. Seller is approved by Ginnie Mae as an approved issuer, and, to the extent necessary, approved by the Secretary of
HUD pursuant to Sections 203 and 211 of the National Housing Act, as amended. In each such case, Seller is in good standing, with
no event having occurred, including a change in insurance coverage which would either make Seller unable to comply with the eligibility
requirements for maintaining all such applicable approvals or require notification to Ginnie Mae or to HUD, FHA or VA.
Section 3.31 No
Adverse Actions. To the extent approved by a Specified Governmental Entity, Seller has not received from any Specified Governmental
Entity a notice of extinguishment or a notice indicating material breach, default or material non-compliance which could be reasonably
likely to cause such Specified Governmental Entity to terminate, suspend, sanction or levy penalties against it, or a notice from any
Specified Governmental Entity indicating any adverse fact or circumstance in respect of it which could be reasonably likely to cause
such Specified Governmental Entity, to revoke any of its approvals or otherwise terminate, suspend it as an approved issuer, seller or
servicer, as applicable, or with respect to which such adverse fact or circumstance has caused any Specified Governmental Entity to terminate
it.
Section 3.32 Use
of Proceeds. Seller will only use the proceeds of the Purchase Price as permitted under Section 2.08. No part of the
proceeds of the Purchase Price will be used directly or indirectly to purchase or carry Margin Stock, or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock, in violation of any of the provisions of Regulations T, U or X of the Board of
Governors of the Federal Reserve System. Seller is not engaged in the business of extending credit for the purpose of purchasing or carrying
any Margin Stock. At no time would more than 25% of the value of the assets of Seller that are subject to any “arrangement”
(as such term is used in Section 221.2(g) of such Regulation U) hereunder be represented by Margin Stock. Seller shall
not use the proceeds of any Transaction to purchase any asset or securities from, or otherwise transfer the proceeds of the Purchase
Price to, an “affiliate” of Buyer, as such term is defined in 12 C.F.R. Part 223.
Section 3.33 Reserved.
Section 3.34 Sanctions
Compliance. Seller confirms as a condition of this agreement and warrants to Buyer that it will, and it will cause each Affiliate
to, abide by all applicable economic sanctions laws and trade restrictions, administered or enforced from time to time by the United
States, including those administered by OFAC or the U.S. Department of State (collectively “Sanctions”), In
particular, Seller represents and warrants that neither it, nor any of the Seller or its respective Affiliates, officers, directors,
partners, or members (i) is an entity or other person that: (a) appears on the “List of Specially Designated Nationals
and Blocked Persons” (the “SDN List”) maintained by OFAC; (b) is operating in, organized in, a national
of or ordinarily resident in a country or territory subject to comprehensive sanctions, programs administered and enforced by OFAC, currently
including, Cuba, Iran, Syria, North Korea, and the Crimean, Donetsk and Luhansk regions of Ukraine (“Sanctioned Jurisdiction”);
(c) is otherwise the target of any Sanctions, including but not limited to U.S. Executive Order 14024 issued on April 15,
2021, U.S. Executive Order 13662 issued on March 20, 2014, and any directives or designations issued pursuant thereto; or (d) is
directly or indirectly owned 50% or more in the aggregate, or controlled by or acting for or on behalf of entities or other persons described
in clauses (a) through (c), above (any and all entities or other persons described in clauses (a) through (d) above
are “Prohibited Persons”); (ii) engaged or engages in any dealings or transactions with or involving any Prohibited
Persons or Sanctioned Jurisdiction; and (iii) otherwise engaged or engages in any dealings or transactions in violation of Sanctions.
ARTICLE IV
CONVEYANCE;
REPURCHASE ASSETS; SECURITY INTEREST
Section 4.01 Ownership.
Upon payment of the Purchase Price, Buyer shall become the sole owner of the Purchased Assets, free and clear of all liens and encumbrances.
Section 4.02 Security
Interest.
(a) Although
the parties intend (other than for U.S. federal tax purposes) that all Transactions hereunder be sales and purchases and not loans, in
the event any such Transactions are deemed to be loans, and in any event, Seller hereby pledges to Buyer as security for the performance
by Seller of its Obligations and hereby grants, assigns and pledges to Buyer a fully perfected first priority security interest in all
of Seller’s right, title and interest in, to and under each of the following items of property, whether now owned or hereafter
acquired, now existing or hereafter created and wherever located, is hereinafter referred to as the “Primary Repurchase Assets”:
(i) the
Note identified on the Asset Schedule;
(ii) all
rights to reimbursement or payment of the Note and/or amounts due in respect thereof under the Note identified on the Asset Schedule;
(iii) all
records, instruments or other documentation evidencing any of the foregoing;
(iv) all
“general intangibles”, “accounts”, “chattel paper”, “securities accounts”, “investment
property”, “deposit accounts” and “money” as defined in the Uniform Commercial Code relating to or constituting
any and all of the foregoing (including, without limitation, all of Seller’s rights, title and interest in and under the Base Indenture
and the Series 2023-MSRVF2 Indenture Supplement); and
(v) any
and all replacements, substitutions, distributions on or proceeds of any and all of the foregoing.
(b) Buyer
and Seller hereby agree that in order to further secure Seller’s Obligations hereunder, Seller hereby assigns, pledges, conveys
and grants to Buyer a security interest in (i) as of the Closing Date, Seller’s rights (but not its obligations) under the
Program Agreements including without limitation any rights to receive payments thereunder or any rights to collateral thereunder whether
now owned or hereafter acquired, now existing or hereafter created (collectively, the “Repurchase Rights”) and (ii) all
collateral however defined or described under the Program Agreements to the extent not otherwise included under the definitions of Primary
Repurchase Assets or Repurchase Rights (such collateral, “Additional Repurchase Assets,” and collectively with the
Primary Repurchase Assets and the Repurchase Rights, the “Repurchase Assets”) to secure the Obligations.
(c) The
foregoing provisions of this Section 4.02 are intended to constitute a security agreement or other arrangement or other
credit enhancement related to this Agreement and the Transactions hereunder as defined under Sections 101(47)(A)(v) and 741(7)(A)(xi) of
the Bankruptcy Code.
Section 4.03 Further
Documentation. At any time and from time to time, upon the written request of Buyer, and at the sole expense of Seller, Seller will
promptly and duly execute and deliver, or will promptly cause to be executed and delivered, such further instruments and documents and
take such further action as Buyer may reasonably request (x) to obtain, preserve, perfect, protect or more fully evidence Buyer’s
security interest in the Purchased Assets, (y) for the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted or (z) to enable Buyer to exercise or enforce any of its rights hereunder or under any
other Program Agreement, including, without limitation, the filing of any financing or continuation statements under the Uniform Commercial
Code in effect in any applicable jurisdiction with respect to the Liens created hereby or amendments thereto or assignments thereof and
such other instruments or notices, as Buyer may reasonably require. Seller also hereby authorizes Buyer to file any such financing or
continuation statement, and amendments thereto and assignments thereof to the extent permitted by applicable law.
Section 4.04 Changes
in Locations, Name, etc. Seller shall not (a) change the location of its chief executive office/chief place of business
from that specified in Section 3.17 or (b) change its name or corporate structure (or the equivalent) or jurisdiction
of organization from the jurisdiction referred to in Section 3.17, unless it shall have given Buyer at least thirty (30)
days’ prior written notice thereof and shall have delivered to Buyer all Uniform Commercial Code financing statements and amendments
thereto as Buyer shall request and taken all other actions deemed necessary by Buyer to continue its perfected status in the Repurchase
Assets with the same or better priority.
Section 4.05 Performance
by Buyer of Seller’s Obligations. If Seller fails to perform or comply with any of its agreements contained in the Program
Agreements and Buyer may itself perform or comply, or otherwise cause performance or compliance, with such agreement, the reasonable
(under the circumstances) out-of-pocket expenses of Buyer actually incurred in connection with such performance or compliance, together
with interest thereon at a rate per annum equal to the Pricing Rate shall be payable by Seller to Buyer on demand and shall constitute
Obligations. Such interest shall be computed on the basis of the actual number of days in each Price Differential Period and a 360-day
year.
Section 4.06 Proceeds.
If an Event of Default shall occur and be continuing, (a) all proceeds of Repurchase Assets received by Seller consisting of cash,
checks and other liquid assets readily convertible to cash items shall be held by Seller in trust for Buyer, segregated from other funds
of Seller, and shall forthwith upon receipt by Seller be turned over to Buyer in the exact form received by Seller (duly endorsed by
Seller to Buyer, if required) and (b) any and all such proceeds received by Buyer (whether from Seller or otherwise) may, in the
sole discretion of Buyer, be held by Buyer as collateral security for, and/or then or at any time thereafter may be applied by Buyer
against, the Obligations (whether matured or unmatured), such application to be in such order as Buyer shall elect. Any balance of such
proceeds remaining after the Obligations shall have been paid in full and this Agreement shall have been terminated shall be paid over
to Seller or to whomsoever may be lawfully entitled to receive the same.
Section 4.07 Remedies.
If an Event of Default shall occur and be continuing, Buyer may exercise, in addition to all other rights and remedies granted to it
in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies
of a secured party under the Uniform Commercial Code (including without limitation, Buyer’s rights to a strict foreclosure under
Section 9-620 of the Uniform Commercial Code). Without limiting the generality of the foregoing, Buyer may seek the appointment
of a receiver, liquidator, conservator, trustee, or similar official in respect of Seller or any of Seller’s property. Buyer without
demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required under this
Agreement or by law referred to below) to or upon Seller or any other Person (each and all of which demands, presentments, protests,
advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the
Repurchase Assets, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose
of and deliver the Repurchase Assets or any part thereof (or contract to do any of the foregoing), in one or more parcels or as an entirety
at public or private sale or sales, at any exchange, broker’s board or office of Buyer or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any
credit risk. Buyer shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Repurchase Assets so sold, free of any right or equity of redemption in Seller,
which right or equity is hereby waived or released. Seller further agrees, at Buyer’s request, to assemble the Repurchase Assets
and make it available to Buyer at places which Buyer shall reasonably select, whether at Seller’s premises or elsewhere. Buyer
shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable
(under the circumstances) out-of-pocket costs and expenses of every kind actually incurred therein or incidental to the care or safekeeping
of any of the Repurchase Assets or in any way relating to the Repurchase Assets or the rights of Buyer hereunder, including without limitation
reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations, in such order as Buyer may
elect, and only after such application and after the payment by Buyer of any other amount required or permitted by any provision of law,
including without limitation Section 9-615 of the Uniform Commercial Code, need Buyer account for the surplus, if any, to Seller.
To the extent permitted by applicable law, Seller waives all claims, damages and demands it may acquire against Buyer arising out of
the exercise by Buyer of any of its rights hereunder, other than those claims, damages and demands arising from the gross negligence
or willful misconduct of Buyer. If any notice of a proposed sale or other disposition of Repurchase Assets shall be required by law,
such notice shall be deemed reasonable and proper if given at least ten (10) days before such sale or other disposition. Seller
shall remain liable for any deficiency (plus accrued interest thereon as contemplated herein) if the proceeds of any sale or other disposition
of the Repurchase Assets are insufficient to pay the Obligations and the fees and disbursements in amounts reasonable under the circumstances,
of any attorneys employed by Buyer to collect such deficiency.
Section 4.08 Limitation
on Duties Regarding Preservation of Repurchase Assets. Buyer’s duty with respect to the custody, safekeeping and physical preservation
of the Repurchase Assets in its possession, under Section 9-207 of the Uniform Commercial Code or otherwise, shall be to deal with
it in the same manner as Buyer deals with similar property for its own account. Neither Buyer nor any of its directors, officers or employees
shall be liable for failure to demand, collect or realize upon all or any part of the Repurchase Assets or for any delay in doing so
or shall be under any obligation to sell or otherwise dispose of any Repurchase Assets upon the request of Seller or otherwise.
Section 4.09 Powers
Coupled with an Interest. All authorizations and agencies herein contained with respect to the Repurchase Assets are irrevocable
and powers coupled with an interest.
Section 4.10 Release
of Security Interest. Upon the latest to occur of (a) the repayment to Buyer of all Obligations hereunder, and (b) the
occurrence of the Termination Date, Buyer shall release its security interest in any remaining Repurchase Assets hereunder and shall
promptly execute and deliver to Seller such documents or instruments as Seller shall reasonably request to evidence such release.
Section 4.11 Reinstatement.
All security interests created by this Article IV shall continue to be effective, or be reinstated, as the case may be,
if at any time any payment, or any part thereof, of any Obligation of Seller is rescinded or must otherwise be restored or returned by
Buyer upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Seller or upon or as a result of the appointment
of a receiver, intervenor or conservator of, or trustee or similar officer for, Seller or any substantial part of its property, or otherwise,
all as if such release had not been made.
Section 4.12 Subordination.
Seller shall not seek in any Insolvency Event of the Issuer to be treated as part of the same class of creditors as Administrative Agent
and Buyer and shall not oppose any pleading or motion by Administrative Agent and Buyer advocating that Administrative Agent and Buyer
should be treated as a separate class of creditors from Seller. Seller acknowledges and agrees that its rights with respect to the Repurchase
Assets are and shall continue to be at all times while the obligations are outstanding junior and subordinate to the rights of Administrative
Agent and Buyer under this Agreement.
ARTICLE V
CONDITIONS
PRECEDENT
Section 5.01 Initial
Transaction. The obligation of Buyer to enter into Transactions with Seller hereunder is subject to the satisfaction, immediately
prior to or concurrently with the entering into such Transaction, of the condition precedent that Buyer shall have received all of the
following items, each of which shall be satisfactory to Buyer and its counsel in form and substance:
(a) Program
Agreements and Note. The Program Agreements and Note, in all instances duly executed and delivered by the parties thereto and being
in full force and effect, free of any modification, breach or waiver.
(b) Security
Interest. Evidence that all other actions necessary or, in the opinion of Buyer, desirable to perfect and protect Buyer’s interest
in the Repurchase Assets have been taken, including, without limitation, duly authorized and filed Uniform Commercial Code financing
statements on Form UCC-1.
(c) Organizational
Documents. A certificate of the corporate secretary of Seller in form and substance acceptable to Buyer, attaching certified copies
of Seller’s certificate of formation, operating agreement and corporate resolutions approving the Program Agreements and transactions
thereunder (either specifically or by general resolution) and all documents evidencing other necessary corporate action or governmental
approvals as may be required in connection with the Program Agreements.
(d) Good
Standing Certificate. A certified copy of a good standing certificate from the jurisdiction of organization of Seller, dated as of
no earlier than the date ten (10) Business Days prior to the Closing Date.
(e) Incumbency
Certificate. An incumbency certificate of the corporate secretary of each of Seller, certifying the names, true signatures and titles
of the representatives duly authorized to request transactions hereunder and to execute the Program Agreements.
(f) Fees.
Buyer shall have received payment in full of all fees and Expenses (including, without limitation the Commitment Fee) which are payable
hereunder to Buyer on or before such date.
Section 5.02 All
Transactions. The obligation of Buyer to enter into each Transaction pursuant to this Agreement is subject to the following conditions
precedent:
(a) Transaction
Notice and Asset Schedule. In accordance with Section 2.02 hereof, Buyer shall have received from Seller a Transaction
Notice with an updated Asset Schedule which includes the Note and any Additional Balance, if applicable, related to a proposed Transaction
hereunder on such Business Day.
(b) No
Margin Deficit. After giving effect to each new Transaction, the aggregate outstanding amount of the Purchase Price shall not exceed
the Asset Value of the Note then in effect.
(c) No
Default. No Default or Event of Default exists or shall have occurred and be continuing immediately after giving effect to such new
Transaction.
(d) Requirements
of Law. Buyer shall not have determined that the introduction of or a change in any Requirement of Law or in the interpretation or
administration of any Requirement of Law applicable to Buyer has made it unlawful, and no Governmental Authority shall have asserted
that it is unlawful, for Buyer to enter into Transactions with a Pricing Rate based on Base Rate.
(e) Representations
and Warranties. Both immediately prior to the related Transaction and also after giving effect thereto and to the intended use thereof,
the representations and warranties made by Seller in each Program Agreement shall be true, correct and complete on and as of such Purchase
Date in all material respects with the same force and effect as if made on and as of such date (or, (i) if any such representation
or warranty is expressly stated to have been made as of a specific date, as of such specific date and (ii) if any such representation
or warranty is already qualified by materiality or material adverse effect, such representation or warranty shall be true and correct
in all respects, as written).
(f) Note.
Buyer shall have received the Note and evidence of the Additional Balances relating to any Purchased Assets, which is in form and substance
satisfactory to Buyer in its sole discretion.
(g) Requirements
of Law. None of the Administrative Agent or Buyer shall have determined that the introduction of any Requirement of Law or in the
interpretation or administration of any Requirement of Law applicable to the Administrative Agent or Buyer has made it unlawful, and
no Governmental Authority shall have asserted that it is unlawful, for the Administrative Agent or Borrower to enter into any Transaction.
(h) No
Material Adverse Change. Since the Closing Date, there has been no event or circumstance which is reasonably likely to have a Material
Adverse Effect on Seller.
(i) Fees.
Buyer shall have received payment in full of all fees and Expenses which are payable hereunder to Buyer on or before such date.
Section 5.03 Closing
Subject to Conditions Precedent. The obligation of Buyer to purchase the Note is subject to the satisfaction on or prior to the Closing
Date of the following conditions (any or all of which may be waived by Buyer):
(a) Performance
by the Issuer and PLS. All the terms, covenants, agreements and conditions of the Transaction Documents and the Acknowledgment Agreement
to be complied with, satisfied, observed and performed by the Issuer, and PLS on or before the Closing Date shall have been complied
with, satisfied, observed and performed in all material respects.
(b) Representations
and Warranties. Each of the representations and warranties of the Issuer and PLS made in the Transaction Documents and the Acknowledgment
Agreement shall be true and correct in all material respects as of the Closing Date (or, (i) if any such representation or warranty
is expressly stated to have been made as of a specific date, as of such specific date and (ii) if any such representation or warranty
is already qualified by materiality or material adverse effect, such representation or warranty shall be true and correct in all respects).
(c) Officer’s
Certificate. The Administrative Agent, Buyer and the Indenture Trustee shall have received in form and substance reasonably satisfactory
to the Administrative Agent an officer’s certificate from PLS and a certificate of a Responsible Officer of the Issuer, dated the
Closing Date, each certifying to the satisfaction of the conditions set forth in the preceding paragraphs (a) and (b),
in each case together with incumbency, by-laws, resolutions and good standing.
(d) Opinions
of Counsel to the Issuer and PLS. Counsel to the Issuer and PLS shall have delivered to the Administrative Agent, Buyer and the Indenture
Trustee favorable opinions, dated the Closing Date and satisfactory in form and substance to the Administrative Agent and its counsel,
relating to corporate matters, enforceability, safe harbor and perfection and an opinion as to which state’s law applies to security
interest and perfection matters. In addition to the foregoing, PLS, as servicer, shall have caused its counsel to deliver to the Issuer,
Buyer, as purchaser of the Note hereunder, the Administrative Agent and the Indenture Trustee an opinion as to certain tax matters dated
as of the Closing Date, satisfactory in form and substance to the Administrative Agent, Buyer and their respective counsel.
(e) Officer’s
Certificate of Indenture Trustee. The Administrative Agent and Buyer shall have received in form and substance reasonably satisfactory
to the Administrative Agent an Officer’s Certificate from the Indenture Trustee, dated the Closing Date, with respect to the Base
Indenture, together with incumbency and good standing.
(f) Opinions
of Counsel to the Indenture Trustee. Counsel to the Indenture Trustee shall have delivered to the Administrative Agent and Buyer
a reliance letter dated as of the date hereof allowing them to rely upon its opinion letters related to the enforceability of the Base
Indenture and reasonably satisfactory in form and substance to Administrative Agent and Buyer and their respective counsel.
(g) Opinions
of Counsel to the Owner Trustee. Delaware counsel to the Owner Trustee of the Issuer shall have delivered to the Administrative Agent
and Buyer a reliance letter, dated as of the date hereof, allowing them to rely upon its opinion letters related to the formation, existence
and standing of the Issuer and of the Issuer’s execution, authorization and delivery of each of the Transaction Documents and the
Acknowledgment Agreement to which it is a party and such other matters as the Administrative Agent may reasonably request and reasonably
satisfactory in form and substance to Administrative Agent and Buyer and their respective counsel.
(h) Filings
and Recordations. The Administrative Agent, Buyer and the Indenture Trustee shall have received evidence reasonably satisfactory
to the Administrative Agent of (i) the completion of all recordings, registrations and filings as may be necessary or, in the reasonable
opinion of the Administrative Agent, desirable to perfect or evidence: (A) the assignment by PLS, as Seller, to the Issuer of the
ownership interest in the Purchased Assets conveyed pursuant to the PC Repurchase Agreement and the proceeds thereof and (ii) the
completion of all recordings, registrations, and filings as may be necessary or, in the reasonable opinion of the Administrative Agent,
desirable to perfect or evidence the grant of a first priority perfected security interest in the Issuer’s ownership interest in
the Purchased Assets in favor of the Indenture Trustee, subject to no Liens prior to the Lien created by the Base Indenture.
(i) Documents.
The Administrative Agent, Buyer and the Indenture Trustee shall have received a duly executed counterpart of each of the Transaction
Documents (including the Pricing Side Letter related to the Note), in form acceptable to Buyer, the Acknowledgment Agreement, the Note
and each and every document or certification delivered by any party in connection with any such Transaction Documents, the Acknowledgment
Agreement or the Note, and each such document shall be in full force and effect.
(j) Actions
or Proceedings. No action, suit, proceeding or investigation by or before any Governmental Authority shall have been instituted to
restrain or prohibit the consummation of, or to invalidate, any of the transactions contemplated by the Transaction Documents, the Acknowledgment
Agreement, the Note and the documents related thereto in any material respect.
(k) Approvals
and Consents. All Governmental Actions of all Governmental Authorities required with respect to the transactions contemplated by
the Transaction Documents, the Acknowledgment Agreement, the Note and the documents related thereto shall have been obtained or made.
(l) Fees,
Costs and Expenses. Buyer shall have received payment in full of all fees and Expenses (including, without limitation the Commitment
Fee) which are payable hereunder to Buyer on or before the Closing Date, and the fees, costs and expenses payable by the Issuer and PLS
on or prior to the Closing Date pursuant to this Agreement or any other Transaction Document shall have been paid in full.
(m) Other
Documents. PLS shall have furnished to the Administrative Agent, Buyer and the Indenture Trustee such other opinions, information,
certificates and documents as the Administrative Agent may reasonably request.
(n) MSR
Valuation Agent. PLS shall have engaged the MSR Valuation Agent pursuant to an agreement reasonably satisfactory to the Administrative
Agent.
(o) Proceedings
in Contemplation of Sale of the Note. All actions and proceedings undertaken by the Issuer and PLS in connection with the issuance
and sale of the Note as herein contemplated shall be satisfactory in all respects to the Administrative Agent, Buyer and their respective
counsel.
(p) Advance
Rate Reduction Event, Servicer Termination Events, Events of Default and Funding Interruption Events. No Advance Rate Reduction Event,
Servicer Termination Event, Event of Default or Funding Interruption Event shall then be occurring.
(q) Satisfaction
of Conditions. Each of the Funding Conditions shall have been satisfied.
If any condition specified
in this Section 5.03 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated
by Buyer by notice to PLS at any time at or prior to the Closing Date, and Buyer shall incur no liability as a result of such termination.
ARTICLE VI
COVENANTS
Seller covenants and agrees
that until the payment and satisfaction in full of all Obligations, whether now existing or arising hereafter, shall have occurred:
Section 6.01 Litigation.
Seller will promptly, and in any event within three (3) Business Days after Seller has actual knowledge, give to Buyer notice of
any action, suit or proceeding instituted by or against Seller or any of its Subsidiaries in any federal or state court or before any
commission or other regulatory body (federal, state or local, foreign or domestic), or any such action, suit or proceeding threatened
against Seller, in any case, if such action, suit or proceeding (x) involves a potential liability, on an individual or aggregate
basis, with respect to which such action, suit or proceeding will result in a liability equal to or greater than 5% of VFN Guarantor’s
Adjusted Tangible Net Worth, (y) is reasonably likely to result in a Material Adverse Effect or (z) questions or challenges
the validity or enforceability of any of the Program Agreements or challenges the sale or the lien (or lien priority) granted thereunder.
On the twelfth (12th) day of each fiscal quarter (or if such day is not a Business Day, the next succeeding Business Day),
Seller will provide to Administrative Agent and Buyer a litigation docket listing all litigation, actions, suits, arbitrations, investigations
(including any of the foregoing which are threatened or pending) or other legal or arbitrable proceedings affecting Seller or any of
its Subsidiaries or affecting any of the Property or any of them before any Governmental Authority. Seller will promptly provide notice
of any judgment, which with the passage of time, could cause an Event of Default hereunder.
Section 6.02 Prohibition
of Fundamental Changes. Seller shall not (a) enter into any transaction of merger or consolidation or amalgamation with any
Person; (b) liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution); (c) sell, lease
or otherwise dispose of, or agree to do any of the foregoing at any future time, all or substantially all of its assets; (d) enter
into any transaction or series of transactions to adopt, file, effect or consummate a Division, or otherwise permits any such Division
to be adopted, filed, effected or consummated; or (e) form or enter into any partnership, joint venture, syndicate or other combination
which could be reasonably likely to result in a Material Adverse Effect; provided, that Seller may merge or consolidate with any Person
if Seller is the surviving entity if after giving effect thereto, no Default would exist hereunder.
Section 6.03 [Reserved].
Section 6.04 No
Adverse Claims. Seller warrants and will defend the right, title and interest of Buyer in and to all Purchased Assets against all
adverse claims and demands.
Section 6.05 Assignment.
Except as permitted herein, Seller shall not sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or
pledge, hypothecate or grant a security interest in or lien on or otherwise encumber (except pursuant to the Program Agreements), any
of the Purchased Assets or any interest therein, provided that this Section 6.06 shall not prevent any transfer of Purchased
Assets in accordance with the Program Agreements.
Section 6.06 Security
Interest. Seller shall do all things necessary to preserve the Purchased Assets so that they remain subject to a first priority perfected
security interest hereunder. Without limiting the foregoing, Seller will comply with all rules, regulations and other laws of any Governmental
Authority and cause the Purchased Assets to comply with all applicable rules, regulations and other laws. Seller will not allow any default
for which Seller is responsible to occur under any Purchased Assets or any Program Agreement and Seller shall fully perform or cause
to be performed when due all of its obligations under any Purchased Assets and any Program Agreement.
Section 6.07 Records.
(a) Seller
shall collect and maintain or cause to be collected and maintained all Records relating to the Purchased Assets in accordance with industry
custom and practice for assets similar to the Purchased Assets, including those maintained pursuant to Section 6.08, and
all such Records shall be in Seller’s possession unless Buyer otherwise approves. Seller will maintain all such Records in good
and complete condition in accordance with industry practices for assets similar to the Purchased Assets and preserve them against loss.
(b) For
so long as Buyer has an interest in or lien on any Purchased Assets, Seller will hold or cause to be held all related Records in trust
for Buyer. Seller shall notify, or cause to be notified, every other party holding any such Records of the interests and liens in favor
of Buyer granted hereby.
(c) Upon
reasonable advance notice from Buyer, Seller shall (x) make any and all such Records available to Buyer to examine any such Records,
either by its own officers or employees, or by agents or contractors, or both, and make copies of all or any portion thereof, and (y) permit
Buyer or its authorized agents to discuss the affairs, finances and accounts of Seller with its chief operating officer and chief financial
officer and to discuss the affairs, finances and accounts of Seller with its independent certified public accountants.
Section 6.08 Books.
Seller shall keep or cause to be kept in reasonable detail books and records of account of its assets and business in which complete
entries will be made in accordance with GAAP consistently applied, and shall clearly reflect therein the transfer of Purchased Assets
to Buyer.
Section 6.09 Approvals.
Seller shall maintain all licenses, permits or other approvals necessary for Seller to conduct its business and to perform its obligations
under the Program Agreements, and Seller shall conduct its business strictly in accordance with applicable law.
Section 6.10 Insurance.
Seller shall maintain or cause to be maintained, at its own expense, insurance coverage as is customary, reasonable and prudent in light
of the size and nature of Seller’s business as of any date after the Closing Date. Seller shall be deemed to have complied with
this provision if one of its Affiliates has such policy coverage and, by the terms of any such policies, the coverage afforded thereunder
extends to Seller. Upon the request of Buyer at any time subsequent to the Closing Date and in no event more than once per calendar year
unless an Event of Default shall have occurred and be continuing, Seller shall cause to be delivered to Buyer, a certification evidencing
Seller’s coverage under any such policies.
Section 6.11 Distributions.
If a Default has occurred and is continuing, Seller shall not pay any dividends with respect to any capital stock or other equity interests
in such entity, whether now or hereafter outstanding, or make any other distribution in respect thereof, or redeem, purchase, retire,
or otherwise acquire any of its Equity Interests, or set apart any money for a sinking or other analogous fund for any dividend or other
distribution on its Equity Interests or for any redemption, purchase, retirement, or other acquisition either directly or indirectly,
whether in cash or property or in obligations of Seller.
Section 6.12 Applicable
Law. Seller shall comply with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority
and shall maintain its status with Ginnie Mae as an approved issuer in accordance with applicable law and all rules, policies, procedures
and standards of Ginnie Mae.
Section 6.13 Existence;
Ginnie Mae Approvals.
(a) Seller
shall preserve and maintain its legal existence and all of its governmental licenses, authorizations, consents and approvals necessary
for Seller to conduct its business and to perform its obligations under the Transaction Documents and the Acknowledgment Agreement.
(b) Seller
shall maintain adequate financial standing, procedures, and experienced personnel necessary for the sound servicing (or for the prudent
oversight of subservicers to ensure the sound servicing) of mortgage loans of the same types as may from time to time constitute Mortgage
Loans and in accordance, in all material respects, with Accepted Servicing Practices and the terms of the Ginnie Mae Contract.
(c) Seller
shall comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities
(including truth in lending, real estate settlement procedures and all environmental laws) if the failure to comply with such requirements
would be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect.
(d) Seller
shall maintain its status with Ginnie Mae as an approved issuer, and shall be in good standing with Ginnie Mae in accordance with applicable
law and all rules, policies, procedures and standards of Ginnie Mae (collectively, “Ginnie Mae Approvals”).
(e) Seller
shall and shall cause any subservicer to service all MSRs in accordance with the Ginnie Mae Requirements.
(f) Should
Seller, (x) receive written notice of any material default or notice of termination of servicing for cause under the Ginnie Mae
Contract, or (y) for any reason, cease to possess all applicable Ginnie Mae Approvals, or should notification from Ginnie Mae or
HUD, FHA or VA as described in Section 3.31 be received, Seller shall so notify Buyer in writing within three (3) Business
Days. Notwithstanding the preceding sentence, Seller shall take all necessary action to maintain all of its Ginnie Mae Approvals at all
times during the term of this Agreement.
Section 6.14 Change
in Organizational Documents. Seller shall not amend, modify or otherwise change any of its Organizational Documents in any material
respect, or except any such amendments, modifications or changes or any such new agreements or arrangements that could not reasonably
be expected, individually or in the aggregate, to have a Material Adverse Effect; provided that Seller shall deliver written notice
to Buyer within thirty (30) days of any material amendment to its Organizational Documents.
Section 6.15 Taxes.
Seller shall timely file all tax returns that are required to be filed by it and shall timely pay and discharge all taxes, assessments
and governmental charges or levies imposed on it or on its income or profits or on any of its property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being maintained in accordance with GAAP.
Section 6.16 Transactions
with Affiliates. Other than the purchase of the Note, Seller will not, directly or indirectly, enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such
transaction (a) does not result in a Default hereunder, (b) is in the ordinary course of Seller’s business and (c) is
upon fair and reasonable terms no less favorable to Seller than it would obtain in a comparable arm’s length transaction with a
Person which is not an Affiliate, or make a payment that is not otherwise permitted by this Section 6.15 to any Affiliate.
Section 6.17 Guarantees.
Seller shall not create, incur, assume or suffer any Guarantees, in excess of $250,000, except to the extent reflected in Seller’s
financial statements or notes thereto.
Section 6.18 Indebtedness.
Seller shall not incur any additional material Indebtedness other than (i) the Existing Indebtedness specified on Exhibit B
hereto; (ii) Indebtedness incurred with Buyer or its Affiliates; (iii) Indebtedness incurred in connection with new or
existing secured lending facilities and (iv) usual and customary accounts payable for a mortgage company, without the prior written
consent of Buyer.
Section 6.19 True
and Correct Information. All information, reports, exhibits, schedules, financial statements or certificates of Seller, any Affiliate
thereof or any of their officers furnished to Buyer hereunder and during Buyer’s diligence of Seller are and will be true and complete
in all material respects and do not and shall not omit to disclose any material facts necessary to make the statements herein or therein,
in light of the circumstances in which they are made, not misleading. All required financial statements, information and reports delivered
by Seller to Buyer pursuant to this Agreement shall be prepared in accordance with U.S. GAAP, or, if applicable, to SEC filings, the
appropriate SEC accounting regulations.
Section 6.20 No
Pledge. Except as contemplated herein, Seller shall not pledge, grant a security interest or assign any existing or future rights
to service any of the Repurchase Assets or pledge or grant to any other Person any security interest in the Note.
Section 6.21 Plan
Assets. Seller shall not be an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described
in Section 4975(e)(1) of the Code and Seller shall not use “plan assets” within the meaning of 29 CFR § 2510.3
101, as amended by Section 3(42) of ERISA to engage in this Agreement or any Transaction hereunder. Transactions to or with Seller
shall not be subject to any state or local statute regulating investments of or fiduciary obligations with respect to governmental plans
within the meaning of Section 3(32) of ERISA.
Section 6.22 Sharing
of Information. Seller shall allow Buyer to exchange information related to Seller and the Transactions hereunder with third party
lenders, permitted assignees, Participants and credit insurance providers and Seller shall permit each third party to share such information
with Buyer.
Section 6.23 Modification
of the Base Indenture and Series 2023-MSRVF2 Indenture Supplement. Seller shall not consent with respect to any of the Base
Indenture and the Series 2023-MSRVF2 Indenture Supplement related to the Purchased Assets, to (i) the modification, amendment
or termination of such the Base Indenture and the Series 2023-MSRVF2 Indenture Supplement, (ii) the waiver of any provision
of the Base Indenture and the Series 2023-MSRVF2 Indenture Supplement, or (iii) the resignation of PLS as servicer under
the Base Indenture and the Series 2023-MSRVF2 Indenture Supplement, or the assignment, transfer, or material delegation of any
of its rights or obligations, under such the Base Indenture and the Series 2023-MSRVF2 Indenture Supplement, without the prior
written consent of Buyer exercised in Buyer’s sole discretion.
Section 6.24 Reporting
Requirements.
(a) Seller
shall furnish to Buyer (i) promptly (but in no event later than three (3) Business Days after Seller has actual knowledge)
copies of any material and adverse notices (including, without limitation, notices of defaults, breaches, potential defaults or potential
breaches) and any material financial information that is not otherwise required to be provided by Seller hereunder which is given to
Seller’s lenders, (ii) immediately upon knowledge, notice of the occurrence of (1) any Default hereunder; (2) any
default or material breach by Seller of any obligation under any Program Agreement or any material contract or agreement of Seller or
(3) the occurrence of any event or circumstance that such party reasonably expects has resulted in, or will, with the passage of
time, result in, a Material Adverse Effect or an Event of Default and (iii) the following:
(1) as
soon as available and in any event within forty-five (45) calendar days after the end of each calendar month, the unaudited balance sheet
of Seller, as at the end of such period and the related unaudited consolidated statements of income for Seller, including changes in
shareholders’ equity (or its equivalent), for such period and the portion of the fiscal year through the end of such period, accompanied
by a certificate of a Responsible Officer of Seller, which certificate shall state that said consolidated financial statements or financial
statements, as applicable, fairly present in all material respects the consolidated financial condition or financial condition, as applicable,
and results of operations of Seller in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to
normal year-end adjustments);
(2) as
soon as available and in any event within forty-five (45) calendar days after the end of each calendar quarter, the unaudited cash flow
statements of Seller, as at the end of such period and the portion of the fiscal year through the end of such period, accompanied by
a certificate of a Responsible Officer of Seller, which certificate shall state that said consolidated financial statements or financial
statements, as applicable, fairly present in all material respects the consolidated financial condition or financial condition, as applicable,
and results of operations of Seller in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to
normal year-end adjustments);
(3) as
soon as available and in any event within ninety (90) days after the end of each fiscal year of Seller, the balance sheet of Seller,
as at the end of such fiscal year and the related consolidated statements of income and retained earnings and of cash flows for Seller
and changes in shareholders’ equity (or its equivalent) for such year, setting forth in comparative form the figures for the previous
year, accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion and
the scope of audit shall be acceptable to Buyer in its sole discretion, shall have no “going concern” qualification and shall
state that said consolidated financial statements or financial statements, as applicable, fairly present the consolidated financial condition
or financial condition, as applicable, and results of operations of Seller as at the end of, and for, such fiscal year in accordance
with GAAP;
(4) such
other prepared statements that Buyer may reasonably request;
(5) from
time to time (x) such other information regarding the financial condition, operations, or business of Seller as Buyer may reasonably
request and (y) information and documentation reasonably requested by Buyer for purposes of compliance with applicable “know
your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act;
(6) as
soon as reasonably possible, and in any event within five (5) Business Days after Seller has knowledge or has reason to believe
that any of the events or conditions specified below with respect to any Plan or Multiemployer Plan has occurred or exists (each, an
“ERISA Event”), a statement signed by a senior financial officer of Seller setting forth details respecting such event
or condition and the action, if any, that Seller or any of its Subsidiaries or ERISA Affiliates, as applicable, propose to take with
respect thereto (and a copy of any report or notice required to be filed with or given to PBGC by Seller or any of its Subsidiaries or
ERISA Affiliates with respect to such event or condition):
a. any
Reportable Event or failure to meet minimum funding standards with respect to a Plan; provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Sections 302 or 303 of ERISA with respect to a Plan, including, without limitation,
the failure to make on or before its due date a required installment under Section 430(j) of the Code or Section 303(j) of
ERISA, shall be a reportable event regardless of the issuance of any waivers in accordance with Section 412(c) of the Code
or any request for a waiver under Section 412(c) of the Code for any Plan;
b. the
distribution under Section 4041(c) of ERISA of a notice of intent to terminate any Plan or any action taken by Seller or
its Subsidiaries or ERISA Affiliates;
c. the
institution by PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan, or the receipt by Seller or its Subsidiaries or ERISA Affiliates of a notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer Plan;
d. the
complete or partial withdrawal from a Multiemployer Plan by Seller or its Subsidiaries or ERISA Affiliates that results in liability
under Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary liability as a result of a purchaser default)
or the receipt by Seller or its Subsidiaries or ERISA Affiliates of notice from a Multiemployer Plan that it is in insolvency pursuant
to Section 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA;
e. the
institution of a proceeding by a fiduciary of any Multiemployer Plan against Seller or its Subsidiaries or ERISA Affiliates to enforce
Section 515 of ERISA, which proceeding is not dismissed within thirty (30) calendar days; and
f. the
adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) and Section 436 of the Code, would result in the
loss of tax-exempt status of the trust of which such Plan is a part if Seller or its Subsidiaries or ERISA Affiliates fails to timely
make a contribution or provide security to such Plan in accordance with the provisions of said Sections;
(7) as
soon as reasonably possible (but in no event later than three (3) Business Days after Seller has actual knowledge), notice of any
of the following events:
a. any
material dispute, litigation, investigation, proceeding or suspension between Seller on the one hand, and any Governmental Authority
or any Person;
b. any
material change in accounting policies or financial reporting practices of Seller;
c. any
material issues raised upon examination of Seller or Seller’s facilities by any Governmental Authority;
d. [Reserved].
e. promptly
upon receipt of notice or knowledge of any lien or security interest (other than security interests created hereby or by the other Program
Agreements) on, or claim asserted against, any of the Purchased Assets;
f. the
filing, recording or assessment of any federal, state or local tax lien against Seller, or any of Seller’s assets, unless such
filing, recording or assessment could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect
with respect to Seller;
g. any
condition or event that constitutes an “event of default” under any Indebtedness with an outstanding principal amount greater
than $25,000,000 or that notice has been given to any party thereunder with respect thereto or any fact that could reasonably be expected
to have a Material Adverse Effect;
h. any
other action, event or condition of any nature that, with notice or lapse of time or both, would constitute a default under any agreement,
instrument or indenture to which Seller is a party or to which Seller, its properties or assets may be subject that could reasonably
be expected to lead to, or result in, a Material Adverse Effect;
i. (i) any
material penalties, sanctions or charges levied, or threatened to be levied, against Seller or any adverse change or threatened change
made in writing in Seller’s Ginnie Mae Approval status, (ii) the commencement of any material non-routine investigation or
the institution of any proceeding or the threat in writing of institution of any proceeding against Seller by any Specified Governmental
Entity or any supervisory or regulatory Governmental Authority supervising or regulating the origination or servicing of mortgage loans
by, or the issuer or seller status of Seller or (iii) the commencement of any material investigation, or the institution of any
material proceeding or the threat in writing of institution of any material proceeding against Seller by any city, county or municipal
supervisory or regulatory Governmental Authority supervising or regulating the origination or servicing of mortgage loans by, or the
issuer or seller status of Seller;
j. (x) any
material settlement with, or issuance of a consent order by, any Governmental Authority and (y) any settlement with, or issuance
of a consent order by, any Governmental Authority; and
k. of
the occurrence of any event or change that has results in or could reasonably be expected to result in a Material Adverse Effect.
