Document:

Amendment Number Three to the Amended and Restated Letter Agreement

 Exhibit 10.5 
  
 AMENDMENT NUMBER THREE 
 to the 
 Amended and Restated Letter Agreement 
 dated as of October 1, 2004 
 by and among 
 NEW CENTURY MORTGAGE CORPORATION 
 NC CAPITAL CORPORATION 
 NEW CENTURY CREDIT CORPORATION 
 and 

CITIGROUP GLOBAL MARKETS REALTY CORP. 
  
 This AMENDMENT NUMBER THREE (this “Amendment Number Three”) is made this 29th day of December, 2004, among NEW CENTURY MORTGAGE CORPORATION, having an address at 18400 Von Karman, Suite 1000, Irvine, California 92612 (“NC
Mortgage”), NC CAPITAL CORPORATION, having an address at 18400 Von Karman, Suite 1000, Irvine, California 92612 (“NC Capital”), NEW CENTURY CREDIT CORPORATION, having an address at 18400 Von Karman, Suite 1000, Irvine,
California 92612 (“NC Credit”) and CITIGROUP GLOBAL MARKETS REALTY CORP., having an address at 390 Greenwich Street, New York, New York 10013 (“Citigroup”) to the AMENDED & RESTATED LETTER AGREEMENT, dated as of
October 1, 2004, among NC Mortgage, NC Capital, NC Credit and Citigroup, as amended (the “Letter Agreement”). 
  
 RECITALS 
  
 WHEREAS, NC Mortgage, NC Capital and NC Credit have requested that Citigroup agree to extend the termination date as more expressly set forth below and
Citigroup has agreed to such request. 
  
 WHEREAS, as of the date
of this Amendment Number Three, each of NC Mortgage, NC Capital and NC Credit represents to Citigroup that it is in compliance with all of the representations and warranties and all of the affirmative and negative covenants set forth in the Letter
Agreement and the Amended and Restated Purchase and Sale Agreement, dated as of October 1, 2004, among NC Capital, NC Credit and Citigroup (the “Purchase and Sale Agreement”) and is not in default under the Letter Agreement or the Purchase
and Sale Agreement. 
  
 NOW THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and of the mutual covenants herein contained, the parties hereto hereby agree as follows: 
  
 SECTION 1. Effective as of December 29, 2004, the first paragraph of Section 1(a) of the Letter Agreement is hereby amended
by deleting the words “December 31, 2004” on the second and third lines thereof and replacing each with “March 31, 2005”. 
  
 SECTION 2. Effective as of December 29, 2004, the first paragraph of Section 4(c) of the Letter Agreement is hereby amended by deleting the words
“December 31, 2004” on the second and third lines thereof and replacing each with “March 31, 2005”. 

 SECTION 3. Fees and Expenses. NC Capital agrees to pay to Citigroup all fees and out of pocket
expenses incurred by Citigroup in connection with this Amendment Number Three (including all reasonable fees and out of pocket costs and expenses of Citigroup’s legal counsel incurred in connection with this Amendment Number Three), in
accordance with Section 5(i) of the Letter Agreement. 
  
 SECTION
4. Defined Terms. Any terms capitalized but not otherwise defined herein shall have the respective meanings set forth in the Letter Agreement. 
  
 SECTION 5. Representations. In order to induce Citigroup to execute and deliver this Amendment Number Three, NC Capital, NC Mortgage and NC Credit
hereby represent to Citigroup that as of the date hereof, after giving effect to this Amendment Number Three, each of NC Capital, NC Mortgage and NC Credit is in full compliance with all of the terms and conditions of the Letter Agreement and the
Purchase and Sale Agreement and no Termination Event or material adverse change has occurred under the Letter Agreement and no Seller default or Seller Event of Default has occurred under the Purchase and Sale Agreement. 
  
