Exhibit 10.16

AMENDMENT NO. 2 TO

SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

 

Amendment No. 2 to Second Amended and Restated Master Repurchase Agreement,
dated as of April 26, 2019 (this “Amendment”), among Credit Suisse First Boston
Mortgage Capital LLC (the “Administrative Agent”), Credit Suisse AG, a company
incorporated in Switzerland, acting through its Cayman Islands Branch (a
“Buyer”), Alpine Securitization LTD (a “Buyer”), PennyMac Operating Partnership,
L.P. (the “Seller”) and PennyMac Mortgage Investment Trust (the “Guarantor”).

RECITALS

 

The Administrative Agent, the Buyers, the Seller and the Guarantor are parties
to that certain (i) Second Amended and Restated Master Repurchase Agreement,
dated as of April 28, 2017 (as amended by Amendment No. 1, dated as of April 27,
2018, the “Existing Repurchase Agreement”; and as further amended by this
Amendment, the “Repurchase Agreement”) and (ii) the related Third Amended and
Restated Pricing Side Letter, dated as of March 14, 2019 together with PennyMac
Holdings, LLC (“PennyMac Holdings”), PennyMac Corp. (“PMC”), PMC REO Financing
Trust, an asset subsidiary (the “Existing REO Subsidiary”) and PMC REO Trust
2015-1, as asset subsidiary (the “Joining REO Subsidiary”) (as amended,
restated, supplemented or otherwise modified from time to time, the “Pricing
Side Letter”), as each is assigned to Buyers.  The Guarantor is party to that
certain Amended and Restated Guaranty (as amended, restated, supplemented or
otherwise modified from time to time, the “Guaranty”), dated as of April 28,
2017, by the Guarantor in favor of the Administrative Agent for the benefit of
Buyers.  Capitalized terms used but not otherwise defined herein shall have the
meanings given to them in the Repurchase Agreement and Guaranty, as applicable.

The Administrative Agent, the Buyers, the Seller and the Guarantor have agreed,
subject to the terms and conditions of this Amendment, that the Existing
Repurchase Agreement be amended to reflect certain agreed upon revisions to the
terms of the Existing Repurchase Agreement.  As a condition precedent to
amending the Existing Repurchase Agreement, the Administrative Agent and Buyers
have required the Guarantor to ratify and affirm the Guaranty on the date
hereof.

 

Accordingly, the Administrative Agent, the Buyers, the Seller and the Guarantor
hereby agree, in consideration of the mutual promises and mutual obligations set
forth herein, that the Existing Repurchase Agreement is hereby amended as
follows:

SECTION 1.Definitions.  Section 2 of the Existing Repurchase Agreement is hereby
amended by:

1.1deleting the definition of “Termination Date” and replacing it with the
following:

“Termination Date” means the earlier of (a) April 24, 2020, and (b) the date of
the occurrence of an Event of Default.

 

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1.2adding the following definitions in their proper alphabetical order:

“Successor Rate” means a rate determined by Administrative Agent in accordance
with Section 5(c) hereof.

“Successor Rate Conforming Changes” means with respect to any proposed Successor
Rate, any spread adjustments or other conforming changes to the timing and
frequency of determining rates and making payments of interest and other
administrative matters as may be appropriate, in the discretion of
Administrative Agent, to reflect the adoption of such Successor Rate and to
permit the administration thereof by Administrative Agent in a manner
substantially consistent with market practice.

SECTION 2.Price Differential. Section 5 of the Existing Repurchase Agreement is
hereby amended by adding the following new subsection (c) at the end thereof:

(c)If prior to any Price Differential Payment Date, Administrative Agent
determines in its sole discretion that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for ascertaining
LIBOR, LIBOR is no longer in existence, or the administrator of LIBOR or a
Governmental Authority having jurisdiction over Administrative Agent has made a
public statement identifying a specific date after which LIBOR shall no longer
be made available or used for determining the interest rate of loans,
Administrative Agent may give prompt notice thereof to Seller, whereupon the
rate for such period that will replace LIBOR for such period, and for all
subsequent periods until such notice has been withdrawn by Administrative Agent,
shall be the greater of (i) an alternative benchmark rate (including any
mathematical or other adjustments to the benchmark rate (if any) incorporated
therein) and (ii) zero, together with any proposed Successor Rate Conforming
Changes, as determined by Administrative Agent in its sole discretion (any such
rate, a “Successor Rate”). Any such determination of the Successor Rate shall be
made by Administrative Agent in a manner substantially consistent with market
practice with respect to similarly situated counterparties with substantially
similar assets in similar facilities; provided, that the foregoing standard
shall only apply to repurchase transactions that are under the supervision of
Administrative Agent’s investment bank New York mortgage finance business that
administers the Transactions.

SECTION 3.Representations and Warranties. Subsection 13(11) of the Existing
Repurchase Agreement is hereby amended by deleting such subsection in its
entirety and replacing it with the following:

(11)Litigation.  Except as set forth on Exhibit E, there is no action,
proceeding or investigation pending with respect to which either Seller or
Guarantor has received service of process or, to the best of Seller’s or
Guarantor’s knowledge threatened against it before any court, administrative
agency or other tribunal (A) asserting the invalidity of any Program Agreement
and any Transaction Request, (B) seeking to prevent the consummation of any of
the transactions contemplated any Program Agreement and any Transaction Request,
(C) making a claim individually or in the aggregate in an amount greater than
(x) five percent (5%) of Guarantor’s Net Worth against Guarantor, Underlying
Repurchase Counterparty or any of their Affiliates not otherwise identified
herein, or (y) $10,000,000 against Seller, (D) which requires filing with the
Securities and Exchange Commission in accordance with the 1934 Act or any rules
thereunder or (E) which might materially and adversely affect the validity of
the Mortgage Loans or the performance by it of its obligations under, or the
validity or enforceability of any Program Agreement and any Transaction Request