(b) Officer’s
Certificates. Seller will furnish to Buyer, at the time Seller furnishes each set of financial statements pursuant to Section 6.24(a)(iii)(1),
(2) or (3) above, an Officer’s Compliance Certificate of Seller.
(c) Monthly
Reporting. Seller shall at all times maintain a current list (which may be stored in electronic form) of the Note and Additional
Balances. Seller shall deliver to Buyer no later than the 25th day of each month (the “Monthly Report Date”)
a cumulative Asset Schedule, each of which, when so delivered, shall replace the current Asset Schedule and which may be delivered in
electronic form acceptable to Buyer. Each such updated Asset Schedule shall indicate the outstanding VFN Principal Balance of the Note
as of the close of the preceding week. As of each Monthly Report Date, Seller hereby certifies, represents and warrants to Buyer that
each such updated Asset Schedule is true, complete and correct in all material respects.
(d) Hedging
Reports. Seller shall deliver to Buyer a monthly summary hedge report (data elements to be agreed upon by Seller and Buyer). To the
extent Seller retains any Person(s) to perform hedging services on behalf of Seller, Seller hereby grants Buyer authority to contact,
request and receive hedging reports directly from such Person(s) at no cost to Buyer. Further, Seller shall instruct such Person(s),
upon reasonable notice from Buyer and during normal business hours, to answer candidly and fully, at no cost to Buyer, any and all questions
that Buyer may address to them in reference to the hedging reports of Seller.
(e) Other.
Seller shall deliver to Buyer any other reports or information reasonably requested by Buyer or as otherwise required pursuant to this
Agreement and the Indenture (including, without limitation, all reports and information delivered by the Issuer, the Administrator or
the Indenture Trustee relating to the Note). Seller understands and agrees that all reports and information provided to Buyer by or relating
to Seller may be disclosed to Buyer’s Affiliates.
(f) Regulatory
Reporting Compliance. Seller shall, on or before the last Business Day of the fifth (5th) month following the end of each
of Seller’s fiscal years (December 31), beginning with the fiscal year ending in 2022, deliver to Buyer a copy of the results
of any Uniform Single Attestation Program for Mortgage Bankers or an Officer’s Certificate that satisfies the requirements of Item
1122(a) of Regulation AB, an independent public accountant’s report that satisfies the requirements of Item 1123 of Regulation
AB, or similar review conducted on Seller by its accountants, and such other reports as Seller may prepare relating to its servicing
functions as Seller.
Section 6.25 Liens
on Substantially All Assets. Seller shall not grant a security interest to any Person other than Buyer or an Affiliate of Buyer in
substantially all assets of Seller unless Seller has entered into an amendment to this Agreement that grants to Buyer a pari passu security
interest on such assets.
Section 6.26 Litigation
Summary. On each date on which the Officer’s Compliance Certificate is delivered, Seller shall provide to Buyer a true and
correct summary of all material actions, notices, proceedings and investigations pending with respect to which Seller has received service
of process or other form of notice or, to the best of Seller’s knowledge, threatened against it, before any court, administrative
or governmental agency or other regulatory body or tribunal.
Section 6.27 Material
Change in Business. Seller shall not make any material change in the nature of its business as carried on at the Closing Date other
than lines of business typical for companies engaged in mortgage or consumer finance.
Section 6.28 MSR
Valuation. On each date on which the Officer’s Compliance Certificate is delivered, to the extent available, Seller shall provide
to Administrative Agent and Buyer a detailed summary of the fair market value and Market Value Percentage of MSRs from the most recently
delivered Market Value Report in accordance with the timing requirements of Section 3.3(g) of the Base Indenture.
Section 6.29 Ginnie
Mae Contract.
(a) Within
five (5) Business Days after (x) a Responsible Officer of Seller becomes aware of an amendment to the Ginnie Mae Contract
or (y) a Responsible Officer of Seller becomes aware of an amendment to the Acknowledgment Agreement that, in each case, could
reasonably be expected to materially and adversely affect Seller, the Purchased Assets or Buyer’s interest therein or to result
in a Material Adverse Effect, to the extent permitted by Ginnie Mae, Seller shall deliver to Buyer copies of any such amendments; provided
that Seller shall cooperate with any requests by Buyer to deliver copies of each amendment, restatement, supplement or other modification
to the Ginnie Mae Contract or the Acknowledgment Agreement that Buyer shall reasonably request, to the extent permitted by Ginnie Mae.
(b) Seller
shall not execute any amendments with respect to the Acknowledgment Agreement without the prior consent of Buyer.
(c) Should
Seller for any reason cease to possess the Ginnie Mae Approvals, or should notification to Ginnie Mae be required, Seller shall immediately
notify Buyer in writing.
(d) Seller
shall promptly, and in no event later than five (5) days after Seller has knowledge thereof, notify Buyer of any Servicer Termination
Event or event of default under any Ginnie Mae Contract or its receipt of a notice of actual termination of Seller’s right to service
under any Ginnie Mae Contract which evidences an intent to transfer such servicing to a third party.
Section 6.30 Trigger
Event MSR Asset Sale. Seller shall, within one (1) Business Day, notify Buyer in the event that it has voluntarily relinquished
or delivered notice of its intent to sell or transfer Ginnie Mae Contract rights constituting more than 10% of the aggregate Ginnie Mae
Contract rights of Seller with respect to Ginnie Mae, in any event without Buyer’s prior express written consent.
Section 6.31 Termination
of Servicing Notice. Seller shall give notice to Buyer promptly but not later than two (2) Business Days after receipt of notice
or knowledge by a Responsible Officer of (i) any material default, notice of termination of servicing for cause or notice of any
other matter materially and adversely affecting the Purchased Assets under the Ginnie Mae Contract or (ii) any resignation of servicing,
termination of servicing or notice of resignation of or termination of servicing, under the Ginnie Mae Contract, outside the ordinary
course of business.
Section 6.32 [Reserved].
Section 6.33 Ginnie
Mae Audit and Approval Maintenance. Seller shall (i) at all times maintain copies of relevant portions of all Audits 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, (ii) to
the extent not otherwise prohibited by reason of confidentiality or other non-disclosure restrictions, provide Buyer with copies of such
Audits promptly upon Buyer’s request, and (iii) take all actions necessary to maintain its Ginnie Mae Approvals.
Section 6.34 Sale
and Lease-Backs. Seller shall not enter into any arrangement, directly or indirectly, with any Person whereby Seller shall sell or
transfer any property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property
or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred if
any Default exists or will exist after giving effect thereto.
Section 6.35 Fiscal
Year. Seller shall not change its fiscal year-end from December 31 or change its method of determining fiscal quarters.
Section 6.36 Most
Favored Status. Seller and Buyer agree that (i) should Seller or any Subsidiary or Affiliate thereof enter into a repurchase
agreement, credit facility or other comparable agreement with any Person other than Buyer or an Affiliate of Buyer, or (ii) with
respect to any repurchase agreement or comparable agreement, in place as of the date hereof, directly related to any MSR VFN, SPIA VFN
or MBS Advance VFN, and in the case of (i) or (ii), the applicable terms set forth therein provide any of the following (each,
a “More Favorable Agreement”):
(a) more
favorable terms with respect to any guaranties or financial covenants, including without limitation covenants covering the same or similar
subject matter set forth or referred to in Section 6.11 hereof and Section 2 of the Pricing Side Letter,
the
terms of this Agreement and/or the Pricing Side Letter shall be deemed automatically amended to include such more favorable terms contained
in such More Favorable Agreement, such that such terms operate in favor of Buyer or an Affiliate of Buyer; provided, that in the event
that such More Favorable Agreement is terminated, upon notice by Seller to Buyer of such termination, the original terms of this Agreement
and/or Pricing Side Letter shall be deemed to be automatically reinstated. Upon Seller or any Subsidiary or Affiliate thereof
entering into any such repurchase agreement, credit facility or other comparable agreement with any Person other than Buyer or an Affiliate
of Buyer, Seller shall provide notice to Buyer or Administrative Agent of such more favorable terms contained in such More Favorable
Agreement (including a summary thereof) no later than the next date on which Seller is required to deliver an Officer’s Compliance
Certificate; which notice requirement may be satisfied by the VFN Guarantor including such information such Officer’s Compliance
Certificate.
Section 6.37 Quality
Control. In addition to maintaining its own internal monitoring program for servicing oversight operations, Seller shall and shall
cause each Approved Subservicer to conduct quality control reviews of such Approved Subservicer’s servicing operations in accordance
with industry standards and Specified Governmental Entity requirements. Seller shall provide oversight of its Approved Subservicer to
ensure the sound subservicing of the Mortgage Loans, in all material respects in accordance with Accepted Servicing Practices, the applicable
Approved Subservicing Agreement and the Ginnie Mae Requirements.
ARTICLE VII
DEFAULTS/RIGHTS
AND REMEDIES OF BUYER UPON DEFAULT
Section 7.01 Events
of Default. Each of the following events or circumstances shall constitute an “Event of Default”:
(a) Payment
Failure. Failure of Seller to (i) make any payment of the Purchase Price beyond the applicable dates on which such payment
is due, (ii) make any payment (which failure continues for a period of one (1) Business Day following the earlier of (x) written
notice (which may be in electronic form) from Buyer and (y) the date upon which Seller obtained knowledge of such failure) of Price
Differential, on a Price Differential Payment Date or a Repurchase Date, (iii) make any payment (which failure continues for a
period of two (2) Business Days following the earlier of (x) written notice (which may be in electronic form) from Buyer
and (y) the date upon which Seller obtained knowledge of such failure) of any other sum which has become due otherwise, whether
by acceleration or otherwise, under the terms of any Program Agreement or (iv) cure any Margin Deficit when due pursuant to Section 2.05
hereof.
(b) Cross
Default. Seller or Affiliates thereof shall be in default under (i) any Nomura Indebtedness, (ii) any Transaction Document;
provided that any such default under the Indenture shall constitute an “Event of Default” only if it continues unremedied
for a period of two (2) Business Days after a Responsible Officer of Seller obtains actual knowledge of such failure, or receives
written notice from Buyer of such default; or (iii) any Indebtedness, in the aggregate, in excess of $25,000,000 of Seller or any
Affiliate thereof which default (1) involves the failure to pay a matured obligation, or (2) permits the acceleration of
the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness.
(c) Insolvency.
An Act of Insolvency shall have occurred with respect to Seller or any Affiliate thereof.
(d) Material
Adverse Change. A Material Adverse Effect shall occur, and, if reasonably susceptible to cure and so long as Seller is pursuing such
cure by taking actions that Seller believes in its good faith discretion are reasonably likely to achieve such cure (as Seller shall
inform Buyer to its reasonable satisfaction), such Material Adverse Effect continues for a period of ten (10) Business Days.
(e) Immediate
Breach of Representation or Covenant or Obligation. A breach by Seller of any of the representations, warranties or covenants or
obligations set forth in Sections 3.01 (Seller Existence), 3.07 (Solvency), 3.12 (Material Adverse Change),
Section 3.22 (Other Indebtedness), Section 3.34 (Sanctions Compliance), Section 6.02 (Prohibition
of Fundamental Changes), Section 6.05 (Assignment), Section 6.13 (Existence), Section 6.17 (Guarantees),
Section 6.20 (No Pledge) or Section 6.21 (Plan Assets) of this Agreement.
(f) Additional
Breach of Covenant. Seller shall fail to perform or observe (i) the covenants set forth in Section 4.04 (Changes
in Locations, Name, etc.), Section 6.03, Section 6.11 (Defaults), Section 6.14 (Change in
Organizational Documents), Section 6.17 (Guarantees), Section 6.18 (Indebtedness), Section 6.24
(Reporting Requirements), Section 6.25 (Liens on Substantially All Assets), Section 6.33 (Sale and Lease-Backs),
Section 6.34 (Fiscal Year), Section 6.35 (Most Favored Status) or Section 2 of the Pricing Side Letter
and such failure shall continue unremedied for five (5) Business Days after the earlier of (A) a written notice of such failure
shall have been given to Seller by the Administrative Agent or Buyer or (B) the date upon which a Seller obtained knowledge of
such failure (and giving effect to any grace or other cure periods set forth therein), or (ii) except as set forth Section 7.01(e) or
in clauses (i) hereof, any other term, covenant or agreement contained in this Agreement or in any other Transaction Document or
the Acknowledgment Agreement, and, such failure shall continue unremedied for thirty (30) days after the earlier of (A) a written
notice of such failure shall have been given to Seller by the Administrative Agent or Buyer or (B) the date upon which a Seller
obtained knowledge of such failures.
(g) Representations.
Except as set forth in clause (h) below, any representation or warranty made or deemed made by Seller herein or in any other
Program Agreement (after giving effect to any qualification as to materiality set forth therein, if any) shall prove to have been false
and misleading when made or any Monthly Report or Officer’s Compliance Certificate delivered hereunder shall prove to have been
false and misleading in any material respect when made and such breach, if susceptible of cure, is not cured within ten (10) Business
Days after the earlier of (i) written notice of such failure shall have been given to Buyer or (ii) the date upon which Buyer
obtained knowledge of such failure.
(h) 1940
Act. The representation and warranty in Section 3.16 shall be false or misleading at any time.
(i) Change
in Control. The occurrence of a Change in Control.
(j) Failure
to Transfer. Seller fails to transfer a material portion of the Purchased Assets to Buyer on the applicable Purchase Date (provided
Buyer has tendered the related Purchase Price).
(k) Judgment.
A final judgment or judgments for the payment of money in excess of the lesser of (x) 3.0% of VFN Guarantor’s Adjusted Tangible
Net Worth and (y) $25,000,000 shall be rendered against Seller or any of their Affiliates by one or more courts, administrative
tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such
discharge) or bonded, or a stay of execution thereof shall not be procured, within forty-five (45) days from the date of entry thereof.
(l) Government
Action. Any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority shall
have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Property
of Seller or any Affiliate thereof, or shall have taken any action to displace the management of Seller or any Affiliate thereof or to
curtail its authority in the conduct of the business of Seller or any Affiliate thereof, or takes any action in the nature of enforcement
to remove, limit or restrict the approval of Seller or Affiliate as an issuer, buyer or a seller/servicer of mortgage loans or securities
backed thereby, and such action provided for in this subparagraph (l) shall not have been discontinued or stayed within sixty (60) days.
(m) Inability
to Perform. A Responsible Officer of Seller or VFN Guarantor shall admit its inability to, or its intention not to, perform any of
Seller’s Obligations or VFN Guarantor’s obligations hereunder or the VFN Guaranty.
(n) Security
Interest. This Agreement shall for any reason cease to create a valid, first priority security interest in any material portion of
the Repurchase Assets purported to be covered hereby.
(o) Financial
Statements. Seller’s audited annual financial statements or the notes thereto or other opinions or conclusions stated therein
shall be qualified or limited by reference to the status of Seller as a “going concern” or a reference of similar import.
(p) Validity
of Agreement. For any reason, this Agreement at any time shall not be in full force and effect in all material respects or shall
not be enforceable in all material respects in accordance with its terms, or any Lien granted pursuant thereto shall fail to be perfected
and of first priority, or Seller or any Affiliate of Seller shall seek to disaffirm, terminate, limit or reduce its obligations hereunder
or VFN Guarantor’s obligations under the VFN Guaranty.
(q) VFN
Guarantor Breach. A breach by VFN Guarantor of any material representation, warranty or covenant set forth in the VFN Guaranty or
any other Program Agreement, any “event of default” by VFN Guarantor under the VFN Guaranty, any repudiation of the VFN Guaranty
by VFN Guarantor, or if the VFN Guaranty is not enforceable against VFN Guarantor.
(r) Approved
Issuer; Approved Servicer.
(i) Seller
ceases to be a Ginnie Mae approved issuer;
(ii) Ginnie
Mae suspends, rescinds, halts, eliminates, withdraws, annuls, repeals, voids or terminates the status of Ginnie Mae as a Ginnie Mae approved
issuer.
(iii) As
distinct from and in addition to any loss of approval or actions taken by Ginnie Mae, as applicable, described in (i)-(ii), a Servicer
Termination Event shall occur with respect to Seller.
(s) ERISA
Related Events.
(i) An
ERISA Event occurs that, alone or together with all other ERISA Events that have occurred could reasonably be expected to result in a
Material Adverse Effect, or
(ii) the
assets of Seller or VFN Guarantor become “plan assets” within the meaning of 29 C.F.R. Sections 25103-101, as modified
by Section 3(42) of ERISA.
(t) Servicing.
Greater than 25% of Seller’s servicing portfolio consisting of Ginnie Mae loans is seized or terminated in any single event or
series of events arising from the same or substantially similar circumstances or occurrences.
Section 7.02 No
Waiver. An Event of Default shall be deemed to be continuing unless expressly waived by Buyer in writing.
Section 7.03 Due
and Payable. Upon the occurrence of any Event of Default which has not been waived in writing by Buyer, Administrative Agent may
(and at the direction of Buyer shall), by notice to Seller, declare all Obligations to be immediately due and payable, and any obligation
of Buyer to enter into Transactions with Seller shall thereupon immediately terminate. Upon such declaration, the Obligations shall become
immediately due and payable, both as to Purchase Price outstanding and Price Differential, without presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived, anything contained herein or other evidence of such Obligations to the contrary
notwithstanding, except with respect to any Event of Default set forth in Section 7.01(c), in which case all Obligations
shall automatically become immediately due and payable without the necessity of any notice or other demand, and any obligation of Buyer
to enter into Transactions with Seller shall immediately terminate. Administrative Agent and Buyer may enforce payment of the same and
exercise any or all of the rights, powers and remedies possessed by Administrative Agent or Buyer, whether under this Agreement or any
other Program Agreement or afforded by applicable law.
Section 7.04 Fees.
The remedies provided for herein are cumulative and are not exclusive of any other remedies provided by law. In addition to the Seller’s
obligation contained in Section 3 of the Pricing Side Letter, Seller agrees to pay to Administrative Agent and Buyer reasonable
attorneys’ fees and reasonable legal expenses incurred in enforcing Administrative Agent’s and Buyer’s rights, powers
and remedies under this Agreement and each other Program Agreement.
Section 7.05 Default
Rate. Without regard to whether Buyer has exercised any other rights or remedies hereunder, if an Event of Default shall have occurred
and be continuing, the applicable Margin in respect of the Pricing Rate shall be increased, to the extent permitted by law, as set forth
in clause (ii) of the definition of “Margin”.
ARTICLE VIII
ENTIRE
AGREEMENT; AMENDMENTS
AND WAIVERS; SEPARATE ACTIONS BY BUYER
Section 8.01 Entire
Agreement; Amendments. This Agreement (including the Schedules and Exhibits hereto) constitutes the entire agreement of the parties
hereto and supersedes any and all prior or contemporaneous agreements, written or oral, as to the matters contained herein, and no modification
or waiver of any provision hereof or any of the Program Agreements, nor consent to the departure by Seller therefrom, shall be effective
unless the same is in writing, and then such waiver or consent shall be effective only in the specific instance, and for the purpose,
for which it is given. This Agreement may not be amended, modified or supplemented except by writing executed by Seller, Administrative
Agent and Buyer. The Administrative Agent shall comply with its obligations under Section 6(c) of the Acknowledgement Agreement;
and in addition, the Seller shall deliver to Ginnie Mae a copy of any executed amendment to this Agreement promptly after execution thereof.
Section 8.02 Waivers,
Separate Actions by Buyer. Any amendment or waiver effected in accordance with this Article VIII shall be binding upon
Buyer and Seller; and Buyer’s failure to insist upon the strict performance of any term, condition or other provision of this Agreement
or any of the Program Agreements, or of Buyer or Administrative Agent to exercise any right or remedy hereunder or thereunder, shall
not constitute a waiver by Buyer or Administrative Agent of any such term, condition or other provision or Default or Event of Default
in connection therewith, nor shall a single or partial exercise of any such right or remedy preclude any other or future exercise, or
the exercise of any other right or remedy; and any waiver of any such term, condition or other provision or of any such Default or Event
of Default shall not affect or alter this Agreement or any of the Program Agreements, and each and every term, condition and other provision
of this Agreement and the Program Agreements shall, in such event, continue in full force and effect and shall be operative with respect
to any other then existing or subsequent Default or Event of Default in connection therewith. An Event of Default hereunder or under
any of the Program Agreements shall be deemed to be continuing unless and until waived in writing by Buyer.
ARTICLE IX
SUCCESSORS
AND ASSIGNS
Section 9.01 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and permitted assigns, any portion thereof, or any interest therein. Seller shall not have the right to assign all or any part of this
Agreement or any interest herein without the prior written consent of Buyer.
Section 9.02 Participations
and Transfers.
(a) Buyer
may in accordance with applicable law at any time sell to one or more banks or other entities (“Participants”) participating
interests in all or a portion of Buyer’s rights and obligations under this Agreement and the other Program Agreements; provided,
that (i) unless an Event of Default has occurred and is continuing, Buyer shall not issue one or more participation interest
to a Restricted Participant (or any party or Person with whom Seller or its affiliates is adverse to in an active litigation) without
the prior written consent of Seller, (ii) each such sale shall represent an interest in a Transaction in a Purchase Price of $1,000,000
or more and (iii) other than with respect to a participating interest consisting of a pro rata interest in all payments due to
Buyer under this Agreement and prior to an Event of Default Buyer receives an opinion of a nationally recognized tax counsel experienced
in such matters that such sale will not result in the Issuer being subject to tax on its net income as an association (or publicly traded
partnership) taxable as a corporation or a taxable mortgage pool taxable as a corporation, each for U.S. federal income tax purposes.
Buyer shall provide notice to Ginnie Mae within five (5) Business Days of any assignment, pledge or hypothecation made in accordance
with this Section 9.02(a). In the event of any such sale by Buyer of participating interests to a Participant, Buyer shall
remain a party to the Transaction for all purposes under this Agreement and the Program Agreements and Seller shall continue to deal
solely and directly with Buyer in connection with Buyer’s rights and obligations under this Agreement and the Program Agreements.
For the avoidance of doubt, the terms and provisions of Section 9.02(b) shall not restrict or otherwise qualify the terms
and provisions set forth in this Section 9.02(a).
(b) Buyer
may in accordance with applicable law at any time assign, pledge, hypothecate, or otherwise transfer (a “Buyer Subsequent Transaction”)
to one or more banks, financial institutions, investment companies, investment funds or any other Person (each, a “Buyer Counterparty”)
all or a portion of Buyer’s rights and obligations under this Agreement and the other Program Agreements so long as a Noteholder
of an MBS Advance VFN continues to own interests in the outstanding Series of VFNs that are funded in an aggregate amount that
equals or exceeds the amount required to avoid an Early Amortization Event under any outstanding Series of Term Notes and the other
Program Agreements; provided, that (i) Seller has consented to such Buyer Subsequent Transaction (such consent not
to be unreasonably withheld, conditioned, or delayed); provided, however, Seller’s consent shall not be required
in the event that (A) such Buyer Counterparty is an Affiliate of Buyer or (B) an Event of Default has occurred; (ii) absent
an Event of Default, Buyer shall give at least ten days’ prior notice thereof to Seller and Seller shall be deemed to have consented
to any such Buyer Subsequent Transaction (to the extent Seller’s consent is required as set forth pursuant to the terms and provisions
of clause (i) immediately above) unless it shall object thereto by written notice to the Administrative Agent within 10 days after
having received notice thereof; (iii) that each such Buyer Subsequent Transaction involving a sale or assignment shall represent
an interest in the Transactions in an aggregate Purchase Price of $1,000,000 or more; (iv) such Buyer Counterparty shall have also
acquired the same percentage interest in each other Series of Variable Funding Notes (with respect to which Nomura is the administrative
agent), unless Ginnie Mae has consented in writing to waive this requirement, and (v) other than with respect to a Buyer Subsequent
Transaction consisting of a pro rata interest in all payments due to Buyer under this Agreement and prior to an Event of Default Buyer
received an opinion of a nationally recognized tax counsel experienced in such matters that such Buyer Subsequent Transaction will not
result in the Issuer being subject to tax on its net income as an association (or publicly traded partnership) taxable as a corporation
or a taxable mortgage pool taxable as a corporation, each for U.S. federal income tax purposes. For the avoidance of doubt, and notwithstanding
the foregoing, the conditions with respect to any Buyer Subsequent Transaction set forth in this clause (b) (including but not
limited to subclauses (i) through (v) herein) shall not restrict or otherwise qualify the terms and provisions set forth
in Section 9.02(a) or Section 11.10 set forth herein.
(c) All
actions taken by Buyer pursuant to this Section 9.02 shall be at the expense of Buyer. Buyer may distribute to any prospective
assignee any document or other information delivered to Buyer by Seller.
(d) Notwithstanding
any other provision of this Agreement to the contrary, Buyer may pledge as collateral, or grant a security interest in, all or any portion
of its rights in, to and under this Agreement to a Federal Reserve Bank to secure obligations to such Federal Reserve Bank, in
each case without the consent of Seller; provided that no such pledge or grant shall release Buyer from its obligations under
this Agreement; provided, further, that no such pledge or grant shall be to a competitor of Seller.
Section 9.03 Buyer
and Participant Register.
(a) Subject
to acceptance and recording thereof pursuant to paragraph (b) of this Section 9.03, from and after the effective
date specified in each assignment and acceptance the assignee thereunder shall be a party hereto and, to the extent of the interest assigned
by such assignment and acceptance, have the rights and obligations of Buyer under this Agreement. Any assignment or transfer by Buyer
of rights or obligations under this Agreement that does not comply with this Section 9.03 shall be treated for purposes
of this Agreement as a sale by Buyer of a participation in such rights and obligations in accordance with Section 9.02.
Buyer shall provide notice to Ginnie Mae within five (5) Business Days of any participation made in accordance with this Section 9.03(a).
(b) Seller
or an agent of Seller shall maintain a register (the “Transaction Register”) on which it will record the Transactions
entered into hereunder, and each assignment and acceptance and participation. The Transaction Register shall include the names and addresses
of Buyer (including all assignees, successors and Participants), and the Purchase Price of the Transactions entered into by Buyer. Failure
to make any such recordation, or any error in such recordation shall not affect Seller’s obligations in respect of such Transactions.
If a Buyer sells a participation in any Transaction, it shall provide Seller, or maintain as agent of Seller, the information described
in this paragraph and permit Seller to review such information as reasonably needed for Seller to comply with its obligations under this
Agreement or under any applicable law or governmental regulation or procedure. The entries in the Transaction Register shall be prima
facie conclusive and binding, and Seller may treat each Person whose name is recorded in the Transaction Register as the owner of
the Transactions recorded therein for all purposes of this Agreement. No assignment shall be effective until it is recorded in the Transaction
Register.
ARTICLE X
AGENT
PROVISIONS
Section 10.01 Appointment
of Administrative Agent.
(a) Buyer
hereby irrevocably appoints Nomura Corporate Funding Americas, LLC, as Administrative Agent hereunder and under the other Program Agreements,
and Buyer hereby authorizes Nomura Corporate Funding Americas, LLC Nomura Corporate Funding Americas, LLC, in such capacity, to act as
its agent in accordance with the terms hereof. The provisions of this Article X are solely for the benefit of Administrative
Agent and Buyer, and Seller shall not have any rights as a third party beneficiary of any of the provisions thereof. In performing its
functions and duties hereunder, Administrative Agent shall act solely as an agent of Buyer and does not assume and shall not be deemed
to have assumed any obligation towards or relationship of agency or trust with or for Seller.
(b) The
Buyer may, to the extent permitted by applicable law, and with the consent of Seller (such consent not to be required if an Event of
Default has occurred and is continuing and not to be unreasonably withheld), by notice in writing to such Person remove for cause such
Person as Administrative Agent and, with the consent of Seller (such consent not to be required if an Event of Default has occurred and
is continuing and not to be unreasonably withheld), appoint a successor Administrative Agent. If no such successor Administrative Agent
shall have been so appointed by the Buyer and shall have accepted such appointment within thirty (30) days (or such earlier day as shall
be agreed by the Buyer and Seller), then such removal shall nonetheless become effective in accordance with such notice on the date thirty
(30) days (or such earlier day as shall be agreed by the Buyer and Seller) after the Administrative Agent’s receipt of such notice
of removal.
Section 10.02 Powers
and Duties. Buyer irrevocably authorizes Administrative Agent to take such action on Buyer’s behalf and to exercise such powers,
rights and remedies hereunder and under the other Program Agreements as are specifically delegated or granted to Administrative Agent
by the terms hereof and thereof, together with such powers, rights and remedies as are reasonably incidental thereto. Administrative
Agent shall have only those duties and responsibilities that are expressly specified herein and the other Program Agreements. Administrative
Agent may exercise such powers, rights and remedies and perform such duties by or through its agents or employees. Administrative Agent
shall not have, by reason hereof or any of the other Program Agreements, a fiduciary relationship in respect of Buyer; and nothing herein
or any of the other Program Agreements, expressed or implied, is intended to or shall be so construed as to impose upon Administrative
Agent any obligations in respect hereof or any of the other Program Agreements except as expressly set forth herein or therein.
Section 10.03 General
Immunity.
(a) No
Responsibility for Certain Matters. Except for Administrative Agent’s failure to perform a specifically required task set forth
herein (and which failure constitutes gross negligence, bad faith or willful misconduct, as determined by a court of competent jurisdiction
in a final, non-appealable order), Administrative Agent shall not be responsible for the execution, effectiveness, genuineness, validity,
enforceability, collectability or sufficiency hereof or any other Program Agreement or with respect to any other party for any representations,
warranties, recitals or statements made herein or therein or made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by or on behalf of Buyer or any other party in connection
with the Program Agreements and the transactions contemplated thereby or for the financial condition or business affairs of Seller or
any other Person liable for the payment of any Obligations, nor shall Administrative Agent be required (except as set forth herein or
in the Program Agreements) to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Program Agreements or as to the use of the proceeds of the Transactions or as to the existence
or possible existence of any Event of Default or Default.
(b) Exculpatory
Provisions. Neither Administrative Agent nor any of its officers, partners, directors, employees or agents shall be liable for any
action taken or omitted by Administrative Agent under or in connection with any of the Program Agreements except to the extent caused
by Administrative Agent’s gross negligence, bad faith or willful misconduct, as determined by a court of competent jurisdiction
in a final, non-appealable order. Administrative Agent shall be entitled to refrain from any act or the taking of any action (including
the failure to take an action) in connection herewith or any of the other Program Agreements or from the exercise of any power, discretion
or authority vested in it hereunder or thereunder unless and until Administrative Agent shall have received instructions in respect thereof
from Buyer and, upon receipt of such instructions from the Buyer, Administrative Agent shall be entitled to act or (where so instructed)
refrain from acting, or to exercise such power, discretion or authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon
any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper Person
or Persons, and shall be entitled to rely and shall be protected in relying on opinions and judgments of attorneys (who may be attorneys
for Seller), accountants, experts and other professional advisors selected by it; (ii) no Buyer shall have any right of action
whatsoever against Administrative Agent as a result of Administrative Agent acting or (where so instructed) refraining from acting hereunder
or any of the other Program Agreements in accordance with the instructions of the Buyer; and (iii) no action taken or omitted by
Administrative Agent shall be considered to have resulted from Administrative Agent’s gross negligence, bad faith or willful misconduct
if such action or omission was done at the direction of the Buyer.
Section 10.04 Administrative
Agent to Act as Buyer. The agency hereby created shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, Administrative Agent in its individual capacity as Buyer. Administrative Agent shall have the same rights
and powers as any other Buyer and may exercise the same as if it were not performing the duties and functions delegated to it hereunder,
and the term “Buyer” shall, unless the context clearly otherwise indicates, include Administrative Agent in its individual
capacity. Administrative Agent and its Affiliates may accept deposits from, lend money to, own securities of, and generally engage in
any kind of banking, trust, financial advisory or other business with Seller or any of their Affiliates as if it were not performing
the duties specified herein, and may accept fees and other consideration from Seller for services in connection herewith and otherwise
without having to account for the same to Buyer.
Section 10.05 Buyer’s
Representations, Warranties and Acknowledgment.
(a) Buyer
represents and warrants that it has made its own independent investigation of the financial condition and affairs of Seller in connection
with the Transactions hereunder and that it has made and shall continue to make its own appraisal of the creditworthiness of Seller.
Administrative Agent shall not have any duty or responsibility, either initially or on a continuing basis, to make any such investigation
or any such appraisal on behalf of Buyer or to provide Buyer with any credit or other information with respect thereto, whether coming
into its possession before the making of the Transactions or at any time or times thereafter, and Administrative Agent shall not have
any responsibility with respect to the accuracy of or the completeness of any information provided to Buyer.
(b) Unless
otherwise agreed to by Buyer and Seller, Buyer, by delivering its signature page to this Agreement and entering into Transactions
with Seller hereunder shall be deemed to have acknowledged receipt of, and consented to and approved, each Program Agreement and each
other document required to be approved by Administrative Agent or Buyer, as applicable on the Closing Date or such other funding date.
Buyer acknowledges that by agreeing to remit its Commitment Share of the Purchase Price on any Purchase Date, Buyer agrees that all conditions
precedent to entering into such Transaction have been met on such Purchase Date.
Section 10.06 Right
to Indemnity.
(a) Buyer
hereby agrees to indemnify Administrative Agent, any Affiliate of the Administrative Agent, and their respective directors, officers,
agents and employees (each, an “Indemnitee Agent Party”), and hold such Indemnitee Agent Party harmless
to the extent that such Indemnitee Agent Party shall not have been reimbursed by Seller, from and against any and all losses, claims,
damages, liabilities, deficiencies, judgments or expenses incurred by any of them (except to the extent that it has resulted from the
gross negligence or willful misconduct of such Indemnitee Agent Party) which may be imposed on, incurred by or asserted against such
Indemnitee Agent Party in exercising its powers, rights and remedies or performing its duties hereunder or under the other Program Agreements
or otherwise in its capacity as an Indemnitee Agent Party in any way relating to or arising out of this Agreement or the other Program
Agreements, including amounts paid in settlement, court costs and reasonable fees and disbursements of counsel incurred in connection
with any such litigation, investigation, claim or proceeding or any advice rendered in connection with any of the foregoing. If any indemnity
furnished to any Indemnitee Agent Party for any purpose shall, in the opinion of such Indemnitee Agent Party, be insufficient or become
impaired, such Indemnitee Agent Party may call for additional indemnity and cease, or not commence, to do the acts indemnified against
until such additional indemnity is furnished.
(b) Promptly
after receipt by the Indemnitee Agent Party of notice of the commencement of any action regarding which a claim in respect thereof is
to be made against Buyer, the Indemnitee Agent Party shall notify Buyer in writing of the commencement thereof, but the omission to so
notify will not relieve Buyer from any liability which they may have under this Agreement or from any other liability which they may
have, except to the extent that they have been prejudiced in any material respect by the failure by the Indemnitee Agent Party to provide
prompt notice. Upon receipt of notice by Buyer, Buyer will be entitled to participate in the related action, and they may elect by written
notice delivered to the Indemnitee Agent Party to assume the defense thereof. Upon receipt of notice by the Indemnitee Agent Party of
the Buyer’s election to assume the defense of such action, Buyer shall not be liable to the Indemnitee Agent Party for legal expenses
incurred by such party in connection with the defense thereof unless (i) Buyer shall not have employed counsel to represent the
Indemnitee Agent Party within a reasonable time after receipt of notice of commencement of the action, (ii) Buyer have authorized
in writing the employment of separate counsel for the Indemnitee Agent Party, or (iii) the Indemnitee Agent Party has previously
engaged counsel and reasonable legal expenses are necessary (a) to transfer the file to the Buyer’s designated counsel, or
(b) to pursue immediate legal action necessary to preserve the legal rights or defenses of the Indemnitee Agent Party as against
a third party claimant, and such legal action must occur prior to said transfer. Buyer shall not settle any suit or claim without the
Indemnitee Agent Party’s written consent unless such settlement solely involves the payment of money by parties other than the
Indemnitee Agent Party and includes unconditional release of the Indemnitee Agent Party from all liability on all matters that are the
subject of such proceeding or claim.
Section 10.07 Successor
Administrative Agent.
