Exhibit 10.2

 

EXECUTION

 

AMENDMENT NO. 3
TO SECOND AMENDED AND RESTATED LOAN SECURITY AGREEMENT

 

Amendment No. 3, dated as of December 30, 2013 (this “Amendment”), among CREDIT
SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the “Lender”), PENNYMAC LOAN SERVICES,
LLC (“Borrower”) and PRIVATE NATIONAL MORTGAGE ACCEPTANCE COMPANY, LLC (the
“Guarantor”).

 

RECITALS

 

WHEREAS, the Borrower, Lender and Guarantor are parties to that certain Second
Amended and Restated Loan and Security Agreement, dated as of March 27, 2012 (as
amended by Amendment No. 1, dated as of December 12, 2012 and Amendment No. 2,
dated as of March 22, 2013, the “Existing Loan Agreement”; and as further
amended by this Amendment, the “Loan and Security Agreement”) and the related
Amended and Restated Pricing Side Letter, dated as of March 27, 2012 (as amended
by Amendment No. 1, dated as of December 12, 2012 and Amendment No. 2, dated as
of March 22, 2013, the “Pricing Side Letter”). The Guarantor is a party to that
certain Amended and Restated Guaranty (the “Guaranty”), dated as of March 27,
2012, as the same may be further amended from time to time, by the Guarantor in
favor of Lender.  Capitalized terms used but not otherwise defined herein shall
have the meanings given to them in the Existing Loan Agreement and Guaranty, as
applicable.

 

WHEREAS, the Borrower is the servicer under certain Servicing Contracts, and
pursuant to the Existing Loan Agreement, the Lender was granted a blanket lien
on all Ginnie Mae Servicing Rights.

 

WHEREAS, Borrower desires to sell from time to time to Spread Buyer all of
Borrower’s right, title and interest in and to the Portfolio Excess Spread (as
defined below).

 

WHEREAS, the sale of any Portfolio Excess Spread is subject to the consent of
the Lender, in its sole discretion.

 

WHEREAS, Lender has agreed to consent to the sale of the Portfolio Excess Spread
by Borrower to the Spread Buyer in consideration of (i) such sale being made
subject and subordinate to the Lender’s Lien on the Servicing Rights including
the Portfolio Excess Spread and (ii) the Spread Buyer reaffirming such lien and
Spread Buyer’s subordination of its right by entering into the Security
Agreement (as defined below).

 

WHEREAS, the Borrower, the Lender and the Guarantor have agreed, subject to the
terms and conditions of this Amendment, that the Existing Loan Agreement be
amended to reflect certain agreed upon revisions to the terms of the Existing
Loan Agreement.  As a condition precedent to amending the Existing Loan
Agreement, the Lender has required the Guarantor to ratify and affirm the
Guaranty on the date hereof.

 

NOW, THEREFORE, the Borrower, the Lender and the Guarantor hereby agree, in
consideration of the mutual promises and mutual obligations set forth herein,
that the Existing Loan Agreement is hereby amended as follows:

 

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

 

(a)                                 amending the following definitions by
deleting such definitions in their entirety and replacing them with the
following:

 

“Collateral” has the meaning assigned to such term in Section 4.01(a), and
which, for the avoidance of doubt, shall continue to include the Collateral sold
to Spread Buyer subject to the Lien of this Agreement and which is the subject
of the Security Agreement.

 

“Loan Documents” means this Agreement, the Pricing Side Letter, the Dedicated
Account Control Agreement, the Note, the Guaranty, the Power of Attorney, the
Spread Buyer Power of Attorney and the Security Agreement, as each of the same
may hereafter be amended, supplemented, restated or otherwise modified from time
to time.

 

(b)                                 adding the following definitions in the
appropriate alphabetical order:

 

“Borrower Originated Ginnie Mae Servicing Rights” means those Ginnie Mae
Servicing Rights that have been originated (and not acquired) by Borrower.

 

“Master Spread Acquisition Agreement” means that certain Master Spread
Acquisition and MSR Servicing Agreement, dated as of December 30, 2013 between
the Spread Buyer and the Borrower, as amended from time to time.

 

“Portfolio Excess Spread” means any Primary Portfolio Excess Spread or Secondary
Portfolio Excess Spread, each as defined in, and sold by the Borrower to the
Spread Buyer under, the Master Spread Acquisition Agreement, from time to time.

