Exhibit 10.10

 

AMENDED AND RESTATED GUARANTY

 

THIS AMENDED AND RESTATED GUARANTY, dated as of October 1, 2004 (“Guaranty”) is
made by NEW CENTURY FINANCIAL CORPORATION (f/k/a New Century REIT, Inc.) (“NCFC”
or “Guarantor”), in favor of CITIGROUP GLOBAL MARKETS REALTY CORP. (the
“Lender”), party to the Servicer Advance Financing Facility Agreement referred
to below.

 

RECITALS

 

WHEREAS, New Century Financial Corporation (“NCFC”) and the Lender entered into
that certain Guaranty, dated as of August 28, 2003 (“Original Guaranty”).

 

WHEREAS, the parties are entering into this Guaranty to reflect the
reorganization of New Century Financial Corporation (“NCFC”) and New Century
REIT, Inc., a Maryland corporation (“New Century REIT”), through the merger of
NC Merger Sub, Inc., a wholly-owned subsidiary of New Century REIT, with and
into NCFC, resulting in New Century REIT becoming the parent company of NCFC
(the “REIT Conversion”) on October 1, 2004 (the “REIT Conversion Date”); and

 

WHEREAS, as a result of the REIT Conversion, NCFC is now known as New Century
TRS Holdings, Inc. and New Century REIT is now known as New Century Financial
Corporation; and

 

WHEREAS, New Century Financial Corporation (f/k/a New Century REIT) and Lender
desire to enter into this Guaranty in order to replace NCFC as a Guarantor with
New Century Financial Corporation (f/k/a New Century REIT), and to amend,
restate and replace the Original Guaranty in its entirety.

 

WHEREAS, Pursuant to the Servicer Advance Financing Facility Agreement dated as
of August 28, 2003 (as amended, supplemented or otherwise modified from time to
time, the “Financing Facility Agreement”) by and between New Century Mortgage
Corporation (the “Borrower”) and the Lender, the Lender has agreed to make
certain Loans to the Borrower upon the terms and subject to the conditions set
forth therein. It is a condition precedent to the obligation of the Lender to
make any such Loan to the Borrower under the Financing Facility Agreement that
the Guarantor shall have executed and delivered this Guaranty to the Lender. As
of the date hereof, NCFC holds all of the outstanding shares of the Borrower and
will therefore derive a benefit from the Lender’s Loans to the Borrower pursuant
to the Financing Facility Agreement.

 

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NOW, THEREFORE, in consideration of the premises and to induce the Lender to
enter into the Financing Facility Agreement and to induce the Lender to make any
Loans to the Borrower under the Financing Facility Agreement, the Guarantor
hereby agrees with the Lender as follows:

 

1. Defined Terms. (a) Unless otherwise defined herein, capitalized terms used
herein shall have the meanings given to them in the Financing Facility
Agreement.

 

(b) The words “hereof,” “herein” and “hereunder” and words of similar import
when used in this Guaranty shall refer to this Guaranty as a whole and not to
any particular provision of this Guaranty, and section and paragraph references
are to this Guaranty unless otherwise specified.

 

(c) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

 

2. Guaranty. (a) The Guarantor hereby, unconditionally and irrevocably,
guarantees to the Lender and its successors, indorsees, transferees and assigns,
the prompt and complete payment and performance by the Borrower when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations.

 

(b) The Guarantor further agrees to pay any and all expenses (including, without
limitation, all reasonable fees and disbursements of counsel) which may be paid
or incurred by the Lender in enforcing any rights with respect to, or
collecting, any or all of the Obligations and/or enforcing any rights with
respect to, or collecting against, the Guarantor under this Guaranty. This
Guaranty shall remain in full force and effect until the Obligations are paid in
full notwithstanding that from time to time prior thereto the Borrower may be
free from any Obligations.