 SECTION 6. Limited Effect. This Amendment Number Three shall become
effective upon the execution hereof by the parties hereto. Except as expressly amended and modified by this Amendment Number Three, the Letter Agreement shall continue in full force and effect in accordance with its terms. Reference to this
Amendment Number Three need not be made in the Letter Agreement 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 Letter
Agreement, any reference in any of such items to the Letter Agreement being sufficient to refer to the Letter Agreement as amended hereby. 
  
 SECTION 7. GOVERNING LAW. THIS AMENDMENT NUMBER THREE 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 WITHOUT REGARD TO CONFLICT OF LAWS DOCTRINE APPLIED IN SUCH STATE (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). 
  
 SECTION 8. Counterparts. This Amendment Number Three 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. 
  
 [SIGNATURE PAGE FOLLOWS] 
  

 -2- 

 IN WITNESS WHEREOF, NC Capital, NC Mortgage, NC Credit and Citigroup have caused this Amendment Number
Three to be executed and delivered by their duly authorized officers as of the day and year first above written. 
  

			
	CITIGROUP GLOBAL MARKETS REALTY CORP.
		
	 By:
	 	 /s/ James Xanthos

	 Name:
	 	 James Xanthos

	 Title:
	 	 Authorized Signer

	
	NC CAPITAL CORPORATION
		
	 By:
	 	 /s/ Kevin Cloyd

	 Name:
	 	 Kevin Cloyd

	 Title:
	 	 President

	
	NEW CENTURY MORTGAGE CORPORATION
		
	 By:
	 	 /s/ Kevin Cloyd

	 Name:
	 	 Kevin Cloyd

	 Title:
	 	 Executive Vice President

	
	 NEW CENTURY CREDIT CORPORATION

		
	 By:
	 	 /s/ Kevin Cloyd

	 Name:
	 	 Kevin Cloyd

	 Title:
	 	 Executive Vice President

  

 -3-Amendment No. 4 to Master Repurchase Agreement

 Exhibit 10.6 
  
 AMENDMENT NO. 4 
 TO 
 MASTER REPURCHASE AGREEMENT 
  
 THIS AMENDMENT NO. 4, made as of December 30, 2004 (“Amendment No. 4”), by and among BEAR STEARNS MORTGAGE CAPITAL CORPORATION (the
“Buyer”), NC CAPITAL CORPORATION (“NC Capital”), NC RESIDUAL II CORPORATION (“NC Residual”) and NEW CENTURY CREDIT CORPORATION (“NC Credit”, and together with NC Capital and NC Residual, each a
“Seller” and collectively the “Sellers”). 
  
 R E C I T A L S 
  
 WHEREAS, Buyer and NC Capital
have previously entered into a Master Repurchase Agreement, dated as of October 31, 2003, as amended by Amendment No.1 to the Master Repurchase Agreement, dated as of January 14, 2004 (as amended, the “Repurchase Agreement”); 

 
 WHEREAS, Buyer, NC Capital and NC Residual have previously entered into
Amendment No. 2 to Master Repurchase Agreement, dated as of June 29, 2004; 
  
 WHEREAS, Buyer and Sellers have previously entered in to Amendment No. 3 to the Master Repurchase Agreement, dated as of October 1, 2004 (the Repurchase Agreement as so amended is hereinafter referred to as the
“Agreement”; 
  
 WHEREAS, Buyer and Sellers intend that
certain mortgage loans referred to as high cost loans under various Federal, State or local statutes and other non permitted mortgage loans will not be sold by Sellers to Buyer under the Agreement; 
  
 WHEREAS, Buyer and Sellers intend to extend the term of the Agreement; and

  
 WHEREAS, Buyer and Sellers intend to make certain
modifications to the Agreement as described herein. 
  
 NOW,
THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 
  
 Section 1. Definitions. Capitalized terms used herein and not
otherwise defined shall have the meanings assigned in the Agreement. Capitalized terms used in the Agreement whose definitions are modified in this Amendment No. 4 shall, for all purposes of the Agreement, be deemed to have such modified
definitions. 