 

“Security Agreement” means that certain Security and Subordination Agreement,
dated as of December 30, 2013 between the Spread Buyer and the Lender, as
amended from time to time.

 

“Spread Buyer” means PennyMac Holdings, LLC, and its permitted successors and
assigns.

 

“Spread Buyer Power of Attorney” means the Power of Attorney required to be
executed and delivered by the Spread Buyer pursuant to the Security Agreement,
as the same may be amended from time to time.

 

“Trigger Event” has the meaning assigned thereto in the Security Agreement.

 

SECTION 2.                            No Additional Loan Advances With Respect
to Ginnie Mae Servicing Rights.  Notwithstanding anything to the contrary
contained in the Loan and Security Agreement, although the Collateral Value of
the Ginnie Mae Servicing Rights has increased and may increase on and after the
date hereof, the Lender shall not make future Loan Advances with respect to
Ginnie Mae Servicing Rights other than Borrower Originated Ginnie Mae Servicing
Rights, unless expressly consented to by the Lender.

 

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SECTION 3.                            Dedicated Accounts.  Section 2.14 of the
Existing Loan Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:

 

2.14                        Dedicated Accounts.  Lender shall establish and
maintain each of the Dedicated Accounts in the form of a time deposit or demand
account.  Receivables funds received and retained by Borrower pursuant to the
applicable Servicing Contract shall promptly, in any event within two
(2) Business Days after receipt, be deposited in the Receivables Dedicated
Account.  Amounts received on account of Servicing Rights and retained by
Borrower pursuant to the applicable Servicing Contract shall promptly, in any
event within two (2) Business Days after receipt, be deposited in the applicable
Servicing Rights Dedicated Account; provided that, prior to the occurrence of an
Event of Default or Trigger Event, as applicable, (i) any amounts received by
Borrower on account of the Portfolio Excess Spread and the related Servicing
Rights shall be remitted by Borrower to Spread Buyer, and (ii) any amounts on
account of the Portfolio Excess Spread and the related Servicing Rights to be
remitted back to Borrower pursuant to the Master Spread Acquisition Agreement
shall be remitted directly to the Dedicated Account; provided further that after
the occurrence of an Event of Default or Trigger Event, as applicable, all
amounts, including any amounts received on account of the Portfolio Excess
Spread and the related Servicing Rights, shall be deposited in the applicable
Servicing Rights Dedicated Account.  For the avoidance of doubt, prior to an
Event of Default or Trigger Event, as applicable, any amounts received by
Borrower on account of the Portfolio Excess Spread and the related Servicing
Rights shall be remitted to Spread Buyer, and if such amounts are remitted back
to Borrower pursuant to the Master Spread Acquisition Agreement, such amounts
shall be remitted directly to the Dedicated Account.  Funds deposited in the
Dedicated Accounts (including any interest paid on such funds) may be
distributed only in accordance with Section 2.07.  Upon the Termination Date and
the payment of all amounts due by Borrower hereunder, all amounts on deposit in
the Dedicated Accounts shall be remitted to Borrower.

 

SECTION 4.                            Ownership.  Section 3.13(a) of the
Existing Loan Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:

 

(a)                                 Borrower has good title to all of the
Collateral other than the Portfolio Excess Spread, free and clear of all
mortgages, security interests, restrictions, Liens and encumbrances of any kind
other than the Liens created hereby.

 

SECTION 5.                            Collateral; Security Interest.

 

(a)                                 Section 4.01(a) of the Existing Loan
Agreement is hereby amended by (1) renumbering clause (v) as clause (vi),
(2) renumbering clause (vi) as clause (vii), (3) renumbering clause (vii) as
clause (viii), and (4) inserting the following immediately after clause (iv):

 

(v) all rights under the Master Spread Acquisition Agreement; and

 

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(b)                                 Section 4.01 of the Existing Loan Agreement
is hereby amended by adding the following Section 4.01(e) at the end thereof:

 

(e)                                  Lender and Borrower hereby acknowledge and
agree that the Spread Buyer has acquired the Portfolio Excess Spread subject to
the Lien of the Lender created herein and in order to evidence such Lien, Spread
Buyer shall reaffirm such Lien, and pursuant to the Security Agreement, grant a
security interest in and Lien on the Portfolio Excess Spread and related
collateral as more particularly set forth in the Security Agreement.

