Exhibit 10.4


 


AMENDMENT
NO. 1


 


TO
MANAGEMENT AGREEMENT


 


Amendment
No. 1 to Management Agreement, dated as of March 3, 2010 (the “Amendment”), by and among PennyMac Mortgage Investment
Trust, a Maryland real estate investment trust (the “Trust”),
PennyMac Operating Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”), and PNMAC Capital Management, LLC,
a Delaware limited liability company (the “Manager”).


 


RECITALS


 


WHEREAS,
the Trust, the Operating Partnership and the Manager are parties to that
certain Management Agreement, dated as of August 4, 2009 (the “Existing Management Agreement” and, as amended by the
Amendment, the “Management Agreement”).  Capitalized terms used but not otherwise
defined herein shall have the meanings given to them in the Existing Management
Agreement.


 


WHEREAS,
the Trust, the Operating Partnership and the Manager have agreed, subject to
the terms and conditions of this Amendment, that the Existing Management
Agreement be amended to incorporate certain agreed upon revisions that reflect
the original intent of the Existing Management Agreement.


 


NOW,
THEREFORE, in consideration of the mutual premises and mutual obligations set
forth herein, the Trust, the Operating Partnership and the Manager hereby agree
that the Existing Management Agreement is hereby amended as follows:


 


SECTION 1.                                Definitions. Section 2
of the Existing Management Agreement is hereby amended by deleting the
definition of “Incentive Fee” in its entirety
and replacing it with the following:


 


“Incentive Fee”
means an incentive management fee calculated and payable (in cash) each fiscal
quarter in arrears in an amount equal to 20% per annum of the dollar amount by
which the Trust’s Core Earnings, for the Rolling Four Quarters Period, plus the
amount of the Incentive Fee, if any, during any of the fiscal quarters in such
Rolling Four Quarters Period and less the amount of any Core Earnings Offset,
exceeds the product of:


 


(1)                                  the weighted average of the issue price
per Common Share of all of the Trust’s public offerings of Common Shares
(including the Initial Public Offering) multiplied by the weighted average
number of Common Shares outstanding (including, for the avoidance of doubt,
restricted share units granted under one or more of the Trust’s equity
incentive plans) in the four-quarter period; and


 

















 


(2)                                  8.0%.


 


For purposes of calculating the Incentive Fee,
outstanding limited partnership interests in the Operating Partnership (other
than limited partnership interests held by the Trust) shall be treated as
outstanding Common Shares.


 


SECTION 2.                                Definitions. Section 2
of the Existing Management Agreement is hereby amended by deleting the
definition of “Shareholders’ Equity” in its
entirety and replacing it with the following:


 


“Shareholders’ Equity”
means:


 


(A) the
sum of the net proceeds from any issuances of the Trust’s equity securities
since inception (allocated on a pro rata daily basis for such issuances during
the fiscal quarter of any such issuance); plus


 


(B) the
Trust’s retained earnings at the end of such quarter (without taking into
account any non-cash equity compensation expense incurred in current or prior
periods); less


 


(C) any
amount that the Trust pays for repurchases of its Common Shares (allocated on a
pro rata daily basis for such repurchases during the fiscal quarter of any such
repurchase); excluding


 


(D) any
unrealized gains, losses or other non-cash items that have impacted the Trust’s
shareholders’ equity as reported in the Trust’s financial statements prepared
in accordance with GAAP, regardless of whether such items are included in other
comprehensive income or loss, or in net income; and excluding


 


(E) one-time
events pursuant to changes in GAAP and certain other non-cash charges after
discussions between the Manager and the Independent Trustees and after approval
by a majority of the Independent Trustees.


 


The
Conditional Payments shall be taken into account in the calculation of
Shareholders’ Equity only from and after the payment thereof, if any.


 


For
purposes of calculating the Base Management Fee, outstanding limited
partnership interests in the Operating Partnership (other than limited
partnership interests held by the Trust) shall be treated as outstanding Common
Shares.


 


SECTION 3.                                Conditions
Precedent.  This Amendment
shall become effective on as of the date first set forth above (the “Amendment Effective Date”) subject to the satisfaction of
the following conditions precedent:


 


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3.1                                 Delivered
Documents.  On the
Amendment Effective Date, each party shall have received the following
documents, each of which shall be satisfactory to such party in form and
substance:


 


(a)                                  this Amendment, executed and delivered by
duly authorized officers of the Trust, the Operating Partnership and the
Manager; and


 


(b)                                 such other documents as such party or
counsel to such party may reasonably request.


 


SECTION 4.                                Representations
and Warranties. Each party represents that it is in compliance in
all material respects with all the terms and provisions set forth in the
Existing Management Agreement on its part to be observed or performed.


 


SECTION 5.                                Limited Effect.  Except as expressly amended and modified by
this Amendment, the Existing Management Agreement shall continue to be, and shall
remain, in full force and effect in accordance with its terms.


 


SECTION 6.                                GOVERNING
LAW.  THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.


 


SECTION 7.                                Counterparts.  This Amendment may be executed in one or more
counterparts and by different parties hereto on separate counterparts, each of
which, when so executed, shall constitute one and the same agreement.


 


SECTION 8.                                Conflicts.  The parties hereto agree that in the event
there is any conflict between the terms of this Amendment, and the terms of the
Existing Management Agreement, the provisions of this Amendment shall control.


 


[SIGNATURE PAGE
FOLLOWS]


 


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IN
WITNESS WHEREOF, the parties have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year
first above written.


 


 


	
  The Trust:

  	
   

  	
  PENNYMAC MORTGAGE INVESTMENT
  TRUST

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Anne D. McCallion

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Operating
  Partnership:

  	
   

  	
  PENNYMAC OPERATING PARTNERSHIP,
  L.P

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  PennyMac GP OP, Inc.,

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   Anne D. McCallion

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
  and Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Manager:

  	
   

  	
  PNMAC CAPITAL MANAGEMENT, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Anne D. McCallion

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
  and Treasurer