 The definition of “Eligible Loan” is hereby deleted and replaced in its entirety as follows:

  
 “Eligible Loan” means any Mortgage Loan
which is determined in the reasonable judgment of Buyer to meet the criteria set forth in the Underwriting Guidelines or the Sub prime Underwriting Guidelines (subject, however, to the restrictions described in the covenant of Sellers set forth in
Section 10(e)(xxi) hereof); provided that notwithstanding anything contained in the Underwriting Guidelines or Sub prime Underwriting Guidelines the following mortgage loans shall not be Eligible Loans: 
  

	 	(a)	Any mortgage loan which is subject to 12 CFR Part 226.31, 12 CFR Part 226.32 or 226.34 of Regulation Z, the regulation implementing TILA, which implements the Home Ownership and
Equity Protection Act of 1994, as amended, or (b) classified and/or defined, as a “high cost”, “threshold”, “predatory” or “covered” loan (or a similarly classified loan using different terminology under a law
imposing additional legal liability for mortgage loans having high interest rates, points and/or fees) under any other applicable state, federal or local law. In addition to and notwithstanding anything to the contrary herein, a Mortgage Loan for
which the Mortgaged Property is located in New Jersey which is a Home Loan as defined in the Act that was made, arranged, or assigned by a person selling either a manufactured home or home improvements to the Mortgaged Property or was made by an
originator to whom the Mortgagor was referred by any such seller; and 

  

	 	(b)	Any mortgage loan which is secured by mortgaged property in the Commonwealth of Massachusetts with a loan application date on or after November 7, 2004 that refinances a mortgage
loan that is less than sixty (60) months old, unless such Mortgage Loan (i) is on an investment property, (ii) meets the requirements set forth in the Code of Massachusetts Regulation (“CMR”), 209 CMR 53.04(1)(b), or (iii) meets the
requirements set forth in the 209 CMR 53.04(1)(c).” 

  
 Appraised Value: With respect to any Mortgaged Property, the lesser of (i) the value thereof as determined by an appraisal made for the originator of the Mortgage Loan at the time of origination of the Mortgage Loan by a qualified
appraiser, and (ii) the purchase price paid for the related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan. 
  
 Combined Loan-to-Value Ratio or CLTV: With respect to any Mortgage Loan, the sum of the original principal balance of such Mortgage Loan and the
outstanding principal balance of any related first lien as of the date of origination of the Mortgage Loan, divided by the lesser of the Appraised Value of the Mortgage Property as of the origination date or the purchase price of the Mortgaged
Property. 
  
 Loan-to-Value Ratio or LTV: With respect to
any Mortgage Loan as of origination, the ratio on such date of the outstanding principal amount of the Mortgage Loan to the lesser of the Appraised Value of the Mortgaged Property as of the origination date or the purchase price of the Mortgaged
Property. 
  
 Mortgaged Property: The underlying real
property securing repayment of a Note, consisting of a single parcel of real estate considered to be real estate under the laws of the state in which such real property is located which may include condominium units and planned unit developments,
improved by a residential dwelling. 
  

 2 

 The Definition of “Sales Commitment” is hereby deleted and all references thereto are hereby deleted.

  
 Section 2. Initiation, Request/Confirmation; Termination;
Transactions Optional. 
  

	 	(a)	Paragraph 3 of the Agreement is hereby amended by adding the following after Subparagraph (3)(h): 

  
 (i) Notwithstanding anything to the contrary contained herein, the purchase of any Wet Mortgage Loan shall be made in
accordance with provisions set forth in Exhibit H attached hereto. 
  

	 	(b)	The Agreement is hereby amended by adding new Exhibit H attached hereto as Schedule II. 

  
 Section 3. Representation, Warranties and Covenants. 
  

	 	(a)	Subparagraphs 10(a)(xix) and (xx) and 10(e)(xxii) are deleted. 