 

SECTION 6.                            Release of Security Interest. 
Section 4.14 of the Existing Loan Agreement is hereby amended by deleting it in
its entirety and replacing it with the following:

 

4.14                    Release of Security Interest.  Upon the latest to occur
of (a) the repayment of the Loan, and (b) the occurrence of the Termination
Date, Lender shall release its security interest in any remaining Collateral
hereunder and shall promptly execute and deliver to Borrower such documents or
instruments as Borrower shall reasonably request to evidence such release;
provided that, such release shall not be required until such time as the
Acknowledgment Agreement is terminated.

 

SECTION 7.                            Collateral Security.  Article 4 of the
Existing Loan Agreement is hereby amended by adding the following Section 4.16
at the end thereof:

 

4.16                        Subordination.

 

(a)                                 It is anticipated that in connection with
the transactions contemplated by the Loan Documents, that (x) the Spread Buyer
has purchased the Portfolio Excess Spread from the Borrower subject to the Lien
of the Lender and (y) Borrower hereby reaffirms such Lien.  Borrower
acknowledges and agrees that its rights with respect to the Collateral under the
Master Spread Acquisition Agreement are and shall continue to be at all times
junior and subordinate to (i) the rights of Lender under this Agreement and
(ii) the rights of the Lender under the Security Agreement.  In connection with
the foregoing Borrower agrees to subordinate all of the rights under the Master
Spread Acquisition Agreement to the rights of the Lender hereunder and under the
other Loan Documents.  In furtherance of the foregoing, notwithstanding any
rights or remedies available to Borrower hereunder or under Master Spread
Acquisition Agreement, applicable law or otherwise, Borrower shall not, directly
or indirectly, exercise any remedies available to it under the Master Spread
Acquisition Agreement or at law or equity for ninety-one (91) days following the
date that all Obligations are paid in full under the Loan Documents; provided
that nothing in the foregoing shall prohibit Borrower from making payments with
respect to the obligations under the Master Spread Acquisition Agreement as, and
in the manner, contemplated therein, but subject to the prior rights of the
Lender hereunder and under the Loan Documents.  For the avoidance of doubt, in
no instance shall the Lender succeed to any liabilities or obligations of
Borrower under the Master Spread Acquisition Agreement.

 

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(b)                                 In furtherance of the foregoing, Borrower
agrees to not assert any objection to, and shall be deemed to have otherwise
consented to, a disposition of any assets subject to the Master Spread
Acquisition Agreement and subject to the Loan Documents during an Act of
Insolvency of Spread Buyer or Borrower, free and clear of any lien, encumbrance,
pledge or other claims under Section 363 of the Bankruptcy Code (or any similar
bankruptcy law) if Lender has consented to such disposition.

 

(c)                                  If an Act of Insolvency of Spread Buyer or
Borrower occurs, the Borrower agrees not to contest (or support any other Person
contesting) any request by Lender for adequate protection, or any objection by
Lender to any motion, relief, action or proceeding based on Lender claiming a
lack of adequate protection.

 

(d)                                 Until the obligations under the Loan
Documents are paid in full, the Borrower shall not oppose any request by Lender
for relief from the automatic stay or any other stay in any Act of Insolvency of
Spread Buyer or Borrower.

 

(e)                                  Borrower shall not oppose or seek to
challenge any claim by Lender for allowance and payment in any Act of Insolvency
of Spread Buyer or Borrower, of obligations under the Loan Documents consisting
of post-petition interest, fees, costs or other charges to the extent of the
value of Lender’s lien, encumbrance, pledge or other claims on the assets that
are the subject of this Agreement or the Loan Agreement, without regard to the
existence of a lien, encumbrance, pledge or other claims of Spread Buyer
applicable to the obligations of the other parties to the Loan Documents.

 

(f)                                   Borrower shall not seek in any Act of
Insolvency of Spread Buyer or Borrower, to be treated as part of the same class
of creditors as Lender and shall not oppose any pleading or motion by Lender
advocating that Lender and Spread Buyer and Borrower should be treated as
separate classes of creditors. Borrower acknowledges and agrees that its rights
with respect to the Collateral are and shall continue to be at all times junior
and subordinate to the rights of Lender under this Agreement.

