Exhibit 10.4

 

[Information indicated with brackets has been excluded from this exhibit because
it is not material and would be competitively harmful if publicly disclosed]

 

JOINT AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT (FREDDIE MAC MSRS) AND
AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT PRICING SIDE LETTER

This Joint Amendment No. 2 to Loan and Security Agreement  and Amendment No. 1
to Pricing Side Letter is made as of this 24th day of April, 2020 (this
“Amendment”), by and among CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the
“Administrative Agent”), CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH (the “Lender”),
PENNYMAC MORTGAGE INVESTMENT TRUST (the “Guarantor”) and PENNYMAC CORP. (“PMC
Borrower”) and PENNYMAC HOLDINGS, LLC ( “PMH Borrower” and together with PMC
Borrower, the “Borrowers”) amends that certain Loan and Security Agreement,
dated as of February 1, 2018 (as amended by Amendment No. 1, dated as of January
29, 2020, and as may be further amended, restated, supplemented or otherwise
modified from time to time, the “Loan Agreement”), by and among the Lender, the
Guarantor and the Borrowers, and the related Loan and Security Agreement Pricing
Side Letter, dated February 1, 2018 (as amended, restated, supplemented or
otherwise modified from time to time, the “Pricing Side Letter” and Pricing Side
Letter, together with the Loan Agreement, the “Agreements”), by and among the
Borrowers, the Guarantor and the Lender.

WHEREAS, the Administrative Agent, the Lender, the Guarantor and the Borrowers
have agreed to amend the Loan Agreement and the Pricing Side Letter as more
particularly set forth herein.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and for the mutual covenants herein contained,
the parties hereto hereby agree as follows:

SECTION 1.Amendments to the Loan Agreement. Effective as of the date hereof:

(a)Section 1.1 of Schedule I of the Loan Agreement is hereby amended by deleting
the defined terms “Maturity Date,” “MLRA Pricing Side Letter,” “Default Rate”
and “Obligations” in their entirety and replacing such terms with the following:

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

“Maturity Date” means October 21, 2020.

“MLRA Pricing Side Letter” means that certain Third Amended and Restated Pricing
Side Letter, dated as of March 14, 2019, by and among CSFB, CSCIB, Alpine
Securitization Ltd., PMC, Holdings, PMC REO Financing Trust, PMC REO Trust
2015-1, Guarantor and POP with respect to the Roll-Up Agreement and the External
Rewarehouse Agreement.

“Obligations” means the Outstanding Aggregate Loan Amount, all accrued and
unpaid interest thereon and all other amounts payable by a Borrower to the
Lender pursuant to this Agreement, the Note or any other Facility Document or
any amounts payable by a Borrower pursuant to Section 11.12 hereof.

 

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(b)Section 1.1 of Schedule I of the Loan Agreement is hereby amended by adding
the defined terms “Base Rate,” “Exposure Margin Deficit,” “Financing Documents”
and “Other Financing Agreements” in proper alphabetical order:

“Base Rate” has the meaning assigned to the term in the Pricing Side Letter.

“Exposure Margin Deficit” has the meaning assigned to the term in the Pricing
Side Letter.

“Financing Documents” means any or all of the “Program Agreements,” “Facility
Documents” or any similar term as defined in each Other Financing Agreement.

“Other Financing Agreements” means each of the agreements listed on Schedule II
hereto, which may be updated from time to time in a written confirmation signed
by the parties to this Agreement.

(c)Section 2.05 of the Loan Agreement is hereby amended by replacing only the
first occurrence of the word “LIBOR Rate” therein with “Base Rate.”

(d)Section 2.08(b) of the Loan Agreement is hereby amended by deleting in its
entirety and replacing it with the following:

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

(e)The Loan Agreement is hereby amended by adding the following section in
proper numerical order:

Section 4.06Other Financing Agreements. Borrower hereby delivers an irrevocable
instruction to the buyer or lender under any Financing Document that upon
receipt of notice of an Event of Default under this Agreement, the buyer or
lender thereunder is authorized and instructed to (i) remit to Lender hereunder
directly any amounts otherwise payable to Borrower and (ii) deliver to Lender
all collateral otherwise deliverable to Borrower, to the extent all obligations
then due and owing under such Other Financing Agreement have been paid in
full.  In furtherance of the foregoing, upon repayment of the outstanding
repurchase price or loan amount under any Other Financing Agreement and
termination of all obligations of the Borrower thereunder or other termination
of the related Financing Documents following repayment of all obligations
thereunder, the related buyer or lender under any Financing Document is hereby
instructed to deliver to Lender hereunder any collateral (as such term may be
defined under the related Financing Documents) then in its possession or
control.

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(f)Section 7.01 of the Loan Agreement is hereby amended by deleting subclause
(w)(iii) in its entirety and replacing it with the following:

(iii)Reserved.

(g)Section 7.01 of the Loan Agreement is hereby amended by adding the following
subclause (cc)(ii):

 

(ii)

On the last Business Day of the month, Borrower shall report to Lender whether,
as of the last Business Day of the month, the Exposure Margin Deficit exceeds
zero.

