EXHIBIT 10.9

 

SCHEDULE

 

to the

 

ISDA Master Agreement

 

dated as of September 5, 2003,

 

between

 

CITIBANK, N.A.,

a national banking association organized under the laws of the United States

(“Party A”)

 

and

 

NC CAPITAL CORPORATION

a corporation organized and existing

under the laws of California

(“Party B”)

 

Part 1

 

Termination Provisions

 

In this Agreement:

 

(a) “Specified Entity” with respect to both Party A and Party B: None.

 

(b) “Specified Transaction” will have the meaning specified in Section 14 of
this Agreement.

 

(c) The “Default Under Specified Transactions” provision of Section 5(a)(v) will
not apply to Party A and will not apply to Party B.

 

(d) The “Cross Default” provisions of Section 5(a)(vi) will not apply to Party A
and will not apply to Party B.

 

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(e) The “Credit Event Upon Merger” provisions of Section 5(b)(v) of this
Agreement will apply to Party A and will apply to Party B.

 

(f) The “Automatic Early Termination” provisions of Section 6(a) will not apply
to Party A and will not apply to Party B.

 

(g) Payment on Early Termination.  The provisions of Sections 6(d) and 6(e) of
this Agreement shall not apply, therefore no termination payment under Section
6(e) shall be payable by either party.

 

(h) Restriction on Designating an Early Termination Date.  Notwithstanding any
provisions in this Agreement to the contrary, an Early Termination Date may not
be designated under this Agreement by either party. The Termination Date as
defined in the Confirmation is the sole Termination Date for this Agreement.

 

(i) “Termination Currency” means United Sated Dollars (“USD”).

 

(j) “Additional Termination Event” will not apply.

 

Part 2

 

Tax Representations

 

(a) Payer Representations.  For the purpose of Section 3(e) of this Agreement,
Party A will make the following representation and Party B will make the
following representation:

 

It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to
be made by it to the other party under this Agreement. In making this
representation, it may rely on (i) the accuracy of any representations made by
the other party pursuant to Section 3(f) of this Agreement, (ii) the
satisfaction of the agreement of th other party contained in Section 4(a)(i) or
4(a)(iii) of this Agreement and the accuracy and effectiveness of any document
provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
Agreement and (iii) the satisfaction of the agreement of the other party
contained in Section 4(d) of this Agreement, provided that it shall not be a
breach of this representation where reliance is placed on clause (ii) above and
the other party does not deliver a form or documents under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial position.

 

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(b) Payee Representations.  For the purpose of Section 3(f) of the Agreement,
Party A and Party B make the representations specified below, if any:

 

The following representation will apply to Party A:

 

It is a national banking association organized under the laws of the United
States and its U.S. taxpayer identification number is 13-5266470. It is “exempt”
within the meaning of Treasury Regulation sections 1.6041-3(p) and 1.6049-4(c)
from information reporting on Form 1099 and backup withholding.

 

The following representation will apply to Party B:

 

It is a corporation created or organized in the United States or under the laws
of the State of California; and its U.S. taxpayer identification number is
33-0829437.

 

Part 3

 

Agreement to Deliver Documents

 

For the purpose of Section 4(a) of this Agreement:

 

I. Tax forms, documents or certificates to be delivered are:

 

Party required to

deliver document

 

Form/Document/

Certificate

 

Date by which to

be delivered

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(i) Party A and Party B

  As required under Section 4(a)(i) of the Agreement, IRS Form W-9.   Promptly
upon execution of this Agreement; and promptly upon learning that any form
previously provided by Party B has become obsolete or incorrect.

 

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II. Other documents to be delivered are:

 

Party required

to deliver

document

 

Form/Document/

Certificate

 

Date by which to

be delivered

 

Covered by

Section 3(d)

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(a) Party A, Party B and Credit Support Provider

  Evidence reasonably satisfactory to the other party of the (i) authority of
such entity to enter into the Agreement and each such Credit Support Document
and any Transactions and (ii) the authority and genuine signature of the
individual signing the Agreement and each Credit Support Document on behalf of
such entity to execute the same.   As soon as practicable after execution of
this Agreement and, if requested by the other party, as soon as practicable
after execution of any Confirmation of any other Transaction.   Yes

(b) Party A and Party B

  The party’s (or the party’s Credit Support Provider’s) annual report
containing audited consolidated financial statements prepared in accordance with
accounting principles that are generally accepted in such party’s country of
organization and certified by independent certified public accountants for each
fiscal year.   Upon request.   Yes

 

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Party required

to deliver

document

  Form/Document/
Certificate  

Date by which to

be delivered

 