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SECTION 4.Covenants. Section 14 of the Existing Repurchase Agreement is hereby
amended by:

4.1deleting subsection 14(a) in its entirety and replacing it with the
following:

(a)Litigation. Seller and Guarantor, as applicable, will promptly, and in any
event within ten (10) days after service of process on any of the following,
give to Administrative Agent notice of all litigation, actions, suits,
arbitrations, investigations (including, without limitation, any of the
foregoing which are threatened or pending) or other legal or arbitrable
proceedings affecting Seller, Guarantor or any of their Subsidiaries or
affecting any of the Property of any of them before any Governmental Authority
that (i) questions or challenges the validity or enforceability of any of the
Program Agreements or any action to be taken in connection with the transactions
contemplated hereby, (ii) makes a claim individually or in the aggregate in an
amount greater than (x) five percent (5%) of Guarantor’s Net Worth against
Guarantor, Underlying Repurchase Counterparty or any of their Affiliates not
otherwise identified herein or (y) $10,000,000 against Seller, or (iii) which,
individually or in the aggregate, if adversely determined, could be reasonably
likely to have a Material Adverse Effect with respect to Seller or
Guarantor.  Seller and Guarantor, as applicable, will promptly provide notice of
any judgment, which with the passage of time, could cause an Event of Default
hereunder.

4.2deleting subsection (ee) in its entirety and replacing it with the following:

(ee)Reserved.

 

SECTION 5.Conditions Precedent to Amendment.  This Amendment shall become
effective as of the date hereof (the “Amendment Effective Date”), subject to the
satisfaction of the following conditions precedent:

 

5.1Delivered Documents.  On the Amendment Effective Date, the Administrative
Agent on behalf of the Buyers shall have received the following documents, each
of which shall be satisfactory to the Administrative Agent in form and
substance:

 

(a)this Amendment, executed and delivered by duly authorized officers of the
Administrative Agent, the Buyers, the Seller and the Guarantor;

(b)Amendment No. 1 to Third Amended and Restated Pricing Side Letter, executed
and delivered by duly authorized officers of the Administrative Agent, the
Buyers, the Seller, PennyMac Holdings, LLC, PennyMac Corp., PMC REO Financing
Trust, PMC REO Trust 2015-1 and Guarantor; and

(c)such other documents as the Administrative Agent or counsel to the
Administrative Agent may reasonably request.

 

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SECTION 6.Representations and Warranties.  Seller hereby represents and warrants
to the Administrative Agent and the Buyers that it is in compliance with all the
terms and provisions set forth in the Repurchase Agreement on its part to be
observed or performed, and that no Event of Default has occurred or is
continuing, and hereby confirms and reaffirms the representations and warranties
contained in Section 13 of the Repurchase Agreement.

 

SECTION 7.Limited Effect.  Except as expressly amended and modified by this
Amendment, the Existing Repurchase Agreement shall continue to be, and shall
remain, in full force and effect in accordance with its terms.

 

SECTION 8.Counterparts.  This Amendment may be executed by each of the parties
hereto on any number of separate counterparts, each of which shall be an
original and all of which taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page of this
Amendment in Portable Document Format (PDF) or by facsimile shall be effective
as delivery of a manually executed original counterpart of this Amendment.

 

SECTION 9.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.

 

SECTION 10.GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE
CHOICE OF LAW PROVISIONS THEREOF.

 

SECTION 11.Reaffirmation of Guaranty.  The Guarantor hereby ratifies and affirms
all of the terms, covenants, conditions and obligations of the Guaranty and
acknowledges and agrees that the term “Obligations” as used in the Guaranty
shall apply to all of the Obligations of Seller to Administrative Agent and
Buyers under the Repurchase Agreement and related Program Agreements, as amended
hereby.

 

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IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly
executed as of the date first above written.

 

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as Administrative Agent

 

 

 

By:

 

/s/ Margaret Dellafera

 

 

Name: Margaret Dellafera

 

 

Title: Vice President

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Buyer

 

 

 

By:

 

/s/ Margaret Dellafera

 

 

Name: Margaret Dellafera

 

 

Title: Authorized Signatory

 

By:

 

/s/ Charles Trombley

 

 

Name: Charles Trombley

 

 

Title: Authorized Signatory

 

 

ALPINE SECURITIZATION LTD, as a Buyer, by Credit Suisse AG, New York Branch as
Attorney-in-Fact

 

 

 

By:

 

/s/ Kenneth Aiani

 

 

Name: Kenneth Aiani

 

 

Title: Vice President

 

By:

 

/s/Patrick J. Hart

 

 

Name: Patrick J. Hart

 

 

Title: Director

 

Signature Page to Amendment No. 2 to Second Amended and Restated Master
Repurchase Agreement

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PENNYMAC OPERATING PARTNERSHIP, L.P., as Seller

 

 

 

By:

 

PennyMac GP OP, Inc., its General Partner

 

By:

 

/s/ Pamela Marsh

 

 

Name: Pamela Marsh

 

 

Title: Managing Director, Treasurer

 

PENNYMAC MORTGAGE INVESTMENT TRUST, as Guarantor

 

 

 

By:

 

/s/ Pamela Marsh

 

 

Name: Pamela Marsh

 

 

Title: Managing Director, Treasurer

 

Signature Page to Amendment No. 2 to Second Amended and Restated Master
Repurchase Agreement