Consent and Collateral Agent Agreement Regarding Global Master Repurchase Agreements among U.S. Bank, NC Capital, NCRC, and Salomon Smith Barney

Summary

This agreement involves U.S. Bank National Association, NC Capital Corporation, NC Residual II Corporation, and Salomon Smith Barney, Inc. acting as agent for Salomon Brothers International. It allows U.S. Bank, as collateral agent, to hold a security interest in the rights of NC Capital and NCRC under certain repurchase agreements with Salomon. Salomon consents to this arrangement, grants the collateral agent certain rights in case of default, and outlines procedures for notification, cure, and transfer of securities. The agreement is intended to facilitate the extension of subordinated debt maturity for the parent company.

EX-10.87 21 a2042227zex-10_87.txt EXHIBIT 10.87 Exhibit 10.87 [U.S. Bank National Association Letterhead] March 29, 2001 NC Capital Corporation 18400 Von Karman Suite 1000 Irvine, CA 92612 Attention: Patrick Flanagan, President NC Residual II Corporation 18400 Von Karman Suite 1000 Irvine, CA 92612 Attention: Patrick Flanagan, President Salomon Smith Barney, Inc. as Agent for Salomon Brothers International, Ltd. 390 Greenwich Street New York, NY 10013 Attention: Matthew R. Bollo, Vice President Re: Global Master Repurchase Agreements dated as of (a) March 29, 2001 between Salomon Smith Barney, Inc., as Agent for Salomon Brothers International, Inc. ("Salomon") and NC Capital Corporation ("NCCC"), and (b) March 29, 2001 between Salomon and NC Residual II Corporation ("NCRC") Ladies and Gentlemen: We refer to the above-referenced Global Master Repurchase Agreements (the "Repurchase Agreements"), pursuant to which Salomon has purchased and may from time to time hereafter purchase from NCCC and NCRC certain residual mortgage-backed securities (the "Securities"), subject to the obligations of NCCC and NCRC, respectively, to repurchase the Securities. Terms capitalized and used herein without being defined will have the meanings given to them in the Repurchase Agreements. NCCC and NCRC propose to grant to U.S. Bank National Association, as collateral agent for itself and certain other lenders (in such capacity, the "Collateral Agent"), a security interest in the rights of NCCC and NCRC under the Repurchase Agreements in order to satisfy a condition NC Capital Corporation NC Residual II Corporation Salomon Smith Barney, Inc. as Agent for Salomon Brothers International, Ltd. Page 2 imposed in connection with such lenders' extension of the maturity of certain subordinated debt to NCCC's and NCRC's parent corporation, New Century Mortgage Corporation. Section 16 of each of the Repurchase Agreements prohibits NCCC and NCRC, respectively, from assigning or otherwise charging its rights and obligations under the Repurchase Agreements without the consent of Salomon. The Collateral Agent hereby requests that Salomon consent to such security interest and agree to the following with respect to the Repurchase Agreements and the Securities: 1. Salomon will notify the Collateral Agent (at the address provided below) of any default by NCCC or NCRC under the Repurchase Agreements in the same manner and at the same time Salomon notifies NCCC or NCRC thereunder. 2. The Collateral Agent will have the same rights as NCCC and NCRC to cure any defaults under the Repurchase Agreements, and the right to purchase the Securities from Salomon at the Repurchase Price, at any time before Salomon exercises its remedies with respect to the Securities under the Repurchase Agreements; PROVIDED, that the Collateral Agent shall have no obligation to cure any default or purchase any Securities. In addition, the Collateral Agent will have the right to purchase the Securities from Salomon after Salomon exercises remedies with respect to the Securities, for a period of 14 calendar days after Salomon notifies the Collateral Agent of its exercise of remedies, for the Repurchase Price (including interest to the date of purchase by the Collateral Agent). Upon any purchase of the Securities by the Collateral Agent pursuant to this agreement, as between NCCC or NCRC, on the one hand, and the Collateral Agent, on the other hand, such Securities shall be owned by NCCC or NCRC, as applicable, subject to the Collateral Agent's security interest therein as set forth in the applicable security agreement between NCCC and NCRC, as debtors, and the Collateral Agent, as secured party. 3. If at any time following the exercise by Salomon of its remedies with respect to the Securities there is any amount payable to NCCC or NCRC under the Repurchase Agreements, such amounts shall be paid to the Collateral Agent by wire transfer of immediately available funds to: U.S. Bank National Association U.S. Bank Place 601 Second Avenue South Minneapolis, Minnesota ###-###-#### ABA Routing Number 091000022 Account Number: 1731-0097-1378 NC Capital Corporation NC Residual II Corporation Salomon Smith Barney, Inc. as Agent for Salomon Brothers International, Ltd. Page 3 4. If at any time Salomon receives the Repurchase Price with respect to any of the Securities, unless Salomon purchases such Securities again on the same day in a new Transaction, Salomon will deliver to the Collateral Agent at the address set forth below, such Securities, together with any assignment documentation required to transfer record ownership of such Securities, duly executed in blank. 5. Salomon is under no obligation to violate any applicable law (including, without limitation, 11 U.S.C. ss. 362) or order of any court of competent jurisdiction with respect to the Securities or the proceeds thereof. In the event NCCC, NCRC or any other person or entity seeks to recover from Salomon any Securities or proceeds delivered to the Collateral Agent pursuant to paragraphs 3 or 4 hereof, Salomon shall notify the Collateral Agent thereof and permit the Collateral Agent to assume the defense thereof. Provided that Salomon has complied with the foregoing sentence, the Collateral Agent will reimburse Salomon for any amount recovered from Salomon with respect to the Securities or the proceeds thereof. 6. Salomon confirms to the Collateral Agent that it has not received notice of any other security interests in or encumbrances on the Repurchase Agreements or the Collateral, and agrees to notify the Collateral Agent within two (2) Business Days after it receives notice of any such security interest or encumbrance. Except as set forth above, Salomon will have no other obligation to the Collateral Agent with respect to the Repurchase Agreements or the Securities. NCCC and NCRC agree that this letter in no way limits Salomon's rights under the Repurchase Agreements. NCCC and NCRC, by their acknowledgment hereof, hereby consent to Salomon's compliance with the provisions set forth above. NC Capital Corporation NC Residual II Corporation Salomon Smith Barney, Inc. as Agent for Salomon Brothers International, Ltd. Page 4 Please indicate your agreement to the foregoing by acknowledging this letter in the space provided below. Very truly yours, U.S. BANK NATIONAL ASSOCIATION By /s/ John P. Crenshaw ----------------------------------- Its Vice President ------------------------------------ Address: U.S. Bank National Association U.S. Bank Place - MPFP0508 601 Second Avenue South Minneapolis, Minnesota 55402 Attention: Mr. Edwin D. Jenkins Facsimile: (612) 973-0826 Acknowledged and Agreed to this 29th day of March, 2001 NC CAPITAL CORPORATION By /s/ Patrick Flanagan -------------------------- Its President -------------------------- NCRC RESIDUAL II CORPORATION By Patrick Flanagan -------------------------- Its President -------------------------- SALOMON SMITH BARNEY, INC., as Agent for Salomon Brothers International, Ltd. By /s/ ILLEGIBLE -------------------------- Its --------------------------