(a) Administrative
Agent may resign at any time by giving sixty (60) days’ prior written notice thereof to Buyer. Upon any such notice of resignation,
Buyer shall have the right to appoint a successor administrative agent; provided, that the retiring Administrative Agent shall continue
to hold the Collateral and all liens and security interest therein for the benefit of Buyer until a successor administrative agent is
appointed.
(b) Upon
the acceptance of any appointment as Administrative Agent hereunder by a successor administrative agent, that successor administrative
agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative
Agent and the retiring Administrative Agent shall promptly (i) transfer to such successor administrative agent all sums and items
of Collateral held under the Program Agreements, together with all records and other documents necessary or appropriate in connection
with the performance of the duties of the successor administrative agent under the Program Agreements, and (ii) execute and deliver
to such successor administrative agent such amendments to financing statements, and take such other actions, as may be necessary or appropriate
in connection with the assignment to such successor administrative agent of the security interests created under the Program Agreements,
whereupon such retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative
Agent’s resignation hereunder as Administrative Agent, the provisions of this Article X and Section 11.02
shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent hereunder.
(c) Notwithstanding
anything herein to the contrary, Administrative Agent may assign its rights and duties as Administrative Agent hereunder to an Affiliate
without written notice to, the Buyer; provided, that Seller and Buyer may deem and treat such assigning Administrative Agent as Administrative
Agent for all purposes hereof, unless and until such assigning Administrative Agent provides written notice to Seller and Buyer of such
assignment. Upon such assignment such Affiliate shall succeed to and become vested with all rights, powers, privileges and duties as
Administrative Agent hereunder and under the other Program Agreements.
Section 10.08 Delegation
of Duties. Administrative Agent may perform any of its duties and exercise its rights and powers hereunder or under any other Program
Agreement by or through (i) any one or more of its Affiliates or (ii) any one or more sub agents appointed by Administrative
Agent with the prior consent of the Buyer. Administrative Agent and any such sub agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Affiliates and their respective officers, partners, directors, trustees, employees
and agents. The exculpatory provisions of this Article X shall apply to any such Affiliate or sub agent and to such other
parties as are listed above provided that notwithstanding this Section 10.08, no such delegation relieves the Administrative
Agent of its duties or obligations under this Agreement.
Section 10.09 Right
to Realize on Collateral. Anything contained in any of the Program Agreements to the contrary notwithstanding, Seller, Administrative
Agent and each Buyer hereby agree that (i) no Buyer shall have any right individually to realize upon any of the Collateral, it
being understood and agreed that all powers, rights and remedies hereunder may be exercised solely by Administrative Agent, on behalf
of Buyer in accordance with the terms hereof and all powers, rights and remedies under the Program Agreements may be exercised solely
by Administrative Agent, and (ii) in the event of a foreclosure by Administrative Agent on any of the Collateral pursuant to a
public or private sale, Administrative Agent or any Buyer may be the purchaser of any or all of such Collateral at any such sale and
Administrative Agent, as agent for and representative of Buyer (but not any Buyer in its or their respective individual capacities unless
Buyer shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Obligations as a credit on account
of the purchase price for any collateral payable by Administrative Agent at such sale.
Section 10.10 Erroneous
Payments.(a) If the Administrative Agent notifies Buyer
or any Person who has received funds on behalf of Buyer (any Buyer or other recipient, a “Payment Recipient”) that
the Administrative Agent has determined in its sole discretion that any funds received by such Payment Recipient from the Administrative
Agent or any of its Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient
(whether or not known to Buyer or other Payment Recipient on its behalf) (any such funds, whether received as a payment, prepayment or
repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”)
and demands the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property
of the Administrative Agent and shall be segregated by the Payment Recipient and held in trust for the benefit of the Administrative
Agent, and Buyer shall (or, with respect to any Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient
to) promptly, but in no event later than two (2) Business Days thereafter, return to the Administrative Agent the amount of any
such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received), together
with interest thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by
such Payment Recipient to the date such amount is repaid to the Administrative Agent in same day funds at the greater of the overnight
federal funds rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation
from time to time in effect. A notice of the Administrative Agent to any Payment Recipient under this clause (a) shall be conclusive,
absent manifest error. If a Payment Recipient receives any payment, prepayment or repayment of principal, interest, fees, distribution
or otherwise and does not receive a corresponding payment notice or payment advice, such payment, prepayment or repayment shall be presumed
to be in error absent written confirmation from the Administrative Agent to the contrary.
(b) Buyer
hereby authorizes the Administrative Agent to set off, net and apply any and all amounts at any time owing to Buyer under any Transaction
Document, or otherwise payable or distributable by the Administrative Agent to Buyer from any source, against any amount due to the Administrative
Agent under immediately preceding clause (a) or under the indemnification provisions of this Agreement.
(c) For
so long as an Erroneous Payment (or portion thereof) has not been returned by any Payment Recipient who received such Erroneous Payment
(or portion thereof) (such unrecovered amount, an “Erroneous Payment Return Deficiency”) to the Administrative Agent
after demand therefor in accordance with immediately preceding clause (a), (i) the Administrative Agent may elect, in its sole
discretion on written notice to Buyer, that all rights and claims of Buyer with respect to the Repurchase Price or other Obligations
owed to such Person up to the amount of the corresponding Erroneous Payment Return Deficiency in respect of such Erroneous Payment (the
“Corresponding Repurchase Price”) shall immediately vest in the Administrative Agent upon such election; after such
election, the Administrative Agent (x) may reflect its ownership interest in the related Repurchase Price in a principal amount
equal to the Corresponding Repurchase Price on the Asset Schedule, and (y) upon five business days’ written notice to Buyer,
may sell such Repurchase Price (or portion thereof) in respect of the Corresponding Repurchase Price, and upon receipt of the proceeds
of such sale, the Erroneous Payment Return Deficiency owing by Buyer shall be reduced by the net proceeds of the sale of such Repurchase
Price (or portion thereof), and the Administrative Agent shall retain all other rights, remedies and claims against Buyer (and/or against
any Payment Recipient that receives funds on its behalf), and (ii) each party hereto agrees that, except to the extent that the
Administrative Agent has sold such Repurchase Price, and irrespective of whether the Administrative Agent may be equitably subrogated,
the Administrative Agent shall be contractually subrogated to all the rights and interests of Buyer with respect to the Erroneous Payment
Return Deficiency. For the avoidance of doubt, no vesting or sale pursuant to the foregoing clause (i) will reduce the Committed
Amount of any Buyer and such Committed Amount shall remain available in accordance with the terms of this Agreement.
(d) The
parties hereto agree that an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by Seller,
except, in each case, to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is,
comprised of funds received by the Administrative Agent from Seller for the purpose of making such Erroneous Payment.
(e) No
Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim,
defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return
of any Erroneous Payment received, including without limitation waiver of any defense based on “discharge for value” or any
similar doctrine.
(f) Each
party’s obligations, agreements and waivers under this Section 10.10 shall survive the resignation or replacement
of the Administrative Agent, any transfer of rights or obligations by, or the replacement of, Buyer, the termination of the obligations
set forth in Section 2.01 with respect to the Committed Amount and/or the repayment, satisfaction or discharge of all Obligations
(or any portion thereof) under any Transaction Document.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Survival.
This Agreement and the other Program Agreements and all covenants, agreements, representations and warranties herein and therein and
in the certificates delivered pursuant hereto and thereto, shall survive the entering into of the Transaction and shall continue in full
force and effect so long as any Obligations are outstanding and unpaid.
Section 11.02 Indemnification.
Seller shall, and hereby agrees to, indemnify, defend and hold harmless Administrative Agent, Buyer, any Affiliate of Administrative
Agent and Buyer and their respective directors, officers, agents, employees and counsel from and against any and all losses, claims,
damages, liabilities, deficiencies, judgments or expenses incurred by any of them (except to the extent that it is finally judicially
determined to have resulted from their own gross negligence or willful misconduct) as a consequence of, or arising out of or by reason
of any litigation, investigations, claims or proceedings which arise out of or are in any way related to, (i) this Agreement or
any other Program Agreement, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement
any other Program Agreement or any transaction contemplated hereby or thereby (including without limitation any such liabilities, losses,
damages, judgments, costs and expenses arising from (A) any acts or omissions of the Seller and (B) any wire fraud (to the
extent caused by a negligent act or omission by, or occurring through the systems of Seller, its employees, officers agents, or other
persons acting on Seller’s behalf) or data or systems intrusion (solely to the extent caused by or occurring through the systems
of, Seller, its employees, officers, agents, or other persons acting on Seller’s behalf)), (ii) Seller’s servicing
practices or procedures; (iii) any actual or proposed use by Seller of the proceeds of the Purchase Price, and (iv) any Default,
Event of Default or any other breach by Seller of any of the provisions of this Agreement or any other Program Agreement, including,
without limitation, amounts paid in settlement, court costs and reasonable fees and disbursements of counsel incurred in connection with
any such litigation, investigation, claim or proceeding or any advice rendered in connection with any of the foregoing. If and to the
extent that any Obligations are unenforceable for any reason, Seller hereby agrees to make the maximum contribution to the payment and
satisfaction of such Obligations which is permissible under applicable law. Seller’s obligations set forth in this Section 11.02
shall survive any termination of this Agreement and each other Program Agreement and the payment in full of the Obligations, and
are in addition to, and not in substitution of, any other of its obligations set forth in this Agreement or otherwise. In addition, Seller
shall, upon demand, pay to Buyer or Administrative Agent, as applicable, all costs and Expenses (including the reasonable fees and disbursements
of counsel) paid or incurred by Buyer or Administrative Agent in (i) enforcing or defending its rights under or in respect of this
Agreement or any other Program Agreement, (ii) collecting the Purchase Price outstanding, (iii) foreclosing or otherwise
collecting upon any Repurchase Assets and (iv) obtaining any legal, accounting or other advice in connection with any of the foregoing.
Section 11.03 Nonliability
of Buyer. The parties hereto agree that, notwithstanding any affiliation that may exist between Seller and Buyer, the relationship
between Seller and Buyer shall be solely that of arms-length participants. Buyer shall not have any fiduciary responsibilities to Seller.
Seller (i) agrees that Buyer shall not have any liability to Seller (whether sounding in tort, contract or otherwise) for losses
suffered by Seller in connection with, arising out of, or in any way related to, the transactions contemplated and the relationship established
by this agreement, the other loan documents or any other agreement entered into in connection herewith or any act, omission or event
occurring in connection therewith, unless it is determined by a judgment of a court that is binding on Buyer (which judgment shall be
final and not subject to review on appeal), that such losses were the result of acts or omissions on the part of Buyer constituting gross
negligence or willful misconduct and (ii) waives, releases and agrees not to sue upon any claim against Buyer (whether sounding
in tort, contract or otherwise), except a claim based upon gross negligence or willful misconduct. Whether or not such damages are related
to a claim that is subject to such waiver and whether or not such waiver is effective, neither Buyer nor Administrative Agent shall have
any liability with respect to, and Seller hereby waives, releases and agrees not to sue upon any claim for, any special, indirect, consequential
or punitive damages suffered by Seller in connection with, arising out of, or in any way related to the transactions contemplated or
the relationship established by this Agreement, the other loan documents or any other agreement entered into in connection herewith or
therewith or any act, omission or event occurring in connection herewith or therewith, unless it is determined by a judgment of a court
that is binding on Buyer (which judgment shall be final and not subject to review on appeal), that such damages were the result of acts
or omissions on the part of Buyer, as applicable, constituting willful misconduct or gross negligence.
Section 11.04 Governing
Law; Submission to Jurisdiction; Waivers.
(a) This
Agreement shall be binding and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Seller
acknowledges that the obligations of Buyer hereunder or otherwise are not the subject of any VFN Guaranty by, or recourse to, any direct
or indirect parent or other Affiliate of Buyer. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO OR IN
CONNECTION WITH THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES HERETO, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES
OF THE PARTIES HERETO WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE
CONFLICT OF LAW PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND 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 SUCH LAWS.
(b) EACH
OF THE PARTIES HERETO AND THE BUYER, BY THEIR ACCEPTANCE OF THE NOTE, HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) 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 GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING 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;
(ii) 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;
(iii) 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 HEREIN OR AT SUCH OTHER ADDRESS OF WHICH
EACH OTHER PARTY HERETO SHALL HAVE BEEN NOTIFIED IN WRITING;
(iv) 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; AND
(v) WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THE INDENTURE OR THE TRANSACTIONS CONTEMPLATED THEREBY AND HEREBY.
Section 11.05 Notices.
Any and all notices (with the exception of Transaction Notices, which shall be delivered via facsimile only), statements, demands or
other communications hereunder may be given by a party to the other by mail, email, facsimile, messenger or otherwise to the address
specified below, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other.
All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified
in the preceding sentence.
If to Seller:
PennyMac
Loan Services, LLC
3043 Townsgate Road
Westlake Village, CA 91361
Attention: Pamela Marsh/Richard Hetzel
Phone Number: (805) 330-6059/ (818) 746-2877 / (818) 224-7078
E-mail: pamela.marsh@pnmac.com;
richard.hetzel@pnmac.com;
mortgage.finance@pnmac.com;
josh.smith@pennymac.com
with a copy to:
PennyMac
Loan Services, LLC
3043 Townsgate Road
Westlake Village, CA 91361
Attention: Derek Stark
Phone Number: (818) 746-2289
E-mail:derek.stark@pennymac.com
If to Buyer:
Nomura
Corporate Funding Americas, LLC
Worldwide Plaza
309 West 49th Street
New York, New York 10019-7316
Tel: 212.667.1578
Fax: 646.587.1582
Attention: Operations
Email:
wholeloanmosupport@nomura.com
With copies to:
Nomura Corporate Funding Americas, LLC
Worldwide Plaza
309 West 49th Street
New York, New York 10019-7316
Tel: 212.667.1578
Fax: 646.587.1582
Attention: Michael Rogozinski
Email:
michael.rogozinski@nomura.com
Section 11.06 Severability.
Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall
be enforceable notwithstanding the unenforceability of any such other provision or agreement. In case any provision in or obligation
under this Agreement or any other Program Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not
in any way be affected or impaired thereby.
Section 11.07 Section Headings.
The Article and Section headings in this Agreement are inserted for convenience of reference only and shall not in any way
affect the meaning or construction of any provision of this Agreement.
Section 11.08 Counterparts.
This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which
when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery
of an executed counterpart of a signature page to this Agreement by facsimile or other electronic means shall be effective as delivery
of a manually executed counterpart of this Agreement. The parties agree that this Agreement, any addendum or amendment hereto or any
other document necessary for the consummation of the transactions contemplated by this Agreement may be accepted, executed or agreed
to through the use of an electronic signature in accordance with the Electronic Signatures in Global and National Commerce Act, 15 U.S.C.
§ 7001 et seq, Official Text of the Uniform Electronic Transactions Act as approved by the National Conference of Commissioners
on Uniform State Laws at its Annual Conference on July 29, 1999 and any applicable state law. Any document accepted, executed
or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed
and each party hereby consents to the use of any secure third party electronic signature capture service providers with appropriate document
access tracking, electronic signature tracking and document retention as may be approved by the Administrative Agent in its sole discretion.
Section 11.09 Periodic
Due Diligence Review. Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to Seller
and the MSR and Purchased Assets, for purposes of verifying compliance with the representations, warranties and specifications made hereunder,
or otherwise, and Seller agree that upon reasonable (but no less than five (5) Business Days’) prior written notice
unless an Event of Default shall have occurred, in which case no notice is required, to Seller, Buyer or its authorized representatives
will be permitted during normal business hours, and in a manner that does not unreasonably interfere with the ordinary conduct of Seller’s
business, to examine, inspect, and make copies and extracts of, any and all documents, records, agreements, instruments or information
relating to such MSR and Purchased Assets in the possession or under the control of Seller. Seller also shall make available to Buyer
a knowledgeable financial or accounting officer for the purpose of answering questions respecting the MSR and Purchased Assets. Without
limiting the generality of the foregoing, Seller acknowledges that Buyer may enter into a Transaction related to any Purchased Assets
from Seller based solely upon the information provided by Seller to Buyer in the Asset Schedule and the representations, warranties and
covenants contained herein, and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review
on some or all of the Purchased Assets related to a Transaction. Seller agrees to cooperate with Buyer and any third party underwriter
in connection with such underwriting, including, but not limited to, providing Buyer and any third party underwriter with access to any
and all documents, records, agreements, instruments or information relating to such MSR and Purchased Assets in the possession, or under
the control, of Seller.
Section 11.10 Hypothecation
or Pledge of Repurchase Assets. Buyer shall have free and unrestricted use of all Repurchase Assets and nothing in this Agreement
shall preclude Buyer from engaging in repurchase transactions with all or a portion of the Repurchase Assets or otherwise pledging, repledging,
transferring, hypothecating, or rehypothecating all or a portion of the Repurchase Assets; provided that prior to an Event of Default,
such pledge, repledge, transfer, hypothecation or rehypothecation is treated as a financing or hedging transaction for U.S. federal income
tax purposes or a pro rata interest in all payments due to Buyer under this Agreement; provided, further that other than with respect
to a pro rata interest in all payments due to Buyer under this Agreement and prior to an Event of Default Buyer receives an opinion of
a nationally recognized tax counsel experienced in such matters that such repurchase transaction, pledge, repledge, transfer, hypothecation
or rehypothecation will not result in the Issuer being subject to tax on its net income as an association (or publicly traded partnership)
taxable as a corporation or a taxable mortgage pool taxable as a corporation, each for U.S. federal income tax purposes. For the avoidance
of doubt, the terms and provisions of Section 9.02(b) shall not restrict or otherwise qualify the terms and provisions set
forth in this 11.10.
Section 11.11 Non-Confidentiality
of Tax Treatment.
(a) This
Agreement and its terms, provisions, supplements and amendments, and notices hereunder, are proprietary to Buyer or Seller, as applicable
and shall be held by each party hereto, as applicable in strict confidence and shall not be disclosed to any third party without the
written consent of Buyer or Seller, except for (i) disclosure to Buyer’s or Seller’s direct and indirect Affiliates
and Subsidiaries, attorneys, accountants, insurance consultants, insurers or financing sources, but only to the extent such disclosure
is necessary and such parties agree to hold all information in strict confidence, (ii) disclosure to any assignee, prospective
assignee, participant or prospective participant which is not prohibited from being an assignee or participant and which agrees to be
bound by the confidentiality provisions set forth herein, or (iii) disclosure required by law, rule, regulation or order of a court
or other regulatory body. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Program Agreements,
the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of
the Transactions, any fact relevant to understanding the federal, state and local tax treatment of the Transactions, and all materials
of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant
to understanding such tax treatment; provided that Seller may not disclose the name of or identifying information with respect to Buyer
or any pricing terms (including, without limitation, the Pricing Rate, Purchase Price Percentage, Purchase Price and Commitment Fee)
or other nonpublic business or financial information (including any sublimits) that is unrelated to the federal, state and local tax
treatment of the Transactions and is not relevant to understanding the federal, state and local tax treatment of the Transactions, without
the prior written consent of Buyer.
(b) Notwithstanding
anything in this Agreement to the contrary, Seller shall comply with all applicable local, state and federal laws, including, without
limitation, all privacy and data protection law, rules and regulations that are applicable to the Repurchase Assets and/or any
applicable terms of this Agreement (the “Confidential Information”). Seller understands that the Confidential Information
may contain “nonpublic personal information”, as that term is defined in Section 509(4) of the Gramm-Leach-Bliley
Act (the “GLB Act”), and Seller agrees to maintain such nonpublic personal information that it receives hereunder
in accordance with the GLB Act and other applicable federal and state privacy laws. Seller shall implement such physical and other security
measures as shall be necessary to (a) ensure the security and confidentiality of the “nonpublic personal information”
of the “customers” and “consumers” (as those terms are defined in the GLB Act) of Buyer or any Affiliate of Buyer
which Seller holds, (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information,
and (c) protect against any unauthorized access to or use of such nonpublic personal information. Seller represents and warrants
that it has implemented appropriate measures to meet the objectives of Section 501(b) of the GLB Act and of the applicable
standards adopted pursuant thereto, as now or hereafter in effect. Upon request, Seller will provide evidence reasonably satisfactory
to allow Buyer to confirm that the providing party has satisfied its obligations as required under this Section 11.11. Without
limitation, this may include Buyer’s review of audits, summaries of test results, and other equivalent evaluations of Seller. Seller
shall notify Buyer immediately following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic
personal information of the customers and consumers of Buyer or any Affiliate of Buyer provided directly to Seller by Buyer or such Affiliate.
Seller shall provide such notice to Buyer by personal delivery, by facsimile with confirmation of receipt, or by overnight courier with
confirmation of receipt to the applicable requesting individual.
Section 11.12 Set-off;
Netting. In addition to any rights and remedies of Buyer hereunder and by law, upon Buyer’s exercise against Seller of its
contractual right as set forth in section 555 and 559 of the Bankruptcy Code to liquidate, terminate, or accelerate such contractual
right, Buyer and any of its Affiliates shall have the right, without prior notice to Seller and its Affiliates, any such notice being
expressly waived by Seller, on behalf of itself and its Affiliates, to the extent permitted by applicable law, to aggregate, offset or
net out any termination value, payment amount, or other transfer obligation arising under or in connection with set-off, foreclose, net
and appropriate and apply against any Obligation hereunder or other contractual obligation, transaction, confirmation, or agreement set
forth in section 555 and 559 of the Bankruptcy Code under any other financing facility between the Seller or its Affiliates and the Buyer
(including, but not limited to, that certain Master Securities Forward Transaction Agreement, dated as of April 26, 2023, between
Nomura Securities International, Inc. and PennyMac Loan Service, LLC (as amended by Amendment to Master Securities Forward Transaction
Agreement to Conform with FINRA 4210, dated as of June 20, 2018, and as the same may be further amended from time to time)), whenever
arising, from Seller or any of its Affiliates thereof to Buyer or any of its Affiliates including (i) any and all deposit, securities
or other trust or custodial accounts maintained for the Seller or its applicable Affiliates by the Buyer or its Affiliates and any related
deposits (general or special, time or demand, provisional or final), in any currency, or other property (including security entitlements)
now or hereafter credited to or held in any such account or otherwise held, or carried by or through, or subject to the control of the
Buyer or its applicable Affiliates or agent thereof in connection with any Obligation hereunder or other obligation, transaction, confirmation,
or agreement under any other financing facility, whenever arising, whether fully paid or otherwise, (ii) all accounts, chattel
paper, commodity accounts, commodity contracts, documents, general intangibles, instruments, investment property, letter-of-credit rights,
and securities held under or constituting collateral or security under or pursuant to this Agreement or any other financing facility
or any related document, (iii) any other obligation (including to return funds to Seller or an Affiliate thereof), credits, indebtedness
or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or
owing by or due from Buyer or any Affiliate thereof to or for the credit or the account of Seller or any Affiliate thereof, and (iv) all
proceeds of or distributions on any of the foregoing, in each case solely to the extent held under or constituting collateral or security
under or pursuant to this Agreement or any other financing facility or any related document. The rights of the Buyer and its Affiliates
contained herein are in addition to any and all recoupment rights that each such party may have at law or in equity against the Seller
and its Affiliates under any Transaction Document or any other financing agreement. For the avoidance of doubt, the Affiliates of the
Buyer shall be third party beneficiaries with respect to the terms and provisions of this Section 11.12. Buyer agrees promptly
to notify Seller after any such set off or netting and application made by Buyer; provided, that, the failure to give such notice shall
not affect the validity of such set off, netting and its application.
Section 11.13 Intent.
(a) The
parties recognize that each Transaction is a “master netting agreement” as that term is defined in Section 101 of Title 11
of the United States Code, as amended and a “securities contract” as that term is defined in Section 741 of Title 11
of the United States Code, as amended and that all payments hereunder are deemed “margin payments” or “settlement payments”
as defined in Title 11 of the United States Code.
(b) It
is understood that either party’s right to liquidate Purchased Assets delivered to it in connection with Transactions hereunder
or to exercise any other remedies pursuant to Section 7.03 hereof is a contractual right to liquidate such Transaction as
described in Sections 555 and Section 561 of Title 11 of the United States Code, as amended.
(c) The
parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the
Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial
contract,” as that term is defined in 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 under
any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment
obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial
institution” as that term is defined in FDICIA).
(e) This
Agreement is intended to be a “securities contract,” within the meaning of Section 555 under the Bankruptcy Code, and
a “master netting agreement,” (including but not limited to the agreements set forth in Section 11.12 hereof),
within the meaning of Section 561 under the Bankruptcy Code.
(f) It
is the intention of the parties that, for U.S. federal income tax purposes and for accounting purposes, each Transaction constitute a
financing, and that Seller be (except to the extent that Buyer shall have exercised its remedies following an Event of Default) the owner
of the Purchased Assets for such purposes. Unless prohibited by applicable law, Seller and Buyer shall treat the Transactions as described
in the preceding sentence (including on any and all filings with any U.S. federal, state, or local taxing authority and agree not to
take any action inconsistent with such treatment).
IN WITNESS WHEREOF, Seller
and Buyer have caused this Master Repurchase Agreement to be executed and delivered by their duly authorized officers or trustees as
of the date first above written.
|
NOMURA CORPORATE FUNDING AMERICAS, LLC, as Buyer |
| By: | /s/
Sanil Patel
Name: Sanil Patel
Title: Managing Director |
[Signature Page to MSRVF1 Master Repurchase
Agreement]
|
Nomura
CORPORATE FUNDING AMERICAS, LLC, as Administrative Agent |
| By: | /s/
Sanil Patel
Name: Sanil Patel
Title: Managing Director |
[Signature Page to MSRVF1 Master Repurchase
Agreement]
|
PENNYMAC LOAN SERVICES, LLC, as Seller |
| By: | /s/
Pamela Marsh
Name: Pamela
Marsh Title: Senior Managing Director and Treasurer |
[Signature Page to MSRVF1 Master Repurchase
Agreement]
SCHEDULE 1
RESPONSIBLE OFFICERS – SELLER
SELLER AUTHORIZATIONS
Any of the persons whose signatures and titles
appear below are authorized, acting singly, to act for Seller under this Agreement:
Responsible Officers for execution of Program
Agreements and amendments:
Name |
|
Title |
|
Signature |
|
|
|
|
|
Pamela
Marsh |
|
Senior
Managing Director and Treasurer |
|
|
Responsible Officers for execution of Transaction
Notices and day-to-day operational functions:
Name |
|
Title |
|
Signature |
|
|
|
|
|
Pamela Marsh |
|
Senior Managing Director
and Treasurer |
|
|
|
|
|
|
|
Maurice Watkins |
|
Senior Managing Director,
Capital Markets Operations |
|
|
|
|
|
|
|
Thomas Rettinger |
|
Senior Managing Director,
Head of Secondary Marketing |
|
|
|
|
|
|
|
Kevin Chamberlain |
|
Executive Vice President, Investor
Relations |
|
|
|
|
|
|
|
Richard Hetzel |
|
Senior Vice President,
Treasury |
|
|
|
|
|
|
|
Adriana Villalobos |
|
First Vice President, Secondary
Marketing Operations |
|
|
|
|
|
|
|
Angela Everest |
|
Authorized Representative |
|
|
|
|
|
|
|
Ryan Huddleston |
|
Authorized Representative |
|
|
|
|
|
|
|
Adeshola Makinde |
|
Authorized Representative |
|
|
|
|
|
|
|
Virginia Movsessian |
|
Authorized Representative |
|
|
SCHEDULE 2
ASSET SCHEDULE
Note | |
Initial
Note
Balance | | |
Additional
Balance(s) | | |
Outstanding
VFN Principal
Balance | | |
Maximum
VFN Principal
Balance | |
PNMAC GMSR ISSUER TRUST,
Class A-MSRVF1 Variable Funding Note | |
$ | 224,459,003.45 | | |
$ | 0.00 | | |
$ | 224,459,003.45 | | |
$ | 2,000,000,000 | |
Repurchase Price attributable to the Series 2023-MSRVF2
Variable Funding Note and Additional Balances pursuant to the Series 2023-MSRVF2 Repurchase Agreement
| |
Current
Balance | | |
Additional
Balance(s) | | |
Outstanding
Principal
Balance | | |
Maximum
Principal
Balance | |
| |
$ | 50,000,000.00 | | |
$ | 0.00 | | |
$ | 50,000,000.00 | | |
$ | 350,000,000 | |
SCHEDULE 3
BUYER ACCOUNT
Bank Name: |
Bank of America
NA, New York |
ABA #: |
026009593 |
Acct. Name: |
NOMURA CORPORATE FUNDING
AMERICA LLC |
Account #: |
6550561119 |
Reference: |
PENNYMACLOANSERVICESLLC(MSL)11676668 |
SCHEDULE 4
RESTRICTED PARTICIPANTS
EXHIBIT A
FORM OF TRANSACTION NOTICE
Dated: [_________]
Nomura Corporate
Funding Americas, LLC
Worldwide Plaza
309 West 49th Street
New York, New York 10019-7316
Tel: 212.667.1578
Fax: 646.587.1582
Attention: Operations
Email: wholeloanmosupport@nomura.com
TRANSACTION NOTICE
Ladies and Gentlemen:
We
refer to the Master Repurchase Agreement, dated as of [_], 2023 (the “Agreement”), among PennyMac Loan Services,
LLC (the “Seller”), NOMURA CORPORATE FUNDING AMERICAS, LLC (in such capacity, the “Buyer”) and
NOMURA CORPORATE FUNDING AMERICAS, LLC, as administrative agent. Each capitalized term used but not defined herein shall have the meaning
specified in the Agreement. This notice is being delivered by Seller pursuant to Section 2.02 of the Agreement.
Please be notified that Seller
hereby irrevocably requests that Buyer enter into the following Transaction(s) with Seller as follows:
1. Maximum
VFN Principal Balance: [$___________]
2. Initial
Note Balance/Purchase Price requested: [$___________]
3. Additional
Balance/Purchase Price requested: [$___________]
4. Purchase
Date: [_________]
5. Repurchase
Date: [________]
6. Pricing
Rate / Repurchase Price: [$___________]
Seller requests that the
proceeds of the Purchase Price be deposited in Seller’s account at _______, ABA Number _______, account number ____, References:
_____, Attn: _______.
Seller hereby represents
and warrants that each of the representations and warranties made by Seller in each of the Program Agreements to which it is a party
is true and correct in all material respects, in each case, on and as of the date hereof, except to the extent such representations and
warranties expressly relate to an earlier date. Attached hereto is a true and complete updated copy of the Asset Schedule.
|
PENNYMAC LOAN SERVICES, LLC, as Seller |
Asset Schedule
Note | |
Initial
Note Balance | | |
Additional
Balance(s) | | |
Outstanding
VFN Principal Balance | | |
Maximum
VFN Principal Balance | |
PNMAC GMSR ISSUER TRUST,
Class A-MSRVF1 Variable Funding Note | |
$ | [________] | | |
$ | [________] | | |
$ | [________] | | |
$ | [________] | |
EXHIBIT B
EXISTING INDEBTEDNESS
[See Attached]
EXHIBIT 10.2
EXECUTION VERSION
MASTER REPURCHASE
AGREEMENT
among
NOMURA CORPORATE FUNDING AMERICAS, LLC, as administrative
agent (“Administrative Agent”)
and
NOMURA CORPORATE FUNDING AMERICAS, LLC, as buyer
(“Buyer”)
and
PENNYMAC LOAN SERVICES, LLC, as seller (“Seller”)
Dated as of August 4, 2023
PNMAC GMSR ISSUER TRUST
MSR COLLATERALIZED NOTES,
SERIES 2020-SPIADVF1
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS |
1 |
Section 1.01 |
Certain
Defined Terms |
1 |
Section 1.02 |
Other
Defined Terms |
12 |
ARTICLE II GENERAL TERMS |
12 |
Section 2.01 |
Transactions |
12 |
Section 2.02 |
Procedure
for Entering into Transactions |
12 |
Section 2.03 |
Repurchase;
Payment of Repurchase Price |
13 |
Section 2.04 |
Price
Differential |
13 |
Section 2.05 |
Margin
Maintenance |
13 |
Section 2.06 |
Payment
Procedure |
13 |
Section 2.07 |
Application
of Payments |
14 |
Section 2.08 |
Use
of Purchase Price and Transaction Requests |
14 |
Section 2.09 |
Recourse |
14 |
Section 2.10 |
Requirements
of Law |
15 |
Section 2.11 |
Taxes |
16 |
Section 2.12 |
Indemnity |
17 |
Section 2.13 |
Additional
Balance |
17 |
Section 2.14 |
Fees |
17 |
Section 2.15 |
Termination |
17 |
ARTICLE III REPRESENTATIONS AND WARRANTIES |
18 |
Section 3.01 |
Seller
Existence |
18 |
Section 3.02 |
Licenses |
18 |
Section 3.03 |
Power |
18 |
Section 3.04 |
Due
Authorization |
18 |
Section 3.05 |
Financial
Statements |
18 |
Section 3.06 |
No
Event of Default |
18 |
Section 3.07 |
Solvency |
19 |
Section 3.08 |
No
Conflicts |
19 |
Section 3.09 |
True
and Complete Disclosure |
19 |
Section 3.10 |
Approvals |
19 |
Section 3.11 |
Litigation |
19 |
Section 3.12 |
Material
Adverse Change |
20 |
Section 3.13 |
Ownership |
20 |
Section 3.14 |
The
Note |
21 |
Section 3.15 |
Taxes |
21 |
Section 3.16 |
Investment
Company |
21 |
Section 3.17 |
Chief
Executive Office; Jurisdiction of Organization |
21 |
Section 3.18 |
Location
of Books and Records |
21 |
Section 3.19 |
ERISA |
21 |
Section 3.20 |
Financing
of Note and Additional Balances |
21 |
Section 3.21 |
Agreements |
22 |
Section 3.22 |
Other
Indebtedness |
22 |
Section 3.23 |
No
Reliance |
22 |
Section 3.24 |
Plan
Assets |
22 |
Section 3.25 |
Anti-Money
Laundering Laws |
22 |
Section 3.26 |
Anti-Corruption
Laws |
22 |
Section 3.27 |
Compliance
with 1933 Act |
22 |
Section 3.28 |
Compliance
with Laws |
22 |
Section 3.29 |
The
Ginnie Mae Contract |
23 |
Section 3.30 |
Ginnie
Mae Approvals |
23 |
Section 3.31 |
No
Adverse Actions |
23 |
Section 3.32 |
Use
of Proceeds |
23 |
Section 3.33 |
Reserved |
23 |
Section 3.34 |
Sanctions
Compliance |
23 |
ARTICLE IV CONVEYANCE; REPURCHASE ASSETS; SECURITY INTEREST |
24 |
Section 4.01 |
Ownership |
24 |
Section 4.02 |
Security
Interest |
24 |
Section 4.03 |
Further
Documentation |
24 |
Section 4.04 |
Changes
in Locations, Name, etc. |
24 |
Section 4.05 |
Performance
by Buyer of Seller’s Obligations |
24 |
Section 4.06 |
Proceeds |
25 |
Section 4.07 |
Remedies |
25 |
Section 4.08 |
Limitation
on Duties Regarding Preservation of Repurchase Assets |
25 |
Section 4.09 |
Powers
Coupled with an Interest |
25 |
Section 4.10 |
Release
of Security Interest |
25 |
Section 4.11 |
Reinstatement |
25 |
Section 4.12 |
Subordination |
25 |
ARTICLE V CONDITIONS PRECEDENT |
26 |
Section 5.01 |
Initial
Transaction |
26 |
Section 5.02 |
All
Transactions |
27 |
Section 5.03 |
Closing
Subject to Conditions Precedent |
28 |
ARTICLE VI COVENANTS |
30 |
Section 6.01 |
Litigation |
30 |
Section 6.02 |
Prohibition
of Fundamental Changes |
30 |
Section 6.03 |
[Reserved] |
31 |
Section 6.04 |
No
Adverse Claims |
31 |
Section 6.05 |
Assignment |
31 |
Section 6.06 |
Security
Interest |
31 |
Section 6.07 |
Records |
31 |
Section 6.08 |
Books |
31 |
Section 6.09 |
Approvals |
31 |
Section 6.10 |
Insurance |
31 |
Section 6.11 |
Distributions |
31 |
Section 6.12 |
Applicable
Law |
31 |
Section 6.13 |
Existence;
Ginnie Mae Approvals |
32 |
Section 6.14 |
Change
in Organizational Documents |
32 |
Section 6.15 |
Taxes |
32 |
Section 6.16 |
Transactions
with Affiliates |
32 |
Section 6.17 |
Guarantees |
32 |
Section 6.18 |
Indebtedness |
32 |
Section 6.19 |
True
and Correct Information |
32 |
Section 6.20 |
No
Pledge |
32 |
Section 6.21 |
Plan
Assets |
32 |
Section 6.22 |
Sharing
of Information |
33 |
Section 6.23 |
Modification
of the Base Indenture and Series 2020-SPIADVF1 Indenture Supplement |
33 |
Section 6.24 |
Reporting
Requirements |
33 |
Section 6.25 |
Liens
on Substantially All Assets |
36 |
Section 6.26 |
Litigation
Summary |
36 |
Section 6.27 |
Material
Change in Business |
36 |
Section 6.28 |
Ginnie
Mae Contract |
36 |
Section 6.29 |
Trigger
Event MSR Asset Sale |
37 |
Section 6.30 |
Termination
of Servicing Notice |
37 |
Section 6.31 |
[Reserved] |
37 |
Section 6.32 |
Ginnie
Mae Audit and Approval Maintenance |
37 |
Section 6.33 |
Sale
and Lease-Backs |
37 |
Section 6.34 |
Fiscal
Year |
37 |
Section 6.35 |
Most
Favored Status |
37 |
Section 6.36 |
Quality
Control |
37 |
ARTICLE VII DEFAULTS/RIGHTS AND REMEDIES OF BUYER UPON DEFAULT |
38 |
Section 7.01 |
Events
of Default |
38 |
Section 7.02 |
No
Waiver |
40 |
Section 7.03 |
Due
and Payable |
40 |
Section 7.04 |
Fees |
40 |
Section 7.05 |
Default
Rate |
40 |
ARTICLE VIII ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; SEPARATE ACTIONS BY BUYER |
40 |
Section 8.01 |
Entire
Agreement; Amendments |
40 |
Section 8.02 |
Waivers,
Separate Actions by Buyer |
40 |
ARTICLE IX SUCCESSORS AND ASSIGNS |
41 |
Section 9.01 |
Successors
and Assigns |
41 |
Section 9.02 |
Participations
and Transfers |
41 |
Section 9.03 |
Buyer
and Participant Register |
42 |
ARTICLE X AGENT PROVISIONS |
42 |
Section 10.01 |
Appointment
of Administrative Agent |
42 |
Section 10.02 |
Powers
and Duties |
43 |
Section 10.03 |
General
Immunity |
43 |
Section 10.04 |
Administrative
Agent to Act as Buyer |
44 |
Section 10.05 |
Buyer’s
Representations, Warranties and Acknowledgment |
44 |
Section 10.06 |
Right
to Indemnity |
44 |
Section 10.07 |
Successor
Administrative Agent |
45 |
Section 10.08 |
Delegation
of Duties |
45 |
Section 10.09 |
Right
to Realize on Collateral |
45 |
Section 10.10 |
Erroneous
Payments |
45 |
ARTICLE XI MISCELLANEOUS |
46 |
Section 11.01 |
Survival |
46 |
Section 11.02 |
Indemnification |
46 |
Section 11.03 |
Nonliability
of Buyer |
47 |
Section 11.04 |
Governing
Law; Submission to Jurisdiction; Waivers |
47 |
Section 11.05 |
Notices |
48 |
Section 11.06 |
Severability |
49 |
Section 11.07 |
Section Headings |
49 |
Section 11.08 |
Counterparts |
49 |
Section 11.09 |
Periodic
Due Diligence Review |
50 |
Section 11.10 |
Hypothecation
or Pledge of Repurchase Assets |
50 |
Section 11.11 |
Non-Confidentiality
of Tax Treatment |
50 |
Section 11.12 |
Set-off;
Netting |
51 |
Section 11.13 |
Intent |
51 |
Schedule
1 |
– |
Responsible
Officers of Seller |
|
|
|
Schedule
2 |
– |
Asset
Schedule |
|
|
|
Schedule
3 |
– |
Buyer
Account |
|
|
|
Schedule
4 |
- |
Restricted
Participants |
|
|
|
Exhibit A |
– |
Form of
Transaction Notice |
|
|
|
Exhibit B |
– |
Existing
Indebtedness |
MASTER REPURCHASE AGREEMENT
This
Master Repurchase Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time, this “Agreement”)
is made as of August 4, 2023, among NOMURA CORPORATE FUNDING AMERICAS, LLC (“Nomura”), as administrative agent
(in such capacity, the “Administrative Agent”), Nomura, as buyer, and PENNYMAC LOAN SERVICES, LLC, as seller (“Seller”
or “PLS”).
