Document:

Amendment No. 2 to the Master Loan and Security Agreement

 Exhibit 10.1 
  
 AMENDMENT NO. 2 
  
 AMENDMENT NO. 2, dated as of August 22, 2005 (this “Amendment”), to that certain Master Loan and Security Agreement, dated as
of March 1, 2005 (as amended, supplemented or otherwise modified prior to the date hereof, the “Existing Loan Agreement”, as modified hereby and as further amended, restated, supplemented or otherwise modified and in effect
from time to time, the “Loan Agreement”), by and among NC CAPITAL CORPORATION, a California corporation (“NC Capital”), NEW CENTURY MORTGAGE CORPORATION, a California corporation (“New Century”), NC
RESIDUAL II CORPORATION, a Delaware corporation (“NC Residual”), NEW CENTURY CREDIT CORPORATION, a California corporation (“NC Credit”, together with NC Capital, New Century and NC Residual, collectively, the
“Borrowers”, each, a “Borrower”), CONCORD MINUTEMEN CAPITAL COMPANY, LLC, a Delaware limited liability company (“Concord”), MORGAN STANLEY BANK, a Utah industrial loan corporation
(“MSB”, together with Concord, collectively, the “Lenders”, each, a “Lender”), and MORGAN STANLEY MORTGAGE CAPITAL INC., a New York corporation, as agent for the Lenders (in such capacity, the
“Agent”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Loan Agreement. 
  
 RECITALS 
  
 The Borrowers, the Lenders and the Agent are parties to the Existing Loan Agreement, pursuant to which the Lenders have agreed to make and to permit to
remain outstanding certain extensions of credit on the terms and subject to the conditions of the Existing Loan Agreement. 
  
 The Borrowers, the Lenders and the Agent have agreed, subject to the terms and conditions hereof, that the Existing Loan Agreement shall be amended,
solely during the period (such period, the “Increase Period”) beginning on the Effective Date (defined below) and ending on October 10, 2005 (such ending date, the “Increase Expiration Date”), to temporarily
increase the total Commitment of Concord from $1,500,000,000 to 2,500,000,000 (the $1,000,000,000 amount of such increase, the “Temporary Increase Amount”) and to effect certain other agreements and changes, as set forth in this
Amendment. 
  
 The parties hereto hereby agree, in consideration
of the mutual premises and mutual obligations set forth herein, as follows: 
  
 SECTION 1. Amendment. 
  
 (a) Solely during the Increase Period, Section 1.01 of the Existing Loan Agreement is hereby amended by deleting the definition of “Maximum Credit” in its entirety and inserting in lieu thereof the following: 
  
 “Maximum Credit” shall mean, at any time,
an amount equal to $3,000,000,000, as such amount may be reduced in accordance with Section 2.01 hereof, less the 

 
aggregate unpaid principal amount of all loans then outstanding under the Existing Loan Agreement.” 
  
 (b) From and after the Increase Expiration Date, the then-existing definition
of “Maximum Credit” shall be deleted in its entirety and replaced by the following in lieu thereof: 
  
 “Maximum Credit” shall mean, at any time, an amount equal to $2,000,000,000, as such amount may be reduced in accordance
with Section 2.01 hereof, less the aggregate unpaid principal amount of all loans then outstanding under the Existing Loan Agreement.” 
  
 (c) Solely during the Increase Period, Schedule 4 of the Existing Loan Agreement is hereby amended by deleting Schedule 4 in its entirety and inserting in
lieu thereof the document attached as Exhibit A hereto. 
  
 (d) From and after the Increase Expiration Date, the then-existing Schedule 4 of the Existing Loan Agreement shall be deleted in its entirety and the document attached as Exhibit B hereto shall be inserted in lieu thereof.

  
 SECTION 2. Agreement. 
  