Covered by

Section 3(d)

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(c) Party A and Party B

  The party’s (or the party’s Credit Support Provider’s) unaudited consolidated
financial statements, the consolidated balance sheet and related statements of
income for each fiscal quarter prepared in accordance with accounting principles
that are generally accepted in such party’s country of organization.   Upon
request.   Yes

(d) Party A, Party B and the Credit Support Provider for Party B

  Legal opinion in a form acceptable to the other party.   Upon execution of
this Agreement.   No

 

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Part 4

 

Miscellaneous

 

(a)  Addresses for Notices. For the purpose of Section 12(a) of this Agreement:

 

Address for notices or communications to Party A:

 

Address:

  250 West Street                   

10th Floor

                  

New York, New York 10013

         

Attention:

 

Director Derivatives Operations

         

Facsimile No.:

 

212 723 2956

              

(For all purposes)

                  

 

In addition, in the case of notices or communications relating to Section 5, 6,
11 or 13 of this Agreement, a second copy of any such notice or communication
shall be addressed to the attention of Party A’s legal department as follows:

 

Address:

  Legal Department                   

77 Water Street

                  

9th Floor

                  

New York, New York 10004

         

Attention:

 

Department Head

         

Facsimile No.:

 

212 657 1452

              

 

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Address for notices or communications to Party B:

 

Address:

  18400 Von Karman Avenue, Suite 1000              

Irvine,CA 92612

         

Attention:

 

Kevin Cloyd

         

Facsimile No.:

 

949-440-7033

              

Telephone:

 

949-440-7030

              

 

In addition, in the case of notices or communications relating to Section 5, 6,
11 or 13 of this Agreement, a second copy of any such notice or communication
shall be addressed to the attention of Party B’s legal department as follows:

 

Address:

  18400 Von Karman Avenue, Suite 1000              

Irvine,CA 92612

         

Attention:

 

General Counsel

         

Facsimile No.:

 

949-440-7033

              

Telephone:

 

949-440-7030

              

 

(b) Process Agent.  For the purpose of Section 13(c) of this Agreement:

 

Party B appoints as its Process Agent: Not applicable.

 

(c) Offices.  The provisions of Section 10(a) will apply to this Agreement.

 

(d) Multibranch Party.  For the purpose of Section 10(c) of this Agreement:

 

Party A is not a Multibranch Party.

 

Party B is not a Multibranch Party.

 

(e) Calculation Agent.  Has the meaning specified in the Confirmation.

 

(f) Credit Support Document.  Details of any Credit Support Document:

 

The Credit Support Document is the Guarantee made by the Credit Support Provider
in favor of Party A, in a form satisfactory to Party A.

 

(g) Credit Support Provider.  With respect to Party A; not applicable, and with
respect to Party B; New Century Financial Corporation.

 

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(h) Governing Law.  This Agreement will be governed by and construed in
accordance with the laws of the State of New York.

 

(i) “Affiliate” will have the meaning specified in Section 14 of this Agreement.

 

(j) Additional Representations.  For purposes of Section 3 of this Agreement,
the following shall be added, immediately following paragraph (f) thereof:

 

“(g) No Reliance.  It is acting for its own account, and it has made its own
independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or as a
recommendation to enter into that Transaction; it being understood that
information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. It has not received from the other party any
assurance or guarantee as to the expected results of that Transaction.

 

(h) Evaluation and Understanding.  It is capable of evaluating and understanding
(on its own behalf or through independent professional advice), and understands
and accepts, the terms, conditions and risks of that Transaction. It is also
capable of assuming, and assumes, the financial and other risks of that
Transaction.

 

(i) Status of Parties.  The other party is not acting as a fiduciary or an
advisor for it in respect of that Transaction.

 

(j) No Agency.  It is entering into this Agreement and each Transaction as
principal and not as agent.”

 

(k) Eligible Contract Participant.  Each party represents that (a) it is an
“eligible contract participant” within the meaning of Section 1(a)(12) of the
Commodity Exchange Act, as amended (the “CEA”), (b) this Agreement and each
Transaction is subject to individual negotiation by each party, and (c) neither
this Agreement nor any Transaction will be executed or traded on a “trading
facility” within the meaning of Section 1a(33) of the CEA.

 

(l) Financial Institution.  Party A represents that it is a “financial
institution” as defined in the Federal Deposit Insurance Corporation Improvement
Act of 1991 or Regulation EE promulgated by the Federal Reserve Board
thereunder.

 

(m) “Netting of Payments” Subparagraph (ii) of Section 2(c) of this Agreement
will apply to any Transaction.