W I T N E S S E T H:
WHEREAS,
from time to time the parties hereto may enter into transactions in which Seller agrees to transfer to Buyer (as defined below)
a certain Note (as defined below) against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller
such Note at a date certain or on demand, against the transfer of funds by Seller. Each such transaction shall be referred to herein
as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental
terms or conditions contained in any annexes identified herein, as applicable hereunder;
WHEREAS,
pursuant to the Base Indenture (as defined below) and the Series 2020-SPIADVF1 Indenture Supplement (as defined below), PNMAC GMSR
ISSUER TRUST (the “Issuer”) has duly authorized the issuance of a Series of Notes, as a single Class of
Variable Funding Note, known as the “PNMAC GMSR ISSUER TRUST MSR Collateralized Notes, Series 2020-SPIADVF1” (the “SPIAD
Notes”), including the SPIAD Note, No. 9 (such specific SPIAD Note, the “Note”);
WHEREAS,
Seller is the owner of the Note; and
WHEREAS,
Seller wishes to sell the Note to Buyer, which will be held by the Administrative Agent on behalf of the Buyer, pursuant to
the terms of this Agreement;
NOW,
THEREFORE, in consideration of the mutual agreements set forth herein, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Buyer and Seller hereby agree as follows.
ARTICLE I
DEFINITIONS
Section 1.01 Certain
Defined Terms. Capitalized terms used herein shall have the indicated meanings:
“1933
Act” means the Securities Act of 1933, as amended from time to time.
“1934
Act” means the Securities Exchange Act of 1934, as amended from time to time.
“Accepted
Servicing Practices” means (a) with respect to any Mortgage Loan, the customary and usual standards of mortgage servicing
practices of prudent mortgage banking institutions in the business servicing mortgage loans for itself or for other third-party portfolios
of mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related mortgaged property is located; and (b) with
respect to all MSRs, those practices required by Ginnie Mae; provided, however, that in all cases the accepted servicing
practices must (i) comply with the terms of applicable laws and the related loan documents and (ii) meet a standard of care
not less than customary, reasonable and usual standards of practice for institutions that service loans that are similar to the Mortgage
Loans.
“Act
of Insolvency” means, with respect to any Person,
(a) such
Person shall become insolvent or generally fail to pay, or admit in writing its inability to pay, its debts as they become due, or shall
voluntarily commence any proceeding or file any petition under any bankruptcy, insolvency or similar Law, which proceeding or petition
seeks dissolution, liquidation or reorganization or the appointment of a receiver, trustee, custodian, conservator or liquidator for
itself or a substantial portion of its property, assets or business or to effect a plan or other arrangement with its creditors, or shall
file any answer admitting the jurisdiction of the court and the material allegations of an involuntary petition filed against it in any
bankruptcy, insolvency or similar proceeding, or shall be adjudicated bankrupt, or shall make a general assignment for the benefit of
creditors, or such Person, or a substantial part of its property, assets or business, shall be subject to, consent to or acquiesce in
the appointment of a receiver, trustee, custodian, conservator or liquidator for itself or a substantial property, assets or business;
(b) corporate
action shall be taken by such Person for the purpose of effectuating any of the foregoing;
(c) an
order for relief shall be entered in a case under the Bankruptcy Code in which such Person is a debtor; or
(d) involuntary
proceedings or an involuntary petition shall be commenced or filed against such Person under any bankruptcy, insolvency or similar Law,
which proceeding or petition seeks dissolution, liquidation or reorganization of such Person or the appointment of a receiver, trustee,
custodian, conservator or liquidator for such Person or of a substantial part of the property, assets or business of such Person, or
any writ, order, judgment, warrant of attachment, execution or similar process shall be issued or levied against a substantial part of
the property, assets or business of such Person.
“Additional
Balance” has the meaning set forth in Section 2.13.
“Additional
Repurchase Assets” has the meaning set forth in Section 4.02(a).
“Administrative
Agent” has the meaning given to such term in the preamble to this Agreement.
“Administrative
Fee” has the meaning assigned to such term in the Series 2020-SPIADVF1 Indenture Supplement.
“Affiliate”
means, with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code; provided,
however, that in respect of Seller the term “Affiliate” shall include only PNMAC and its wholly owned subsidiaries.
“Agreement”
has the meaning given to such term in the preamble to this Agreement.
“Anti-Corruption Laws”
means any applicable U.S. law, regulation, or rule related to combating corruption or bribery, including, but not limited to, the
United States Foreign Corrupt Practices Act of 1977.
“Anti-Money Laundering
Laws” means any applicable U.S. law, regulation, or rule related to combating money laundering, suspicious transactions,
or terrorist financing, including, but not limited to, the U.S. Bank Secrecy Act of 1986 (31 U.S.C. Sections 5301 et seq.) and all regulations
issued pursuant to it, and the USA Patriot Act (in each case to the extent applicable to the parties and to this Agreement)..
“Applicable Law”
means all applicable U.S. federal, state, and local provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations,
permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts
and arbitrators including, without limitation, the Anti-Corruption Laws and the Anti-Money Laundering Laws.
“Applicable
Lending Office” means the “lending office” of Buyer (or of an Affiliate of Buyer) designated in Section 11.05
hereof or such other office of Buyer (or of an Affiliate of Buyer) as Buyer may from time to time specify to Seller in writing as
the office by which the Transactions are to be made and/or maintained.
“Asset
Schedule” means Schedule 2 attached hereto, which lists the Note and the terms thereof, as such schedule shall be updated
from time to time in accordance with Section 2.02 hereof, including without limitation, in connection with Buyer’s
approval of any Additional Balances pursuant to Section 2.13.
“Asset
Value” has the meaning assigned to such term in the Pricing Side Letter.
“Bankruptcy
Code” means the United States Bankruptcy Code of 1978, as amended from time to time.
“Base
Indenture” means the Third Amended and Restated Base Indenture, dated as of April 1, 2020, among Buyer, Citibank, N.A.,
as indenture trustee, as calculation agent, as paying agent and as securities intermediary, Seller, as administrator and as servicer,
Atlas Securitized Products, L.P., as administrative agent, and the Credit Manager, including the schedules and exhibits thereto, as amended
by Amendment No. 1 dated as of June 8, 2022, as further amended by Amendment No. 2, dated as of June 9, 2022,
as further amended by Amendment No. 3, dated as of February 7, 2023 and as may be further amended, restated, supplemented
or otherwise modified from time to time.
“Base
Rate” has the meaning assigned to the term in the Pricing Side Letter.
“Business
Day” means any day excluding Saturday, Sunday, any day which is a legal holiday under the laws of the State of New York, any
day on which banking institutions located in any such state are authorized or required by law or other governmental action to close,
and any day on which the New York Stock Exchange or the Federal Reserve Bank of New York is authorized or obligated by law or executive
order to be closed.
“Buyer”
means Nomura Corporate Funding Americas, LLC, together with its successors, and any assignee of and Participant (subject to the restrictions
in Section 9.02) or Buyer Counterparty in the Transaction.
“Buyer
Account” means the account identified on Schedule 3 hereto.
“Buyer Counterparty”
has the meaning set forth in Section 9.02(b).
“Capital
Lease Obligations” means, for any Person, all obligations of such Person 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 a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall
be the capitalized amount thereof, determined in accordance with GAAP.
“Change
in Control” means any of the following shall occur without the prior written consent of the Administrative Agent:
(i) any
transaction or event as a result of which PNMAC ceases to own, beneficially or of record, more than 50% of the Equity Interests of Seller
or ceases to have the power to vote, directly, voting securities of Seller representing more than 50% of the voting power of the total
outstanding voting securities of Seller;
(ii) the
sale, transfer, or other disposition of all or substantially all of Seller’s or PNMAC’s assets (excluding any such action
taken in connection with any securitization transaction);
(iii) the
consummation of a merger or consolidation of Seller or PNMAC with or into another entity or any other corporate reorganization or series
of related transactions, if after giving effect thereto, more than 50% of the combined voting power of the voting securities or majority
voting control interest of the continuing or surviving entity’s stock outstanding immediately after such merger, consolidation
or such other reorganization is owned by Persons who were not stockholders of Seller or PNMAC immediately prior to such merger, consolidation
or other reorganization;
(iv) any
transaction or event as a result of which PennyMac Financial Services, Inc. ceases to (a) be a public company or (b) own,
directly or indirectly, 10% of the stock of PNMAC; or
(v) any
transaction or series of related transactions that has the effect of any one or more of the foregoing.
“Closing
Date” means August 4, 2023.
“Code”
means the Internal Revenue Code of 1986, as amended from time to time.
“Commitment”
means the obligation of Buyer to enter into Transactions with Seller with an aggregate outstanding Purchase Price at any one time not
to exceed the Maximum Purchase Price.
“Commitment
Fee” has the meaning assigned to the term in the Pricing Side Letter.
“Commitment
Period” means the period from and including the Closing Date to but not including the Termination Date or such earlier date
on which the Commitment shall have terminated pursuant to this Agreement.
“Confidential
Information” has the meaning set forth in Section 11.11(b).
“Control”,
“Controlling” or “Controlled” means the possession of the power to direct or cause the direction
of the management or policies of a Person through the right to exercise voting power or by contract, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.
“Credit Manager”
means Pentalpha Surveillance LLC and any successor thereto in such capacity.
“Default”
means an event, condition or default that, with the giving of notice, the passage of time, or both, would constitute an Event of Default.
“Division”
means, with respect to any Person that is a limited liability company organized under the laws of the State of Delaware, that any such
Person (a) divides into two or more Persons (whether or not the original Person or Subsidiary thereof survives such division) or
(b) creates, or reorganizes into, one or more series, in each case, as contemplated under the laws of the State of Delaware, including
Section 18-217 of the Delaware Limited Liability Company Act.
“Dollars”
and “$” means dollars in lawful currency of the United States of America.
“Equity
Interests” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of
a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and
membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
“ERISA
Affiliate” means any person (as defined in Section 3(9) of ERISA) that together with Seller or PNMAC would be a
member of the same “controlled group” or is treated as a single employer under Section 414(b) or (c) of
the Code or solely for purposes of Section 302 of ERISA and Section 412 of the Code is treated as single employer described
in Section 414 of the Code.
“ERISA
Event” has the meaning assigned to such term in Section 6.24(a)(6).
“Event
of Default” has the meaning assigned to such term in Section 7.01.
“Existing
Indebtedness” has the meaning specified in Section 3.22.
“Expenses”
means all present and future expenses reasonably incurred by or on behalf of Buyer in connection with the negotiation, execution or enforcement
of this Agreement or any of the other Program Agreements and any amendment, supplement or other modification or waiver related hereto
or thereto, whether incurred heretofore or hereafter, which expenses shall include the reasonable and documented cost of title, lien,
judgment and other record searches; reasonable and documented attorneys’ fees; any ongoing audits or due diligence costs in connection
with valuation, entering into Transactions or determining whether a Margin Deficit may exist; and costs of preparing and recording any
UCC financing statements or other filings necessary to perfect the security interest created hereby.
“FATCA”
Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantially
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any
agreement entered into pursuant to Section 1471(b) of the Code, or any U.S. or non-U.S. fiscal or regulatory legislation,
guidance, notes, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code.
“FHA”
means the Federal Housing Administration, an agency within HUD, or any successor thereto, and including the Federal Housing Commissioner
and the Secretary of HUD where appropriate.
“Fidelity
Insurance” means insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and
destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount acceptable
to Seller’s regulators.
“Financial
Statements” means the consolidated financial statements of Seller prepared in accordance with GAAP for the year or other period
then ended.
“GAAP”
means U.S. generally accepted accounting principles that are (i) consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its successors, as in effect from time to time, and (ii) applied consistently with principles applied
to past financial statements of Seller and its subsidiaries; provided, that a certified public accountant would, insofar
as the use of such accounting principles is pertinent, be in a position to deliver an unqualified opinion (other than a qualification
regarding changes in generally accepted accounting principles) that such principles have been properly applied in preparing such financial
statements.
“Ginnie Mae”
means the Government National Mortgage Association, its successors and assigns.
“Ginnie Mae Contract”
means (i) 12 U.S.C. § 1721(g) and the implementing regulations governing the MBS Program 24 C.F.R. Part 300;
(ii) applicable Guaranty Agreements and contractual agreements between Ginnie Mae and Seller; and (iii) the Ginnie Mae Guide
and other applicable guides.
“Ginnie Mae Guide”
means the Ginnie Mae Mortgage-Backed Securities Guide, Handbook 5500.3, Rev. 1, as amended from time to time, and any related announcements,
directives and correspondence issued by Ginnie Mae.
“Ginnie
Mae Requirements” means all rights, powers, interests and prerogatives of Ginnie Mae in and to the MSRs arising under the Ginnie
Mae Contract, the Acknowledgment Agreement or any other agreement between Seller and Ginnie Mae.
“GLB
Act” has the meaning set forth in Section 11.11(b).
“Governmental
Actions” means any and all consents, approvals, permits, orders, authorizations, waivers, exceptions, variances, exemptions
or licenses of, or registrations, declarations or filings with, any Governmental Authority required under any Governmental Rules.
“Governmental
Authority” means any nation or government, any state or other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions over Seller or Buyer, as applicable.
“Governmental
Rules” means any and all laws, statutes, codes, rules, regulations, ordinances, orders, writs, decrees and injunctions, of
any Governmental Authority and any and all legally binding conditions, standards, prohibitions, requirements and judgments of any Governmental
Authority.
“Guarantee”
means, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in
any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness
against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services,
or to take-or-pay or otherwise); provided that the term “Guarantee” shall not include (i) endorsements for collection
or deposit in the ordinary course of business, or (ii) obligations to make servicing advances for delinquent taxes and insurance
or other obligations in respect of a mortgaged property. The amount of any Guarantee of a Person shall be deemed to be an amount equal
to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “Guarantee”
and “Guaranteed” used as verbs shall have correlative meanings.
“Indebtedness”
means, for any Person: (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 of such Person 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 such
Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise)
of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for
the account of such Person; (e) Capital Lease Obligations of such Person; (f) obligations of such Person under repurchase
agreements, sale/buy-back agreements or like arrangements, including, without limitation, any Indebtedness arising hereunder; (g) Indebtedness
of others Guaranteed by such Person; (h) all obligations of such Person incurred in connection with the acquisition or carrying
of fixed assets by such Person; (i) Indebtedness of general partnerships of which such Person is a general partner and (j) with
respect to clauses (a)-(i) above both on and off balance sheet.
“Indenture”
means the Base Indenture, together with the Series 2020-SPIADVF1 Indenture Supplement thereto.
“Indenture
Trustee” means Citibank, N.A., its permitted successors and assigns.
“Issuer”
has the meaning given to such term in the recitals to this Agreement.
“Laws”
means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Governmental Authority.
“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.
“Margin”
has the meaning assigned to the term in the Pricing Side Letter.
“Margin
Call” has the meaning set forth in Section 2.05(a).
“Margin
Deadlines” has the meaning set forth in Section 2.05(b).
“Margin
Deficit” has the meaning set forth in Section 2.05(a).
“Material
Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business,
properties, assets, condition (financial or otherwise) or prospects of Seller or any Affiliate that is a party to any Program Agreement;
(b) a material impairment of the ability of Seller or any Affiliate that is a party to any Program Agreement to perform under any
Program Agreement and to avoid any Event of Default; (c) a material adverse effect upon the legality, validity, binding effect
or enforceability of any Program Agreement against Seller or any Affiliate that is a party to any Program Agreement or (d) a material
adverse effect upon the existence, perfection, priority or enforceability of Buyer’s security interest in a material portion of
the Repurchase Assets.
“Maximum
Purchase Price” has the meaning assigned to the term in the Pricing Side Letter.
“Monthly Report Date”
has the meaning set forth in Section 6.24(c).
“Multiemployer
Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which Seller or any
of its ERISA Affiliates has contributed, or has been obligated to contribute.
“Nomura Indebtedness”
means Indebtedness (other than hereunder), entered into between (i) Buyer or one of its Affiliates, and (ii) any one or more
of the VFN Guarantor or any of its Subsidiaries.
“Non-Excluded
Taxes” has the meaning set forth in Section 2.11(a).
“Non-Usage Fees”:
has the meaning given to such term in the Pricing Side Letter.
“Note”
has the meaning given to such term in the recitals to this Agreement.
“Notice”
or “Notices” means all requests, demands and other communications, in writing (including facsimile transmissions and
e-mails), sent by overnight delivery service, facsimile transmission, electronic transmission or hand-delivery to the intended recipient
at the address specified in Section 11.05 or, as to any party, at such other address as shall be designated by such party
in a written notice to the other party.
“Obligations”
means (a) all of Seller’s indebtedness, obligations to pay the outstanding principal balance of the Purchase Price, together
with interest thereon on the Termination Date, outstanding interest due on each Price Differential Payment Date, and other obligations
and liabilities, to Administrative Agent, Buyer or their respective Affiliates arising under, or in connection with, the Program Agreements,
whether on account of principal, interest, reimbursement obligations, fees, indemnities, out-of-pocket costs, and expenses (including
all fees, charges and disbursements of counsel to the Administrative Agent or Buyer that are required to be paid by seller pursuant hereto
or under any other Program Agreement) or otherwise, whether now existing or hereafter arising; (b) any and all sums reasonably
incurred and paid by Buyer or on behalf of Buyer in order to preserve any Repurchase Asset or its interest therein; (c) all Servicing
Diligence Agent Fees; (d) in the event of any proceeding for the collection or enforcement of any of Seller’s indebtedness,
obligations or liabilities referred to in this definition, the reasonable expenses of retaking, holding, collecting, preparing for sale,
selling or otherwise disposing of or realizing on any Repurchase Asset, or of any exercise by Buyer of its rights under the Program Agreements,
including, without limitation, reasonable attorneys’ fees and disbursements and court costs’ and (e) all of Seller’s
indemnity obligations to Buyer pursuant to the Program Agreements.
“OFAC”
means the United States Treasury Department’s Office of Foreign Assets Control.
“Officer’s
Compliance Certificate” has the meaning assigned to such term in the Pricing Side Letter.
“Organizational
Documents” means the corporate charter and by-laws, the articles of organization and operating agreement and the partnership
certificate and partnership agreement, as applicable of a Person.
“Other
Taxes” has the meaning set forth in Section 2.11(b).
“Participant”
has the meaning set forth in Section 9.02(a).
“PBGC”
means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Pension
Protection Act” means the Pension Protection Act of 2006, as amended from time to time.
“Person”
means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political subdivision or agency thereof.
“Plan”
means any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA that is subject to Title
IV of ERISA or Section 412 of the Code (other than a Multiemployer Plan) and that is maintained and contributed to by (or to which
there is an obligation to contribute), or at any time during the five (5) calendar years preceding the date of this Agreement was
maintained or contributed to by (or to which there was an obligation to contribute), Seller or any Subsidiary thereof or any of their
respective ERISA Affiliates.
“PLS”
has the meaning given to such term in the preamble to this Agreement.
“PNMAC”
means Private National Mortgage Acceptance Company, LLC, its permitted successors and assigns.
“Price
Differential” means with respect to any Transaction as of any date of determination, an amount equal to the product of (A) the
Pricing Rate for such Transaction and (B) the Purchase Price for such Transaction, calculated daily on the basis of a 360 day year
for the actual number of days during the Price Differential Period.
“Price
Differential Payment Date” means, for as long as any Obligations shall remain owing by Seller to Buyer, each Payment Date (as
defined in the Indenture).
“Price
Differential Period” means, the period from and including a Price Differential Payment Date, up to but excluding the next Price
Differential Payment Date.
“Price
Differential Statement Date” has the meaning set forth in Section 2.04.
“Pricing
Rate” means Base Rate plus the applicable Margin.
“Pricing
Side Letter” means the letter agreement captioned “Pricing Side Letter” dated as of August 4,
2023, between among Administrative Agent, Buyer, Seller and VFN Guarantor, as amended, restated, supplemented or otherwise modified from
time to time, titled the SPIADVFN-1 Pricing Side Letter.
“Proceeds”
means “proceeds” as defined in Section 9-102(a)(64) of the UCC.
“Program
Agreements” means this Agreement, the Pricing Side Letter, the VFN Guaranty, the Base Indenture and the Series 2020-SPIADVF1
Indenture Supplement, as each of the same may hereafter be amended, restated, supplemented or otherwise modified from time to time; provided,
however, that the Program Agreements shall not include any rights created pursuant to an Indenture Supplement other than the Series 2020-SPIADVF1
Indenture Supplement, or any rights under the Base Indenture or any other Program Agreements relating to such other Indenture Supplements.
“Property”
means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Purchase
Date” means, subject to the satisfaction of the conditions precedent set forth in Article V hereof, each Funding
Date (as defined in the Indenture) on which a Transaction is entered into by Buyer pursuant to Section 2.02 or such other
mutually agreed upon date as more particularly set forth on Exhibit A hereto.
“Purchase
Price” means on any date of determination:
(i) the
price at which each Purchased Asset (or portion thereof) is transferred by Seller to Buyer, which shall equal the Asset Value of such
Purchased Asset on the related Purchase Date, minus
(ii) the
sum of (a) any Purchase Price paid with respect to such Purchased Asset pursuant to Section 2.03, plus (b) any
Additional Note Payment made with respect to such Purchased Asset pursuant to Section 4.4(b) or Section 4.5(e) of
the Indenture, plus (c) any Redemption Amount paid pursuant to Section 13.1 of the Indenture, plus (d) any
amounts paid or applied with respect to such Purchased Asset pursuant to Section 2.05.
“Purchase
Price Percentage” has the meaning assigned to the term in the Pricing Side Letter.
“Purchased
Assets” means, collectively, the Note and all outstanding Additional Balances together with the Repurchase Assets related to
such Note and Additional Balances transferred by Seller to Buyer in a Transaction hereunder, as listed on the related Asset Schedule
attached to the related Transaction Notice.
“Records”
means all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information
maintained by Seller, or any other person or entity with respect to the Purchased Assets.
“Reportable
Event” means a reportable event as defined in Section 4043 of ERISA with respect to a Plan as to which the PBGC has not
waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of
such event.
“Repurchase
Assets” has the meaning set forth in Section 4.02(b).
“Repurchase
Date” means the earlier of (i) the Termination Date or (ii) the date requested by Seller on which the Repurchase
Price is paid pursuant to Section 2.03.
“Repurchase
Price” means the price at which Purchased Assets are to be transferred from Buyer to Seller upon termination of a Transaction,
which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price, the accrued but
unpaid Price Differential and Obligations payable to the Buyer under any Transaction Document as of the date of such determination.
“Repurchase
Rights” has the meaning set forth in Section 4.02(b).
“Requirement
of Law” means, with respect to any Person, any law, treaty, rule or regulation or determination of an arbitrator, a court
or other Governmental Authority, applicable to or binding upon such Person or any of its property or to which such Person or any of its
property is subject.
“Responsible
Officer” means as to any Person, the chief executive officer or, with respect to financial matters, the chief financial officer
or treasurer of such Person. The Responsible Officers of Seller as of the Closing Date are listed on Schedule 1 hereto.
“Restricted Participant”
shall mean a direct competitor of Seller and its affiliates set forth in Schedule 4 attached hereto (and updated in good faith by
Seller through a written notice delivered to Buyer by Seller from time to time).
“Sanctions”
shall have the meaning set forth in Section 3.34.
“Sanctioned Jurisdiction”
shall have the meaning set forth in Section 3.34.
“SEC”
means the Securities and Exchange Commission, or any successor thereto.
“Seller”
has the meaning assigned to such term in the preamble to this Agreement and includes PLS’ permitted successors and assigns.
“Seller
Termination Option” means (a) Buyer has or shall incur material costs in connection with those matters provided for in
Section 2.10 or 2.11 and (b) Buyer requests that Seller pay to Buyer those costs in connection therewith.
“Series 2020-SPIADVF1
Indenture Supplement” means the Amended and Restated Series 2020-SPIADVF1 Indenture Supplement, dated as of February 7,
2023, among the Issuer, Citibank, N.A., as indenture trustee, as calculation agent, as paying agent and as securities intermediary, PLS,
as administrator and as servicer, Goldman Sachs Bank USA, as an administrative agent and Atlas Securitized Products, L.P., as an administrative
agent, as amended, restated, supplemented or otherwise modified from time to time.
“Specified
Governmental Entity” means The Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Ginnie Mae, HUD,
the FHA, the VA or the United States Department of Agriculture Rural Development and, in each case any successor thereto.
“SPIADVF1
Funding Conditions” with respect to the Series 2020-SPIADVF1 Notes and any Funding Date, the following conditions:
(i) the
Advance Verification Agent Report immediately preceding such Funding Date has been delivered in accordance with Section 3.3(g)(2) of
the Base Indenture;
(ii) to
the extent the Advance Verification Agent Report delivered immediately preceding such Funding Date contains any exceptions noted therein,
such exceptions have been waived by the Administrative Agent in its sole discretion; and
(iii) solely
with respect to funding of MBS Advances, Seller shall not have submitted an Appendix XI-01A Request for Pass-Through Assistance Related
to COVID-19 and Repayment Agreement.
“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.
“Taxes”
has the meaning assigned to such term in Section 2.11(a).
“Termination
Date” has the meaning assigned to such term in the Pricing Side Letter.
“Transaction”
has the meaning assigned to such term in the recitals to this Agreement.
“Transaction
Documents” means, collectively, (i) this Agreement, the Indenture, the Note Purchase Agreement, the PC Repurchase Agreement,
the Series 2023-MSRVF2 Repurchase Agreement, the Participation Agreements, the PC Guaranty, the PMT Guaranty, the Acknowledgment
and Subordination Agreement, the Pricing Side Letter, the Participation Certificate Schedule, all Notes, the Trust Agreement, the Administration
Agreement, the Series 2023-MSRVF2 Indenture Supplement, the Amended and Restated Series 2020-SPIADVF1 Indenture Supplement,
the Series 2023-MBSDV2 Indenture Supplement, the Credit Management Agreement, the Advance Verification Agent Agreement, the MSR
Valuation Agent Agreement and (ii) each of the other documents, instruments and agreements entered into on the date hereof and
thereafter in connection with any of the foregoing or the transactions contemplated thereby, each as amended, supplemented, restated,
or otherwise modified from time to time; provided, that clause (ii) shall not be deemed to include (a) any repurchase agreement
or financing arrangement relating to any variable funding note or any Indenture Supplement where Nomura Corporate Funding Americas, LLC
is not the applicable administrative agent, or (b) any related rights pursuant to any document referenced in part (i) stemming
therefrom.
“Transaction
Notice” has the meaning assigned to such term in Section 2.02(a).
“Transaction
Register” has the meaning assigned to such term in Section 9.03(b).
“Uniform
Commercial Code” or “UCC” means the Uniform Commercial Code as in effect on the Closing Date in the State
of New York or the Uniform Commercial Code as in effect in the applicable jurisdiction.
“VA”
means the U.S. Department of Veterans Affairs, an agency of the United States of America, or any successor thereto including the Secretary
of Veterans Affairs.
“VFN
Guarantor” means Private National Mortgage Acceptance Company, LLC, in its capacity as guarantor under the VFN Guaranty.
“VFN
Guaranty” means the Guaranty, dated as of August 4, 2023, as amended, restated, supplemented or otherwise modified from
time to time, pursuant to which VFN Guarantor fully and unconditionally guarantees the obligations of Seller hereunder.
Section 1.02 Other
Defined Terms.
(a) Any
capitalized terms used and not defined herein shall have the meaning set forth in the Base Indenture or the Series 2020-SPIADVF1
Indenture Supplement, as applicable.
(b) The
words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise specified herein, the
term “or” has the inclusive meaning represented by the term “and/or” and the term “including” is
not limiting. All references to Sections, subsections, Articles and Exhibits shall be to Sections, subsections, and Articles of, and
Exhibits to, this Agreement unless otherwise specifically provided.
(c) Reference
to and the definition of any document (including this Agreement) shall be deemed a reference to such document as it may be amended, restated,
supplement or otherwise modified from time to time.
(d) In
the computation of periods of time from a specified date to a later specified date, unless otherwise specified herein the words “commencing
on” mean “commencing on and including,” the word “from” means “from and including” and the
words “to” and “until” each means “to but excluding.”
ARTICLE II
GENERAL
TERMS
Section 2.01 Transactions.
Subject to the terms and conditions hereof, Buyer agrees to enter into Transactions with Seller for a Purchase Price outstanding at any
one time not to exceed the Maximum Purchase Price. During the Commitment Period, Seller may utilize the Commitment by requesting Transactions,
Seller may pay the Repurchase Price in whole or in part at any time during such period without penalty, and additional Transactions may
be entered into in accordance with the terms and conditions hereof. Buyer’s obligation to enter into Transactions pursuant to the
terms of this Agreement shall terminate on the Termination Date. Notwithstanding the foregoing, Buyer shall have no commitment or obligation
to enter into Transactions in connection with the Note to the extent the aggregate outstanding Purchase Price of all Transactions exceeds
the Maximum Purchase Price.
Section 2.02 Procedure
for Entering into Transactions.
(a) Seller
may enter into Transactions with Buyer under this Agreement during the Commitment Period on any Purchase Date; provided, that
Seller shall have given Buyer irrevocable notice (each, a “Transaction Notice”), which notice (i) shall be substantially
in the form of Exhibit A, (ii) shall be signed by a Responsible Officer of Seller and be received by Buyer prior to
1:00 p.m. (New York time) one (1) Business Day prior to the related Purchase Date on a Purchase Date that shall not
occur more than twice per calendar week without consent of the Administrative Agent, and (iii) shall specify: (A) (i) the
Maximum VFN Principal Balance of the Note, (ii) with respect to the first Purchase Date, the Initial Note Balance of the Note,
and, with respect to any other Purchase Date, the Additional Balance and (iii) after taking into account the Additional Balance
being requested on such Purchase Date, the outstanding VFN Principal Balance of the Note; (B) the Dollar amount of the requested
Purchase Price; (C) the requested Purchase Date; (D) the Repurchase Date; (E) the Pricing Rate and Repurchase Price
applicable to the Transaction; and (F) any additional terms or conditions of the Transaction not inconsistent with this Agreement.
Each Transaction Notice on any Purchase Date shall be in an amount equal to at least $250,000.
(b) If
Seller shall deliver to Buyer a Transaction Notice that satisfies the requirements of Section 2.02(a), Buyer will notify
Seller of its intent to remit the requested Purchase Price one (1) Business Day prior to the requested Purchase Date. If all applicable
conditions precedent set forth in Article V have been satisfied on or prior to the Purchase Date, then subject to
the foregoing, on the Purchase Date, Buyer shall remit the amount of the requested Purchase Price in U.S. Dollars and in immediately
available funds to the account of Seller specified in Schedule 5 to the Base Indenture (or such other account designated by Seller in
the Transaction Notice).
(c) Upon
entering into each Transaction hereunder, the Asset Schedule shall be automatically updated and replaced with the Asset Schedule attached
to the related Transaction Notice.
Section 2.03 Repurchase;
Payment of Repurchase Price.
(a) Seller
hereby promises to repurchase the Purchased Assets and pay all outstanding Obligations on the Termination Date.
(b) By
notifying Buyer in writing at least one (1) Business Day in advance, Seller shall be permitted, at its option, to prepay, subject
to Section 2.12, the Purchase Price in whole or in part at any time and accrued and unpaid interest on the amount so prepaid;
provided, that in connection with any partial prepayment of the purchase price under any other repurchase transaction relating to SPIA
VFNs (as defined in the Base Indenture), Seller shall ensure that the outstanding Purchase Price hereunder is reduced concurrently on
a pro rata basis with such outstanding purchase price under such other repurchase transaction.
(c) To
the extent an Event of Default shall not have occurred and be continuing, the aggregate amount of payments of the Purchase Price by the
Seller over the term of this Agreement, including, without limitation, Margin Calls, that are paid from Collections on the Participation
Certificates shall not exceed 10% of the Purchase Price as of the date of any such payment. For the avoidance of doubt, nothing stated
in this Section 2.03(c), limits the Seller’s obligations to pay Repurchase Price, any Margin Calls or other obligations
as set forth in this Agreement from funds other than Collections on the Participation Certificates.
Section 2.04 Price
Differential. On each Price Differential Payment Date, Seller hereby promises to pay to Buyer all accrued and unpaid Price Differential
on the Transactions, as invoiced by Buyer to Seller three (3) Business Days prior to the related Price Differential Payment
Date (the “Price Differential Statement Date”); provided, on each Price Differential Payment Date prior to the occurrence
and continuation of an Event of Default, the estimated Price Differential owed hereunder shall be subject to a true up of the amount
determined by Administrative Agent and agreed by Seller one (1) Business Day prior to the related Price Differential Payment Date.
If Buyer fails to deliver such invoice on the Price Differential Statement Date, on such Price Differential Payment Date Seller shall
pay the amount which Seller calculates as the Price Differential due and upon delivery of the statement, Seller shall remit to Buyer
any shortfall, or Buyer shall refund to Seller any excess, in the Price Differential paid. Price Differential shall accrue each day on
the Purchase Price at a rate per annum equal to the Pricing Rate. The Price Differential shall be computed on the basis of the actual
number of days in each Price Differential Period and a 360-day year.
Section 2.05 Margin
Maintenance.
(a) If
at any time the aggregate outstanding amount of the Purchase Price of the Note is greater than the related Asset Value or the Maximum
Purchase Price (such excess, a “Margin Deficit”) by $250,000 or more, then Buyer may by notice to Seller require Seller
to transfer to Buyer cash in an amount at least equal to the Margin Deficit (such requirement, a “Margin Call”).
(b) Notice
delivered pursuant to Section 2.05(a) may be given by any written or electronic means. With respect to a Margin Call,
any notice given before 10:00 a.m. (New York City time) on a Business Day shall be met, and the related Margin Call satisfied,
no later than 4:00 p.m. (New York City time) on the following Business Day. With respect to a Margin Call, any notice given after
10:00 a.m. (New York City time) on a Business Day shall be met, and the related Margin Call satisfied, no later than 3:00 p.m. (New
York City time) on the second (2nd) Business Day following the date of such notice. The foregoing time requirements for satisfaction
of a Margin Call are referred to as the “Margin Deadlines”. The failure of Buyer, on any one or more occasions, to
exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right
of Buyer to do so at a later date. Seller and Buyer each agree that a failure or delay by Buyer to exercise its rights hereunder shall
not limit or waive Buyer’s rights under this Agreement or otherwise existing by law or in any way create additional rights for
Seller.
(c) In
the event that a Margin Deficit exists, Buyer may retain any funds received by it to which Seller would otherwise be entitled hereunder,
which funds (i) may be held by Buyer against the related Margin Deficit or (ii) may be applied by Buyer against the Purchase
Price. Notwithstanding the foregoing, Buyer retains the right, in its sole discretion, to make a Margin Call in accordance with the provisions
of this Section 2.05.
Section 2.06 Payment
Procedure. Seller absolutely, unconditionally, and irrevocably, shall make, or cause to be made, all payments required to be made
by Seller hereunder. Seller shall deposit or cause to be deposited all amounts constituting collection, payments and proceeds of the
Note (including, without limitation, all fees and proceeds of sale) to the Buyer Account.
Section 2.07 Application
of Payments.
(a) On
each Price Differential Payment Date prior to the occurrence of an Event of Default, all amounts deposited into the Buyer Account from
and after the immediately preceding Price Differential Payment Date (or the Closing Date in connection with the initial Price Differential
Payment Date) shall be applied as follows:
(i) first,
to the Buyer, any Administrative Fee to which it is entitled in its capacity as a funding ADV1 Noteholder pursuant to Section 20
of the Series 2020-SPIADVF1 Indenture Supplement;
(ii) second,
to the payment of any accrued and unpaid Price Differential owing;
(iii) third,
to the payment of Purchase Price outstanding to satisfy any Margin Deficit owing;
(iv) fourth,
ratably, to payment of all other costs and fees payable to Buyer or any other Person pursuant to this Agreement; and
(v) fifth,
any remainder to Seller.
(b) Notwithstanding
the preceding provisions, if an Event of Default shall have occurred hereunder, all funds related to the Note shall be applied as follows:
(i) first,
to the Buyer, any Administrative Fee to which it is entitled in its capacity as a funding ADV1 Noteholder pursuant to Section 20
of the Series 2020-SPIADVF1 Indenture Supplement;
(ii) second,
the payment of any accrued and unpaid Price Differential owing;
(iii) third,
to the payment of Purchase Price until reduced to zero;
(iv) fourth,
ratably, to payment of all other costs and fees payable to Buyer or any other Person pursuant to this Agreement;
(v) fifth,
to the payment of any other Obligations; and
(vi) sixth,
any remainder to Seller.
(c) To
the extent any Collections (as defined in the Base Indenture) are paid to reduce the outstanding purchase price under any other repurchase
transaction relating to SPIA VFNs (as defined in the Base Indenture), Seller shall ensure that the outstanding Purchase Price hereunder
is reduced concurrently on a pro rata basis with such outstanding purchase price under such other repurchase transaction.
Section 2.08 Use
of Purchase Price and Transaction Requests. The Purchase Price shall be used by Seller for general corporate purposes.
Section 2.09 Recourse.