(h)Section 8.03 of the Loan Agreement is hereby amended by deleting “and” at the
end of subclause (d)(ii), adding the following subclause (d)(iii) and
renumbering subclause (d)(iii) in proper numerical order:

(iii) to the Lender or any Affiliate any amount then due to such Persons
pursuant to Section 11.12 that have not been paid by the Borrowers; and

(i)Section 11.12 of the Loan Agreement is hereby amended by adding the language
“or any Termination Fee” immediately after “Surplus Proceeds.”

(j)Section 11.15(e) of the Loan Agreement is hereby amended by adding the
language “or any Termination Fee” immediately after “Surplus Proceeds.”

(k)Schedule 5.02 of the Loan Agreement is hereby amended by adding the following
new subclause (vi) to clause (e) thereto, in proper numerical order:

(vi)Guarantor has maintained profitability of at least $1.00 in Net Income for
at least one of the two prior Test Periods.

(l)The Loan Agreement is hereby amended by adding Schedule II in proper order
attached hereto as Exhibit A.

SECTION 2.Amendments to the Pricing Side Letter. Effective as of the date
hereof:

(a)Section 1 of the Pricing Side Letter is hereby amended by deleting the
defined terms “Applicable Margin” and “Available Facility Amount” in their
entirety and replacing such terms with the following:

“Applicable Margin” means [*****].

“Available Facility Amount” means: (i) an amount agreed to by the Lender that,
when added to the aggregate outstanding repurchase price under the Roll-Up
Agreement and CSCIB’s pro rata portion of the FMSR VF1 Repo, would not exceed
the Maximum Combined Purchase Price; or (ii) the lesser of: (A) the Borrowing
Base or (B) the amount that, when added to the aggregate outstanding repurchase
price under the Roll-Up Agreement and CSCIB’s pro rata portion of the FMSR VF1
Repo, would not exceed the Maximum Combined Committed Purchase Price; provided,
however, that the Available Facility Amount shall not exceed the positive
difference between $375,000,000, minus the Lender’s pro rata share of the
aggregate outstanding purchase price under the FMSR VF1 Repo; in each case, as
may be modified from time to time in a written confirmation signed by the
parties hereto.

3

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For purposes of this definition, the terms “Maximum Combined Purchase Price,”
“Maximum Combined Committed Purchase Price” and “Roll-Up Agreement” shall have
the meaning assigned to such terms in the MLRA Pricing Side Letter.

(b)Section 1 of the Pricing Side Letter is hereby amended by adding the
following defined terms “Actual Seller Equity,” “Base Rate,” “Exposure Margin
Deficit” and “Required Seller Equity,” in proper alphabetical order:

“Actual Seller Equity” means the amount, measured on the last Business Day of
each month, equal to the product of (x) the aggregate outstanding purchase price
under the Roll-Up Agreement on such day, and (y) [**].

“Base Rate” means the greater of (a) the LIBOR Rate or (b) [*****].

“Exposure Margin Deficit” means, the excess, if any, measured on the last
Business Day of each month, of (x) the Required Seller Equity, over (y) the
Actual Seller Equity.

“Required Seller Equity” means the amount, measured on the last Business Day of
each month, equal to the product of (A) [*****] (B) the sum of (x) CSCIB’s pro
rata portion of the aggregate outstanding repurchase price under the FMSR VF1
Repo on such day and (y) the Outstanding Aggregate Loan Amount under the
Agreement on such day, and (C) [**].

SECTION 3.Fees and Expenses. For purposes of this Amendment, the following terms
shall have the following meanings:

“Structuring Fee” means an amount equal to the product of (i) [*****] and
$375,000,000.

“Up-front Fee” means an amount equal to the product of (i) [*****] and
$375,000,000.

The Borrowers agree to pay to the Lender all fees and out of pocket expenses
incurred by the Lender in connection with this Amendment, including all
reasonable fees and out of pocket costs and expenses of the legal counsel to the
Lender incurred in connection with this Amendment, in accordance with Section
3.03 of the Loan Agreement.  On the date hereof, the Borrowers shall pay to the
Lender the Up-front Fee and the Structuring Fee. The Up-front Fee and the
Structuring Fee shall be fully earned on the date hereof and nonrefundable when
paid.

SECTION 4.Defined Terms. Any terms capitalized but not otherwise defined herein
shall have the respective meanings set forth in the Loan Agreement or the
Pricing Side Letter, as applicable.

SECTION 5.Limited Effect. Except as amended hereby, each Agreement shall
continue in full force and effect in accordance with its terms. Reference to
this Amendment need not be made in the Agreements or any other instrument or
document executed in connection therewith, or in any certificate, letter or
communication issued or made pursuant to, or with respect to, the Agreements,
any reference in any of such items to the Agreements being sufficient to refer
to the Agreements as amended hereby.

SECTION 6.Representations. In order to induce the Lender and the Administrative
Agent to execute and deliver this Amendment, each of PMC Borrower, PMH Borrower
and the Guarantor hereby represents to the Administrative Agent and the Lender
that as of the date hereof, (i) each of PMC Borrower, PMH Borrower and the
Guarantor is in full compliance with all of the terms and conditions of the
Facility Documents and remains bound by the terms thereof, and (ii) no default
or event of default has occurred and is continuing under the Facility Documents.