 (a) On the Increase Expiration Date, to the extent that the aggregate
principal amounts of the Loans made by Concord, expressed as a percentage of the Initial Advance Amount, is greater than Concord’s Commitment Percentage as listed on Schedule 4 to the Existing Loan Agreement, the Borrowers shall, no later than
4:30 p.m., New York City time, remit cash to the Agent, for the account of Concord, to be applied to reduce the Commitment of Concord under Schedule 4 of the Existing Loan Agreement from $2,500,000,000 to $1,500,000,000 such that (i) after
giving effect to such payment, the Maximum Credit does not exceed $2,000,000,000 and (ii) the aggregate unpaid principal amount of Loans made by each Lender, expressed as a percentage of the aggregate unpaid principal amount of all Loans
outstanding hereunder, shall equal the Commitment Percentage of such Lender as listed on Schedule 4 of the Existing Loan Agreement. 
  
 (b) The Temporary Increase Amount shall be evidenced by an amended and restated promissory note, attached hereto as Exhibit C (the “Amended
and Restated Promissory Note”). The Amended and Restated Promissory Note amends and restates the promissory note made in favor of Concord executed by the Borrowers in favor of Concord on March 1, 2005, in the amount of $1,500,000,000.
Pursuant to subsection (a) above, any amount borrowed under the Amended and Restated Promissory Note which would cause (i) the Maximum Credit to exceed $2,000,000,000 or (ii) the Commitment Percentage of each Lender to differ from the
Commitment Percentage, as listed on Schedule 4 of the Existing Loan Agreement, shall be repaid on the Increase Expiration Date. 
  
 (c) Any Loans made to the Borrowers during the Increase Period shall be made, first, by Concord as utilization of its Commitment in respect of the
Temporary Increase Amount, until fully utilized (“Temporary Increase Loans”), and second, as utilization of the Commitments not taking into account the Temporary Increase Amount, until fully utilized. All repayments of

  

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principal of Loans made by the Borrowers during the Increase Period shall be applied, first, to repayment of the Loans that are not Temporary Increase
Loans, until repaid in full, and second, to repayment of any Temporary Increase Loans; provided that, notwithstanding the foregoing, on the earlier of (i) the date identified by the Borrowers in a notice delivered to the Lenders
that the increase of the Commitments consisting of the Temporary Increase Amount shall be terminated and (ii) the Increase Expiration Date, repayments of principal of the Loans made by the Borrower on such date shall be applied, first,
to repayment of Temporary Increase Loans, until repaid in full, and second, to repayment of the Loans that are not Temporary Increase Loans. 
  
 SECTION 3. Conditions Precedent. This Amendment shall become effective on the first date (the “Effective Date”) on which
all of the following conditions precedent shall have been satisfied: 
  
 3.1 Delivered Documents. On the Effective Date, the Agent shall have received the following documents, each of which shall be satisfactory to the Agent in form and substance: 
  
 (a) Amendment. This Amendment, executed and delivered by a duly
authorized officer of each of the Borrowers, the Lenders and the Agent; 
  
 (b) Note. For the account of Concord, the Amended and Restated Promissory Note referenced in Section 2(b), substantially in the form of Exhibit C attached hereto, executed and delivered by a duly authorized officer of
each of the Borrowers; 
  
 (c) Officer’s Certificate of
each Borrower. A certificate of a Responsible Officer of each of the Borrowers, substantially in the form of Exhibit D hereto, dated as of the date hereof, and: 
  
 i. attaching certificates dated as of a recent date from the Secretary of State or other appropriate
authority, evidencing the good standing of each Borrower in the jurisdiction of its organization, 
  
 ii. attaching a copy of the resolutions, in form and substance satisfactory to the Agent, of the Board of Directors of each Borrower
authorizing (A) the execution, delivery and performance of this Amendment, and (B) the borrowings contemplated under the Loan Agreement, 
  
 iii. certifying that there have been no changes to any of the organizational documents of any Borrower since such documents were last
delivered to the Agent under the Existing Loan Agreement, and 
  
 iv. certifying as to the incumbency and specimen signature of each officer executing this Amendment certifying as to the authority, incumbency and specimen signature of each officer executing this Amendment;

  
 (d) Legal Opinions. Legal opinions of internal and
outside counsel to the Borrowers; and 
  

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 (e) Other Documents. Such other documents as the Agent or counsel to the Agent may reasonably
request. 
  