Notwithstanding anything else to the contrary contained or implied herein or in any other Program Agreement, Buyer shall have full, unlimited
recourse against Seller and its assets in order to satisfy the Obligations.
Section 2.10 Requirements
of Law.
(a) If
any Requirement of Law (other than with respect to any amendment made to Buyer’s certificate of trust and trust agreement or other
organizational or governing documents) or any change in the interpretation or application thereof or compliance by Buyer with any request
or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the Closing
Date:
(i) shall
subject Buyer to any tax of any kind whatsoever with respect to this Agreement or the Transactions (excluding income taxes, branch profits
taxes, franchise taxes or similar taxes imposed on Buyer as a result of any present or former connection between Buyer and the United
States, other than any such connection arising solely from Buyer having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement) or change the basis of taxation of payments to Buyer in respect thereof;
(ii) shall
impose, modify or hold any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of
Buyer which is not otherwise included in the determination of the Price Differential hereunder; or
(iii) shall
impose on Buyer any other condition;
and the result of any of the
foregoing is to increase the cost to Buyer, by an amount which Buyer deems to be material, of entering, continuing or maintaining this
Agreement or any other Program Agreement, the Transactions or to reduce any amount due or owing hereunder in respect thereof, then, in
any such case, Seller shall promptly pay Buyer such additional amount or amounts as calculated by Buyer in good faith as will compensate
Buyer for such increased cost or reduced amount receivable.
(b) If
Buyer shall have determined that the adoption of or any change in any Requirement of Law (other than with respect to any amendment made
to Buyer’s certificate of incorporation and by-laws or other organizational or governing documents) regarding capital adequacy
or in the interpretation or application thereof or compliance by Buyer or any corporation Controlling Buyer with any request or directive
regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the Closing Date
shall have the effect of reducing the rate of return on Buyer’s or such corporation’s capital as a consequence of its obligations
hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking
into consideration Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by Buyer
to be material, then from time to time, Seller shall promptly pay to Buyer such additional amount or amounts as will compensate Buyer
for such reduction.
(c) If
Buyer becomes entitled to claim any additional amounts pursuant to this Section 2.10, it shall promptly notify Seller of
the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this Section 2.10
submitted by Buyer to Seller shall be conclusive in the absence of manifest error.
Section 2.11 Taxes.
(a) Any
and all payments by or on behalf of Seller under or in respect of this Agreement or any other Program Agreements to which Seller is a
party shall be made free and clear of, and without deduction or withholding for or on account of, any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities (including penalties, interest and additions to tax) with respect
thereto, whether now or hereafter imposed, levied, collected, withheld or assessed by any taxation authority or other Governmental Authority
(collectively, “Taxes”), unless required by law. If Seller shall be required under any applicable Requirement of Law
to deduct or withhold any Taxes from or in respect of any sum payable under or in respect of this Agreement or any of the other Program
Agreements to Buyer (including for purposes of Section 2.10 and this Section 2.11, any assignee, successor
or participant), (i) Seller shall make all such deductions and withholdings in respect of Taxes, (ii) Seller shall pay the
full amount deducted or withheld in respect of Taxes to the relevant taxation authority or other Governmental Authority in accordance
with any applicable Requirement of Law, and (iii) the sum payable by Seller shall be increased as may be necessary so that after
Seller has made all required deductions and withholdings (including deductions and withholdings applicable to additional amounts payable
under this Section 2.11) Buyer receives an amount equal to the sum it would have received had no such deductions or withholdings
been made in respect of Non-Excluded Taxes. For purposes of this Agreement the term “Non-Excluded Taxes” are Taxes
other than, in the case of Buyer, Taxes that are (i) imposed on its overall net income (and franchise taxes imposed in lieu thereof)
by the jurisdiction under the laws of which Buyer is organized or of its Applicable Lending Office, or any political subdivision thereof,
unless such Taxes are imposed as a result of Buyer having executed, delivered or performed its obligations or received payments under,
or enforced, this Agreement or any of the other Program Agreements (in which case such Taxes will be treated as Non-Excluded Taxes) and
(ii) imposed pursuant to FATCA.
(b) In
addition, Seller hereby agrees to pay any present or future stamp, recording, documentary, excise, property or value-added taxes, or
similar taxes, charges or levies that arise from any payment made under or in respect of this Agreement or any other Program Agreement
or from the execution, delivery or registration of, any performance under, or otherwise with respect to, this Agreement or any other
Program Agreement (collectively, “Other Taxes”).
(c) Seller
hereby agrees to indemnify Buyer for, and to hold it harmless against, the full amount of Non-Excluded Taxes and Other Taxes, and the
full amount of Taxes of any kind imposed by any jurisdiction on amounts payable by Seller under this Section 2.11 imposed
on or paid by Buyer and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect
thereto. The indemnity by Seller provided for in this Section 2.11 shall apply and be made whether or not the Non-Excluded
Taxes or Other Taxes for which indemnification hereunder is sought have been correctly or legally asserted. Amounts payable by Seller
under the indemnity set forth in this Section 2.11(c) shall be paid within ten (10) days from the date
on which Buyer makes written demand therefor.
(d) Without
prejudice to the survival of any other agreement of Seller hereunder, the agreements and obligations of Seller contained in this Section 2.11
shall survive the termination of this Agreement and the other Program Agreements. Nothing contained in Section 2.10
or this Section 2.11 shall require any Buyer to make available any of its tax returns or any other information that it deems
to be confidential or proprietary.
(e) Buyer
will timely furnish Seller, or any agent of Seller, any tax forms or certifications (such as an applicable IRS Form W-8, IRS
Form W-9 or any successors to such IRS forms) that it is legally entitled to provide and that Seller or its agents may reasonably
request (A) to permit Seller or its agents to make payments to it without, or at a reduced rate of, deduction or withholding, (B) to
enable Seller or its agents to qualify for a reduced rate of withholding or deduction in any jurisdiction from or through which Seller
or its agents receive payments and (C) to enable Seller or its agents to satisfy reporting and other obligations under the Code
and Treasury Regulations and under any other applicable laws, and shall update or replace such tax forms or certifications as appropriate
or in accordance with their terms or subsequent amendments, and acknowledges that the failure to provide, update or replace any such
tax forms or certifications may result in the imposition of withholding or back-up withholding upon payments to Buyer.
Section 2.12 Indemnity.
Without limiting, and in addition to, the provisions of Section 11.02, Seller agrees to indemnify Buyer and to hold Buyer
harmless from any loss or expense that Buyer may sustain or incur as a consequence of (i) a default by Seller in payment when due
of the Repurchase Price or Price Differential or (ii) a default by Seller in making any prepayment of Repurchase Price after Seller
has given a notice thereof in accordance with Section 2.03.
Section 2.13 Additional
Balance. Subject to Section 2.01, in the event that Seller wishes an increase in the VFN Principal Balance, Seller shall
deliver to Administrative Agent a copy of the VFN Note Balance Adjustment Request that is delivered under the Indenture. If all the Funding
Conditions required pursuant to Section 5.02 hereof and the Indenture have been satisfied, then upon approval in writing
by the Administrative Agent of such increase in the VFN Principal Balance (such increase, upon such approval, an “Additional
Balance”), (i) the outstanding VFN Principal Balance set forth in the Asset Schedule hereof shall be automatically updated
as set forth in the related Transaction Notice in accordance with Section 2.02 and (ii) if requested by Seller pursuant
to Section 2.02, Administrative Agent shall thereupon deliver the Purchase Price set forth in Section 2.02(b),
which Purchase Price shall equal the Buyer’s pro rata portion (based on the Buyer’s related Borrowing Capacity (as defined
in the Indenture)) of the related aggregate purchase price of all Series 2020-SPIADVF1 Notes under all SPIADVF1 Repurchase Agreements.
Section 2.14 Fees.
Seller shall pay the Commitment Fee and Non-Usage Fees as specified in (and in accordance with) the Pricing Side Letter. Such payment
shall be made in Dollars, in immediately available funds, without deduction, set off or counterclaim, to Buyer at such account designated
in writing by Buyer.
Section 2.15 Termination.
(a) Notwithstanding
anything to the contrary set forth herein, if a Seller Termination Option occurs, Seller may, upon five (5) Business Days’
prior written notice of such event, upon payment of the applicable Repurchase Price and satisfaction of the other termination conditions
set forth in the Indenture, terminate this Agreement and the Termination Date shall be deemed to have occurred (upon the expiration of
such five (5) Business Day period).
(b) In
the event that a Seller Termination Option as described in clause (a) of the definition thereof has occurred and Seller has
notified Buyer in writing of its option to terminate this Agreement, Buyer shall have the right to withdraw such request for payment
within three (3) Business Days of Seller’s notice of its exercise of Seller Termination Option and Seller shall no longer
have the right to terminate this Agreement.
(c) For
the avoidance of doubt, Seller shall remain responsible for all costs actually incurred by Buyer pursuant to Sections 2.10
and 2.11 in connection with any related prepayment.
ARTICLE III
REPRESENTATIONS
AND WARRANTIES
Seller represents and warrants
to Buyer as of the Closing Date and as of each Purchase Date for any Transaction that:
Section 3.01 Seller
Existence. Seller has been duly organized and is validly existing as a limited liability company in good standing under the laws
of the State of Delaware and in each other jurisdiction in which the transaction of its business makes such qualification necessary.
Section 3.02 Licenses.
Seller is duly licensed or is otherwise qualified in each jurisdiction in which it transacts business for the business which it conducts
and is not in default of any applicable federal, state or local laws, rules and regulations unless, in either instance, the failure
to take such action is not reasonably likely (either individually or in the aggregate) to cause a Material Adverse Effect and is not
in default of such state’s applicable laws, rules and regulations. Seller has the requisite power and authority and legal
right to own, sell and grant a lien on all of its right, title and interest in and to the Note. Seller has the requisite power and authority
and legal right to execute and deliver, engage in the transactions contemplated by, and perform and observe the terms and conditions
of, this Agreement, each Program Agreement and any Transaction Notice.
Section 3.03 Power.
Seller has all requisite corporate or other power and authority, and has all governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses,
authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect.
Section 3.04 Due
Authorization. Seller has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations
under each of the Program Agreements, as applicable. This Agreement, any Transaction Notice and the Program Agreements have been (or,
in the case of Program Agreements and any Transaction Notice not yet executed, will be, at the time of such execution) duly authorized,
executed and delivered by Seller, all requisite or other corporate action having been taken, and each is valid, binding and enforceable
against Seller in accordance with its terms except as such enforcement may be affected by bankruptcy, by other insolvency laws, or other
similar laws affecting the enforcement of creditor’s rights.
Section 3.05 Financial
Statements. (A) Seller has heretofore furnished to Buyer a copy of (a) its balance sheet for the fiscal year of Seller
ended December 31, 2022 and the related statements of income for Seller for such fiscal year, with the opinion thereon of Deloitte &
Touche LLP and (b) its balance sheet for the quarterly fiscal period of Seller ended December 31, 2022 and the related statements
of income for Seller for such quarterly fiscal period. All such financial statements are accurate, complete and correct and fairly present,
in all material respects, the financial condition of Seller (subject to normal year-end adjustments) and the results of its operations
as at such dates and for such fiscal periods, all in accordance with GAAP applied on a consistent basis, and to the best of Seller’s
knowledge, do not omit any material fact as of the date(s) thereof. Since December 31, 2022, there has been no material adverse
change in the consolidated business, operations or financial condition of Seller from that set forth in said financial statements nor
is Seller aware of any state of facts which (with notice or the lapse of time) would or could result in any such material adverse change.
Seller has no liabilities, direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or liabilities for taxes,
long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said balance sheet and related
statements, and at the present time there are no material unrealized or anticipated losses from any loans, advances or other commitments
of Seller except as heretofore disclosed to Buyer in writing.
(B) Seller
has heretofore caused VFN Guarantor to furnish to Buyer a copy of (a) its balance sheet for the fiscal year of VFN Guarantor ended
December 31, 2022 and the related statements of income for VFN Guarantor for such fiscal year, with the opinion thereon of Deloitte &
Touche LLP and (b) its balance sheet for the quarterly fiscal period of VFN Guarantor ended December 31, 2022 and the related
statements of income for VFN Guarantor for such quarterly fiscal period. All such financial statements are accurate, complete and correct
and fairly present, in all material respects, the financial condition of VFN Guarantor (subject to normal year-end adjustments) and the
results of its operations as at such dates and for such fiscal periods, all in accordance with GAAP applied on a consistent basis, and
to the best of Seller’s knowledge, do not omit any material fact as of the date(s) thereof. Since December 31, 2022,
there has been no material adverse change in the consolidated business, operations or financial condition of VFN Guarantor from that
set forth in said financial statements nor is Seller aware of any state of facts which (with notice or the lapse of time) would or could
result in any such material adverse change. VFN Guarantor has no liabilities, direct or indirect, fixed or contingent, matured or unmatured,
known or unknown, or liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved
against in, said balance sheet and related statements, and at the present time there are no material unrealized or anticipated losses
from any loans, advances or other commitments of VFN Guarantor except as heretofore disclosed to Buyer in writing.
Section 3.06 No
Event of Default. There exists no (a) Event of Default under Section 7.01 hereof or (b) default under any
mortgage, borrowing agreement or other instrument or agreement pertaining to indebtedness for borrowed money or to the repurchase of
mortgage loans or securities or other instrument or contractual or legal obligation to which it is a party or by which it is bound in
any respect that could reasonably be expected to result in a Material Adverse Effect.
Section 3.07 Solvency.
As of the date hereof and immediately after giving effect to each Transaction, the fair value of its assets is greater than the fair
value of its liabilities (including, without limitation, contingent liabilities if and to the extent required to be recorded as a liability
on the financial statements of it in accordance with GAAP) and Seller is solvent and will not be rendered insolvent by any Transaction
and, after giving effect to such Transaction, 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
and is not contemplating the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a
receiver, liquidator, conservator, trustee or similar official in respect of such entity or any of its assets. Seller is not selling
and/or pledging any Repurchase Assets with any intent to hinder, delay or defraud any of its creditors.
Section 3.08 No
Conflicts. The execution, delivery and performance by of Seller of this Agreement, any Transaction Notice hereunder and the Program
Agreements do not constitute or will not result in (a) any breach of any term or provision of the organizational documents of Seller,
(b) a breach of any indenture, loan agreement, warehouse line of credit, repurchase agreement, mortgage, deed of trust, Ginnie
Mae Contract or any other material contractual obligation of it; (c) a material default or an acceleration under any of the foregoing;
(d) the violation of any law, rule, regulation, order, judgment, writ, injunction or decree applicable to Seller or its property,
which conflict would have a Material Adverse Effect; (e) require the creation or imposition of any Lien upon any of the properties
or assets of Seller (other than any Liens created under any of this Agreement, any Transaction Notice and the Program Agreements in favor
of Buyer), or (f) or require any approval of stockholders, members or partners or any approval or consent of any Person under any
material contractual obligation of the it, except for such approvals or consents which have been obtained on or before the Closing Date.
Section 3.09 True
and Complete Disclosure. All information, reports, exhibits, schedules, financial statements or certificates of Seller or any Affiliate
thereof or any of their officers furnished or to be furnished to Buyer in connection with the initial or any ongoing due diligence of
Seller or any Affiliate or officer thereof, negotiation, preparation, or delivery of this Agreement or the other Program Agreements,
included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, are true and complete in all material respects
and do not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which
they are made, not misleading. All financial statements have been prepared in accordance with GAAP. There is no fact known to it that,
after due inquiry, could reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Program
Agreements or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished in writing to Buyer for
use in connection with the transactions contemplated hereby or thereby.
Section 3.10 Approvals.
No consent, approval, authorization or order of, registration or filing with, or notice to any governmental authority, court or other
Person is required under applicable law in connection with the execution, delivery and performance by Seller of this Agreement, any Transaction
Notice and the Program Agreements.
Section 3.11 Litigation.
There is no action, proceeding or investigation pending with respect to which Seller has received service of process or, to the best
of Seller’s knowledge threatened or affecting it or any of its property against it before any court, administrative agency or other
tribunal (A) asserting the invalidity of this Agreement, any Transaction, Transaction Notice or any Program Agreement, (B) seeking
to prevent the consummation of any of the transactions contemplated by this Agreement, any Transaction Notice or any Program Agreement,
(C) makes a claim individually or in the aggregate in an amount greater than 5% of VFN Guarantor’s Adjusted Tangible Net
Worth, (D) which requires filing with the SEC in accordance with the 1934 Act or any rules thereunder, (E) which has
resulted in the voluntary or involuntary suspension of a license, a cease and desist order, or such other action as could adversely impact
Seller’s business, or (F) which might materially and adversely affect the validity of the Purchased Assets or the performance
by it of its obligations under, or the validity or enforceability of, this Agreement, any Transaction Notice or any Program Agreement
which could be reasonably likely to have a Material Adverse Effect.
Section 3.12 Material
Adverse Change. There has been no event or circumstance since March 31, 2023, which is reasonably likely to have a Material
Adverse Effect on Seller.
Section 3.13 Ownership.
(a) Seller
has good, valid, insurable (in the case of real property) and marketable title to all of its properties and other assets, whether real
or personal, tangible or intangible, reflected on the financial statements delivered to Buyer, except for such properties and other assets
that have been disposed of in the ordinary course of business of its business, and all such properties and other assets are free and
clear of all liens except as disclosed in such financial statements.
(b) Seller
has good title to all of the Repurchase Assets, free and clear of all mortgages, security interests, restrictions, Liens and encumbrances
of any kind other than the Liens created hereby or contemplated herein, and any Transaction shall convey all of Seller’s right,
title and interest in and to the related Purchased Assets to Buyer.
(c) Each
item of the Repurchase Assets was acquired by Seller in the ordinary course of its business, in good faith, for value and without notice
of any defense against or claim to it on the part of any Person.
(d) There
are no agreements or understandings between Seller and any other party which would modify, release, terminate or delay the attachment
of the security interests granted to Buyer under this Agreement.
(e) The
provisions of this Agreement are effective to create in favor of Buyer a valid security interest in all right, title and interest of
Seller in, to and under the Repurchase Assets.
(f) Upon
the filing of financing statements on Form UCC-1 naming Buyer as “Secured Party” and Seller as “Debtor”,
and describing the Repurchase Assets, in the recording offices of the Secretary of State of Delaware the security interests granted hereunder
in the Repurchase Assets will constitute fully perfected first priority security interests under the Uniform Commercial Code in all right,
title and interest of Seller in, to and under such Repurchase Assets which can be perfected by filing under the Uniform Commercial Code.
Section 3.14 The
Note. Seller has (i) delivered the Note, (ii) duly endorsed the Note to Buyer or Buyer’s designee, (iii) notified
the Indenture Trustee of such transfer and (iv) completed all documents required to effect such transfer in the Note Register,
including, without limitation, receipt by the Note Registrar of the Rule 144A Note Transfer Certificate and such other information
and documents that may be required pursuant to the terms of the Indenture. In addition, Buyer has received all other Program Agreements
(including, without limitation, all exhibits and schedules referred to therein or delivered pursuant thereto), all amendments thereto,
waivers relating thereto and other side letters or agreements affecting the terms thereof and all agreements and other material documents
relating thereto, and Seller hereby certifies that the copies delivered to Buyer by Seller are true and complete. None of such documents
has been amended, supplemented or otherwise modified (including waivers) since the respective dates thereof, except by amendments, copies
of which have been delivered to Buyer. Each such document to which Seller is a party has been duly executed and delivered by Seller and
is in full force and effect, and no default or material breach has occurred and is continuing thereunder.
Section 3.15 Taxes.
Seller and its Subsidiaries have timely filed all tax returns that are required to be filed by them and have paid all taxes, assessments,
fees and other governmental charges levied upon it or its property or income (whether or not shown on such tax returns) that are due
and payable, including interest and penalties, except for any such taxes, assessments, fees and other governmental charges as are being
appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have
been provided. The charges, accruals and reserves on the books of Seller and its Subsidiaries in respect of taxes and other governmental
charges are, in the opinion of Seller, adequate. Any taxes, fees and other governmental charges payable by it in connection with a Transaction
and the execution and delivery of this Agreement, any Transaction Notice and the Program Agreements have been paid.
Section 3.16 Investment
Company. Neither Seller nor any of its Subsidiaries are required to register, nor will Seller or any of its Subsidiaries be required
to register as a result of the transactions contemplated hereby, as an “investment company” under the Investment Company
Act of 1940 and although there may be additional exclusions or exemptions available to Seller, Seller will rely on Section 3(c)(5)(C) under
the Investment Company Act for its exclusion from the definition of “investment company”; no one acting on Seller’s
behalf has taken any action that would require registration of Seller or any of its Subsidiaries under the Investment Company Act, and
no one acting on Seller’s behalf has authorized or will authorize any Person to act in such manner; provided, however, that any
entity that is under the management of PNMAC Capital Management LLC in its capacity as an “investment adviser” within the
meaning of the Investment Advisers Act of 1940 and is otherwise not directly or indirectly owned or controlled by Seller shall not be
deemed a “Subsidiary” for the purposes of this Section 3.16. No Transaction represents an “ownership interest”
in Seller for purposes of the “Volcker Rule” (Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection
Act). Seller is structured so as not to constitute a “covered fund” as defined in the final regulations issued December 10,
2013, implementing the “Volcker Rule” (Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act).
Section 3.17 Chief
Executive Office; Jurisdiction of Organization. On the Closing Date, Seller’s chief executive office, is, and has been, located
at 3043 Townsgate Road, Westlake Village, CA 91361. On the Closing Date, Seller’s jurisdiction of organization is the State of
Delaware. Seller has no trade name. During the preceding five (5) years, Seller has not been known by or done business under any
other name, corporate or fictitious, and has not filed or had filed against it any bankruptcy receivership or similar petitions nor has
it made any assignments for the benefit of creditors.
Section 3.18 Location
of Books and Records. The location where Seller keeps its books and records, including all computer tapes and records relating to
the Repurchase Assets is its chief executive office.
Section 3.19 ERISA.
Except as could not reasonably be expected to result in a Material Adverse Effect (i) Seller, its ERISA Affiliates, and each Plan
are in compliance in all respects with the requirements of ERISA and the Code, (ii) no Reportable Event has occurred with respect
to any Plan, (iii) no Plan is considered to be an “at-risk” plan within the meaning of Section 430 of the Code
or Section 303 of ERISA, (iv) Seller and its Subsidiaries and their respective ERISA Affiliates do not provide any material
medical or health benefits to former employees other than as required by the Consolidated Omnibus Budget Reconciliation Act, as amended,
or similar state or local law (collectively, “COBRA”), (v) Seller and its Subsidiaries and their
respective ERISA Affiliates have made all required contributions to each Plan, and to each Multiemployer Plan to which it is obligated
to contribute, and (vi) no event or condition described in Section 6.24(a)(6) has occurred or exists, other
than an event or condition with respect to which notice has been provided in accordance with Section 6.24(a)(6).
Section 3.20 Financing
of Note and Additional Balances. Each Transaction will be used to purchase the Note and one or more Additional Balances relating
thereto, which Note will be conveyed and/or sold by Seller to Buyer.
Section 3.21 Agreements.
Neither Seller nor any Subsidiary of Seller is a party to any agreement, instrument, or indenture or subject to any restriction materially
and adversely affecting its business, operations, assets or financial condition, except as disclosed in the financial statements described
in Section 3.05 hereof. Neither Seller nor any Subsidiary of Seller is in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any agreement, instrument, or indenture which default could have a material
adverse effect on the business, operations, properties, or financial condition of Seller. No holder of any indebtedness of Seller or
of any of its Subsidiaries has given notice of any asserted default thereunder.
Section 3.22 Other
Indebtedness. All Indebtedness (other than Indebtedness evidenced by this Agreement) of Seller existing on the Closing Date is listed
on Exhibit B hereto (the “Existing Indebtedness”).
Section 3.23 No
Reliance. Seller has made its own independent decisions to enter into the Program Agreements and each Transaction and as to whether
such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation,
legal counsel and accountants) as it has deemed necessary. Seller is not relying upon any advice from Buyer as to any aspect of the Transactions,
including without limitation, the legal, accounting or tax treatment of such Transactions.
Section 3.24 Plan
Assets. Seller is not an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of
the Code, and the Purchased Assets are not “plan assets” within the meaning of 29 CFR § 2510.3 101 as amended
by Section 3(42) of ERISA, in Seller’s hands, and transactions by or with Seller are not subject to any state or local statute
regulating investments or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA.
Section 3.25 Anti-Money
Laundering Laws. The Seller has complied in all material respects with all Anti-Money Laundering Laws, and has established an anti-money
laundering compliance program, and such other procedures and controls to remain in material compliance with all applicable Anti-Money
Laundering Laws.
Section 3.26 Anti-Corruption
Laws.
(a) Seller
is and will remain in compliance with all applicable Anti-Corruption Laws, and agrees that no part of the proceeds of the Purchase Price
will be used, directly or to its knowledge indirectly, by any Person for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain,
retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977,
as amended.
(b) Seller
acknowledges by executing this Agreement and the other Program Agreements to which Seller is a party that Buyer has notified it that,
pursuant to the requirements of the Patriot Act, Buyer is required to obtain, verify and record such information as may be necessary
to identify Seller, and confirm that the administrator of Seller (or the administrator of the applicable direct or indirect owner of
Equity Interests of it) has obtained, verified and recorded such information as may be necessary to identify any Person owning twenty-five
percent (25%) or more of the direct Equity Interests of it (including, without limitation, the name and address of such Person), in each
case, in accordance with the Patriot Act.
(c) None
of Seller or any director, officer, agent or employee of Seller, has used or to its knowledge indirectly used any of the proceeds of
any Transaction (i) for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity,
(ii) to make any direct or indirect unlawful payment to any government official or employee from corporate funds, (iii) to
violate any provision of the U.S. Foreign Corrupt Practices Act of 1977 or similar law of a jurisdiction in which Seller conducts its
business and to which they are lawfully subject or (iv) to make any unlawful bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
Section 3.27 Compliance
with 1933 Act. Neither Seller nor anyone acting on its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Note, any interest in the Note or any other similar security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Note, any interest in the Note or any other similar security from, or otherwise approached or negotiated with respect
to the Note, any interest in the Note or any other similar security with, any person in any manner, or made any general solicitation
by means of general advertising or in any other manner, or taken any other action which would constitute a distribution of the Note under
the 1933 Act or which would render the disposition of the Note a violation of Section 5 of the 1933 Act or require registration
pursuant thereto.
Section 3.28 Compliance
with Laws. Seller is not in violation of any of its certificate of formation or operating agreement (or corresponding organizational
documents if it is not a limited liability company), of any provision of any applicable law, or of any judgment, award, rule, regulation,
order, decree, writ or injunction of any court or public regulatory body or authority that could reasonably be expected to result in
a Material Adverse Effect.
Section 3.29 The
Ginnie Mae Contract. Seller has delivered to Buyer a copy of the Ginnie Mae Contract which was executed on Ginnie Mae’s standard
forms and Seller hereby represents and warrants that there has been no amendment to such Ginnie Mae Contract that would grant additional
or more favorable rights to terminate the servicer from those rights specified in the Ginnie Mae Guide) and copies delivered to Buyer
by Seller are true, correct and complete. Each such document to which Seller is a party has been duly executed and delivered by Seller
and is in full force and effect, and no default or event of default (howsoever defined) has occurred and is continuing thereunder, except
where the occurrence and continuance of such default or event of default would not reasonably be expected to result in a Material Adverse
Effect. The Ginnie Mae Contract is in full force and effect, and Seller has not been terminated as the servicer under the Ginnie Mae
Contract.
Section 3.30 Ginnie
Mae Approvals. Seller is approved by Ginnie Mae as an approved issuer, and, to the extent necessary, approved by the Secretary of
HUD pursuant to Sections 203 and 211 of the National Housing Act, as amended. In each such case, Seller is in good standing, with
no event having occurred, including a change in insurance coverage which would either make Seller unable to comply with the eligibility
requirements for maintaining all such applicable approvals or require notification to Ginnie Mae or to HUD, FHA or VA.
Section 3.31 No
Adverse Actions. To the extent approved by a Specified Governmental Entity, Seller has not received from any Specified Governmental
Entity a notice of extinguishment or a notice indicating material breach, default or material non-compliance which could be reasonably
likely to cause such Specified Governmental Entity to terminate, suspend, sanction or levy penalties against it, or a notice from any
Specified Governmental Entity indicating any adverse fact or circumstance in respect of it which could be reasonably likely to cause
such Specified Governmental Entity, to revoke any of its approvals or otherwise terminate, suspend it as an approved issuer, seller or
servicer, as applicable, or with respect to which such adverse fact or circumstance has caused any Specified Governmental Entity to terminate
it.
Section 3.32 Use
of Proceeds. Seller will only use the proceeds of the Purchase Price as permitted under Section 2.08. No part of the
proceeds of the Purchase Price will be used directly or indirectly to purchase or carry Margin Stock, or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock, in violation of any of the provisions of Regulations T, U or X of the Board of
Governors of the Federal Reserve System. Seller is not engaged in the business of extending credit for the purpose of purchasing or carrying
any Margin Stock. At no time would more than 25% of the value of the assets of Seller that are subject to any “arrangement”
(as such term is used in Section 221.2(g) of such Regulation U) hereunder be represented by Margin Stock. Seller shall
not use the proceeds of any Transaction to purchase any asset or securities from, or otherwise transfer the proceeds of the Purchase
Price to, an “affiliate” of Buyer, as such term is defined in 12 C.F.R. Part 223.
Section 3.33 Reserved.
Section 3.34 Sanctions
Compliance. Seller confirms as a condition of this agreement and warrants to Buyer that it will, and it will cause each Affiliate
to, abide by all applicable economic sanctions laws and trade restrictions, administered or enforced from time to time by the United
States, including those administered by OFAC and the U.S. Department of State (collectively “Sanctions”). In particular,
Seller represents and warrants that neither it, nor any of its respective Affiliates, officers, directors, partners, or members (i) is
an entity or other person that: (a) appears on the “List of Specially Designated Nationals and Blocked Persons” (the
“SDN List”) maintained by OFAC; (b) is operating in, organized in, a national of or ordinarily resident in a
country or territory subject to comprehensive sanctions programs administered and enforced by OFAC, currently including, Cuba, Iran,
Syria, North Korea, and the Crimean, Donetsk and Luhansk regions of Ukraine (“Sanctioned Jurisdiction”); (c) is otherwise
the target of any Sanctions, including but not limited to U.S. Executive Order 14024 issued on April 15, 2021, U.S. Executive Order
13662 issued on March 20, 2014, and any directives or designations issued pursuant thereto; or (d) is directly or indirectly
owned 50% or more in the aggregate, or controlled by or acting for or on behalf of entities or other persons described in clauses (a) through
(c), above (any and all entities or other persons described in clauses (a) through (d) above are “Prohibited Persons”);
(ii) engaged or engages in any dealings or transactions with or involving any Prohibited Persons or Sanctioned Jurisdiction; and
(iii) otherwise engaged or engages in any dealings or transactions in violation of Sanctions.
ARTICLE IV
CONVEYANCE;
REPURCHASE ASSETS; SECURITY INTEREST
Section 4.01 Ownership.
Upon payment of the Purchase Price, Buyer shall become the sole owner of the Purchased Assets, free and clear of all liens and encumbrances.
Section 4.02 Security
Interest.
(a) Although
the parties intend (other than for U.S. federal tax purposes) that all Transactions hereunder be sales and purchases and not loans, in
the event any such Transactions are deemed to be loans, and in any event, Seller hereby pledges to Buyer as security for the performance
by Seller of its Obligations and hereby grants, assigns and pledges to Buyer a fully perfected first priority security interest in all
of Seller’s right, title and interest in, to and under each of the following items of property, whether now owned or hereafter
acquired, now existing or hereafter created and wherever located, is hereinafter referred to as the “Primary Repurchase Assets”:
(i) the
Note identified on the Asset Schedule;
(ii) all
rights to reimbursement or payment of the Note and/or amounts due in respect thereof under the Note identified on the Asset Schedule;
(iii) all
records, instruments or other documentation evidencing any of the foregoing;
(iv) all
“general intangibles”, “accounts”, “chattel paper”, “securities accounts”, “investment
property”, “deposit accounts” and “money” as defined in the Uniform Commercial Code relating to or constituting
any and all of the foregoing (including, without limitation, all of Seller’s rights, title and interest in and under the Base Indenture
and the Series 2020-SPIADVF1 Indenture Supplement); and
(v) any
and all replacements, substitutions, distributions on or proceeds of any and all of the foregoing.
(b) Buyer
and Seller hereby agree that in order to further secure Seller’s Obligations hereunder, Seller hereby assigns, pledges, conveys
and grants to Buyer a security interest in (i) as of the Closing Date, Seller’s rights (but not its obligations) under the
Program Agreements including without limitation any rights to receive payments thereunder or any rights to collateral thereunder whether
now owned or hereafter acquired, now existing or hereafter created (collectively, the “Repurchase Rights”) and (ii) all
collateral however defined or described under the Program Agreements to the extent not otherwise included under the definitions of Primary
Repurchase Assets or Repurchase Rights (such collateral, “Additional Repurchase Assets,” and collectively with the
Primary Repurchase Assets and the Repurchase Rights, the “Repurchase Assets”) to secure the Obligations.
(c) The
foregoing provisions of this Section 4.02 are intended to constitute a security agreement or other arrangement or other
credit enhancement related to this Agreement and the Transactions hereunder as defined under Sections 101(47)(A)(v) and 741(7)(A)(xi) of
the Bankruptcy Code.
Section 4.03 Further
Documentation. At any time and from time to time, upon the written request of Buyer, and at the sole expense of Seller, Seller will
promptly and duly execute and deliver, or will promptly cause to be executed and delivered, such further instruments and documents and
take such further action as Buyer may reasonably request (x) to obtain, preserve, perfect, protect or more fully evidence Buyer’s
security interest in the Purchased Assets, (y) for the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted or (z) to enable Buyer to exercise or enforce any of its rights hereunder or under any
other Program Agreement, including, without limitation, the filing of any financing or continuation statements under the Uniform Commercial
Code in effect in any applicable jurisdiction with respect to the Liens created hereby or amendments thereto or assignments thereof and
such other instruments or notices, as Buyer may reasonably require. Seller also hereby authorizes Buyer to file any such financing or
continuation statement, and amendments thereto and assignments thereof to the extent permitted by applicable law.
Section 4.04 Changes
in Locations, Name, etc. Seller shall not (a) change the location of its chief executive office/chief place of business
from that specified in Section 3.17 or (b) change its name or corporate structure (or the equivalent) or jurisdiction
of organization from the jurisdiction referred to in Section 3.17, unless it shall have given Buyer at least thirty (30)
days’ prior written notice thereof and shall have delivered to Buyer all Uniform Commercial Code financing statements and amendments
thereto as Buyer shall request and taken all other actions deemed necessary by Buyer to continue its perfected status in the Repurchase
Assets with the same or better priority.
Section 4.05 Performance
by Buyer of Seller’s Obligations. If Seller fails to perform or comply with any of its agreements contained in the Program
Agreements and Buyer may itself perform or comply, or otherwise cause performance or compliance, with such agreement, the reasonable
(under the circumstances) out-of-pocket expenses of Buyer actually incurred in connection with such performance or compliance, together
with interest thereon at a rate per annum equal to the Pricing Rate shall be payable by Seller to Buyer on demand and shall constitute
Obligations. Such interest shall be computed on the basis of the actual number of days in each Price Differential Period and a 360-day
year.
Section 4.06 Proceeds.
If an Event of Default shall occur and be continuing, (a) all proceeds of Repurchase Assets received by Seller consisting of cash,
checks and other liquid assets readily convertible to cash items shall be held by Seller in trust for Buyer, segregated from other funds
of Seller, and shall forthwith upon receipt by Seller be turned over to Buyer in the exact form received by Seller (duly endorsed by
Seller to Buyer, if required) and (b) any and all such proceeds received by Buyer (whether from Seller or otherwise) may, in the
sole discretion of Buyer, be held by Buyer as collateral security for, and/or then or at any time thereafter may be applied by Buyer
against, the Obligations (whether matured or unmatured), such application to be in such order as Buyer shall elect. Any balance of such
proceeds remaining after the Obligations shall have been paid in full and this Agreement shall have been terminated shall be paid over
to Seller or to whomsoever may be lawfully entitled to receive the same.
Section 4.07 Remedies.
If an Event of Default shall occur and be continuing, Buyer may exercise, in addition to all other rights and remedies granted to it
in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies
of a secured party under the Uniform Commercial Code (including without limitation, Buyer’s rights to a strict foreclosure under
Section 9-620 of the Uniform Commercial Code). Without limiting the generality of the foregoing, Buyer may seek the appointment
of a receiver, liquidator, conservator, trustee, or similar official in respect of Seller or any of Seller’s property. Buyer without
demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required under this
Agreement or by law referred to below) to or upon Seller or any other Person (each and all of which demands, presentments, protests,
advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the
Repurchase Assets, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose
of and deliver the Repurchase Assets or any part thereof (or contract to do any of the foregoing), in one or more parcels or as an entirety
at public or private sale or sales, at any exchange, broker’s board or office of Buyer or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any
credit risk. Buyer shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Repurchase Assets so sold, free of any right or equity of redemption in Seller,
which right or equity is hereby waived or released. Seller further agrees, at Buyer’s request, to assemble the Repurchase Assets
and make it available to Buyer at places which Buyer shall reasonably select, whether at Seller’s premises or elsewhere. Buyer
shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable
(under the circumstances) out-of-pocket costs and expenses of every kind actually incurred therein or incidental to the care or safekeeping
of any of the Repurchase Assets or in any way relating to the Repurchase Assets or the rights of Buyer hereunder, including without limitation
reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations, in such order as Buyer may
elect, and only after such application and after the payment by Buyer of any other amount required or permitted by any provision of law,
including without limitation Section 9-615 of the Uniform Commercial Code, need Buyer account for the surplus, if any, to Seller.
To the extent permitted by applicable law, Seller waives all claims, damages and demands it may acquire against Buyer arising out of
the exercise by Buyer of any of its rights hereunder, other than those claims, damages and demands arising from the gross negligence
or willful misconduct of Buyer. If any notice of a proposed sale or other disposition of Repurchase Assets shall be required by law,
such notice shall be deemed reasonable and proper if given at least ten (10) days before such sale or other disposition. Seller
shall remain liable for any deficiency (plus accrued interest thereon as contemplated herein) if the proceeds of any sale or other disposition
of the Repurchase Assets are insufficient to pay the Obligations and the fees and disbursements in amounts reasonable under the circumstances,
of any attorneys employed by Buyer to collect such deficiency.
Section 4.08 Limitation
on Duties Regarding Preservation of Repurchase Assets. Buyer’s duty with respect to the custody, safekeeping and physical preservation
of the Repurchase Assets in its possession, under Section 9-207 of the Uniform Commercial Code or otherwise, shall be to deal with
it in the same manner as Buyer deals with similar property for its own account. Neither Buyer nor any of its directors, officers or employees
shall be liable for failure to demand, collect or realize upon all or any part of the Repurchase Assets or for any delay in doing so
or shall be under any obligation to sell or otherwise dispose of any Repurchase Assets upon the request of Seller or otherwise.