 

(c) No payment or payments made by the Borrower, the Guarantor, any other
guarantor or any other Person or received or collected by the Lender from the
Borrower, the Guarantor, any other guarantor or any other Person by virtue of
any action or proceeding or any set-off or appropriation or application at any
time or from time to time in reduction of or in payment of the Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability of the
Guarantor hereunder which shall, notwithstanding any such payment or payments
other than payments made by the Guarantor in respect of the Obligations or
payments received or collected from the Guarantor in respect of the Obligations,
remain liable for the Obligations up to the maximum liability of the Guarantor
hereunder until the Obligations are paid in full and the Financing Facility
Agreement is terminated.

 

(d) The Guarantor agrees that whenever, at any time, or from time to time, it
shall make any payment to the Lender on account of its liability hereunder, it
will notify the Lender in writing that such payment is made under this Guaranty
for such purpose.

 

3. Representations, Warranties and Covenants of Guarantor. (a) Guarantor hereby
represents and warrants that (i) it is duly organized and validly existing in
good standing under the laws of the jurisdiction under which it is organized and
is duly qualified to do business and is in good standing in every other
jurisdiction as to which the

 

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nature of the business conducted by it makes such qualification necessary
(except where the failure to be so qualified will not have a material adverse
effect on its financial condition), (ii) it has power and authority to enter
into and perform this Guaranty, (iii) the execution, delivery and performance of
this Guaranty by it have been duly authorized by proper action and are not in
contravention of law or of the terms of its Articles of Incorporation or
By-Laws, or any material agreement, instrument, indenture or other material
undertaking to which it is a party or by which it is bound, (iv) all
registrations and approvals of any governmental agency, department or commission
necessary for the execution, delivery and performance of this Guaranty and for
the validity and enforceability thereof, have been obtained and are in full
force and effect, (v) this Guaranty is the legal, valid and binding obligation
of the Guarantor, enforceable against the Guarantor, in accordance with its
terms, subject to bankruptcy, insolvency and similar laws and to the
availability of equitable remedies, (vi) except as described on Schedule A
hereto, no legal proceedings are pending, or threatened, before any court or
governmental agency which would materially and adversely affect its financial
condition, operations or any licenses or its ability to perform under this
Guaranty, (vii) the Guarantor has received and reviewed copies of the Financing
Facility Agreement, and (viii) the Guarantor is a qualified real estate
investment trust (“REIT”) under Section 856 of the Internal Revenue Code of
1986, as amended (the “Code”), and it is in compliance with all provisions of
the Code governing its REIT status.

 

(b) The Guarantor covenants and agrees with the Lender that, until the payment
in full of the Obligations or the termination of this Guaranty pursuant to
Section 20 hereof:

 

(i) Maintenance of Tangible Net Worth. The Guarantor shall not permit its
Tangible Net Worth, on a consolidated basis, during each fiscal year, to be less
than the sum of (i) $750,000,000 and (ii) fifty percent (50%) of all subsequent
capital raises as of the last day of each of its fiscal quarters;

 

(ii) Maintenance of Ratio of Total Indebtedness to Tangible Net Worth. The
Guarantor shall not permit its ratio of Total Indebtedness to Tangible Net Worth
as of the last day of each fiscal quarter to be greater than 12:1; and

 

(iii) Liquidity. The Guarantor shall insure that, at all times, on a
consolidated basis, it has cash, Cash Equivalents and Overcollateralization in
an amount of not less than $60,000,000.

 

(iv) REIT Status. The Guarantor shall take all steps necessary to maintain its
status as a REIT.

 

(c) At the time that the Guarantor delivers its consolidated financial
statements to the Lender in accordance with Section 5.1 of the Financing
Facility Agreement, the Guarantor shall forward to the Lender a certificate of a
Responsible Officer of the Guarantor which demonstrates that the Guarantor is in
compliance with the covenants set forth in clause (b) above.