 3.2 No Default. On the Effective Date,
(i) each Borrower shall be in compliance in all material respects with all of the terms and provisions set forth in the Loan Agreement and the other Loan Documents on its part to be observed or performed, (ii) the representations and
warranties made and restated by such Borrower pursuant to Section 4 of this Amendment shall be true and complete in all material respects on and as of such date with the same force and effect as if made on and as of such date and (iii) no
Default shall have occurred and be continuing on such date. 
  
 SECTION 4. Representations and Warranties. Each Borrower hereby represents and warrants to the Agent, as of the date hereof and as of the Effective Date, that it is in compliance in all material respects with all of the terms
and provisions set forth in the Loan Documents on its part to be observed or performed and that no Default has occurred or is continuing, and each Borrower hereby confirms and reaffirms in all material respects the representations and warranties
contained in Section 6 of the Loan Agreement. 
  
 SECTION
5. Limited Effect. Except as expressly modified hereby, the Existing Loan Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms; provided, however, that upon the Effective
Date each reference therein to the “Loan Agreement” shall be deemed to mean the Loan Agreement as defined in this Amendment, each reference in this Amendment to the “Loan Documents” shall be deemed to include, in any event, this
Amendment and each reference to the Loan Agreement in any of the Loan Documents shall be deemed to be a reference to the Loan Agreement as modified hereby. 
  
 SECTION 6. 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 signature page to this Amendment in Portable Document Format (PDF) or by facsimile transmission shall be as
effective as delivery of a manually executed original counterpart thereof. 
  
 SECTION 7. Reproduction of Documents. This Amendment and all documents relating thereto, except with respect to the Collateral, including, without limitation, (a) consents, waivers and modifications
which may hereafter be executed, and (b) certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. 
  

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 SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK. 
  
 [SIGNATURES FOLLOW]

  

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 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of
the day and year first above written. 
  

					
	 NC CAPITAL CORPORATION, as a Borrower

		
	 By:
	 	 /s/ Kevin Cloyd

	 	 	 Name:
	 	 Kevin Cloyd

	 	 	 Title:
	 	 President

	
	 NEW CENTURY MORTGAGE CORPORATION, as a Borrower

		
	 By:
	 	 /s/ Kevin Cloyd

	 	 	 Name:
	 	 Kevin Cloyd

	 	 	 Title:
	 	 Executive Vice President

	
	 NC RESIDUAL II CORPORATION, as a Borrower

		
	 By:
	 	 /s/ Kevin Cloyd

	 	 	 Name:
	 	 Kevin Cloyd

	 	 	 Title:
	 	 Executive Vice President

	
	 NEW CENTURY CREDIT CORPORATION, as a Borrower

		
	 By:
	 	 /s/ Kevin Cloyd

	 	 	 Name:
	 	 Kevin Cloyd

	 	 	 Title:
	 	 Executive Vice President

					
	 CONCORD MINUTEMEN CAPITAL COMPANY, LLC, as a Lender

		
	 By:
	 	 /s/ Thomas J. Irvin

	 	 	 Name:
	 	 Thomas J. Irvin

	 	 	 Title:
	 	 Manager

	
	 MORGAN STANLEY BANK, as a Lender

		
	 By:
	 	 /s/ Andrew Neuberger

	 	 	 Name:
	 	 Andrew Neuberger

	 	 	 Title:
	 	 VP

	
	 MORGAN STANLEY MORTGAGE CAPITAL INC., as Agent

		
	 By:
	 	 /s/ Andrew Neuberger

	 	 	 Name:
	 	 Andrew Neuberger

	 	 	 Title:
	 	 VP

					
	Acknowledged by:
	