Section 4.09 Powers
Coupled with an Interest. All authorizations and agencies herein contained with respect to the Repurchase Assets are irrevocable
and powers coupled with an interest.
Section 4.10 Release
of Security Interest. Upon the latest to occur of (a) the repayment to Buyer of all Obligations hereunder, and (b) the
occurrence of the Termination Date, Buyer shall release its security interest in any remaining Repurchase Assets hereunder and shall
promptly execute and deliver to Seller such documents or instruments as Seller shall reasonably request to evidence such release.
Section 4.11 Reinstatement.
All security interests created by this Article IV shall continue to be effective, or be reinstated, as the case may be,
if at any time any payment, or any part thereof, of any Obligation of Seller is rescinded or must otherwise be restored or returned by
Buyer upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Seller or upon or as a result of the appointment
of a receiver, intervenor or conservator of, or trustee or similar officer for, Seller or any substantial part of its property, or otherwise,
all as if such release had not been made.
Section 4.12 Subordination.
Seller shall not seek in any Insolvency Event of the Issuer to be treated as part of the same class of creditors as Administrative Agent
and Buyer and shall not oppose any pleading or motion by Administrative Agent and Buyer advocating that Administrative Agent and Buyer
should be treated as a separate class of creditors from Seller. Seller acknowledges and agrees that its rights with respect to the Repurchase
Assets are and shall continue to be at all times while the obligations are outstanding junior and subordinate to the rights of Administrative
Agent and Buyer under this Agreement.
ARTICLE V
CONDITIONS
PRECEDENT
Section 5.01 Initial
Transaction. The obligation of Buyer to enter into Transactions with Seller hereunder is subject to the satisfaction, immediately
prior to or concurrently with the entering into such Transaction, of the condition precedent that Buyer shall have received all of the
following items, each of which shall be satisfactory to Buyer and its counsel in form and substance:
(a) Program
Agreements and Note. The Program Agreements and Note, in all instances duly executed and delivered by the parties thereto and being
in full force and effect, free of any modification, breach or waiver.
(b) Security
Interest. Evidence that all other actions necessary or, in the opinion of Buyer, desirable to perfect and protect Buyer’s interest
in the Repurchase Assets have been taken, including, without limitation, duly authorized and filed Uniform Commercial Code financing
statements on Form UCC-1.
(c) Organizational
Documents. A certificate of the corporate secretary of Seller in form and substance acceptable to Buyer, attaching certified copies
of Seller’s certificate of formation, operating agreement and corporate resolutions approving the Program Agreements and transactions
thereunder (either specifically or by general resolution) and all documents evidencing other necessary corporate action or governmental
approvals as may be required in connection with the Program Agreements.
(d) Good
Standing Certificate. A certified copy of a good standing certificate from the jurisdiction of organization of Seller, dated as of
no earlier than the date ten (10) Business Days prior to the Closing Date.
(e) Incumbency
Certificate. An incumbency certificate of the corporate secretary of each of Seller, certifying the names, true signatures and titles
of the representatives duly authorized to request transactions hereunder and to execute the Program Agreements.
(f) Fees.
Buyer shall have received payment in full of all fees and Expenses (including, without limitation the Commitment Fee) which are payable
hereunder to Buyer on or before such date.
Section 5.02 All
Transactions. The obligation of Buyer to enter into each Transaction pursuant to this Agreement is subject to the following conditions
precedent:
(a) [Reserved].
(b) Transaction
Notice and Asset Schedule. In accordance with Section 2.02 hereof, Buyer shall have received from Seller a Transaction
Notice with an updated Asset Schedule which includes the Note and any Additional Balance, if applicable, related to a proposed Transaction
hereunder on such Business Day.
(c) No
Margin Deficit. After giving effect to each new Transaction, the aggregate outstanding amount of the Purchase Price shall not exceed
the Asset Value of the Note then in effect.
(d) No
Default. No Default or Event of Default exists or shall have occurred and be continuing immediately after giving effect to such new
Transaction.
(e) Requirements
of Law. Buyer shall not have determined that the introduction of or a change in any Requirement of Law or in the interpretation or
administration of any Requirement of Law applicable to Buyer has made it unlawful, and no Governmental Authority shall have asserted
that it is unlawful, for Buyer to enter into Transactions with a Pricing Rate based on Base Rate.
(f) Representations
and Warranties. Both immediately prior to the related Transaction and also after giving effect thereto and to the intended use thereof,
the representations and warranties made by Seller in each Program Agreement shall be true, correct and complete on and as of such Purchase
Date in all material respects with the same force and effect as if made on and as of such date (or, (i) if any such representation
or warranty is expressly stated to have been made as of a specific date, as of such specific date and (ii) if any such representation
or warranty is already qualified by materiality or material adverse effect, such representation or warranty shall be true and correct
in all respects, as written).
(g) Note.
Buyer shall have received the Note and evidence of the Additional Balances relating to any Purchased Assets, which is in form and substance
satisfactory to Buyer in its sole discretion.
(h) Requirements
of Law. None of the Administrative Agent or Buyer shall have determined that the introduction of any Requirement of Law or in the
interpretation or administration of any Requirement of Law applicable to the Administrative Agent or Buyer has made it unlawful, and
no Governmental Authority shall have asserted that it is unlawful, for the Administrative Agent or Borrower to enter into any Transaction.
(i) No
Material Adverse Change. Since the Closing Date, there has been no event of circumstance which is reasonably likely to have a Material
Adverse Effect on Seller.
(j) Fees.
Buyer shall have received payment in full of all fees and Expenses which are payable hereunder to Buyer on or before such date.
Section 5.03 Closing
Subject to Conditions Precedent. The obligation of Buyer to purchase the Note is subject to the satisfaction on or prior to the Closing
Date of the following conditions (any or all of which may be waived by Buyer):
(a) Performance
by the Issuer and PLS. All the terms, covenants, agreements and conditions of the Transaction Documents and the Acknowledgment Agreement
to be complied with, satisfied, observed and performed by the Issuer, and PLS on or before the Closing Date shall have been complied
with, satisfied, observed and performed in all material respects.
(b) Representations
and Warranties. Each of the representations and warranties of the Issuer and PLS made in the Transaction Documents and the Acknowledgment
Agreement shall be true and correct in all material respects as of the Closing Date (or, (i) if any such representation or warranty
is expressly stated to have been made as of a specific date, as of such specific date and (ii) if any such representation or warranty
is already qualified by materiality or material adverse effect, such representation or warranty shall be true and correct in all respects).
(c) Officer’s
Certificate. The Administrative Agent, Buyer and the Indenture Trustee shall have received in form and substance reasonably satisfactory
to the Administrative Agent an officer’s certificate from PLS and a certificate of a Responsible Officer of the Issuer, dated the
Closing Date, each certifying to the satisfaction of the conditions set forth in the preceding paragraphs (a) and (b),
in each case together with incumbency, by-laws, resolutions and good standing.
(d) Opinions
of Counsel to the Issuer and PLS. Counsel to the Issuer and PLS shall have delivered to the Administrative Agent, Buyer and the Indenture
Trustee favorable opinions, dated the Closing Date and satisfactory in form and substance to the Administrative Agent and its counsel,
relating to corporate matters, enforceability, safe harbor and perfection and an opinion as to which state’s law applies to security
interest and perfection matters. In addition to the foregoing, PLS, as servicer, shall have caused its counsel to deliver to the Issuer,
Buyer, as purchaser of the Note hereunder, the Administrative Agent and the Indenture Trustee an opinion as to certain tax matters dated
as of the Closing Date, satisfactory in form and substance to the Administrative Agent, Buyer and their respective counsel.
(e) Officer’s
Certificate of Indenture Trustee. The Administrative Agent and Buyer shall have received in form and substance reasonably satisfactory
to the Administrative Agent an Officer’s Certificate from the Indenture Trustee, dated the Closing Date, with respect to the Base
Indenture, together with incumbency and good standing.
(f) Opinions
of Counsel to the Indenture Trustee. Counsel to the Indenture Trustee shall have delivered to the Administrative Agent and Buyer
a reliance letter dated as of the date hereof allowing them to rely upon its opinion letters related to the enforceability of the Base
Indenture and reasonably satisfactory in form and substance to Administrative Agent and Buyer and their respective counsel.
(g) Opinions
of Counsel to the Owner Trustee. Delaware counsel to the Owner Trustee of the Issuer shall have delivered to the Administrative Agent
and Buyer a reliance letter, dated as of the date hereof, allowing them to rely upon its opinion letters related to the formation, existence
and standing of the Issuer and of the Issuer’s execution, authorization and delivery of each of the Transaction Documents and the
Acknowledgment Agreement to which it is a party and such other matters as the Administrative Agent may reasonably request and reasonably
satisfactory in form and substance to Administrative Agent and Buyer and their respective counsel.
(h) Filings
and Recordations. The Administrative Agent, Buyer and the Indenture Trustee shall have received evidence reasonably satisfactory
to the Administrative Agent of (i) the completion of all recordings, registrations and filings as may be necessary or, in the reasonable
opinion of the Administrative Agent, desirable to perfect or evidence: (A) the assignment by PLS, as Seller, to the Issuer of the
ownership interest in the Purchased Assets conveyed pursuant to the PC Repurchase Agreement and the proceeds thereof and (ii) the
completion of all recordings, registrations, and filings as may be necessary or, in the reasonable opinion of the Administrative Agent,
desirable to perfect or evidence the grant of a first priority perfected security interest in the Issuer’s ownership interest in
the Purchased Assets in favor of the Indenture Trustee, subject to no Liens prior to the Lien created by the Base Indenture.
(i) Documents.
The Administrative Agent, Buyer and the Indenture Trustee shall have received a duly executed counterpart of each of the Transaction
Documents (including the Pricing Side Letter related to the Note), in form acceptable to Buyer, the Acknowledgment Agreement, the Note
and each and every document or certification delivered by any party in connection with any such Transaction Documents, the Acknowledgment
Agreement or the Note, and each such document shall be in full force and effect.
(j) Actions
or Proceedings. No action, suit, proceeding or investigation by or before any Governmental Authority shall have been instituted to
restrain or prohibit the consummation of, or to invalidate, any of the transactions contemplated by the Transaction Documents, the Acknowledgment
Agreement, the Note and the documents related thereto in any material respect.
(k) Approvals
and Consents. All Governmental Actions of all Governmental Authorities required with respect to the transactions contemplated by
the Transaction Documents, the Acknowledgment Agreement, the Note and the documents related thereto shall have been obtained or made.
(l) Fees,
Costs and Expenses. Buyer shall have received payment in full of all fees and Expenses (including, without limitation the Commitment
Fee) which are payable hereunder to Buyer on or before the Closing Date, and the fees, costs and expenses payable by the Issuer and PLS
on or prior to the Closing Date pursuant to this Agreement or any other Transaction Document shall have been paid in full.
(m) [Reserved].
(n) Other
Documents. PLS shall have furnished to the Administrative Agent, the Buyer and the Indenture Trustee such other opinions, information,
certificates and documents as the Administrative Agent may reasonably request.
(o) Advance
Verification Agent. PLS shall have engaged the Advance Verification Agent pursuant to an agreement reasonably satisfactory to the
Administrative Agent.
(p) Proceedings
in Contemplation of Sale of the Note. All actions and proceedings undertaken by the Issuer and PLS in connection with the issuance
and sale of the Note as herein contemplated shall be satisfactory in all respects to the Administrative Agent, Buyer and their respective
counsel.
(q) SPIA
Advance Receivable Advance Rate Reduction Event, Servicer Termination Events, Events of Default and Funding Interruption Events.
No SPIA Advance Receivable Advance Rate Reduction Event, Servicer Termination Event, Event of Default or Funding Interruption Event shall
then be occurring.
(r) Satisfaction
of Conditions. Each of the Funding Conditions and the SPIADVF1 Funding Conditions shall have been satisfied. The Administrator shall
include the SPIADVF1 Funding Conditions in each Funding Certification in addition to the Funding Conditions and present a “yes”
or “no” answer beside such SPIADVF1 Funding Conditions indicating whether such SPIADVF1 Funding Conditions have been satisfied,
as set forth in Section 4.3 of the Base Indenture.
If any condition specified
in this Section 5.03 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated
by Buyer by notice to PLS at any time at or prior to the Closing Date, and Buyer shall incur no liability as a result of such termination.
ARTICLE VI
COVENANTS
Seller covenants and agrees
that until the payment and satisfaction in full of all Obligations, whether now existing or arising hereafter, shall have occurred:
Section 6.01 Litigation.
Seller will promptly, and in any event within three (3) Business Days after Seller has actual knowledge, give to Buyer notice of
any action, suit or proceeding instituted by or against Seller or any of its Subsidiaries in any federal or state court or before any
commission or other regulatory body (federal, state or local, foreign or domestic), or any such action, suit or proceeding threatened
against Seller, in any case, if such action, suit or proceeding (x) involves a potential liability, on an individual or aggregate
basis, with respect to such action, suit or proceeding will result in a liability equal to or greater than 5% of VFN Guarantor’s
Adjusted Tangible Net Worth, (y) is reasonably likely to result in a Material Adverse Effect or (z) questions or challenges
the validity or enforceability of any of the Program Agreements or challenges the sale or the lien (or lien priority) granted thereunder.
On the twelfth (12th) day of each fiscal quarter (or if such day is not a Business Day, the next succeeding Business Day), Seller will
provide to Administrative Agent and Buyer a litigation docket listing all litigation, actions, suits, arbitrations, investigations (including
any of the foregoing which are threatened or pending) or other legal or arbitrable proceedings affecting Seller or any of its Subsidiaries
or affecting any of the Property or any of them before any Governmental Authority. Seller will promptly provide notice of any judgment,
which with the passage of time, could cause an Event of Default hereunder.
Section 6.02 Prohibition
of Fundamental Changes. Seller shall not (a) enter into any transaction of merger or consolidation or amalgamation with any
Person; (b) liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution); (c) sell, lease
or otherwise dispose of, or agree to do any of the foregoing at any future time, all or substantially all of its assets; (d) enter
into any transaction or series of transactions to adopt, file, effect or consummate a Division, or otherwise permits any such Division
to be adopted, filed, effected or consummated; or (e) form or enter into any partnership, joint venture, syndicate or other combination
which could be reasonably likely to result in a Material Adverse Effect; provided, that Seller may merge or consolidate with any Person
if Seller is the surviving entity if after giving effect thereto, no Default would exist hereunder.
Section 6.03 [Reserved].
Section 6.04 No
Adverse Claims. Seller warrants and will defend the right, title and interest of Buyer in and to all Purchased Assets against all
adverse claims and demands.
Section 6.05 Assignment.
Except as permitted herein, Seller shall not sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or
pledge, hypothecate or grant a security interest in or lien on or otherwise encumber (except pursuant to the Program Agreements), any
of the Purchased Assets or any interest therein, provided that this Section 6.06 shall not prevent any transfer of Purchased
Assets in accordance with the Program Agreements.
Section 6.06 Security
Interest. Seller shall do all things necessary to preserve the Purchased Assets so that they remain subject to a first priority perfected
security interest hereunder. Without limiting the foregoing, Seller will comply with all rules, regulations and other laws of any Governmental
Authority and cause the Purchased Assets to comply with all applicable rules, regulations and other laws. Seller will not allow any default
for which Seller is responsible to occur under any Purchased Assets or any Program Agreement and Seller shall fully perform or cause
to be performed when due all of its obligations under any Purchased Assets and any Program Agreement.
Section 6.07 Records.
(a) Seller
shall collect and maintain or cause to be collected and maintained all Records relating to the Purchased Assets in accordance with industry
custom and practice for assets similar to the Purchased Assets, including those maintained pursuant to Section 6.08, and
all such Records shall be in Seller’s possession unless Buyer otherwise approves. Seller will maintain all such Records in good
and complete condition in accordance with industry practices for assets similar to the Purchased Assets and preserve them against loss.
(b) For
so long as Buyer has an interest in or lien on any Purchased Assets, Seller will hold or cause to be held all related Records in trust
for Buyer. Seller shall notify, or cause to be notified, every other party holding any such Records of the interests and liens in favor
of Buyer granted hereby.
(c) Upon
reasonable advance notice from Buyer, Seller shall (x) make any and all such Records available to Buyer to examine any such Records,
either by its own officers or employees, or by agents or contractors, or both, and make copies of all or any portion thereof, and (y) permit
Buyer or its authorized agents to discuss the affairs, finances and accounts of Seller with its chief operating officer and chief financial
officer and to discuss the affairs, finances and accounts of Seller with its independent certified public accountants.
Section 6.08 Books.
Seller shall keep or cause to be kept in reasonable detail books and records of account of its assets and business in which complete
entries will be made in accordance with GAAP consistently applied, and shall clearly reflect therein the transfer of Purchased Assets
to Buyer.
Section 6.09 Approvals.
Seller shall maintain all licenses, permits or other approvals necessary for Seller to conduct its business and to perform its obligations
under the Program Agreements, and Seller shall conduct its business strictly in accordance with applicable law.
Section 6.10 Insurance.
Seller shall maintain or cause to be maintained, at its own expense, insurance coverage as is customary, reasonable and prudent in light
of the size and nature of Seller’s business as of any date after the Closing Date. Seller shall be deemed to have complied with
this provision if one of its Affiliates has such policy coverage and, by the terms of any such policies, the coverage afforded thereunder
extends to Seller. Upon the request of Buyer at any time subsequent to the Closing Date and in no event more than once per calendar year
unless an Event of Default shall have occurred and be continuing, Seller shall cause to be delivered to Buyer, a certification evidencing
Seller’s coverage under any such policies.
Section 6.11 Distributions.
If a Default has occurred and is continuing, Seller shall not pay any dividends with respect to any capital stock or other equity interests
in such entity, whether now or hereafter outstanding, or make any other distribution in respect thereof, or redeem, purchase, retire,
or otherwise acquire any of its Equity Interests, or set apart any money for a sinking or other analogous fund for any dividend or other
distribution on its Equity Interests or for any redemption, purchase, retirement, or other acquisition either directly or indirectly,
whether in cash or property or in obligations of Seller.
Section 6.12 Applicable
Law. Seller shall comply with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority
and shall maintain its status with Ginnie Mae as an approved issuer in accordance with applicable law and all rules, policies, procedures
and standards of Ginnie Mae.
Section 6.13 Existence;
Ginnie Mae Approvals.
(a) Seller
shall preserve and maintain its legal existence and all of its governmental licenses, authorizations, consents and approvals necessary
for Seller to conduct its business and to perform its obligations under the Transaction Documents and the Acknowledgment Agreement.
(b) Seller
shall maintain adequate financial standing, procedures, and experienced personnel necessary for the sound servicing (or for the prudent
oversight of subservicers to ensure the sound servicing) of mortgage loans of the same types as may from time to time constitute Mortgage
Loans and in accordance, in all material respects, with Accepted Servicing Practices and the terms of the Ginnie Mae Contract.
(c) Seller
shall comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities
(including truth in lending, real estate settlement procedures and all environmental laws) if the failure to comply with such requirements
would be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect.
(d) Seller
shall maintain its status with Ginnie Mae as an approved issuer, and shall be in good standing with Ginnie Mae in accordance with applicable
law and all rules, policies, procedures and standards of Ginnie Mae (collectively, “Ginnie Mae Approvals”).
(e) Seller
shall and shall cause any subservicer to service all MSRs in accordance with the Ginnie Mae Requirements.
(f) Should
Seller, (x) receive written notice of any material default or notice of termination of servicing for cause under the Ginnie Mae
Contract, or (y) for any reason, cease to possess all applicable Ginnie Mae Approvals, or should notification from Ginnie Mae or
HUD, FHA or VA as described in Section 3.31 be received, Seller shall so notify Buyer in writing within three (3) Business
Days. Notwithstanding the preceding sentence, Seller shall take all necessary action to maintain all of its Ginnie Mae Approvals at all
times during the term of this Agreement.
Section 6.14 Change
in Organizational Documents. Seller shall not amend, modify or otherwise change any of its Organizational Documents in any material
respect, or except any such amendments, modifications or changes or any such new agreements or arrangements that could not reasonably
be expected, individually or in the aggregate, to have a Material Adverse Effect; provided that Seller shall deliver written notice to
Buyer within thirty (30) days of any material amendment to its Organizational Documents.
Section 6.15 Taxes.
Seller shall timely file all tax returns that are required to be filed by it and shall timely pay and discharge all taxes, assessments
and governmental charges or levies imposed on it or on its income or profits or on any of its property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being maintained in accordance with GAAP.
Section 6.16 Transactions
with Affiliates. Other than the purchase of the Note, Seller will not, directly or indirectly, enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such
transaction (a) does not result in a Default hereunder, (b) is in the ordinary course of Seller’s business and (c) is
upon fair and reasonable terms no less favorable to Seller than it would obtain in a comparable arm’s length transaction with a
Person which is not an Affiliate, or make a payment that is not otherwise permitted by this Section 6.15 to any Affiliate.
Section 6.17 Guarantees.
Seller shall not create, incur, assume or suffer any Guarantees, in excess of $250,000, except to the extent reflected in Seller’s
financial statements or notes thereto.
Section 6.18 Indebtedness.
Seller shall not incur any additional material Indebtedness other than (i) the Existing Indebtedness specified on Exhibit B
hereto; (ii) Indebtedness incurred with Buyer or its Affiliates; (iii) Indebtedness incurred in connection with new or existing
secured lending facilities and (iv) usual and customary accounts payable for a mortgage company, without the prior written consent
of Buyer.
Section 6.19 True
and Correct Information. All information, reports, exhibits, schedules, financial statements or certificates of Seller, any Affiliate
thereof or any of their officers furnished to Buyer hereunder and during Buyer’s diligence of Seller are and will be true and complete
in all material respects and do not and shall not omit to disclose any material facts necessary to make the statements herein or therein,
in light of the circumstances in which they are made, not misleading. All required financial statements, information and reports delivered
by Seller to Buyer pursuant to this Agreement shall be prepared in accordance with U.S. GAAP, or, if applicable, to SEC filings, the
appropriate SEC accounting regulations.
Section 6.20 No
Pledge. Except as contemplated herein, Seller shall not pledge, grant a security interest or assign any existing or future rights
to service any of the Repurchase Assets or pledge or grant to any other Person any security interest in the Note.
Section 6.21 Plan
Assets. Seller shall not be an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described
in Section 4975(e)(1) of the Code and Seller shall not use “plan assets” within the meaning of 29 CFR § 2510.3
101, as amended by Section 3(42) of ERISA to engage in this Agreement or any Transaction hereunder. Transactions to or with Seller
shall not be subject to any state or local statute regulating investments of or fiduciary obligations with respect to governmental plans
within the meaning of Section 3(32) of ERISA.
Section 6.22 Sharing
of Information. Seller shall allow Buyer to exchange information related to Seller and the Transactions hereunder with third party
lenders, permitted assignees, Participants and credit insurance providers and Seller shall permit each such third party to share such
information with Buyer.
Section 6.23 Modification
of the Base Indenture and Series 2020-SPIADVF1 Indenture Supplement. Seller shall not consent with respect to any of the Base
Indenture and the Series 2020-SPIADVF1 Indenture Supplement related to the Purchased Assets, to (i) the modification, amendment
or termination of the Base Indenture and the Series 2020-SPIADVF1 Indenture Supplement, (ii) the waiver of any provision
of the Base Indenture and the Series 2020-SPIADVF1 Indenture Supplement, or (iii) the resignation of PLS as servicer under
the Base Indenture and the Series 2020-SPIADVF1 Indenture Supplement, or the assignment, transfer, or material delegation of any
of its rights or obligations, under such the Base Indenture and the Series 2020-SPIADVF1 Indenture Supplement, without the prior
written consent of Buyer exercised in Buyer’s sole discretion.
Section 6.24 Reporting
Requirements.
(a) Seller
shall furnish to Buyer (i) promptly (but in no event later than three (3) Business Days after Seller has actual knowledge)
copies of any material and adverse notices (including, without limitation, notices of defaults, breaches, potential defaults or potential
breaches) and any material financial information that is not otherwise required to be provided by Seller hereunder which is given to
Seller’s lenders, (ii) immediately upon knowledge, notice of the occurrence of (1) any Default hereunder; (2) any
default or material breach by Seller of any obligation under any Program Agreement or any material contract or agreement of Seller or
(3) the occurrence of any event or circumstance that such party reasonably expects has resulted in, or will, with the passage of
time, result in, a Material Adverse Effect or an Event of Default and (iii) the following:
(1) as
soon as available and in any event within forty-five (45) calendar days after the end of each calendar month, the unaudited balance sheet
of Seller, as at the end of such period and the related unaudited consolidated statements of income for Seller, including changes in
shareholders’ equity (or its equivalent), for such period and the portion of the fiscal year through the end of such period, accompanied
by a certificate of a Responsible Officer of Seller, which certificate shall state that said consolidated financial statements or financial
statements, as applicable, fairly present in all material respects the consolidated financial condition or financial condition, as applicable,
and results of operations of Seller in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to
normal year-end adjustments);
(2) as
soon as available and in any event within forty-five (45) calendar days after the end of each calendar quarter, the unaudited cash flow
statements of Seller, as at the end of such period and the portion of the fiscal year through the end of such period, accompanied by
a certificate of a Responsible Officer of Seller, which certificate shall state that said consolidated financial statements or financial
statements, as applicable, fairly present in all material respects the consolidated financial condition or financial condition, as applicable,
and results of operations of Seller in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to
normal year-end adjustments);
(3) as
soon as available and in any event within ninety (90) days after the end of each fiscal year of Seller, the balance sheet of Seller,
as at the end of such fiscal year and the related consolidated statements of income and retained earnings and of cash flows for Seller
and changes in shareholders’ equity (or its equivalent) for such year, setting forth in comparative form the figures for the previous
year, accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion and
the scope of audit shall be acceptable to Buyer in its sole discretion, shall have no “going concern” qualification and shall
state that said consolidated financial statements or financial statements, as applicable, fairly present the consolidated financial condition
or financial condition, as applicable, and results of operations of Seller as at the end of, and for, such fiscal year in accordance
with GAAP;
(4) such
other prepared statements that Buyer may reasonably request;
(5) from
time to time (x) such other information regarding the financial condition, operations, or business of Seller as Buyer may reasonably
request and (y) information and documentation reasonably requested by Buyer for purposes of compliance with applicable “know
your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act;
(6) as
soon as reasonably possible, and in any event within five (5) Business Days after Seller has knowledge or has reason to believe
that any of the events or conditions specified below with respect to any Plan or Multiemployer Plan has occurred or exists (each, an
“ERISA Event”), a statement signed by a senior financial officer of Seller setting forth details respecting such event
or condition and the action, if any, that Seller or any of its Subsidiaries or ERISA Affiliates, as applicable, propose to take with
respect thereto (and a copy of any report or notice required to be filed with or given to PBGC by Seller or any of its Subsidiaries or
ERISA Affiliates with respect to such event or condition):
a. any
Reportable Event or failure to meet minimum funding standards with respect to a Plan; provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Sections 302 or 303 of ERISA with respect to a Plan, including, without limitation,
the failure to make on or before its due date a required installment under Section 430(j) of the Code or Section 303(j) of
ERISA, shall be a reportable event regardless of the issuance of any waivers in accordance with Section 412(c) of the Code
or any request for a waiver under Section 412(c) of the Code for any Plan;
b. the
distribution under Section 4041(c) of ERISA of a notice of intent to terminate any Plan or any action taken by Seller or
its Subsidiaries or ERISA Affiliates;
c. the
institution by PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan, or the receipt by Seller or its Subsidiaries or ERISA Affiliates of a notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer Plan;
d. the
complete or partial withdrawal from a Multiemployer Plan by Seller or its Subsidiaries or ERISA Affiliates that results in liability
under Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary liability as a result of a purchaser default)
or the receipt by Seller or its Subsidiaries or ERISA Affiliates of notice from a Multiemployer Plan that it is in insolvency pursuant
to Section 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA;
e. the
institution of a proceeding by a fiduciary of any Multiemployer Plan against Seller or its Subsidiaries or ERISA Affiliates to enforce
Section 515 of ERISA, which proceeding is not dismissed within thirty (30) calendar days; and
f. the
adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) and Section 436 of the Code, would result in the
loss of tax-exempt status of the trust of which such Plan is a part if Seller or its Subsidiaries or ERISA Affiliates fails to timely
make a contribution or provide security to such Plan in accordance with the provisions of said Sections;
(7) as
soon as reasonably possible (but in no event later than three (3) Business Days after Seller has actual knowledge), notice of any
of the following events:
a. any
material dispute, litigation, investigation, proceeding or suspension between Seller on the one hand, and any Governmental Authority
or any Person;
b. any
material change in accounting policies or financial reporting practices of Seller;
c. any
material issues raised upon examination of Seller or Seller’s facilities by any Governmental Authority;
d. [Reserved].
e. promptly
upon receipt of notice or knowledge of any lien or security interest (other than security interests created hereby or by the other Program
Agreements) on, or claim asserted against, any of the Purchased Assets;
f. the
filing, recording or assessment of any federal, state or local tax lien against Seller, or any of Seller’s assets, unless such
filing, recording or assessment could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect
with respect to Seller;
g. any
condition or event that constitutes an “event of default” under any Indebtedness with an outstanding principal amount greater
than $25,000,000 or that notice has been given to any party thereunder with respect thereto or any fact that could reasonably be expected
to have a Material Adverse Effect;
h. any
other action, event or condition of any nature that, with notice or lapse of time or both, would constitute a default under any agreement,
instrument or indenture to which Seller is a party or to which Seller, its properties or assets may be subject that could reasonably
be expected to lead to, or result in, a Material Adverse Effect;
i. (i) any
material penalties, sanctions or charges levied, or threatened to be levied, against Seller or any adverse change or threatened change
made in writing in Seller’s Ginnie Mae Approval status, (ii) the commencement of any material non-routine investigation or
the institution of any proceeding or the threat in writing of institution of any proceeding against Seller by any Specified Governmental
Entity or any supervisory or regulatory Governmental Authority supervising or regulating the origination or servicing of mortgage loans
by, or the issuer or seller status of Seller or (iii) the commencement of any material investigation, or the institution of any
material proceeding or the threat in writing of institution of any material proceeding against Seller by any city, county or municipal
supervisory or regulatory Governmental Authority supervising or regulating the origination or servicing of mortgage loans by, or the
issuer or seller status of Seller;
j. (x) any
material settlement with, or issuance of a consent order by, any Governmental Authority and (y) any settlement with, or issuance
of a consent order by, any Governmental Authority; and
k. of
the occurrence of any event or change that has results in or could reasonably be expected to result in a Material Adverse Effect.
(b) Officer’s
Certificates. Seller will furnish to Buyer, at the time Seller furnishes each set of financial statements pursuant to Section 6.24(a)(iii)(1),
(2) or (3) above, an Officer’s Compliance Certificate of Seller.
(c) Monthly
Reporting. Seller shall at all times maintain a current list (which may be stored in electronic form) of the Note and Additional
Balances. Seller shall deliver to Buyer no later than the 25th day of each month (the “Monthly Report Date”)
a cumulative Asset Schedule, each of which, when so delivered, shall replace the current Asset Schedule and which may be delivered in
electronic form acceptable to Buyer. Each such updated Asset Schedule shall indicate the outstanding VFN Principal Balance of the Note
as of the close of the preceding week. As of each Monthly Report Date, Seller hereby certifies, represents and warrants to Buyer that
each such updated Asset Schedule is true, complete and correct in all material respects.
(d) Other.
Seller shall deliver to Buyer any other reports or information reasonably requested by Buyer or as otherwise required pursuant to this
Agreement and the Indenture (including, without limitation, all reports and information delivered by the Issuer, the Administrator or
the Indenture Trustee relating to the Note). Seller understands and agrees that all reports and information provided to Buyer by or relating
to Seller may be disclosed to Buyer’s Affiliates.
(e) Hedging
Reports. Seller shall deliver to Buyer a monthly summary hedge report (data elements to be agreed upon by Seller and Buyer). To the
extent Seller retains any Person(s) to perform hedging services on behalf of Seller, Seller hereby grants Buyer authority to contact,
request and receive hedging reports directly from such Person(s) at no cost to Buyer. Further, Seller shall instruct such Person(s),
upon reasonable notice from Buyer and during normal business hours, to answer candidly and fully, at no cost to Buyer, any and all questions
that Buyer may address to them in reference to the hedging reports of Seller.
(f) Regulatory
Reporting Compliance. Seller shall, on or before the last Business Day of the fifth (5th) month following the end of each
of Seller’s fiscal years (December 31), beginning with the fiscal year ending in 2022, deliver to Buyer a copy of the results
of any Uniform Single Attestation Program for Mortgage Bankers or an Officer’s Certificate that satisfies the requirements of Item
1122(a) of Regulation AB, an independent public accountant’s report that satisfies the requirements of Item 1123 of Regulation
AB, or similar review conducted on Seller by its accountants, and such other reports as Seller may prepare relating to its servicing
functions as Seller.
Section 6.25 Liens
on Substantially All Assets. Seller shall not grant a security interest to any Person other than Buyer or an Affiliate of Buyer in
substantially all assets of Seller unless Seller has entered into an amendment to this Agreement that grants to Buyer a pari passu security
interest on such assets.
Section 6.26 Litigation
Summary. On each date on which the Officer’s Compliance Certificate is delivered, Seller shall provide to Buyer a true and
correct summary of all material actions, notices, proceedings and investigations pending with respect to which Seller has received service
of process or other form of notice or, to the best of Seller’s knowledge, threatened against it, before any court, administrative
or governmental agency or other regulatory body or tribunal.
Section 6.27 Material
Change in Business. Seller shall not make any material change in the nature of its business as carried on at the Closing Date other
than lines of business typical for companies engaged in mortgage or consumer finance.
Section 6.28 Ginnie
Mae Contract.
(a) Within
five (5) Business Days after (x) a Responsible Officer of Seller becomes aware of an amendment to the Ginnie Mae Contract
or (y) a Responsible Officer of Seller becomes aware of an amendment to the Acknowledgment Agreement that, in each case, could
reasonably be expected to materially and adversely affect Seller, the Purchased Assets or Buyer’s interest therein or to result
in a Material Adverse Effect, to the extent permitted by Ginnie Mae, Seller shall deliver to Buyer copies of any such amendments; provided
that Seller shall cooperate with any requests by Buyer to deliver copies of each amendment, restatement, supplement or other modification
to the Ginnie Mae Contract or the Acknowledgment Agreement that Buyer shall reasonably request, to the extent permitted by Ginnie Mae.
(b) Seller
shall not execute any amendments with respect to the Acknowledgment Agreement without the prior consent of Buyer.
(c) Should
Seller for any reason cease to possess the Ginnie Mae Approvals, or should notification to Ginnie Mae be required, Seller shall immediately
notify Buyer in writing.
(d) Seller
shall promptly, and in no event later than five (5) days after Seller has knowledge thereof, notify Buyer of any Servicer Termination
Event or event of default under any Ginnie Mae Contract or its receipt of a notice of actual termination of Seller’s right to service
under any Ginnie Mae Contract which evidences an intent to transfer such servicing to a third party.
Section 6.29 Trigger
Event MSR Asset Sale. Seller shall, within one (1) Business Day, notify Buyer in the event that it has voluntarily relinquished
or delivered notice of its intent to sell or transfer Ginnie Mae Contract rights constituting more than 10% of the aggregate Ginnie Mae
Contract rights of Seller with respect to Ginnie Mae, in any event without Buyer’s prior express written consent.
Section 6.30 Termination
of Servicing Notice. Seller shall give notice to Buyer promptly but not later than two (2) Business Days after receipt of notice
or knowledge by a Responsible Officer of (i) any material default, notice of termination of servicing for cause or notice of any
other matter materially and adversely affecting the Purchased Assets under the Ginnie Mae Contract or (ii) any resignation of servicing,
termination of servicing or notice of resignation of or termination of servicing, under the Ginnie Mae Contract, outside the ordinary
course of business.
Section 6.31 [Reserved].
Section 6.32 Ginnie
Mae Audit and Approval Maintenance. Seller shall (i) at all times maintain copies of relevant portions of all Audits 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, (ii) to
the extent not otherwise prohibited by reason of confidentiality or other non-disclosure restrictions, provide Buyer with copies of such
Audits promptly upon Buyer’s request, and (iii) take all actions necessary to maintain its Ginnie Mae Approvals.
Section 6.33 Sale
and Lease-Backs. Seller shall not enter into any arrangement, directly or indirectly, with any Person whereby Seller shall sell or
transfer any property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property
or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred if
any Default exists or will exist after giving effect thereto.
Section 6.34 Fiscal
Year. Seller shall not change its fiscal year-end from December 31 or change its method of determining fiscal quarters.
Section 6.35 Most
Favored Status. Seller and Buyer agree that (i) should Seller or any Subsidiary or Affiliate thereof enter into a repurchase
agreement, credit facility or other comparable agreement with any Person other than Buyer or an Affiliate of Buyer or, (ii) with
respect to any repurchase agreement or comparable agreement, in place as of the date hereof, directly related to any MSR VFN, SPIA VFN
or MBS Advance VFN and in the case of (i) or (ii), the applicable terms set forth therein provide any of the following (each, a
“More Favorable Agreement”):
(a) more
favorable terms with respect to any guaranties or financial covenants, including without limitation covenants covering the same or
similar subject matter set forth or referred to in Section 6.11 hereof and Section 2 of the Pricing Side Letter, the
terms of this Agreement and/or the Pricing Side Letter shall be deemed automatically amended to include such more favorable terms
contained in such More Favorable Agreement, such that such terms operate in favor of Buyer or an Affiliate of Buyer; provided, that
in the event that such More Favorable Agreement is terminated, upon notice by Seller to Buyer of such termination, the original
terms of this Agreement and/or Pricing Side Letter shall be deemed to be automatically reinstated. Upon Seller or any Subsidiary or
Affiliate thereof entering into any such repurchase agreement, credit facility or other comparable agreement with any Person other
than Buyer or an Affiliate of Buyer, Seller shall provide notice to Buyer or Administrative Agent of such more favorable terms
contained in such More Favorable Agreement (including a summary thereof) no later than the next date on which Seller is required to
deliver an Officer’s Compliance Certificate; which notice requirement may be satisfied by the VFN Guarantor including such
information such Officer’s Compliance Certificate.
Section 6.36 Quality
Control. In addition to maintaining its own internal monitoring program for servicing oversight operations, Seller shall and shall
cause each Approved Subservicer to conduct quality control reviews of such Approved Subservicer's servicing operations in accordance
with industry standards and Specified Governmental Entity requirements. Seller shall provide oversight of its Approved Subservicer to
ensure the sound subservicing of the Mortgage Loans, in all material respects in accordance with Accepted Servicing Practices, the applicable
Approved Subservicing Agreement and the Ginnie Mae Requirements.