 

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4. Right of Set-off. Upon the occurrence and during the continuance of any Event
of Default, the Guarantor hereby irrevocably authorizes the Lender and each of
its affiliates at any time and from time to time without notice to the
Guarantor, any such notice being expressly waived by the Guarantor, to set-off
and appropriate and apply any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Lender or any of its affiliates to or for the credit or the account
of the Guarantor, or any part thereof in such amounts as the Lender or any of
its affiliates may elect, against and on account of the obligations and
liabilities of the Guarantor to the Lender hereunder and claims of every nature
and description of the Lender or any of its affiliates against the Guarantor, in
any currency, whether arising hereunder, under the Financing Facility Agreement
as the Lender may elect, whether or not the Lender has made any demand for
payment and although such obligations, liabilities and claims may be contingent
or unmatured. The Lender shall notify the Guarantor promptly of any such set-off
and the application made by the Lender, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Lender may
have.

 

5. No Subrogation. Notwithstanding any payment or payments made by the Guarantor
hereunder or any set-off or application of funds of the Guarantor by the Lender,
the Guarantor shall not be entitled to be subrogated to any of the rights of the
Lender against the Borrower or any other guarantor or any collateral security or
guarantee or right of offset held by the Lender or any of its affiliates for the
payment of the Obligations, nor shall the Guarantor seek or be entitled to seek
any contribution or reimbursement from the Borrower or any other guarantor in
respect of payments made by the Guarantor hereunder, until all amounts owing to
the Lender by the Borrower on account of the Obligations are paid in full. If
any amount shall be paid to the Guarantor on account of such subrogation rights
at any time when all of the Obligations shall not have been paid in full, such
amount shall be held by the Guarantor in trust for the Lender, segregated from
other funds of the Guarantor, and shall, forthwith upon receipt by the
Guarantor, be turned over to the Lender in the exact form received by the
Guarantor (duly indorsed by the Guarantor to the Lender, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as
the Lender may determine.

 

6. Amendments, Etc. with Respect to the Obligations. The Guarantor shall remain
obligated hereunder notwithstanding that, without any reservation of rights
against the Guarantor and without notice to or further assent by the Guarantor,
any demand for payment of any of the Obligations made by the Lender may be
rescinded by the Lender and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Lender, and the Financing Facility Agreement and any

 

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other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Lender may
deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by the Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. The Lender
shall not have any obligation to protect, secure, perfect or insure any Lien at
any time held by it as security for the Obligations or for this Guaranty or any
property subject thereto. When making any demand hereunder against the
Guarantor, the Lender may, but shall be under no obligation to, make a similar
demand on the Borrower or any other guarantor, and any failure by the Lender to
make any such demand or to collect any payments from the Borrower or any such
other guarantor or any release of the Borrower or such other guarantor shall not
relieve the Guarantor of its obligations or liabilities hereunder, and shall not
impair or affect the rights and remedies, express or implied, or as a matter of
law, of the Lender against the Guarantor. For the purposes hereof “demand” shall
include the commencement and continuance of any legal proceedings.

 

7. Waiver of Rights. The Guarantor waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations, and notice of or proof
of reliance by the Lender upon this Guaranty or acceptance of this Guaranty; the
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guaranty; and all dealings between the Borrower and the Guarantor, on
the one hand, and the Lender, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon this Guaranty. The
Guarantor waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon the Borrower or the Guarantor with respect
to the Obligations.

 

8. Guaranty Absolute and Unconditional. The Guarantor understands and agrees
that this Guaranty shall be construed as a continuing, absolute and
unconditional guarantee of the full and punctual payment and performance by the
Borrower of the Obligations and not of their collectibility only and is in no
way conditioned upon any requirement that the Lender first attempt to collect
any of the Obligations from the Borrower without regard to (a) the validity,
regularity or enforceability of the Financing Facility Agreement, any of the
Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by the Lender,
(b) any defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower against the Lender, or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Borrower or the Guarantor) (other than
payment or performance by the Borrower) which constitutes, or might be construed
to constitute, an equitable or legal discharge of the Borrower from the
Obligations, or of the Guarantor from this Guaranty, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against the
Guarantor, the Lender may, but shall be under no obligation to, pursue such
rights and remedies as it may have against the Borrower or any other Person or
against any collateral security or guarantee for the Obligations or any right of
offset with respect thereto, and any failure by the Lender to pursue such other