4

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SECTION 7.Governing Law. This Amendment and the rights and obligations of the
parties hereunder shall be construed in accordance with and governed by the laws
of the State of New York, without regard to principles of conflicts of laws
(other than Sections 5‑1401 and 5‑1402 of the New York General Obligations Law
which shall be applicable).

SECTION 8.Counterparts. For the purpose of facilitating the execution of this
Amendment, and for other purposes, this Amendment may be executed simultaneously
in any number of counterparts. Each counterpart shall be deemed to be an
original, and all such counterparts shall constitute one and the same
instrument. The parties intend that faxed signatures and electronically imaged
signatures such as .pdf files shall constitute original signatures and are
binding on all parties. The original documents shall be promptly delivered, if
requested.

SECTION 9.Miscellaneous.

(a)This Amendment shall be binding upon the parties hereto and their respective
successors and assigns.

(b)The various headings and sub-headings of this Amendment are inserted for
convenience only and shall not affect the meaning or interpretation of this
Amendment or the Agreements or any provision hereof or thereof.

 

 

[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

 

 

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IN WITNESS WHEREOF, the Lender, the Administrative Agent, the Guarantor and the
Borrowers have each caused their names to be duly signed to this Amendment by
their respective officers thereunto duly authorized, all as of the date first
above written.

 

 

 

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC,

 

 

as Administrative Agent

 

 

 

 

 

 

By:

/s/ Dominic Obaditch

 

 

 

Name:

Dominic Obaditch

 

 

 

Title:

Vice President

 

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

 

 

As Lender

 

 

 

 

 

 

By:

/s/ Dominic Obaditch

 

 

 

Name:

Dominic Obaditch

 

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Margaret Dellafera

 

 

 

Name:

Margaret Dellafera

 

 

 

Title:

Authorized Signatory

 

[Joint Amendment No. 2 to Loan and Security Agreement and

Amendment No. 1 to Pricing Side Letter (CS-PMC-PMH)]

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PENNYMAC CORP.,

 

 

as a Borrower

 

 

 

 

 

 

By:

/s/ Pamela Marsh using an electronic signature

 

 

 

Name:

Pamela Marsh

 

 

 

Title:

Senior Managing Director and Treasurer

 

 

 

PENNYMAC HOLDINGS, LLC,

 

 

as a Borrower

 

 

 

 

 

 

By:

/s/ Pamela Marsh using an electronic signature

 

 

 

Name:

Pamela Marsh

 

 

 

Title:

Senior Managing Director and Treasurer

 

[Joint Amendment No. 2 to Loan and Security Agreement and

Amendment No. 1 to Pricing Side Letter (CS-PMC-PMH)]

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PENNYMAC MORTGAGE INVESTMENT TRUST,

 

 

as a Guarantor

 

 

 

 

 

 

By:

/s/ Pamela Marsh using an electronic signature

 

 

 

Name:

Pamela Marsh

 

 

 

Title:

Senior Managing Director and Treasurer

 

 

 

[Joint Amendment No. 2 to Loan and Security Agreement and

Amendment No. 1 to Pricing Side Letter (CS-PMC-PMH)]

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EXHIBIT A

 

SCHEDULE II

 

OTHER FINANCING AGREEMENTS

 

Third Amended and Restated Master Repurchase Agreement, dated as of March 14,
2019 (as may be further amended, restated, supplemented or otherwise modified
from time to time, the “Roll-Up Agreement”), by and among Credit Suisse First
Boston Mortgage Capital LLC, as administrative agent, Credit Suisse AG, Cayman
Islands Branch, as committed buyer and a buyer, Alpine Securitization Ltd., as a
buyer, PennyMac Corp, as a seller, PennyMac Holdings, LLC, as a seller, PennyMac
Operating Partnership, L.P., as a seller, PMC REO Financing Trust, as an asset
subsidiary, PMC REO Trust 2015-1, as an asset subsidiary, PennyMac Mortgage
Investment Trust, as a guarantor, and PennyMac Operating Partnership, L.P., as a
seller and as a guarantor.

Second Amended and Restated Master Repurchase Agreement, dated as of April 28,
2017 (as nay be further amended, restated, supplemented or otherwise modified
from time to time, the “External Rewarehouse Agreement”), by and among Credit
Suisse First Boston Mortgage Capital LLC, as administrative agent, Credit Suisse
AG, Cayman Islands Branch, as committed buyer and a buyer, Alpine Securitization
Ltd., as a buyer, PennyMac Operating Partnership, L.P., as a seller, and,
PennyMac Mortgage Investment Trust, as a guarantor.

Master Repurchase Agreement, dated as of December 20, 2017 (as may be further
amended, restated, supplemented or otherwise modified from time to time, the
“FMSR VF1 Repo”), by and among Credit Suisse First Boston Mortgage Capital LLC,
as administrative agent, Credit Suisse AG, Cayman Islands Branch, as repo buyer,
and PennyMac Corp, as repo seller.

EXHIBIT A