	 NEW CENTURY FINANCIAL CORPORATION, as Guarantor

		
	 By:
	 	 /s/ Robert K. Cole

	 	 	 Name:
	 	 Robert K. Cole

	 	 	 Title:
	 	 CEOAudit Incentive Plan

 EXHIBIT 10.15 
  
 FHLBank San Francisco 
 AUDIT INCENTIVE PLAN 
 EFFECTIVE JANUARY 1, 2005 
  
 PLAN PURPOSE 
  
 To optimize the Internal Audit Department’s performance in accomplishing Board approved
goals. 
  
 PLAN OBJECTIVES 
  
 To motivate key Audit Department executives to exceed Audit Department and individual goals
which directly support the audit plan and audit objectives. Attract and retain outstanding executives by providing a competitive total compensation program, including incentive award opportunity. 
  
 ELIGIBILITY 
  
 Participants are the incumbents in the Audit Department’s officer positions, including:

  
 Senior Vice President 
 Vice President 
 Assistant Vice President 
  
 Participants must be employed by the Bank when payment is disbursed to be eligible for an
incentive award for the current Plan year. Employees who participate in other incentive plans are not eligible to participate in this plan. Participants hired, promoted, or who have a leave of absence during the plan year are eligible to participate
on a pro-rata basis. Participants hired or promoted on or after October 1st will not be eligible to participate
during the current plan year. 
  
 INCENTIVE GOALS, WEIGHTS, AND MEASURES

  
 Incentive Goals 
  
 The incentive goals are based on the primary objectives set forth in the Audit
Department’s 2005 plan. For each participant there are two Audit Department goals. The participants will also have one to three individual goals. 
  
 The two Audit Department goals for 2005 are as follows: 
  

	1.	Reduce redundancy of testing between regular operational/financial audits and Sarbanes-Oxley 404 required testing that Internal Audit will perform for management and the external
audit. 

  

	2.	Evaluate several quantitative processes for developing risk assessments and report to the Audit Committee on whether they add value to the process, and implement the one with the
most added value. 

  
 The Audit Committee and Board of Directors
(AC-BOD) will also determine whether or not to allocate a discretionary amount/pool of dollars to the incentive compensation payouts. 

 Incentive Goal Weights 
  
 The Audit Department and individual goals are weighted. The total weighted achievement for any one participant cannot exceed 200%.

  
 Incentive Goal Achievement Measures 
  
 The plan rewards levels of goal achievement, as follows: 
  

			
	 Achievement Level

	  	 Measure Definition

	200% of target	  	The most optimistic achievement level based on reasonable business assumptions conditions.
		
	150% of target	  	An optimistic achievement level based on expected business.
		
	Target (100%)	  	Performance that is considered a target level of successful achievement.
		
	Threshold (75%)	  	A threshold level of performance.

  
 The 2005 goals/discretionary
pool weights and measures are: 
  

																		
	 Goal Weights

	 	 	 Goal Measures

	 2005
 Audit Goals
 &
 AC-BOD
 Discretion

	  	SVP

	 	 	VP

	 	 	AVP

	 	 	 (75%)
 Threshold

	  	 (100%)
 Target

	  	 (150%)
 Exceeds
 Target

	  	 (200%)
 Far
 Exceeds

	Reduce redundancy of testing (Operational vs. Sarbanes-Oxley 404 Audits)	  	38	%	 	19	%	 	15	%	 	Subjective evaluation by the Audit Committee.	  	Develop a process that allows testing to be done only once without negatively impacting the scope of work. Restructure the reporting processes to take this into account. Use on two major
operational audits.	  	Target achieved plus rewrite the operation manual and institute on all operational/financial audits after July, 2005.	  	Subjective evaluation by the Audit Committee. Target and exceeds targets have been accomplished.
								