  

	 	(b)	Exhibit C is amended by adding the following at the end of subparagraph (xlii): 

  
 No mortgage loan is secured by mortgaged property in the Commonwealth of Massachusetts with a loan application date on or
after November 7, 2004 that refinances a mortgage loan that is less than sixty (60) months old, unless such Mortgage Loan (i) is on an investment property, (ii) meets the requirements set forth in the Code of Massachusetts Regulation
(“CMR”), 209 CMR 53.04(1)(b), or (iii) meets the requirements set forth in the 209 CMR 53.04(1)(c).” 
  

	 	(c)	Exhibit D is amended by deleting Exhibit D in its entirety and substituting new Exhibit D attached hereto as Schedule I. 

  
 Section 4. Termination. Sub-paragraph (b) of paragraph 22,
“Non-assignability; Termination” is deleted and replaced in its entirety by the following: 
  
 This Agreement and all Transactions outstanding hereunder shall terminate automatically without any requirement for notice on October 28, 2005; provided,
however, that this Agreement and any Transaction outstanding hereunder may be extended by mutual agreement of Buyer and Seller; and provided further, however, that no such party shall be obligated to agree to such an extension. 
  
 Section 5. Expenses. Sellers shall pay on demand all fees and expenses
(including, without limitation, the fees and expenses for legal services of any kind whatsoever) incurred by Buyer in connection with this Amendment No. 4. The obligation of Sellers to pay such fees and expenses incurred prior to or in connection
with the termination of the Agreement as amended by this Amendment No. 4 shall survive such termination. 
  

 3 

 Section 6. Conditions Precedent; References to Guaranty. 
  

	 	(a)	Sellers shall cause to be delivered to Buyer, as a condition precedent to the effectiveness of this Amendment No. 4, the Guaranty of Guarantor substantially in the form attached
hereto as Exhibit A. 

  

	 	(b)	All references in the Agreement, as amended hereby, to the Guaranty shall mean the Guaranty in the form attached hereto as Exhibit A and the parties agree that such Guaranty shall
replace all prior guaranties under the Agreement. 

  
 Section 7. Governing Law. This Amendment No. 4 shall be governed and construed in accordance with the laws of the State of New York applicable to agreements made and entirely performed therein. 
  
 Section 8. Interpretation. The provisions of the Agreement shall be
read so as to give effect to the provisions of this Amendment No. 4. 
  
 Section 9. Counterparts. This Amendment No. 4 may be executed in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument.

  
 Section 10. Ratification and Confirmation. As amended
by this Amendment No. 4, the Agreement is hereby in all respects ratified and confirmed, and the Agreement as amended by this Amendment No. 4 shall be read, taken and construed as one and the same instrument. 
  

 4 

 IN WITNESS WHEREOF, Buyer and Sellers have caused their names to be signed hereto by their respective
officers thereunto duly authorized, all as of the date first above written. 
  

			
	BEAR STEARNS MORTGAGE CAPITAL
CORPORATION, as Buyer
		
	By:	 	 /s/ David S. Marren

	Name:	 	David S. Marren
	Title:	 	Senior Vice President
	
	 NC CAPITAL CORPORATION,
     as Seller

		
	By:	 	 /s/ Kevin Cloyd

	Name:	 	Kevin Cloyd
	Title:	 	President
	
	 NC RESIDUAL II CORPORATION,
     as Seller

		
	By:	 	 /s/ Kevin Cloyd

	Name:	 	Kevin Cloyd
	Title:	 	Executive Vice President
	
	 NEW CENTURY CREDIT CORPORATION,
     as Seller

		
	By:	 	 /s/ Kevin Cloyd

	Name:	 	Kevin Cloyd
	Title:	 	Executive Vice President

  

			
	ACKNOWLEDGED AND AGREED:
	
	 NEW CENTURY MORTGAGE CORPORATION,
     as Servicer

		
	By:	 	 /s/ Kevin Cloyd

	Name:	 	Kevin Cloyd
	Title:	 	Executive Vice President

  