ARTICLE VII
DEFAULTS/RIGHTS
AND REMEDIES OF BUYER UPON DEFAULT
Section 7.01 Events
of Default. Each of the following events or circumstances shall constitute an “Event of Default”:
(a) Payment
Failure. Failure of Seller to (i) make any payment of the Purchase Price beyond the applicable dates on which such payment
is due, (ii) make any payment (which failure continues for a period of one (1) Business Day following the earlier of (x) written
notice (which may be in electronic form) from Buyer and (y) the date upon which Seller obtained knowledge of such failure) of Price
Differential, on a Price Differential Payment Date or a Repurchase Date, (iii) make any payment (which failure continues for a
period of two (2) Business Days following the earlier of (x) written notice (which may be in electronic form) from Buyer
and (y) the date upon which Seller obtained knowledge of such failure) of any other sum which has become due otherwise, whether
by acceleration or otherwise, under the terms of any Program Agreement or (iv) cure any Margin Deficit when due pursuant to Section 2.05
hereof.
(b) Cross
Default. Seller or Affiliates thereof shall be in default under (i) any Nomura Indebtedness, (ii) any Transaction Document;
provided that any such default under the Indenture shall constitute an “Event of Default” only if it continues unremedied
for a period of two (2) Business Days after a Responsible Officer of Seller obtains actual knowledge of such failure, or receives
written notice from Buyer of such default; or (iii) any Indebtedness, in the aggregate, in excess of $25,000,000 of Seller or any
Affiliate thereof which default (1) involves the failure to pay a matured obligation, or (2) permits the acceleration of
the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness.
(c) Insolvency.
An Act of Insolvency shall have occurred with respect to Seller or any Affiliate thereof.
(d) Material
Adverse Change. A Material Adverse Effect shall occur, and, if reasonably susceptible to cure and so long as Seller is pursuing such
cure by taking actions that Seller believes in its good faith discretion are reasonably likely to achieve such cure (as Seller shall
inform Buyer to its reasonable satisfaction), such Material Adverse Effect continues for a period of ten (10) Business Days.
(e) Immediate
Breach of Representation or Covenant or Obligation. A breach by Seller of any of the representations, warranties or covenants or
obligations set forth in Sections 3.01 (Seller Existence), 3.07 (Solvency), 3.12 (Material Adverse Change),
Section 3.22 (Other Indebtedness), Section 3.34 (Sanctions Compliance), Section 6.02 (Prohibition
of Fundamental Changes), Section 6.05 (Assignment), Section 6.13 (Existence), Section 6.17 (Guarantees),
Section 6.20 (No Pledge) or Section 6.21 (Plan Assets) of this Agreement.
(f) Additional
Breach of Covenant. Seller shall fail to perform or observe (i) the covenants set forth in Section 4.04 (Changes
in Locations, Name, etc), Section 6.03, Section 6.11 (Defaults), Section 6.14 (Change in Organizational
Documents), Section 6.17 (Guarantees), Section 6.18 (Indebtedness), Section 6.24 (Reporting Requirements),
Section 6.25 (Liens on Substantially All Assets), Section 6.33 (Sale and Lease-Backs), Section 6.34
(Fiscal Year), Section 6.35 (Most Favored Status) or Section 2 of the Pricing Side Letter and such failure shall
continue unremedied for five (5) Business Days after the earlier of (A) a written notice of such failure shall have been
given to Seller by the Administrative Agent or Buyer or (B) the date upon which a Seller obtained knowledge of such failure (and
giving effect to any grace or other cure periods set forth therein), or (ii) except as set forth Section 7.01(e) or
in clauses (i) hereof, any other term, covenant or agreement contained in this Agreement or in any other Transaction Document or
the Acknowledgment Agreement, and, such failure shall continue unremedied for thirty (30) days after the earlier of (A) a written
notice of such failure shall have been given to Seller by the Administrative Agent or Buyer or (B) the date upon which a Seller
obtained knowledge of such failures.
(g) Representations.
Except as set forth in clause (h) below, any representation or warranty made or deemed made by Seller herein or in
any other Program Agreement (after giving effect to any qualification as to materiality set forth therein, if any) shall prove to have
been false and misleading when made or any Officer’s Compliance Certificate delivered hereunder shall prove to have been false
and misleading in any material respect when made and such breach, if susceptible of cure, is not cured within ten (10) Business
Days after the earlier of (i) written notice of such failure shall have been given to Buyer or (ii) the date upon which Buyer
obtained knowledge of such failure.
(h) 1940
Act. The representation and warranty in Section 3.16 shall be false or misleading at any time.
(i) Change
in Control. The occurrence of a Change in Control.
(j) Failure
to Transfer. Seller fails to transfer a material portion of the Purchased Assets to Buyer on the applicable Purchase Date (provided
Buyer has tendered the related Purchase Price).
(k) Judgment.
A final judgment or judgments for the payment of money in excess of the lesser of (x) 3.0% of VFN Guarantor’s Adjusted Tangible
Net Worth and (y) $25,000,000 shall be rendered against Seller or any of their Affiliates by one or more courts, administrative
tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such
discharge) or bonded, or a stay of execution thereof shall not be procured, within forty-five (45) days from the date of entry thereof.
(l) Government
Action. Any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority shall
have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Property
of Seller or any Affiliate thereof, or shall have taken any action to displace the management of Seller or any Affiliate thereof or to
curtail its authority in the conduct of the business of Seller or any Affiliate thereof, or takes any action in the nature of enforcement
to remove, limit or restrict the approval of Seller or Affiliate as an issuer, buyer or a seller/servicer of mortgage loans or securities
backed thereby, and such action provided for in this subparagraph (l) shall not have been discontinued or stayed within sixty (60) days.
(m) Inability
to Perform. A Responsible Officer of Seller or VFN Guarantor shall admit its inability to, or its intention not to, perform any of
Seller’s Obligations or VFN Guarantor’s obligations hereunder or the VFN Guaranty.
(n) Security
Interest. This Agreement shall for any reason cease to create a valid, first priority security interest in any material portion of
the Repurchase Assets purported to be covered hereby.
(o) Financial
Statements. Seller’s audited annual financial statements or the notes thereto or other opinions or conclusions stated therein
shall be qualified or limited by reference to the status of Seller as a “going concern” or a reference of similar import.
(p) Validity
of Agreement. For any reason, this Agreement at any time shall not be in full force and effect in all material respects or shall
not be enforceable in all material respects in accordance with its terms, or any Lien granted pursuant thereto shall fail to be perfected
and of first priority, or Seller or any Affiliate of Seller shall seek to disaffirm, terminate, limit or reduce its obligations hereunder
or VFN Guarantor’s obligations under the VFN Guaranty.
(q) VFN
Guarantor Breach. A breach by VFN Guarantor of any material representation, warranty or covenant set forth in the VFN Guaranty or
any other Program Agreement, any “event of default” by VFN Guarantor under the VFN Guaranty, any repudiation of the VFN Guaranty
by VFN Guarantor, or if the VFN Guaranty is not enforceable against VFN Guarantor.
(r) Approved
Issuer; Approved Servicer.
(i) Seller
ceases to be a Ginnie Mae approved issuer;
(ii) Ginnie
Mae suspends, rescinds, halts, eliminates, withdraws, annuls, repeals, voids or terminates the status of Ginnie Mae as a Ginnie Mae approved
issuer.
(iii) As
distinct from and in addition to any loss of approval or actions taken by Ginnie Mae, as applicable, described in (i)-(ii), a Servicer
Termination Event shall occur with respect to Seller.
(s) ERISA
Related Events.
(i) An
ERISA Event occurs that, alone or together with all other ERISA Events that have occurred could reasonably be expected to result in a
Material Adverse Effect, or
(ii) the
assets of Seller or VFN Guarantor become “plan assets” within the meaning of 29 C.F.R. Sections 25103-101, as modified
by Section 3(42) of ERISA.
(t) Servicing.
Greater than 25% of Seller’s servicing portfolio consisting of Ginnie Mae loans is seized or terminated in any single event or
series of events arising from the same or substantially similar circumstances or occurrences.
Section 7.02 No
Waiver. An Event of Default shall be deemed to be continuing unless expressly waived by Buyer in writing.
Section 7.03 Due
and Payable. Upon the occurrence of any Event of Default which has not been waived in writing by Buyer, Administrative Agent may
(and at the direction of Buyer shall), by notice to Seller, declare all Obligations to be immediately due and payable, and any obligation
of Buyer to enter into Transactions with Seller shall thereupon immediately terminate. Upon such declaration, the Obligations shall become
immediately due and payable, both as to Purchase Price outstanding and Price Differential, without presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived, anything contained herein or other evidence of such Obligations to the contrary
notwithstanding, except with respect to any Event of Default set forth in Section 7.01(c), in which case all Obligations
shall automatically become immediately due and payable without the necessity of any notice or other demand, and any obligation of Buyer
to enter into Transactions with Seller shall immediately terminate. Administrative Agent and Buyer may enforce payment of the same and
exercise any or all of the rights, powers and remedies possessed by Administrative Agent or Buyer, whether under this Agreement or any
other Program Agreement or afforded by applicable law.
Section 7.04 Fees.
The remedies provided for herein are cumulative and are not exclusive of any other remedies provided by law. In addition to the Seller’s
obligations contained in Section 3 of the Pricing Side Letter, Seller agrees to pay to Administrative Agent and Buyer reasonable
attorneys’ fees and reasonable legal expenses incurred in enforcing Administrative Agent’s and Buyer’s rights, powers
and remedies under this Agreement and each other Program Agreement.
Section 7.05 Default
Rate. Without regard to whether Buyer has exercised any other rights or remedies hereunder, if an Event of Default shall have occurred
and be continuing, the applicable Margin in respect of the Pricing Rate shall be increased, to the extent permitted by law, as set forth
in clause (ii) of the definition of “Margin”.
ARTICLE VIII
ENTIRE
AGREEMENT; AMENDMENTS
AND WAIVERS; SEPARATE ACTIONS BY BUYER
Section 8.01 Entire
Agreement; Amendments. This Agreement (including the Schedules and Exhibits hereto) constitutes the entire agreement of the parties
hereto and supersedes any and all prior or contemporaneous agreements, written or oral, as to the matters contained herein, and no modification
or waiver of any provision hereof or any of the Program Agreements, nor consent to the departure by Seller therefrom, shall be effective
unless the same is in writing, and then such waiver or consent shall be effective only in the specific instance, and for the purpose,
for which it is given. This Agreement may not be amended, modified or supplemented except by writing executed by Seller, Administrative
Agent and Buyer. The Administrative Agent shall comply with its obligations under Section 6(c) of the Acknowledgement Agreement;
and in addition, the Seller shall deliver to Ginnie Mae a copy of any executed amendment to this Agreement promptly after execution thereof.
Section 8.02 Waivers,
Separate Actions by Buyer. Any amendment or waiver effected in accordance with this Article VIII shall be binding upon
Buyer and Seller; and Buyer’s failure to insist upon the strict performance of any term, condition or other provision of this Agreement
or any of the Program Agreements, or of Buyer or Administrative Agent to exercise any right or remedy hereunder or thereunder, shall
not constitute a waiver by Buyer or Administrative Agent of any such term, condition or other provision or Default or Event of Default
in connection therewith, nor shall a single or partial exercise of any such right or remedy preclude any other or future exercise, or
the exercise of any other right or remedy; and any waiver of any such term, condition or other provision or of any such Default or Event
of Default shall not affect or alter this Agreement or any of the Program Agreements, and each and every term, condition and other provision
of this Agreement and the Program Agreements shall, in such event, continue in full force and effect and shall be operative with respect
to any other then existing or subsequent Default or Event of Default in connection therewith. An Event of Default hereunder or under
any of the Program Agreements shall be deemed to be continuing unless and until waived in writing by Buyer.
ARTICLE IX
SUCCESSORS
AND ASSIGNS
Section 9.01 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and permitted assigns, any portion thereof, or any interest therein. Seller shall not have the right to assign all or any part of this
Agreement or any interest herein without the prior written consent of Buyer.
Section 9.02 Participations
and Transfers.
(a) Buyer
may in accordance with applicable law at any time sell to one or more banks or other entities (“Participants”) participating
interests in all or a portion of Buyer’s rights and obligations under this Agreement and the other Program Agreements; provided,
that (i) unless an Event of Default has occurred and is continuing, Buyer shall not issue one or more participation interest
to a Restricted Participant (or any party or Person with whom Seller or its affiliates is adverse to in an active litigation) without
the prior written consent of Seller, (ii) each such sale shall represent an interest in a Transaction in a Purchase Price of $1,000,000
or more and (ii) other than with respect to a participating interest consisting of a pro rata interest in all payments due to Buyer
under this Agreement and prior to an Event of Default Buyer receives an opinion of a nationally recognized tax counsel experienced in
such matters that such sale will not result in the Issuer being subject to tax on its net income as an association (or publicly traded
partnership) taxable as a corporation or a taxable mortgage pool taxable as a corporation, each for U.S. federal income tax purposes.
Buyer shall provide notice to Ginnie Mae within five (5) Business Days of any assignment, pledge or hypothecation made in accordance
with this Section 9.02(a). In the event of any such sale by Buyer of participating interests to a Participant, Buyer shall
remain a party to the Transaction for all purposes under this Agreement and the Program Agreements and Seller shall continue to deal
solely and directly with Buyer in connection with Buyer’s rights and obligations under this Agreement and the Program Agreements.
For the avoidance of doubt, the terms and provisions of Section 9.02(b) shall not restrict or otherwise qualify the
terms and provisions set forth in this Section 9.02(a).
(b) Buyer
may in accordance with applicable law at any time assign, pledge, hypothecate, or otherwise transfer (a “Buyer Subsequent Transaction”)
to one or more banks, financial institutions, investment companies, investment funds or any other Person (each, a “Buyer Counterparty”)
all or a portion of Buyer’s rights and obligations under this Agreement and the other Program Agreements and the other Program
Agreements; provided, that (i) Seller has consented to such Buyer Subsequent Transaction (such consent not to be
unreasonably withheld, conditioned, or delayed); provided, however, Seller’s consent shall not be required in the
event that (A) such Buyer Counterparty is an Affiliate of Buyer or (B) an Event of Default has occurred; (ii) absent
an Event of Default, Buyer shall give at least ten days’ prior notice thereof to Seller and Seller shall be deemed to have consented
to any such Buyer Subsequent Transaction (to the extent Seller’s consent is required as set forth pursuant to the terms and provisions
of clause (i) immediately above) unless it shall object thereto by written notice to the Administrative Agent within 10 days after
having received notice thereof; (iii) that each such Buyer Subsequent Transaction involving a sale or assignment shall represent
an interest in the Transactions in an aggregate Purchase Price of $1,000,000 or more; (iv) such Buyer Counterparty shall have also
acquired the same percentage interest in each other Series of Variable Funding Notes (with respect to which Nomura is the administrative
agent), unless Ginnie Mae has consented in writing to waive this requirement, and (v) other than with respect to a Buyer Subsequent
Transaction consisting of a pro rata interest in all payments due to Buyer under this Agreement and prior to an Event of Default Buyer
received an opinion of a nationally recognized tax counsel experienced in such matters that such Buyer Subsequent Transaction will not
result in the Issuer being subject to tax on its net income as an association (or publicly traded partnership) taxable as a corporation
or a taxable mortgage pool taxable as a corporation, each for U.S. federal income tax purposes. For the avoidance of doubt, and notwithstanding
the foregoing, the conditions with respect to any Buyer Subsequent Transaction set forth in this clause (b) (including but not
limited to subclauses (i) through (v) herein) shall not restrict or otherwise qualify the terms and provisions set forth
in Section 9.02(a) or Section 11.10 set forth herein.
(c) All
actions taken by Buyer pursuant to this Section 9.02 shall be at the expense of Buyer. Buyer may distribute to any prospective
assignee any document or other information delivered to Buyer by Seller.
(d) Notwithstanding
any other provision of this Agreement to the contrary, Buyer may pledge as collateral, or grant a security interest in, all or any portion
of its rights in, to and under this Agreement to a Federal Reserve Bank to secure obligations to such Federal Reserve Bank, in each case
without the consent of Seller; provided that no such pledge or grant shall release Buyer from its obligations under this Agreement;
provided, further, that no such pledge or grant shall be to a competitor of Seller.
Section 9.03 Buyer
and Participant Register.
(a) Subject
to acceptance and recording thereof pursuant to paragraph (b) of this Section 9.03, from and after the effective
date specified in each assignment and acceptance the assignee thereunder shall be a party hereto and, to the extent of the interest assigned
by such assignment and acceptance, have the rights and obligations of Buyer under this Agreement. Any assignment or transfer by Buyer
of rights or obligations under this Agreement that does not comply with this Section 9.03 shall be treated for purposes
of this Agreement as a sale by Buyer of a participation in such rights and obligations in accordance with Section 9.02.
Buyer shall provide notice to Ginnie Mae within five (5) Business Days of any participation made in accordance with this Section 9.03(a).
(b) Seller
or an agent of Seller shall maintain a register (the “Transaction Register”) on which it will record the Transactions
entered into hereunder, and each assignment and acceptance and participation. The Transaction Register shall include the names and addresses
of Buyer (including all assignees, successors and Participants), and the Purchase Price of the Transactions entered into by Buyer. Failure
to make any such recordation, or any error in such recordation shall not affect Seller’s obligations in respect of such Transactions.
If a Buyer sells a participation in any Transaction, it shall provide Seller, or maintain as agent of Seller, the information described
in this paragraph and permit Seller to review such information as reasonably needed for Seller to comply with its obligations under this
Agreement or under any applicable law or governmental regulation or procedure. The entries in the Transaction Register shall be prima
facie conclusive and binding, and Seller may treat each Person whose name is recorded in the Transaction Register as the owner of
the Transactions recorded therein for all purposes of this Agreement. No assignment shall be effective until it is recorded in the Transaction
Register.
ARTICLE X
AGENT
PROVISIONS
Section 10.01 Appointment
of Administrative Agent.
(a) Buyer
hereby irrevocably appoints Nomura Corporate Funding Americas, LLC as Administrative Agent hereunder and under the other Program Agreements,
and Buyer hereby authorizes Nomura Corporate Funding Americas, LLC, in such capacity, to act as its agent in accordance with the terms
hereof. The provisions of this Article X are solely for the benefit of Administrative Agent and Buyer, and Seller shall
not have any rights as a third party beneficiary of any of the provisions thereof. In performing its functions and duties hereunder,
Administrative Agent shall act solely as an agent of Buyer and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for Seller.
(b) The
Buyer may, to the extent permitted by applicable law, and with the consent of Seller (such consent not to be required if an Event of
Default has occurred and is continuing and not to be unreasonably withheld), by notice in writing to such Person remove for cause such
Person as Administrative Agent and, with the consent of Seller (such consent not to be required if an Event of Default has occurred and
is continuing and not to be unreasonably withheld), appoint a successor Administrative Agent. If no such successor Administrative Agent
shall have been so appointed by the Buyer and shall have accepted such appointment within thirty (30) days (or such earlier day as shall
be agreed by the Buyer and Seller), then such removal shall nonetheless become effective in accordance with such notice on the date thirty
(30) days (or such earlier day as shall be agreed by the Buyer and Seller) after the Administrative Agent’s receipt of such notice
of removal.
Section 10.02 Powers
and Duties.
Buyer irrevocably authorizes
Administrative Agent to take such action on Buyer’s behalf and to exercise such powers, rights and remedies hereunder and under
the other Program Agreements as are specifically delegated or granted to Administrative Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Administrative Agent shall have only those duties and responsibilities
that are expressly specified herein and the other Program Agreements. Administrative Agent may exercise such powers, rights and remedies
and perform such duties by or through its agents or employees. Administrative Agent shall not have, by reason hereof or any of the other
Program Agreements, a fiduciary relationship in respect of Buyer; and nothing herein or any of the other Program Agreements, expressed
or implied, is intended to or shall be so construed as to impose upon Administrative Agent any obligations in respect hereof or any of
the other Program Agreements except as expressly set forth herein or therein.
Section 10.03 General
Immunity.
(a) No
Responsibility for Certain Matters. Except for Administrative Agent’s failure to perform a specifically required task set forth
herein (and which failure constitutes gross negligence, bad faith or willful misconduct, as determined by a court of competent jurisdiction
in a final, non-appealable order), Administrative Agent shall not be responsible for the execution, effectiveness, genuineness, validity,
enforceability, collectability or sufficiency hereof or any other Program Agreement or with respect to any other party for any representations,
warranties, recitals or statements made herein or therein or made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by or on behalf of Buyer or any other party in connection
with the Program Agreements and the transactions contemplated thereby or for the financial condition or business affairs of Seller or
any other Person liable for the payment of any Obligations, nor shall Administrative Agent be required (except as set forth herein or
in the Program Agreements) to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Program Agreements or as to the use of the proceeds of the Transactions or as to the existence
or possible existence of any Event of Default or Default.
(b) Exculpatory
Provisions. Neither Administrative Agent nor any of its officers, partners, directors, employees or agents shall be liable for any
action taken or omitted by Administrative Agent under or in connection with any of the Program Agreements except to the extent caused
by Administrative Agent’s gross negligence, bad faith or willful misconduct, as determined by a court of competent jurisdiction
in a final, non-appealable order. Administrative Agent shall be entitled to refrain from any act or the taking of any action (including
the failure to take an action) in connection herewith or any of the other Program Agreements or from the exercise of any power, discretion
or authority vested in it hereunder or thereunder unless and until Administrative Agent shall have received instructions in respect thereof
from Buyer and, upon receipt of such instructions from the Buyer, Administrative Agent shall be entitled to act or (where so instructed)
refrain from acting, or to exercise such power, discretion or authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon
any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper Person
or Persons, and shall be entitled to rely and shall be protected in relying on opinions and judgments of attorneys (who may be attorneys
for Seller), accountants, experts and other professional advisors selected by it; (ii) no Buyer shall have any right of action
whatsoever against Administrative Agent as a result of Administrative Agent acting or (where so instructed) refraining from acting hereunder
or any of the other Program Agreements in accordance with the instructions of the Buyer; and (iii) no action taken or omitted by
Administrative Agent shall be considered to have resulted from Administrative Agent’s gross negligence, bad faith or willful misconduct
if such action or omission was done at the direction of the Buyer.
Section 10.04 Administrative
Agent to Act as Buyer.
The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any duties or obligations upon, Administrative Agent in its individual
capacity as Buyer. Administrative Agent shall have the same rights and powers as any other Buyer and may exercise the same as if it were
not performing the duties and functions delegated to it hereunder, and the term “Buyer” shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity. Administrative Agent and its Affiliates may accept deposits
from, lend money to, own securities of, and generally engage in any kind of banking, trust, financial advisory or other business with
Seller or any of their Affiliates as if it were not performing the duties specified herein, and may accept fees and other consideration
from Seller for services in connection herewith and otherwise without having to account for the same to Buyer.
Section 10.05 Buyer’s
Representations, Warranties and Acknowledgment.
(a) Buyer
represents and warrants that it has made its own independent investigation of the financial condition and affairs of Seller in connection
with the Transactions hereunder and that it has made and shall continue to make its own appraisal of the creditworthiness of Seller.
Administrative Agent shall not have any duty or responsibility, either initially or on a continuing basis, to make any such investigation
or any such appraisal on behalf of Buyer or to provide Buyer with any credit or other information with respect thereto, whether coming
into its possession before the making of the Transactions or at any time or times thereafter, and Administrative Agent shall not have
any responsibility with respect to the accuracy of or the completeness of any information provided to Buyer.
(b) Unless
otherwise agreed to by Buyer and Seller, Buyer, by delivering its signature page to this Agreement and entering into Transactions
with Seller hereunder shall be deemed to have acknowledged receipt of, and consented to and approved, each Program Agreement and each
other document required to be approved by Administrative Agent or Buyer, as applicable on the Closing Date or such other funding date.
Buyer acknowledges that by agreeing to remit its Commitment Share of the Purchase Price on any Purchase Date, Buyer agrees that all conditions
precedent to entering into such Transaction have been met on such Purchase Date.
Section 10.06 Right
to Indemnity.
(a) Buyer
hereby agrees to indemnify Administrative Agent, any Affiliate of the Administrative Agent, and their respective directors, officers,
agents and employees (each, an “Indemnitee Agent Party”), and hold such Indemnitee Agent Party harmless
to the extent that such Indemnitee Agent Party shall not have been reimbursed by Seller, from and against any and all losses, claims,
damages, liabilities, deficiencies, judgments or expenses incurred by any of them (except to the extent that it has resulted from the
gross negligence or willful misconduct of such Indemnitee Agent Party) which may be imposed on, incurred by or asserted against such
Indemnitee Agent Party in exercising its powers, rights and remedies or performing its duties hereunder or under the other Program Agreements
or otherwise in its capacity as an Indemnitee Agent Party in any way relating to or arising out of this Agreement or the other Program
Agreements, including amounts paid in settlement, court costs and reasonable fees and disbursements of counsel incurred in connection
with any such litigation, investigation, claim or proceeding or any advice rendered in connection with any of the foregoing. If any indemnity
furnished to any Indemnitee Agent Party for any purpose shall, in the opinion of such Indemnitee Agent Party, be insufficient or become
impaired, such Indemnitee Agent Party may call for additional indemnity and cease, or not commence, to do the acts indemnified against
until such additional indemnity is furnished.
(b) Promptly
after receipt by the Indemnitee Agent Party of notice of the commencement of any action regarding which a claim in respect thereof is
to be made against Buyer, the Indemnitee Agent Party shall notify Buyer in writing of the commencement thereof, but the omission to so
notify will not relieve Buyer from any liability which they may have under this Agreement or from any other liability which they may
have, except to the extent that they have been prejudiced in any material respect by the failure by the Indemnitee Agent Party to provide
prompt notice. Upon receipt of notice by Buyer, Buyer will be entitled to participate in the related action, and they may elect by written
notice delivered to the Indemnitee Agent Party to assume the defense thereof. Upon receipt of notice by the Indemnitee Agent Party of
the Buyer’s election to assume the defense of such action, Buyer shall not be liable to the Indemnitee Agent Party for legal expenses
incurred by such party in connection with the defense thereof unless (i) Buyer shall not have employed counsel to represent the
Indemnitee Agent Party within a reasonable time after receipt of notice of commencement of the action, (ii) Buyer have authorized
in writing the employment of separate counsel for the Indemnitee Agent Party, or (iii) the Indemnitee Agent Party has previously
engaged counsel and reasonable legal expenses are necessary (a) to transfer the file to the Buyer’s designated counsel, or
(b) to pursue immediate legal action necessary to preserve the legal rights or defenses of the Indemnitee Agent Party as against
a third party claimant, and such legal action must occur prior to said transfer. Buyer shall not settle any suit or claim without the
Indemnitee Agent Party’s written consent unless such settlement solely involves the payment of money by parties other than the
Indemnitee Agent Party and includes unconditional release of the Indemnitee Agent Party from all liability on all matters that are the
subject of such proceeding or claim.
Section 10.07 Successor
Administrative Agent.
(a) Administrative
Agent may resign at any time by giving sixty (60) days’ prior written notice thereof to Buyer. Upon any such notice of resignation,
Buyer shall have the right to appoint a successor administrative agent; provided, that the retiring Administrative Agent shall continue
to hold the Collateral and all liens and security interest therein for the benefit of Buyer until a successor administrative agent is
appointed.
(b) Upon
the acceptance of any appointment as Administrative Agent hereunder by a successor administrative agent, that successor administrative
agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative
Agent and the retiring Administrative Agent shall promptly (i) transfer to such successor administrative agent all sums and items
of Collateral held under the Program Agreements, together with all records and other documents necessary or appropriate in connection
with the performance of the duties of the successor administrative agent under the Program Agreements, and (ii) execute and deliver
to such successor administrative agent such amendments to financing statements, and take such other actions, as may be necessary or appropriate
in connection with the assignment to such successor administrative agent of the security interests created under the Program Agreements,
whereupon such retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative
Agent’s resignation hereunder as Administrative Agent, the provisions of this Article X and Section 11.02
shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent hereunder.
(c) Notwithstanding
anything herein to the contrary, Administrative Agent may assign its rights and duties as Administrative Agent hereunder to an Affiliate
without written notice to, the Buyer; provided, that Seller and Buyer may deem and treat such assigning Administrative Agent as Administrative
Agent for all purposes hereof, unless and until such assigning Administrative Agent provides written notice to Seller and Buyer of such
assignment. Upon such assignment such Affiliate shall succeed to and become vested with all rights, powers, privileges and duties as
Administrative Agent hereunder and under the other Program Agreements.
Section 10.08 Delegation
of Duties. Administrative Agent may perform any of its duties and exercise its rights and powers hereunder or under any other Program
Agreement by or through (i) any one or more of its Affiliates or (ii) any one or more sub agents appointed by Administrative
Agent with the prior consent of the Buyer. Administrative Agent and any such sub agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Affiliates and their respective officers, partners, directors, trustees, employees
and agents. The exculpatory provisions of this Article X shall apply to any such Affiliate or sub agent and to such other
parties as are listed above provided that notwithstanding this Section 10.08, no such delegation relieves the Administrative
Agent of its duties or obligations under this Agreement.
Section 10.09 Right
to Realize on Collateral. Anything contained in any of the Program Agreements to the contrary notwithstanding, Seller, Administrative
Agent and each Buyer hereby agree that (i) no Buyer shall have any right individually to realize upon any of the Collateral, it
being understood and agreed that all powers, rights and remedies hereunder may be exercised solely by Administrative Agent, on behalf
of Buyer in accordance with the terms hereof and all powers, rights and remedies under the Program Agreements may be exercised solely
by Administrative Agent, and (ii) in the event of a foreclosure by Administrative Agent on any of the Collateral pursuant to a
public or private sale, Administrative Agent or any Buyer may be the purchaser of any or all of such Collateral at any such sale and
Administrative Agent, as agent for and representative of Buyer (but not any Buyer in its or their respective individual capacities unless
Buyer shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Obligations as a credit on account
of the purchase price for any collateral payable by Administrative Agent at such sale.
Section 10.10 Erroneous
Payments.
(a) If
the Administrative Agent notifies Buyer or any Person who has received funds on behalf of Buyer (any Buyer or other recipient, a “Payment
Recipient”) that the Administrative Agent has determined in its sole discretion that any funds received by such Payment
Recipient from the Administrative Agent or any of its Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly
received by, such Payment Recipient (whether or not known to Buyer or other Payment Recipient on its behalf) (any such funds, whether
received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise, individually and collectively,
an “Erroneous Payment”) and demands the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment
shall at all times remain the property of the Administrative Agent and shall be segregated by the Payment Recipient and held in trust
for the benefit of the Administrative Agent, and Buyer shall (or, with respect to any Payment Recipient who received such funds on its
behalf, shall cause such Payment Recipient to) promptly, but in no event later than two (2) Business Days thereafter, return to
the Administrative Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day
funds (in the currency so received), together with interest thereon in respect of each day from and including the date such Erroneous
Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to the Administrative Agent in
same day funds at the greater of the overnight federal funds rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation from time to time in effect. A notice of the Administrative Agent to any Payment
Recipient under this clause (a) shall be conclusive, absent manifest error. If a Payment Recipient receives any payment,
prepayment or repayment of principal, interest, fees, distribution or otherwise and does not receive a corresponding payment notice or
payment advice, such payment, prepayment or repayment shall be presumed to be in error absent written confirmation from the Administrative
Agent to the contrary.
(b) Buyer
hereby authorizes the Administrative Agent to set off, net and apply any and all amounts at any time owing to Buyer under any Transaction
Document, or otherwise payable or distributable by the Administrative Agent to Buyer from any source, against any amount due to the Administrative
Agent under immediately preceding clause (a) or under the indemnification provisions of this Agreement.
(c) For
so long as an Erroneous Payment (or portion thereof) has not been returned by any Payment Recipient who received such Erroneous Payment
(or portion thereof) (such unrecovered amount, an “Erroneous Payment Return Deficiency”) to the Administrative Agent
after demand therefor in accordance with immediately preceding clause (a), (i) the Administrative Agent may elect, in its
sole discretion on written notice to Buyer, that all rights and claims of Buyer with respect to the Repurchase Price or other Obligations
owed to such Person up to the amount of the corresponding Erroneous Payment Return Deficiency in respect of such Erroneous Payment (the
“Corresponding Repurchase Price”) shall immediately vest in the Administrative Agent upon such election; after such
election, the Administrative Agent (x) may reflect its ownership interest in the related Repurchase Price in a principal amount
equal to the Corresponding Repurchase Price on the Asset Schedule, and (y) upon five business days’ written notice to Buyer,
may sell such Repurchase Price (or portion thereof) in respect of the Corresponding Repurchase Price, and upon receipt of the proceeds
of such sale, the Erroneous Payment Return Deficiency owing by Buyer shall be reduced by the net proceeds of the sale of such Repurchase
Price (or portion thereof), and the Administrative Agent shall retain all other rights, remedies and claims against Buyer (and/or against
any Payment Recipient that receives funds on its behalf), and (ii) each party hereto agrees that, except to the extent that the
Administrative Agent has sold such Repurchase Price, and irrespective of whether the Administrative Agent may be equitably subrogated,
the Administrative Agent shall be contractually subrogated to all the rights and interests of Buyer with respect to the Erroneous Payment
Return Deficiency. For the avoidance of doubt, no vesting or sale pursuant to the foregoing clause (i) will reduce the Committed
Amount of any Buyer and such Committed Amount shall remain available in accordance with the terms of this Agreement.
(d) The
parties hereto agree that an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by Seller,
except, in each case, to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is,
comprised of funds received by the Administrative Agent from Seller for the purpose of making such Erroneous Payment.
(e) No
Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim,
defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return
of any Erroneous Payment received, including without limitation waiver of any defense based on “discharge for value” or any
similar doctrine.
(f) Each
party’s obligations, agreements and waivers under this Section 10.10 shall survive the resignation or replacement
of the Administrative Agent, any transfer of rights or obligations by, or the replacement of, Buyer, the termination of the obligations
set forth in Section 2.01 with respect to the Committed Amount and/or the repayment, satisfaction or discharge of all Obligations
(or any portion thereof) under any Transaction Document.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Survival.
This Agreement and the other Program Agreements and all covenants, agreements, representations and warranties herein and therein and
in the certificates delivered pursuant hereto and thereto, shall survive the entering into of the Transaction and shall continue in full
force and effect so long as any Obligations are outstanding and unpaid.
Section 11.02 Indemnification.
Seller shall, and hereby agrees to, indemnify, defend and hold harmless Administrative Agent, Buyer, any Affiliate of Administrative
Agent and Buyer and their respective directors, officers, agents, employees and counsel from and against any and all losses, claims,
damages, liabilities, deficiencies, judgments or expenses incurred by any of them (except to the extent that it is finally judicially
determined to have resulted from their own gross negligence or willful misconduct) as a consequence of, or arising out of or by reason
of any litigation, investigations, claims or proceedings which arise out of or are in any way related to, (i) this Agreement or
any other Program Agreement, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement
any other Program Agreement or any transaction contemplated hereby or thereby (including without limitation any such liabilities, losses,
damages, judgments, costs and expenses arising from (A) any acts or omissions of the Seller and (B) any wire fraud (to the
extent caused by a negligent act or omission by, or occurring through the systems of Seller, its employees, officers agents, or other
persons acting on Seller’s behalf) or data or systems intrusion (solely to the extent caused by or occurring through the systems
of, Seller, its employees, officers, agents, or other persons acting on Seller’s behalf)), (ii) Seller’s servicing
practices or procedures; (iii) any actual or proposed use by Seller of the proceeds of the Purchase Price, and (iv) any Default,
Event of Default or any other breach by Seller of any of the provisions of this Agreement or any other Program Agreement, including,
without limitation, amounts paid in settlement, court costs and reasonable fees and disbursements of counsel incurred in connection with
any such litigation, investigation, claim or proceeding or any advice rendered in connection with any of the foregoing. If and to the
extent that any Obligations are unenforceable for any reason, Seller hereby agrees to make the maximum contribution to the payment and
satisfaction of such Obligations which is permissible under applicable law. Seller’s obligations set forth in this Section 11.02
shall survive any termination of this Agreement and each other Program Agreement and the payment in full of the Obligations, and
are in addition to, and not in substitution of, any other of its obligations set forth in this Agreement or otherwise. In addition, Seller
shall, upon demand, pay to Buyer or Administrative Agent, as applicable, all costs and Expenses (including the reasonable fees and disbursements
of counsel) paid or incurred by Buyer or Administrative Agent in (i) enforcing or defending its rights under or in respect of this
Agreement or any other Program Agreement, (ii) collecting the Purchase Price outstanding, (iii) foreclosing or otherwise
collecting upon any Repurchase Assets and (iv) obtaining any legal, accounting or other advice in connection with any of the foregoing.
Section 11.03 Nonliability
of Buyer. The parties hereto agree that, notwithstanding any affiliation that may exist between Seller and Buyer, the relationship
between Seller and Buyer shall be solely that of arms-length participants. Buyer shall not have any fiduciary responsibilities to Seller.
Seller (i) agrees that Buyer shall not have any liability to Seller (whether sounding in tort, contract or otherwise) for losses
suffered by Seller in connection with, arising out of, or in any way related to, the transactions contemplated and the relationship established
by this agreement, the other loan documents or any other agreement entered into in connection herewith or any act, omission or event
occurring in connection therewith, unless it is determined by a judgment of a court that is binding on Buyer (which judgment shall be
final and not subject to review on appeal), that such losses were the result of acts or omissions on the part of Buyer constituting gross
negligence or willful misconduct and (ii) waives, releases and agrees not to sue upon any claim against Buyer (whether sounding
in tort, contract or otherwise), except a claim based upon gross negligence or willful misconduct. Whether or not such damages are related
to a claim that is subject to such waiver and whether or not such waiver is effective, neither Buyer nor Administrative Agent shall have
any liability with respect to, and Seller hereby waives, releases and agrees not to sue upon any claim for, any special, indirect, consequential
or punitive damages suffered by Seller in connection with, arising out of, or in any way related to the transactions contemplated or
the relationship established by this Agreement, the other loan documents or any other agreement entered into in connection herewith or
therewith or any act, omission or event occurring in connection herewith or therewith, unless it is determined by a judgment of a court
that is binding on Buyer (which judgment shall be final and not subject to review on appeal), that such damages were the result of acts
or omissions on the part of Buyer, as applicable, constituting willful misconduct or gross negligence.
Section 11.04 Governing
Law; Submission to Jurisdiction; Waivers.
(a) This
Agreement shall be binding and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Seller
acknowledges that the obligations of Buyer hereunder or otherwise are not the subject of any VFN Guaranty by, or recourse to, any direct
or indirect parent or other Affiliate of Buyer. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO OR IN
CONNECTION WITH THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES HERETO, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES
OF THE PARTIES HERETO WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE
CONFLICT OF LAW PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND 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 SUCH LAWS.