	Evaluation of quantitative processes for developing functional risk rating for audits	  	30	%	 	19	%	 	15	%	 	Subjective evaluation by the Audit Committee.	  	Formally evaluate two of the models available that use quantitative measures and expanded risk attributes. Compare against the results from the current non-quantitative process and make a
recommendation to the Audit Committee.	  	Target achieved plus implement a new and more detailed process of risk assessment to base the 2006 audit plan on using the method approved by the Audit Committee.	  	Subjective evaluation by the Audit Committee. Target and exceeds targets have been accomplished.
								
	Discretionary	  	22	%	 	12	%	 	10	%	 	AC-BOD Determines	  	AC-BOD Determines	  	AC-BOD Determines	  	AC-BOD Determines
								
	Individual Goals	  	 	 	 	 	 	 	 	 	 	 	  	 	  	 	  	 
	1 to 3 individual goals	  	10	%	 	50	%	 	60	%	 	 	  	 	  	 	  	 
	 	  	
	
	 	
	
	 	
	
	 	 	  	 	  	 	  	 
	 Total
	  	100	%	 	100	%	 	100	%	 	 	  	 	  	 	  	 

  

 Page 2 

 Award Determination 
  
 Awards will be based on success in achieving the key business goals. In the case of the two Audit Department goals, the same achievement
measures apply to all participants. At yearend, accomplishments will be assessed and a percent of achievement will be determined for each goal. 
  

			
	 Percent of Achievement Scale

	  	 Achievement Levels

	0% - 200%	  	200%     = Far Exceeds Target
	 	  	150%     = Exceeds Target
	 	  	100%     = Target
	 	  	75-99%  = Threshold

  
 For each goal, the percent of
achievement will be multiplied by the appropriate weights. The weighted achievements will then be added to determine the total weighted achievement. The basis for award opportunity is total weighted achievement that can not exceed 200%. Performance
from 75-99% (threshold level) is below the target achievement level and therefore will result in an award less than the target award. No awards will be paid for performance between 0-74%. 
  
 Award Opportunity 
  
 The Board of Directors has the discretion to approve awards for achievement below 75% total weighted achievement. The total weighted achievement for any one participant
cannot exceed 200%. 
  
 Award Ranges as a Percent of Base Salary

  

							
	 Total Weighted
 Achievement

	  	SVP

	 	VP

	 	AVP

	200%	  	50%	 	35%	 	20%
	150-199%	  	37-49%	 	27-34%	 	15-19%
	100-149%	  	25-36%	 	18-26%	 	10-14%
	75-99%	  	12-24%	 	9-17%	 	5-9%
	0-74%	  	Award at the discretion of the Board of Directors	 	 

  
 Example of how
award is calculated for a Vice President 
  

							
	 Goal

	  	 Goal
 Weight

	 	 Percent of
 Achievement

	 	Total
Weighted
Achievement

	 Reduce Redundancy of Testing
	  	19% X	 	200%    =	 	38%
				
	 Evaluation of quantitative processes
	  	19% X	 	100%    =	 	19%
				
	 Audit Committee/Board Discretion
	  	12% X	 	150%    =	 	18%
				
	 Individual Goal(s)
	  	50% X	 	150%    =	 	75%
	 	  	
	 	 	 	

	 	  	100%	 	 	 	150%
				
	 	  	Total Weighted
Achievement

	 	 Award as a
 % of 2005 Base Salary

	 	 
	 	  	150%	 	27%	 	 

  
 APPROVAL OF INCENTIVES

  
 All recommended incentive awards must be approved by the Audit
Committee and the Board of Directors prior to payment. The Audit Committee and the Board of Directors have full discretion to modify any and all incentive payments. The Audit Committee Chairperson will make award recommendations to the Board of
Directors at the January 2006 Board meeting. 
  

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