 

SECTION 8.                            Covenants.  Article 6 of the Existing Loan
Agreement is hereby amended by:

 

(a)                                 deleting Section 6.14 in its entirety and
replacing it with the following:

 

6.14                        Collections on Assets and the Dedicated Accounts. 
Prior to the Borrower making any withdrawal from the custodial account or any
other clearing account maintained under the related Servicing Contract, the
Borrower shall instruct the related depository institution to remit all
collections, payments and

 

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proceeds in respect of any Receivable pledged hereunder to be deposited into the
Receivables Dedicated Account and on account of Servicing Rights to the
applicable Servicing Rights Dedicated Account; provided that prior to the
occurrence of an Event of Default or Trigger Event, as applicable, (i) any
amounts received on account of the Portfolio Excess Spread and the related
Servicing Rights shall be remitted by Borrower in accordance with the Master
Spread Acquisition Agreement and (ii) any amounts on account of the Portfolio
Excess Spread and the related Servicing Rights to be remitted back to Borrower
pursuant to the Master Spread Acquisition Agreement shall be remitted directly
to the Dedicated Account; provided further that after the occurrence of an Event
of Default or Trigger Event, as applicable, all amounts received on account of
the Portfolio Excess Spread and the related Servicing Rights shall be deposited
in the applicable Servicing Rights Dedicated Account.  Borrower shall not
withdraw or direct the withdrawal or remittance of any amounts on account of any
Receivables or Servicing Rights income related to any Servicing Contract from
any custodial account into which such amounts have been deposited other than to
remit to each of the applicable Dedicated Accounts; provided that prior to the
occurrence of an Event of Default or Trigger Event, as applicable, Borrower
shall be permitted to direct the remittance of any amounts received on account
of the Portfolio Excess Spread and the related Servicing Rights to Spread Buyer
in accordance with the Master Spread Acquisition Agreement.

 

(b)                                 deleting Section 6.27 in its entirety and
replacing it with the following:

 

6.27                        No Pledge; Other Liens; Creditors.  Except as
contemplated herein, neither Borrower nor Guarantor shall (a) pledge, transfer
or convey any security interest in the Dedicated Account to any Person without
the express written consent of Lender; (b) pledge, grant a security interest or
assign any existing or future rights to service any of the Collateral or to be
compensated for servicing any of the Collateral, or pledge or grant to any other
Person any security interest in any Assets or Servicing Contracts; or
(c) pledge, transfer or convey any security interest or suffer to exist, any
Lien on any interest of any kind (whether in whole or in part) in any Portfolio
Excess Spread or Servicing Contract, including without limitation, any interest
in pools of Mortgage Loans not set forth on Schedule 2.

 

(c)                                  by adding the following sections 6.37 and
6.38 at the end thereof:

 

6.37.                 No Modification of the Master Spread Acquisition
Agreement.  Borrower shall not consent, with respect to the Master Spread
Acquisition Agreement related to any Collateral, to (i) the modification,
amendment or termination of such Master Spread Acquisition Agreement, (ii) the
waiver of any provision of such Master Spread Acquisition Agreement or (iii) 
the assignment, transfer, or material delegation of any of its rights or
obligations, under Master Spread Acquisition Agreement, without the prior
written consent of Lender exercised in Lender’s sole discretion. Notwithstanding
anything to the contrary set forth in the Master Spread Acquisition Agreement,
the Lender is hereby appointed and is an intended third party beneficiary
thereof, with full enforcement rights as if a party thereto.

 

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6.38.  No Subservicing.  Borrower shall not permit any of the Collateral to be
subject to any subservicing agreement or subservicing arrangement without the
prior written consent of the Lender.

 

SECTION 9.                            Events of Default.  Section 7.01 of the
Existing Loan Agreement is hereby amended by adding the following section (t) at
the end thereof:

 

(t)                                    Trigger Event.  A Trigger Event shall
have occurred and Borrower shall have failed to either repay the entire
outstanding principal amount of the loan or purchase from Spread Buyer all
Portfolio Excess Spread that constitutes Collateral within three (3) Business
Days thereof.

 

SECTION 10.                     Indemnification. Section 10.02 of the Existing
Loan Agreement is hereby amended by adding the following sentence at the end
thereof:

 

For the avoidance of doubt, the foregoing indemnity includes, without
limitation, any claims arising from or relating to the Portfolio Excess Spread
or the Master Spread Acquisition Agreement.