 5 

 ACKNOWLEDGED AND AGREED: 
  

			
	 NEW CENTURY FINANCIAL CORPORATION,
 as
Guarantor

		
	By:	 	 /s/ Kevin Cloyd

	Name:	 	Kevin Cloyd
	Title:	 	Executive Vice President

 SCHEDULE I 
  
 REPRESENTATIONS AND WARRANTIES 
 RELATING TO THE
PURCHASED MORTGAGE LOANS 
  
 Sellers represent, warrant and
covenant to Buyer that the aggregate original outstanding Purchase Price for the Purchased Mortgage Loans shall not exceed the limits specified in the table below for the categories indicated, both immediately prior to the purchase of such Mortgage
Loans and also after giving effect thereto: 
  
 Purchased
Mortgage Loan Limitations 
  

											
	 Range of Outstanding
 Purchase Price
for
 Purchased Mortgage Loans
 ($)

	  	Non-Owner
Occupied
Mortgage
Loans ($)

	  	Second Lien
Mortgage Loans ($)

	  	 Mortgage
Loans in
excess of
 85% LTV ($)

	  	Non-Full
Income
Documentation
Mortgage
Loans ($)

	  	Mortgage
Loans
missing FICO
Credit Scores
($)

	                   0.00 –
300,000,000.00
	  	60,000,000	  	45,000,000	  	135,000,000	  	210,000,000	  	3,000,000
	 300,000,000.01 – 400,000,000.00
	  	80,000,000	  	60,000,000	  	180,000,000	  	280,000,000	  	4,000,000
	 400,000,000.01 – 500,000,000.00
	  	100,000,000	  	75,000,000	  	225,000,000	  	350,000,000	  	5,000,000
	 500,000,000.01 – 600,000,000.00
	  	120,000,000	  	90,000,000	  	270,000,000	  	420,000,000	  	6,000,000
	 600,000,000.01 – 700,000,000.00
	  	140,000,000	  	105,000,000	  	315,000,000	  	490,000,000	  	7,000,000
	 700,000,000.01 – 800,000,000.00
	  	160,000,000	  	120,000,000	  	360,000,000	  	560,000,000	  	8,000,000

  

 Sch. I-1 

 SCHEDULE II 
  
 PROCEDURES RELATING TO 
 FUNDING WET MORTGAGE
LOANS 
  
 (i) With respect to each Transaction involving Wet
Mortgage Loans, the Seller shall advise Buyer of the expected amount of funds it will require in order to originate such Wet Mortgage Loans on the Business Day prior to the proposed Purchase Date. 
  
 (ii) On the Purchase Date for such Transaction, Buyer shall wire the funds to
the Disbursement Account. 
  
 (iii) On the Purchase Date for such
Transaction, Seller shall provide Buyer and Custodian with not more than five data files with respect to the Wet Mortgage Loans; Buyer shall consult with Custodian and shall approve up to three batch fundings. 
  
 (iv) On the Purchase Date for such Transaction, upon Buyer’s
reconciliation of each batch of data files with the Custodian, Buyer shall instruct Custodian to wire from the Disbursement Account the funds required for such batch to Seller; provided, however, that no batch of data files and the
related wiring request shall be accepted after 4:00 p.m. (New York time). 
  
 (v) On the Purchase Date for such Transaction, after funding the last batch of data files, Buyer, upon consultation with Custodian and Seller, shall balance the funds wired by Buyer to the Disbursement Account against
the amounts remaining in the Disbursement Account following the related disbursements; Buyer shall instruct the Custodian to wire the remaining funds, if any, to Buyer and Custodian shall issue a Trust Receipt to Buyer relating to the Wet Mortgage
Loans. 
  
 (vi) On the Purchase Date for such Transaction,
Custodian shall issue via facsimile a confirmation to Seller with respect to the total amount of Wet Mortgage Loans funded on such date. 
  
 An example of such funding is set forth below: 
  
 10/21/04 Seller advises Buyer that they need $50,000,000 on 10/22/04. 
  