(b) EACH
OF THE PARTIES HERETO AND THE BUYER, BY THEIR ACCEPTANCE OF THE NOTE, HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) 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 GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING 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;
(ii) 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;
(iii) 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 HEREIN OR AT SUCH OTHER ADDRESS OF WHICH
EACH OTHER PARTY HERETO SHALL HAVE BEEN NOTIFIED IN WRITING;
(iv) 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; AND
(v) WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THE INDENTURE OR THE TRANSACTIONS CONTEMPLATED THEREBY AND HEREBY.
Section 11.05 Notices.
Any and all notices (with the exception of Transaction Notices, which shall be delivered via facsimile only), statements, demands or
other communications hereunder may be given by a party to the other by mail, email, facsimile, messenger or otherwise to the address
specified below, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other.
All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified
in the preceding sentence.
If to Seller:
PennyMac
Loan Services, LLC
3043 Townsgate Road
Westlake Village, CA 91361
Attention: Pamela Marsh/Richard Hetzel
Phone Number: (805) 330-6059/ (818) 746-2877 / (818) 224-7078
E-mail: pamela.marsh@pnmac.com;
richard.hetzel@pnmac.com;
mortgage.finance@pnmac.com;josh.smith@pennymac.com
with a copy to:
PennyMac
Loan Services, LLC
3043 Townsgate Road
Westlake Village, CA 91361
Attention: Derek Stark
Phone Number: (818) 746-2289
E-mail:derek.stark@pennymac.com
If to Buyer:
Nomura
Corporate Funding Americas, LLC
Worldwide Plaza
309 West 49th Street
New York, New York 10019-7316
Tel: 212.667.1578
Fax: 646.587.1582
Attention: Operations
Email: wholeloanmosupport@nomura.com
With copies to:
Nomura Corporate Funding Americas, LLC
Worldwide Plaza
309 West 49th Street
New York, New York 10019-7316
Tel: 212.667.1578
Fax: 646.587.1582
Attention: Michael
Rogozinski
Email: michael.rogozinski@nomura.com
Section 11.06 Severability.
Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall
be enforceable notwithstanding the unenforceability of any such other provision or agreement. In case any provision in or obligation
under this Agreement or any other Program Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not
in any way be affected or impaired thereby.
Section 11.07 Section Headings.
The Article and Section headings in this Agreement are inserted for convenience of reference only and shall not in any way
affect the meaning or construction of any provision of this Agreement.
Section 11.08 Counterparts.
This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which
when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery
of an executed counterpart of a signature page to this Agreement by facsimile or other electronic means shall be effective as delivery
of a manually executed counterpart of this Agreement. The parties agree that this Agreement, any addendum or amendment hereto or any
other document necessary for the consummation of the transactions contemplated by this Agreement may be accepted, executed or agreed
to through the use of an electronic signature in accordance with the Electronic Signatures in Global and National Commerce Act, 15 U.S.C.
§ 7001 et seq, Official Text of the Uniform Electronic Transactions Act as approved by the National Conference of Commissioners
on Uniform State Laws at its Annual Conference on July 29, 1999 and any applicable state law. Any document accepted, executed
or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed
and each party hereby consents to the use of any secure third party electronic signature capture service providers with appropriate document
access tracking, electronic signature tracking and document retention as may be approved by the Administrative Agent in its sole discretion.
Section 11.09 Periodic
Due Diligence Review. Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to Seller
and the Purchased Assets, for purposes of verifying compliance with the representations, warranties and specifications made hereunder,
or otherwise, and Seller agree that upon reasonable (but no less than five (5) Business Days’) prior written notice
unless an Event of Default shall have occurred, in which case no notice is required, to Seller, Buyer or its authorized representatives
will be permitted during normal business hours, and in a manner that does not unreasonably interfere with the ordinary conduct of Seller’s
business, to examine, inspect, and make copies and extracts of, any and all documents, records, agreements, instruments or information
relating to such Purchased Assets in the possession or under the control of Seller. Seller also shall make available to Buyer a knowledgeable
financial or accounting officer for the purpose of answering questions respecting the Purchased Assets. Without limiting the generality
of the foregoing, Seller acknowledges that Buyer may enter into a Transaction related to any Purchased Assets from Seller based solely
upon the information provided by Seller to Buyer in the Asset Schedule and the representations, warranties and covenants contained herein,
and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the
Purchased Assets related to a Transaction. Seller agrees to cooperate with Buyer and any third party underwriter in connection with such
underwriting, including, but not limited to, providing Buyer and any third party underwriter with access to any and all documents, records,
agreements, instruments or information relating to such Purchased Assets in the possession, or under the control, of Seller.
Section 11.10 Hypothecation
or Pledge of Repurchase Assets. Buyer shall have free and unrestricted use of all Repurchase Assets and nothing in this Agreement
shall preclude Buyer from engaging in repurchase transactions with all or a portion of the Repurchase Assets or otherwise pledging, repledging,
transferring, hypothecating, or rehypothecating all or a portion of the Repurchase Assets; provided that prior to an Event of Default,
such pledge, repledge, transfer, hypothecation or rehypothecation is treated as a financing or hedging transaction for U.S. federal income
tax purposes or a pro rata interest in all payments due to Buyer under this Agreement; provided, further that other than with respect
to a pro rata interest in all payments due to Buyer under this Agreement and prior to an Event of Default Buyer receives an opinion of
a nationally recognized tax counsel experienced in such matters that such repurchase transaction, pledge, repledge, transfer, hypothecation
or rehypothecation will not result in the Issuer being subject to tax on its net income as an association (or publicly traded partnership)
taxable as a corporation or a taxable mortgage pool taxable as a corporation, each for U.S. federal income tax purposes. For the avoidance
of doubt, the terms and provisions of Section 9.02(b) shall not restrict or otherwise qualify the terms and provisions
set forth in this Section 11.10.
Section 11.11 Non-Confidentiality
of Tax Treatment.
(a) This
Agreement and its terms, provisions, supplements and amendments, and notices hereunder, are proprietary to Buyer or Seller, as applicable
and shall be held by each party hereto, as applicable in strict confidence and shall not be disclosed to any third party without the
written consent of Buyer or Seller, except for (i) disclosure to Buyer’s or Seller’s direct and indirect Affiliates
and Subsidiaries, attorneys, accountants, insurance consultants, insurers or financing sources, but only to the extent such disclosure
is necessary and such parties agree to hold all information in strict confidence, (ii) disclosure to any assignee, prospective
assignee, participant or prospective participant which is not prohibited from being an assignee or participant and which agrees to be
bound by the confidentiality provisions set forth herein, or (iii) disclosure required by law, rule, regulation or order of a court
or other regulatory body. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Program Agreements,
the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of
the Transactions, any fact relevant to understanding the federal, state and local tax treatment of the Transactions, and all materials
of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant
to understanding such tax treatment; provided that Seller may not disclose the name of or identifying information with respect to Buyer
or any pricing terms (including, without limitation, the Pricing Rate, Purchase Price Percentage, Purchase Price and Commitment Fee)
or other nonpublic business or financial information (including any sublimits) that is unrelated to the federal, state and local tax
treatment of the Transactions and is not relevant to understanding the federal, state and local tax treatment of the Transactions, without
the prior written consent of Buyer.
(b) Notwithstanding
anything in this Agreement to the contrary, Seller shall comply with all applicable local, state and federal laws, including, without
limitation, all privacy and data protection law, rules and regulations that are applicable to the Repurchase Assets and/or any
applicable terms of this Agreement (the “Confidential Information”). Seller understands that the Confidential Information
may contain “nonpublic personal information”, as that term is defined in Section 509(4) of the Gramm-Leach-Bliley
Act (the “GLB Act”), and Seller agrees to maintain such nonpublic personal information that it receives hereunder
in accordance with the GLB Act and other applicable federal and state privacy laws. Seller shall implement such physical and other security
measures as shall be necessary to (a) ensure the security and confidentiality of the “nonpublic personal information”
of the “customers” and “consumers” (as those terms are defined in the GLB Act) of Buyer or any Affiliate of Buyer
which Seller holds, (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information,
and (c) protect against any unauthorized access to or use of such nonpublic personal information. Seller represents and warrants
that it has implemented appropriate measures to meet the objectives of Section 501(b) of the GLB Act and of the applicable
standards adopted pursuant thereto, as now or hereafter in effect. Upon request, Seller will provide evidence reasonably satisfactory
to allow Buyer to confirm that the providing party has satisfied its obligations as required under this Section 11.11. Without
limitation, this may include Buyer’s review of audits, summaries of test results, and other equivalent evaluations of Seller. Seller
shall notify Buyer immediately following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic
personal information of the customers and consumers of Buyer or any Affiliate of Buyer provided directly to Seller by Buyer or such Affiliate.
Seller shall provide such notice to Buyer by personal delivery, by facsimile with confirmation of receipt, or by overnight courier with
confirmation of receipt to the applicable requesting individual.
Section 11.12 Set-off;
Netting. In addition to any rights and remedies of Buyer hereunder and by law, upon Buyer’s exercise against Seller of its
contractual right as set forth in section 555 and 559 of the Bankruptcy Code to liquidate, terminate, or accelerate such contractual
right, Buyer and any of its Affiliates shall have the right, without prior notice to Seller and its Affiliates, any such notice being
expressly waived by Seller on behalf of itself and its Affiliates, to the extent permitted by applicable law, to offset or net out any
termination value, payment amount, or other transfer obligation arising under or in connection with any Obligation hereunder or other
contractual obligation set forth in section 555 and 559 of the Bankruptcy Code between the Seller or its Affiliates and the Buyer (including,
but not limited to, that certain Master Securities Forward Transaction Agreement, dated as of April 26, 2023, between Nomura Securities
International, Inc. and PennyMac Loan Service, LLC (as amended by Amendment to Master Securities Forward Transaction Agreement
to Conform with FINRA 4210, dated as of June 20, 2018, and as the same may be further amended from time to time)), whenever arising,
from Seller or any of its Affiliates to Buyer or any of its Affiliates including (i) any and all deposit, securities or other trust
or custodial accounts maintained for the Seller or its applicable Affiliates by the Buyer or its Affiliates and any related deposits
(general or special, time or demand, provisional or final), in any currency, or other property (including security entitlements) now
or hereafter credited to or held in any such account or otherwise held, or carried by or through, or subject to the control of the Buyer
or its applicable Affiliates or agent thereof in connection with any Obligation hereunder or other obligation, transaction, confirmation,
or agreement under any other financing facility, whenever arising, (ii) all accounts, chattel paper, commodity accounts, commodity
contracts, documents, general intangibles, instruments, investment property, letter-of-credit rights, and securities, (iii) any
other obligation (including to return funds to Seller or an Affiliate thereof), credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by or due from Buyer or
any Affiliate thereof to or for the credit or the account of Seller or any Affiliate thereof, and (iv) all proceeds of or distributions
on any of the foregoing, in each case solely to the extent held under or constituting collateral or security under or pursuant to this
Agreement or any other financing facility or any related document. The rights of the Buyer and its Affiliates contained herein are in
addition to any and all recoupment rights that each such party may have at law or in equity against the Seller and its Affiliates under
any Transaction Document or any other financing agreement. For the avoidance of doubt, the Affiliates of the Buyer shall be third party
beneficiaries with respect to the terms and provisions of this Section 11.12. Buyer agrees promptly to notify Seller after
any such set off or netting and application made by Buyer; provided, that, the failure to give such notice shall not affect the validity
of such set off, netting and its application.
Section 11.13 Intent.
(a) The
parties recognize that each Transaction is a “master netting agreement” as that term is defined in Section 101 of Title 11
of the United States Code, as amended and a “securities contract” as that term is defined in Section 741 of Title 11
of the United States Code, as amended and that all payments hereunder are deemed “margin payments” or “settlement payments”
as defined in Title 11 of the United States Code.
(b) It
is understood that either party’s right to liquidate Purchased Assets delivered to it in connection with Transactions hereunder
or to exercise any other remedies pursuant to Section 7.03 hereof is a contractual right to liquidate such Transaction as
described in Sections 555 and Section 561 of Title 11 of the United States Code, as amended.
(c) The
parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the
Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial
contract,” as that term is defined in 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 under
any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment
obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial
institution” as that term is defined in FDICIA).
(e) This
Agreement is intended to be a “securities contract,” within the meaning of Section 555 under the Bankruptcy Code, and
a “master netting agreement,” (including but not limited to the agreements set forth in Section 11.12 hereof),
within the meaning of Section 561 under the Bankruptcy Code.
(f) It
is the intention of the parties that, for U.S. federal income tax purposes and for accounting purposes, each Transaction constitute a
financing, and that Seller be (except to the extent that Buyer shall have exercised its remedies following an Event of Default) the owner
of the Purchased Assets for such purposes. Unless prohibited by applicable law, Seller and Buyer shall treat the Transactions as described
in the preceding sentence (including on any and all filings with any U.S. federal, state, or local taxing authority and agree not to
take any action inconsistent with such treatment).
IN WITNESS WHEREOF, Seller
and Buyer have caused this Master Repurchase Agreement to be executed and delivered by their duly authorized officers or trustees as
of the date first above written.
|
NOMURA CORPORATE FUNDING AMERICAS,
LLC, as Buyer |
|
|
|
By: |
/s/ Sanil Patel |
|
|
Name: Sanil Patel |
|
|
Title: Managing Director |
[Signature
Page to SPIADVF1 Master Repurchase Agreement]
|
NOMURA CORPORATE FUNDING AMERICAS, LLC, as Administrative Agent |
|
|
|
|
By: |
/s/ Sanil Patel |
|
|
Name: Sanil Patel |
|
|
Title: Managing Director |
[Signature
Page to SPIADVF1 Master Repurchase Agreement]
|
PENNYMAC LOAN SERVICES, LLC, as Seller |
|
|
|
|
By: |
/s/ Pamela Marsh |
|
|
Name: Pamela Marsh |
|
|
Title: Senior Managing Director and Treasurer |
[Signature
Page to SPIADVF1 Master Repurchase Agreement]
SCHEDULE 1
RESPONSIBLE OFFICERS – SELLER
SELLER AUTHORIZATIONS
Any of the persons whose signatures and titles
appear below are authorized, acting singly, to act for Seller under this Agreement:
Responsible Officers for execution of Program
Agreements and amendments:
Name |
|
Title |
|
Signature |
|
|
|
|
|
Pamela Marsh |
|
Senior Managing Director and Treasurer |
|
|
Responsible Officers for execution of Transaction
Notices and day-to-day operational functions:
Name |
|
Title |
|
Signature |
|
|
|
|
|
Pamela Marsh |
|
Senior Managing Director and Treasurer |
|
|
|
|
|
|
|
Maurice Watkins |
|
Senior Managing Director, Capital Markets Operations |
|
|
|
|
|
|
|
Thomas Rettinger |
|
Senior Managing Director, Head of Secondary Marketing |
|
|
|
|
|
|
|
Kevin Chamberlain |
|
Executive Vice President, Investor Relations |
|
|
|
|
|
|
|
Richard Hetzel |
|
Senior Vice President, Treasury |
|
|
|
|
|
|
|
Adriana Villalobos |
|
First Vice President, Secondary Marketing Operations |
|
|
|
|
|
|
|
Angela Everest |
|
Authorized Representative |
|
|
|
|
|
|
|
Ryan Huddleston |
|
Authorized Representative |
|
|
|
|
|
|
|
Adeshola Makinde |
|
Authorized Representative |
|
|
|
|
|
|
|
Virginia Movsessian |
|
Authorized Representative |
|
|
Schedule 1-1
SCHEDULE 2
ASSET SCHEDULE
Note | |
Initial Note Balance | | |
Additional Balance(s) | | |
Outstanding VFN Principal Balance | | |
Maximum VFN Principal Balance | |
PNMAC GMSR Issuer Trust, Series 2020- SPIADVF1 Variable Funding Note | |
$ | 47,802,248.50 | | |
$ | 0 | | |
$ | 47,802,248.50 | | |
$ | 521,739,130.43 | |
Repurchase Price attributable to the Series 2020-SPIADVF1
Variable Funding Note and Additional Balances pursuant to the Series 2020-SPIADVF1 Repurchase Agreement
|
|
Current
Balance | | |
Additional
Balance(s) | | |
Outstanding
Principal
Balance | | |
Maximum
Principal
Balance | |
|
|
$ | 0 | | |
$ | 0 | | |
$ | 0 | | |
$ | 350,000,000 | |
Schedule 2-1
SCHEDULE 3
BUYER ACCOUNT
Bank Name: | |
Bank of America NA, New York |
ABA #: | |
026009593 |
Acct. Name: | |
NOMURA CORPORATE FUNDING AMERICA LLC |
Account #: | |
6550561119 |
Reference: | |
PENNYMACLOANSERVICESLLC(MSL)11676668 |
Schedule 3-1
SCHEDULE 4
RESTRICTIED PARTICIPANTS
Schedule 4-1
EXHIBIT A
FORM OF TRANSACTION NOTICE
Purchase Date: [_________]
NOMURA CORPORATE FUNDING AMERICAS, LLC.
Worldwide Plaza
309 West 49th Street
New York, New York 10019-7316
Tel: 212.667.1578
Fax: 646.587.1582
Attention: Operations
Email: wholeloanmosupport@nomura.com
TRANSACTION NOTICE
Ladies and Gentlemen:
We
refer to the Master Repurchase Agreement, dated as of [_], 2023 (the “Agreement”), among PennyMac Loan Services,
LLC (the “Seller”), Nomura Corporate Funding Americas, LLC (the “Buyer”) and Nomura Corporate Funding
Americas, LLC (the “Administrative Agent”). Each capitalized term used but not defined herein shall have the meaning
specified in the Agreement. This notice is being delivered by Seller pursuant to Section 2.02 of the Agreement.
Please be notified that Seller
hereby irrevocably requests that the Buyer enter into the following Transaction(s) with Seller as follows:
| |
P&I | | |
Escrow | | |
Corp | | |
Total | |
Beginning Receivables Balance | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | |
Ineligible Corporate Advances (Currents>25%) | |
| | | |
| | | |
$ | 0.00 | | |
$ | 0.00 | |
Advance Reimbursement Amounts | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | |
Additional Receivables | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | |
Ending Receivables Balance | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | |
WA Advance Rates | |
| % | | |
| % | | |
| % | | |
| | |
Total WA Advance Rate | |
| | | |
| | | |
| | | |
| % | |
Initial Note Balance/Purchase Price requested (i.e. Ending VFN Balance) | |
| | | |
| | | |
| | | |
$ | 0.00 | |
Purchase Price Percentage | |
| | | |
| | | |
| | | |
| % | |
Additional Balance/Purchase Price requested (i.e. New Purchase Price) | |
| | | |
| | | |
| | | |
$ | 0.00 | |
Current Purchase Price | |
| | | |
| | | |
| | | |
$ | 0.00 | |
Purchase Price Change | |
| | | |
| | | |
| | | |
$ | 0.00 | |
Effective Advance Rate | |
| | | |
| | | |
| | | |
| % | |
Seller requests that the
proceeds of the Purchase Price be deposited in Seller’s account at _______, ABA Number _______, account number ____, References:
_____, Attn: _______.
Seller hereby represents
and warrants that each of the representations and warranties made by Seller in each of the Program Agreements to which it is a party
is true and correct in all material respects, in each case, on and as of the date hereof, except to the extent such representations and
warranties expressly relate to an earlier date. Attached hereto is a true and complete updated copy of the Asset Schedule.
Exhibit A-1
|
PENNYMAC LOAN SERVICES, LLC, as Seller |
Exhibit A-2
Asset Schedule
Note | |
| Initial Note
Balance | | |
| Additional
Balance(s) | | |
| Outstanding
VFN Principal
Balance | | |
| Maximum
VFN Principal
Balance | |
PNMAC GMSR Issuer Trust, Series 2020- SPIADVF1 Variable Funding Note | |
| $ |
[________] | | |
| $ |
[________] | | |
| $ |
[________] | | |
| $ |
[________] | |
Exhibit A-3
EXHIBIT B
EXISTING INDEBTEDNESS
[See Attached]
Exhibit B-1
EXHIBIT 10.3
EXECUTION VERSION
GUARANTY
by
PRIVATE NATIONAL MORTGAGE
ACCEPTANCE COMPANY, LLC, as guarantor
Dated as of August 4, 2023
Table of Contents
|
|
Page |
|
|
|
1. |
Defined Terms |
1 |
2. |
Guaranty |
2 |
3. |
Right of Set-off |
2 |
4. |
Subrogation |
3 |
5. |
Amendments, etc. |
3 |
6. |
Guaranty Absolute and Unconditional |
3 |
7. |
Reinstatement |
5 |
8. |
Payments |
5 |
9. |
Event of Default |
5 |
10. |
Severability |
5 |
11. |
Headings |
5 |
12. |
No Waiver; Cumulative Remedies |
5 |
13. |
Waivers and Amendments; Successors and Assigns; Governing Law |
6 |
14. |
Notices |
6 |
15. |
Governing Law; Jurisdiction; Waivers |
6 |
16. |
Integration |
7 |
17. |
Acknowledgments |
7 |
18. |
Electronic Signatures |
8 |
19. |
Amendment and Restatement |
8 |
GUARANTY
This GUARANTY, dated as of August 4,
2023 (as may be amended, restated, supplemented or otherwise modified from time to time, this “Guaranty”), is made
by Private National Mortgage Acceptance Company, LLC, a Delaware limited liability company (“Guarantor”), in favor
of Nomura Corporate Funding Americas, LLC (“Nomura”), as administrative agent (the “Administrative Agent”)
on behalf of Nomura Corporate Funding Americas, LLC (“Buyer”).
RECITALS
WHEREAS,
pursuant to the Master Repurchase Agreement, dated as of August 4, 2023 (as may be amended, restated, supplemented or otherwise
modified from time to time, the “Series 2023-MSRVF2 Repurchase Agreement”), among PennyMac Loan Services, LLC
(the “Seller”), the Administrative Agent and the Buyer, the Buyer has agreed from time to time to enter into Transactions
with Seller in connection with the Series 2023-MSRVF2 Notes.
WHEREAS,
pursuant to the Master Repurchase Agreement, dated as of August 4, 2023 (as may be amended, restated, supplemented or otherwise
modified from time to time, the “Series 2020-SPIADVF1 Repurchase Agreement”), among PennyMac Loan Services, LLC
(the “Seller”), the Administrative Agent and the Buyer, the Buyer has agreed from time to time to enter into Transactions
with Seller in connection with the Series 2020-SPIADVF1 Notes;
WHEREAS, it is a condition precedent
to the obligation of the Buyer to enter into Transactions with Seller under the Series 2023-MSRVF2 Repurchase Agreement and the Series 2020-SPIADVF1
Repurchase Agreement that Guarantor shall have executed and delivered this Guaranty to the Buyer;
WHEREAS, as a condition precedent
to entering into the Series 2023-MSRVF2 Repurchase Agreement and the Series 2020-SPIADVF1 Repurchase Agreement, the Guarantor
is required to execute and deliver this Guaranty; and
WHEREAS, the Guarantor will
receive a benefit, either directly or indirectly from the Seller for entering into this Guaranty.
NOW, THEREFORE, in consideration
of the foregoing premises, to induce the Buyer to enter into the Series 2023-MSRVF2 Repurchase Agreement and the Series 2020-SPIADVF1
Repurchase Agreement and to enter into Transactions thereunder, Guarantor hereby agrees with the Buyer, as follows:
1. Defined
Terms. (a) Unless otherwise defined herein, terms which are defined in the Series 2023-MSRVF2 Repurchase Agreement or in
the Series 2020-SPIADVF1 Repurchase Agreement, as applicable, and used herein are so used as so defined.
(b) For
purposes of this Guaranty, “Obligations” shall mean all obligations and liabilities of Seller to the Buyer, whether
direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, or out
of or in connection with the Series 2023-MSRVF2 Repurchase Agreement or the Series 2020-SPIADVF1 Repurchase Agreement and any
other Program Agreements and any other document made, delivered or given in connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all fees and disbursements of
counsel to the Buyer that are required to be paid by Seller pursuant to the terms of the Program Agreements and costs of enforcement of
this Guaranty reasonably incurred) or otherwise.
2. Guaranty.
(a) Guarantor hereby unconditionally and irrevocably guarantees to the Buyer the prompt and complete payment and performance by Seller
when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations.
(b) Guarantor
further agrees to pay any and all expenses (including, without limitation, all fees and disbursements of counsel) which may be paid or
incurred by the Buyer in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all
of the Obligations and/or enforcing any rights with respect to, or collecting against, Guarantor under this Guaranty. This Guaranty shall
remain in full force and effect until the latest of (i) the termination of the Series 2023-MSRVF2 Repurchase Agreement, (ii) the
termination of the Series 2020-SPIADVF1 Repurchase Agreement and (iii) the Obligations are paid in full, notwithstanding that
from time to time prior thereto Seller may be free from any Obligations.
(c) No
payment or payments made by Seller or any other Person or received or collected by the Buyer from Seller or any other Person by virtue
of any action or proceeding or any set-off or appropriation or application, at any time or from time to time, in reduction of or in payment
of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of Guarantor hereunder which shall, notwithstanding
any such payment or payments, remain liable for the amount of the outstanding Obligations until the outstanding Obligations are paid in
full.
(d) Guarantor
agrees that whenever, at any time, or from time to time, Guarantor shall make any payment to the Buyer on account of Guarantor’s
liability hereunder, Guarantor will notify the Buyer in writing that such payment is made under this Guaranty for such purpose.
3. Right
of Set-off. The Buyer is hereby irrevocably authorized at any time and from time to time without notice to Guarantor, any such notice
being hereby waived by Guarantor, to set-off and appropriate and apply any and all monies and other property of Guarantor, deposits (general
or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Buyer or any Affiliate
thereof to or for the credit or the account of Guarantor, or any part thereof in such amounts as the Buyer may elect, on account of the
Obligations and liabilities of Guarantor hereunder and claims of every nature and description of the Buyer against Guarantor, in any currency,
whether arising hereunder, under the Series 2023-MSRVF2 Repurchase Agreement, under the Series 2020-SPIADVF1 Repurchase Agreement
or otherwise, as the Buyer may elect, whether or not the Buyer has made any demand for payment and although such Obligations and liabilities
and claims may be contingent or unmatured. The Buyer shall notify Guarantor promptly of any such set-off and the application made by the
Buyer, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the
Buyer under this paragraph are in addition to other rights and remedies (including, without limitation, other rights of set-off) which
the Buyer may have.
4. Subrogation.
Notwithstanding any payment or payments made by Guarantor hereunder or any set-off or application of funds of Guarantor by the Buyer,
Guarantor shall not be entitled to be subrogated to any of the rights of the Buyer against Seller or any other guarantor or any collateral
security or guarantee or right of offset held by the Buyer for the payment of the Obligations, nor shall Guarantor seek or be entitled
to seek any contribution or reimbursement from Seller or any other guarantor in respect of payments made by Guarantor hereunder, until
all amounts owing to the Buyer by Seller on account of the Obligations are paid in full and both the Series 2023-MSRVF2 Repurchase
Agreement and the Series 2020-SPIADVF1 Repurchase Agreement are terminated. If any amount shall be paid to Guarantor on account of
such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amounts shall be held by Guarantor
for the benefit of the Buyer, segregated from other funds of Guarantor, and shall, forthwith upon receipt by Guarantor, be turned over
to the Buyer in the exact form received by Guarantor (duly indorsed by Guarantor to the Buyer, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as the Buyer may determine.
5. Amendments, etc.
with Respect to the Obligations. Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights
against Guarantor, and without notice to or further assent by Guarantor, any demand for payment of any of the Obligations made by the
Buyer may be rescinded by the Buyer, and any of the Obligations continued, and the Obligations, or the liability of any other party upon
or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time,
in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Buyer,
and the Series 2023-MSRVF2 Repurchase Agreement, the Series 2020-SPIADVF1 Repurchase Agreement and the other Program Agreements
and any other document in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, pursuant to
its terms and as the Buyer may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time
held by the Buyer for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. The Buyer shall have no
obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Obligations or for this Guaranty
or any property subject thereto. When making any demand hereunder against Guarantor, the Buyer may, but shall be under no obligation to,
make a similar demand on Seller and any failure by the Buyer to make any such demand or to collect any payments from Seller or any release
of Seller shall not relieve Guarantor of its obligations or liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of the Buyer against Guarantor. For the purposes hereof “demand” shall include,
but is not limited to, the commencement and continuance of any legal proceedings.
6. Guaranty
Absolute and Unconditional. (a) Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of
the Obligations and notice of or proof of reliance by the Buyer upon this Guaranty or acceptance of this Guaranty; the Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived in reliance
upon this Guaranty; and all dealings between Seller or Guarantor, on the one hand, and the Buyer, on the other, shall likewise be conclusively
presumed to have been had or consummated in reliance upon this Guaranty. Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon Seller or the Guaranty with respect to the Obligations. This Guaranty shall be
construed as a continuing, absolute and unconditional guarantee of payment without regard to (i) the validity or enforceability of
the Series 2023-MSRVF2 Repurchase Agreement, the Series 2020-SPIADVF1 Repurchase Agreement, the other Program Agreements, any
of the Obligations or any collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to
time held by the Buyer, (ii) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by Seller against the Buyer, or (iii) any other circumstance whatsoever (with or without notice
to or knowledge of Seller or Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of Seller
for the Obligations, or of Guarantor under this Guaranty, in bankruptcy or in any other instance. When pursuing its rights and remedies
hereunder against Guarantor, the Buyer may, but shall be under no obligation to, pursue such rights and remedies that they may have against
Seller or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto,
and any failure by the Buyer to pursue such other rights or remedies or to collect any payments from Seller or any such other Person or
to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of Seller or any such
other Person or any such collateral security, guarantee or right of offset, shall not relieve Guarantor of any liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Buyer against Guarantor.
This Guaranty shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon Guarantor and
their successors and assigns thereof, and shall inure to the benefit of the Buyer, and successors, indorsees, transferees and assigns,
until all the Obligations and the obligations of Guarantor under this Guaranty shall have been satisfied by payment in full, notwithstanding
that from time to time during the term of the Series 2023-MSRVF2 Repurchase Agreement or the Series 2020-SPIADVF1 Repurchase
Agreement Seller may be free from any Obligations.
(b) Without
limiting the generality of the foregoing, Guarantor hereby agrees, acknowledges, and represents and warrants to the Buyer as follows:
(i) Guarantor
hereby waives any defense arising by reason of, and any and all right to assert against the Buyer any claim or defense based upon, an
election of remedies by the Buyer which in any manner impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor’s
(x) subrogation rights, (y) rights to proceed against Seller or any other guarantor for reimbursement or contribution, and/or
(z) any other rights of Guarantor to proceed against Seller, against any other guarantor, or against any other person or security.
(ii) Guarantor
is presently informed of the financial condition of Seller and of all other circumstances which diligent inquiry would reveal and which
bear upon the risk of nonpayment of the Obligations. Guarantor hereby covenants that it will make its own investigation and will continue
to keep itself informed of Seller’s financial condition, the status of other guarantors, if any, of all other circumstances which
bear upon the risk of nonpayment and that it will continue to rely upon sources other than the Buyer for such information and will not
rely upon the Buyer for any such information. Absent a written request for such information by Guarantor to the Buyer, Guarantor hereby
waives its right, if any, to require the Buyer to disclose to Guarantor any information which the Buyer may now or hereafter acquire concerning
such condition or circumstances including, but not limited to, the release of or revocation by any other guarantor.
(iii) Guarantor
has independently reviewed the Series 2023-MSRVF2 Repurchase Agreement, the Series 2020-SPIADVF1 Repurchase Agreement and related
agreements and has made an independent determination as to the validity and enforceability thereof, and in executing and delivering this
Guaranty to the Buyer, Guarantor is not in any manner relying upon the validity, and/or enforceability, and/or attachment, and/or perfection
of any Liens or security interests of any kind or nature granted by Seller or any other guarantor to the Buyer, now or at any time and
from time to time in the future.
7. Reinstatement.
This Guaranty shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any
of the Obligations is rescinded or must otherwise be restored or returned by the Buyer upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of Seller or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, Seller or any substantial part of its property, or otherwise, all as though such payments had not been made.
8. Payments.
Guarantor hereby agrees that the Obligations will be paid to the Buyer without set-off or counterclaim in U.S. Dollars.
9. Event
of Default. If an Event of Default under the Series 2023-MSRVF2 Repurchase Agreement or the Series 2020-SPIADVF1 Repurchase
Agreement shall have occurred and be continuing, Guarantor agrees that, as between Guarantor and the Buyer, the Obligations may be declared
to be due in accordance with the terms of the Series 2023-MSRVF2 Repurchase Agreement or the Series 2020-SPIADVF1 Repurchase
Agreement, as applicable, for purposes of this Guaranty notwithstanding any stay, injunction or other prohibition which may prevent, delay
or vitiate any such declaration as against the Seller and that, in the event of any such declaration (or attempted declaration), such
Obligations shall forthwith become due by Guarantor for purposes of this Guaranty.
10. Severability.
Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
11. Headings.
The paragraph headings used in this Guaranty are for convenience of reference only and are not to affect the construction hereof or be
taken into consideration in the interpretation hereof.
12. No
Waiver; Cumulative Remedies. The Buyer shall not by any act (except by a written instrument pursuant to Section 13 hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event
of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part
of the Buyer, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Buyer of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which
the Buyer would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.
13. Waivers
and Amendments; Successors and Assigns; Governing Law. None of the terms or provisions of this Guaranty may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by Guarantor and the Buyer, provided that any provision of this Guaranty
may be waived by the Buyer in a letter or agreement executed by the Buyer or by facsimile or electronic transmission from the Buyer to
the Guarantor. This Guaranty shall be binding upon the personal representatives, successors and assigns of Guarantor and shall inure to
the benefit of the Buyer and its successors and assigns.
14. Notices.
Notices delivered in connection with this Guaranty shall be given in accordance with Section 11.05 of the Series 2023-MSRVF2
Repurchase Agreement or Section 11.05 of the Series 2020-SPIADVF1 Repurchase Agreement, as applicable.
15. Governing
Law; Jurisdiction; Waivers.
(a) THIS
GUARANTY AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO OR IN CONNECTION WITH THIS GUARANTY, THE RELATIONSHIP OF THE
PARTIES HERETO, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HERETO WILL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CONFLICT OF LAW PRINCIPLES THEREOF OTHER THAN SECTIONS
5-1401 AND 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 SUCH LAWS.
(b) THE
GUARANTOR SUBMITS ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY, OR FOR RECOGNITION AND ENFORCEMENT
OF ANY JUDGMENT IN RESPECT THEREOF, TO THE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING 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;
(c) THE
GUARANTOR 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;
(d) THE
GUARANTOR 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 HEREIN OR AT SUCH OTHER
ADDRESS OF WHICH EACH OTHER PARTY HERETO SHALL HAVE BEEN NOTIFIED IN WRITING, EXCEPT THAT WITH RESPECT TO THE INDENTURE TRUSTEE, CALCULATION
AGENT, PAYING AGENT AND SECURITIES INTERMEDIARY, SERVICE OF PROCESS MAY ONLY BE MADE AS REQUIRED BY APPLICABLE LAW;
(e) THE
GUARANTOR 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; AND
(f) THE
GUARANTOR WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.
16. Integration.
This Guaranty represents the agreement of Guarantor with respect to the subject matter hereof and there are no promises or representations
by the Buyer relative to the subject matter hereof not reflected herein. This Guaranty may be executed in any number of counterparts,
each of which so executed will be deemed to be an original, but all such counterparts will together constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page to this Guaranty by facsimile or other electronic means shall be effective
as delivery of a manually executed counterpart of this Guaranty.
17. Acknowledgments.
Guarantor hereby acknowledges that:
(a) Guarantor
has been advised by counsel in the negotiation, execution and delivery of this Guaranty and the other Program Agreements;
(b) the
Buyer does not have any fiduciary relationship to Guarantor, Guarantor does not have any fiduciary relationship to the Buyer and the relationship
between the Buyer and Guarantor is solely that of surety and creditor;
(c) no
joint venture exists between the Buyer and Guarantor or among the Buyer, Seller and Guarantor;
(d) this
Guaranty is “a security agreement or arrangement or other credit enhancement” that is “related to” and provided
“in connection with” the PC Repurchase Agreement and each Transaction thereunder and is within the meaning of Sections 101(38A)(A) and
741(7)(A)(xi) of the Bankruptcy Reform Act of 1978, 11 U.S.C. §§ 101 et seq., as amended (the “Bankruptcy
Code”) and is, therefore to the extent of damages in connection with the PC Repurchase Agreement, measured in accordance with
Section 562 of the Bankruptcy Code (i) a “securities contract” as that term is defined in Section 741(7)(A)(xi) of
the Bankruptcy Code and (ii) a “master netting agreement” as that term is defined in Section 101(38A) of the Bankruptcy
Code; and
(e) the
Buyer’s right to cause the termination, liquidation or acceleration of, or to offset or net termination values, payment amounts
or other transfer obligations arising under or in connection with the Series 2023-MSRVF2 Repurchase Agreement, the Series 2020-SPIADVF1
Repurchase Agreement and this Guaranty is in each case a contractual right to cause the termination, liquidation or acceleration of, or
to offset or net termination values, payment amounts or other transfer obligations arising under or in connection with this Guaranty as
described in Sections 362(b)(6), 362(b)(27), 555 and/or 561 of the Bankruptcy Code.
18. Electronic
Signatures. This Guaranty may be accepted, executed or agreed to through the use of an electronic signature in accordance with the
Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq, Official Text of the Uniform Electronic Transactions
Act as approved by the National Conference of Commissioners on Uniform State Laws at its Annual Conference on July 29, 1999 and any
applicable state law. Any document accepted, executed or agreed to in conformity with such laws will be binding on any signatory hereof
to the same extent as if it were physically executed and each signatory hereby consents to the use of any secure third party electronic
signature capture service with appropriate document access tracking, electronic signature tracking and document retention, including DocuSign.
[Signature page follows]
IN WITNESS WHEREOF, the undersigned has caused
this Guaranty to be duly executed and delivered as of the date first above written.
|
PRIVATE NATIONAL
MORTGAGE ACCEPTANCE COMPANY, LLC, as Guarantor |
|
|
|
By: |
/s/ Pamela Marsh |
|
|
Name: |
Pamela Marsh |
|
|
Title: |
Senior Managing Director, Treasurer |
[Signature
Page to Guaranty (2023-MSRVF2 MRA and SPIAVF1 MRA)]
|
CONSENTED
TO BY: |
|
|
|
NOMURA CORPORATE FUNDING
AMERICAS, LLC, as Administrative Agent |
|
|
|
By: |
/s/
Sanil Patel |
|
Name: |
Sanil Patel |
|
Title: |
Managing Director |
|
|
|
NOMURA CORPORATE FUNDING
AMERICAS, LLC, as Buyer |
|
|
|
By: |
/s/ Sanil Patel |
|
Name: |
Sanil Patel |
|
Title: |
Managing Director |
[Signature Page to Guaranty (2023-MSRVF2 MRA and SPIAVF1 MRA)]
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