 

SECTION 11.                     Representations and Warranties Regarding the
Assets.  Schedule 1 of the Existing Loan Agreement is hereby amended by deleting
clause (l) in its entirety and replacing them with the following:

 

(l)                                 Good Title.  Borrower has good title to all
of the Collateral other than the Portfolio Excess Spread, free and clear of all
mortgages, security interests, restrictions, Liens and encumbrances of any kind
other than the Liens created by the Loan Documents.  The Spread Buyer has good
title to Portfolio Excess Spread, subject to the Lien created hereby and further
perfected pursuant to the Security Agreement, but otherwise, free and clear of
all mortgages, security interests, restrictions, Liens and encumbrances of any
kind.

 

SECTION 12.                     Conditions Precedent.  This Amendment shall
become effective as of as of the date hereof (the “Amendment Effective Date”),
subject to the satisfaction of the following conditions precedent:

 

(a)                                 Delivered Documents.  On the Amendment
Effective Date, the Lender shall have received the following documents, each of
which shall be satisfactory to the Lender in form and substance:

 

(1)                                 this Amendment, executed and delivered by
the duly authorized officers of the Lender, Borrower and Guarantor;

 

(2)                                 duly authorized and filed Uniform Commercial
Code financing statement amendments listing Borrower as debtor on Form UCC-3;

 

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(3)                                 a fully executed copy of Master Spread
Acquisition Agreement and all documents required thereunder (including (A) a
duly authorized and filed Uniform Commercial Code financing statement listing
Borrower as debtor and Spread Buyer as secured party on Form UCC-1 and (B) a
duly authorized and filed Uniform Commercial Code assignment financing statement
listing Spread Buyer as Assignor and Lender as assignee on Form UCC-3);

 

(4)                                 a fully executed Security Agreement and all
documents required thereunder;

 

(5)                                 duly authorized and filed Uniform Commercial
Code financing statements listing Spread Buyer as debtor and Lender as secured
party on Form UCC-1;

 

(6)                                 UCC Searches with respect to the Spread
Buyer, reviewed and approved by Lender;

 

(7)                                 an officer’s certificate of Borrower and of
Spread Buyer as to corporate matters in form and substance acceptable to the
Lender;

 

(8)                                 an opinion of counsel of Borrower and of
Spread Buyer as to corporate matters, enforceability and creation and perfection
of security interest in form and substance acceptable to the Lender; provided
that such opinion of counsel may be delivered within fifteen (15) days following
the Amendment Effective Date as a condition subsequent; and

 

(9)                                 such other documents as the Lender or
counsel to the Lender may reasonably request.

 

SECTION 13.                     Representations and Warranties.  The Borrower
hereby represents and warrants to the Lender that it is in compliance with all
the terms and provisions set forth in the Loan Agreement on its part to be
observed or performed, and that no Event of Default has occurred and is
continuing, and hereby confirms and reaffirms the representations and warranties
contained in the Loan and Security Agreement.

 

SECTION 14.                     Limited Effect.  Except as expressly amended and
modified by this Amendment, the Existing Loan Agreement shall continue to be,
and shall remain, in full force and effect in accordance with its terms.

 

SECTION 15.                     Severability. Any provision of this Amendment
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.

 

SECTION 16.                     Counterparts.  This Amendment may be executed by
each of the parties hereto on any number of separate counterparts (including by
facsimile or .pdf), each of which shall be an original and all of which taken
together shall constitute one and the same instrument.

 

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SECTION 17.                           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 18.                     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 Borrower to Lender under
the Loan and Security Agreement, 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 Lender

 

 

 

 

 

By:

/s/ Adam Loskove

 

Name: Adam Loskove

 

Title: Vice President

 

 

 

 

 

PennyMac Loan Services, LLC, as Borrower

 

 

 

 

 

By:

/s/ Pamela Marsh

 

Name: Pamela Marsh

 

Title: Executive Vice President, Treasurer

 

 

 

 

 

Private National Mortgage Acceptance Company, LLC, as Guarantor

 

 

 

 

 

By:

/s/ Pamela Marsh

 

Name: Pamela Marsh

 

Title: Executive Vice President, Treasurer

 

Signature Page to Amendment No.3 to Second Amended and Restated Loan Security
Agreement

 

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