 

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Part 5

 

Other Provisions

 

(a) Waiver of Right to Trial by Jury.  Each party hereby irrevocably waives, to
the fullest extent permitted by applicable law, any right it may have to a trial
by jury in respect of any suit, action or proceeding relating to this Agreement.

 

(b) Severability.  Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition, unenforceability
or non-authorization without invalidating the remaining provisions hereof or
affecting the validity, enforceability or legality of such provision in any
other jurisdiction so long as this Agreement as so modified continues to
express, without material change, the original intentions of the parties as to
the subject matter of this Agreement and the deletion of such portion of this
Agreement will not substantially impair the respective benefits and expectations
of the parties to this Agreement. The parties shall endeavor, in good faith
negotiations, to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

 

(c) Notice of Events of Default.  Each party agrees, upon learning of the
occurrence of any event or commencement of any condition that constitutes (or
that with the giving of notice or passage of time or both would constitute) an
Event of Default or Termination Event with respect to such party, promptly to
give the other party notice of such event or condition (or, in lieu of giving
notice of such event or condition in the case of an event or condition that with
the giving of notice or passage of time or both would constitute an Event of
Default or Termination Event with respect to the party, to cause such event or
condition to cease to exist before becoming an Event of Default or Termination
Event).

 

(d) Recording of Conversations.  Each party hereto consents to the recording of
its telephone conversations relating to this Agreement or any potential
Transaction. To the extent that one party records telephone conversations (the
“Recording Party”) and the other party does not (the “Non-Recording Party”), the
Recording Party shall, in the event of any dispute, make a complete and unedited
copy of such party’s tape of the entire day’s conversations with the
Non-Recording Party’s personnel available to the Non-Recording Party. The
Recording Party’s tapes may be used by either party in any forum in which a
dispute is sought to be resolved and the Recording Party will retain tapes for a
consistent period of time in accordance with the Recording Party’s policy unless
one party notifies the other that a particular transaction is under review and
warrants further retention.

 

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(e) Set-off.  Section 6 of the Agreement is amended by adding the following new
subsection 6(f):

 

(f) In addition to any rights of set-off a party may have as a matter of law or
otherwise, upon the occurrence of an Event of Default or a Termination Event
with respect to a party (“X”) the other party (“Y”) will have the right (but
will not be obliged) without prior notice to X or any other person to set-off
any obligation of X owing to Y (whether or not arising under this Agreement,
whether or not matured, whether or not contingent and regardless of the
currency, place of payment or booking office of the obligation) against any
obligation of Y owing to X (whether or not arising under this Agreement, whether
or not matured, whether or not contingent and regardless of the currency, place
of payment or booking office of the obligation).

 

For the purpose of cross-currency set-off, Y may convert any obligation to
another currency at a market rate determined by Y.

 

If an obligation is unascertained, Y may in good faith estimate that obligation
and set-off in respect of the estimate, subject to the relevant party accounting
to the other when the obligation is ascertained.

 

Nothing in this provision will be deemed to create a charge or other security
interest.

 

(f) Definitions.  The definitions and provisions contained in the 2000 ISDA
Definitions, without regard to any amendment or supplement thereof subsequent to
the date of this Agreement (together, the “Definitions”), are hereby
incorporated into this Agreement, provided that any reference therein to a “Swap
Transaction” shall be deemed to include a “Transaction” hereunder. In the event
of any inconsistency (1) between the provisions of the Definitions and this
Agreement, this Agreement will prevail, (2) between the provisions of a
Confirmation and the Definitions, the Confirmation will prevail and (3) between
the provisions of a Confirmation and this Agreement, the Confirmation will
prevail.

 

(G) Confirmation.  The Confirmation, as amended and supplemented from time to
time, supplements, forms part of, and will be read and construed as one with the
Agreement. The parties hereby agree and acknowledge that the Transaction entered
into pursuant to the Confirmation, dated as of the date hereof and bearing the
Reference No. 50034057, between the parties shall constitute the sole
Transaction under this Agreement.

 

(h) Conditions Precedent.  Section 2(a)(iii) of the Agreement shall not apply to
the obligations of either party.

 

(i) Failure to Pay.  Section 5(a)(i) of the Agreement shall be amended by
deleting the word “third” in line three thereof and replacing it with the word
“first”.

 

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IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

 

CITIBANK, N.A.

     

NC CAPITAL CORPORATION

By:   /s/    LINDA COOK               By:   /s/    KEVIN CLOYD          

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Title:   Vice President       Title:  

President

 

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