 10/22/04 Data files are received during the day. 
  

					
	 PST

	    	EST

	    	 Funding

	 7:30am
	    	10:30am	    	Data file and request for $10,000,000 to be wired immediately.
	 8:30am
	    	11:30am	    	Data file and request for $10,000,000 to be wired immediately.
	 10:30am
	    	1:30pm	    	Data file and request for $10,000,000 to be wired immediately.
	 11:30am
	    	2:30pm	    	Data file and request for $10,000,000 to be wired immediately.
	 1:00pm
	    	4:00pm	    	Data file and request for $10,000,000 to be wired immediately.

  

 Sch. I-1 

 EXHIBIT A 
  
 GUARANTY 
  
 December 30, 2004 
  
 Bear
Stearns Mortgage Capital Corporation 
 383 Madison Avenue 
 New
York, New York 10179 
  
 Ladies and Gentlemen: 
  
 This letter will confirm that New Century Financial Corporation, a Maryland
corporation, as successor in interest to New Century TRS Holdings, Inc., a Delaware corporation (“Guarantor”), agrees to absolutely and unconditionally guaranty to Bear Stearns Mortgage Capital Corporation, its successors and assigns (the
“Beneficiary”), the full and prompt payment and performance of all of the obligations, undertakings and liabilities of NC Capital Corporation, NC Residual II Corporation and New Century Credit Corporation (together, the
“Sellers”), arising under the terms and provisions of a Master Repurchase Agreement, dated as of October 31, 2003, as amended by Amendment No. 1 to the Master Repurchase Agreement, dated as of January 14, 2004, Amendment No. 2 to the
Master Repurchase Agreement, dated as of June 29, 2004, Amendment and Joinder No. 3 to the Master Repurchase Agreement, dated as of October 1, 2004 and Amendment No. 4 to the Master Repurchase Agreement, dated as of December 30, 2004, by and among
the Sellers and Bear Stearns Mortgage Capital Corporation (as amended, the “Master Repurchase Agreement”) and a Custody Agreement, dated as of October 31, 2003, as amended by Amendment No. 1 to the Custody Agreement, dated as of June 29,
2004 and Amendment and Joinder No. 2 to the Custody Agreement, dated as of October 1, 2004 (as amended, the “Custodial Agreement”, and together with the Master Repurchase Agreement, the “Agreements”), by and among Buyer, the
Sellers and Deutsche Bank National Trust Company, as custodian (such obligations, undertakings and liabilities are herein referred to as the “Obligations”). Guarantor hereby expressly consents to any amendment to the Agreements as may be
agreed upon by the Sellers and Buyer and waives notice of any such amendment. Capitalized terms used and not otherwise defined herein shall have the meanings assigned in the Master Repurchase Agreement. 
  
 Guarantor hereby represents and warrants to you that each Seller is an
indirect wholly-owned subsidiary of Guarantor. 
  
 Guarantor
covenants and agrees to immediately notify Buyer if a representation, warranty or covenant of any Seller under either Agreement has been breached or that an Event of Default shall have occurred. 
  
 Payments required under this guaranty shall be payable whenever any
Obligation, has not been promptly paid to Beneficiary in accordance with the Agreements, without regard to any stay or delay with respect to such payment permitted or required by bankruptcy or any other applicable law. Buyer or Custodian on behalf
of Buyer shall realize upon the Purchased Mortgage Loans prior to making a demand under this guarantee; provided, however, neither Buyer nor Custodian on behalf of Buyer shall be required to realize upon any security other than 

  

 Ex. A-1 

 
the Purchased Mortgage Loans or, except as set forth above with respect to realizing upon the Purchased Mortgage Loans, exercise any remedies prior to making
a payment demand under this guaranty. 
  
 Guarantor hereby waives
any requirement that the Beneficiary take legal action against any Seller before enforcing this guaranty; agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Guarantied
Obligations or the dissolution, liquidation, reorganization or other change regarding any Seller or any Seller seeking protection, or having a case or proceeding commenced against it, under any law for the protection of debtors or creditors; waives
diligence, presentment, demand for payment or performance, protest or notice or other formality of any kind whatsoever; waives filing of claims with any court in case of the insolvency, reorganization or bankruptcy of any Seller; and waives any
fact, event or circumstance (other than payment in full) that might otherwise constitute a legal or equitable defense to or discharge of Guarantor, including (but without typifying or limiting this waiver) failure by the Beneficiary to perfect a
security interest in any collateral securing performance of any Obligation and any delay by the Beneficiary in exercising any of its rights hereunder, Guarantor covenants that this guaranty will not be discharged except by full and final payment and
performance to the Beneficiary of the Guarantied Amount incurred while it is effective, and agrees that this guaranty shall continue to be effective or be reinstated (as the case may be) if at any time all or any part of any payment or interest
thereon or other performance by any Seller is avoided or must otherwise be restored by the Beneficiary. Guarantor hereby further consents to any renewal or modification of any Obligation or any extension of the time within which such is to be
performed and to any other indulgences, whether before or after the date of this guaranty. 
  
 Guarantor agrees to pay on demand all out-of-pocket expenses (including legal fees and disbursements) incurred by the Beneficiary in connection with the enforcement and protection of its rights hereunder. Guarantor
further covenants and agrees with Beneficiary to observe the financial covenants set forth in Exhibit G to the Master Repurchase Agreement and to promptly notify Beneficiary if Guarantor breaches any of those covenants. Guarantor hereby waives all
suretyship defenses and agrees that the beneficiary may assign all its rights and obligations hereunder to any of its affiliates without the consent or approval of any party. 
  
 This is a continuing guaranty and will remain in effect until thirty (30) days after written notice of termination is
received by Bear Stearns Mortgage Capital Corporation, 383 Madison Avenue, New York, New York 10179, Attention: Eileen Albus. Any such termination shall not affect or reduce Guarantor’s obligations hereunder for any liability of any Seller that
arose prior to the expiration of said thirty-day period. This guaranty shall terminate and shall be of no further force or effect upon full payment of all amounts due to Buyer under the Agreement. This guaranty shall inure to the benefit of any
successor of the Beneficiary and be binding on any successor or assignee of Guarantor. 
  
 This guaranty shall be governed by and construed in accordance with the laws of the State of New York. Guarantor hereby agrees that (i) any dispute or controversy arising out of or relating to this guaranty, the
Master Repurchase Agreement or the Custodial Agreement shall be submitted to arbitration before the American Arbitration Association utilizing its Rules for the Arbitration of Commercial Disputes and allowing for discovery by the parties, (ii) the
arbitration 

  

 Ex. A-2 

 
proceedings shall be conducted in New York, New York and (iii) the decision of the arbitrators shall be final and judgment may be entered on the award. In
the event that such arbitration is unavailable, Guarantor hereby submits to the personal jurisdiction of the United States Federal and New York State courts situated in the City, County, and State of New York and hereby agrees that any litigation
arising out of or relating to this guaranty, the Master Repurchase Agreement or the Custodial Agreement shall be brought in such courts. 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 non-enforceability of any such other provision or agreement. 
  
 Any demand by Buyer for payment or performance by Guarantor shall be by a written demand to Guarantor, which shall be deemed to have been duly given if
made by facsimile transmission to New Century Financial Corporation, Attention: General Counsel, Phone: (949) 440-7030 , Fax: (949) 440-7033 or if personally delivered at or upon the fifth day after deposit in the mails, mailed by registered mail,
postage prepaid, to 18400 Von Karman, Suite 1000, Irvine, California 92612, Attention: General Counsel. 
  

			
	Very truly yours,
	
	NEW CENTURY FINANCIAL CORPORATION
		
	By:	 	  

	Name:	 	  

	Title:	 	  

		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

 Ex. A-3

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