 

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rights or remedies or to collect any payments from the Borrower or any such
other Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Borrower or any such
other Person or any such collateral security, guarantee or right of offset,
shall not relieve the Guarantor of any liability hereunder, and shall not impair
or affect the rights and remedies, whether express, implied or available as a
matter of law, of the Lender against the Guarantor. This Guaranty shall remain
in full force and effect and be binding in accordance with and to the extent of
its terms upon the Guarantor and the successors and assigns thereof, and shall
inure to the benefit of the Lender, and its successors, indorsees, transferees
and assigns, until all the Obligations and the obligations of the Guarantor
under this Guaranty shall have been satisfied by payment in full and the
Financing Facility Agreement shall be terminated, notwithstanding that from time
to time during the term of the Financing Facility Agreement the Borrower may be
free from any Obligations.

 

9. Reinstatement. This Guaranty shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or the Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or the Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.

 

10. Payments. The Guarantor hereby guarantees that payments hereunder will be
paid to the Lender without set-off or counterclaim in U.S. Dollars in accordance
with the wiring instructions of the Lender.

 

11. Notices. All notices, requests and other communications provided for herein
(including without limitation any modifications of, or waivers, requests or
consents under, this Guaranty) shall be given or made in writing (including
without limitation by telex or telecopy) delivered to the intended recipient at
the “Address for Notices” specified below its name on the signature pages of the
Financing Facility Agreement); or, as to any party, at such other address as
shall be designated by such party in a written notice to each other party. All
such communications shall be deemed to have been duly given when transmitted by
telex or telecopy or personally delivered or, in the case of a mailed notice,
upon receipt, in each case given or addressed as aforesaid.

 

12. Severability. Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

13. Integration. This Guaranty and the Financing Facility Agreement represent
the agreement of the Guarantor with respect to the subject matter hereof and

 

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thereof and there are no promises or representations by the Lender relative to
the subject matter hereof or thereof not reflected herein or therein.

 

14. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of the terms
or provisions of this Guaranty may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by the Guarantor and the
Lender, provided that any provision of this Guaranty may be waived by the
Lender.

 

(b) The Lender shall not by any act (except by a written instrument pursuant to
Section 14(a) hereof), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Default
or Event of Default or in any breach of any of the terms and conditions hereof.
No failure to exercise, nor any delay in exercising, on the part of the Lender,
any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Lender would otherwise have on any future occasion.

 

(c) The rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any other rights or remedies
provided by law.

 

15. Section Headings. The section headings used in this Guaranty are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

 

16. Successors and Assigns. This Guaranty shall be binding upon the successors
and assigns of the Guarantor and shall inure to the benefit of the Lender and
its successors and assigns. This Guaranty may not be assigned by the Guarantor
without the express written consent of the Lender.

 

17. Governing Law. This Guaranty shall be governed by New York law without
reference to such state’s choice of law doctrine.

 

18. SUBMISSION TO JURISDICTION; WAIVERS. THE GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY:

 

(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS GUARANTY AND THE FINANCING FACILITY AGREEMENT, OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE PERSONAL JURISDICTION OF THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;

 

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(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS
AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT
OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;

 

(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH
UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE LENDER SHALL
HAVE BEEN NOTIFIED; AND

 

(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN
ANY OTHER JURISDICTION.

 

19. WAIVER OF JURY TRIAL. EACH OF THE GUARANTOR AND THE LENDER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE FINANCING FACILITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.

 

20. Termination. This Guaranty shall terminate upon the final payment in full of
the Obligations and the termination of the Financing Facility Agreement.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly executed
and delivered by its duly authorized officer as of the day and year first above
written.

 

NEW CENTURY FINANCIAL

CORPORATION (f/k/a New Century REIT, Inc.)

By:  

/s/ Kevin Cloyd

Name:

 

Kevin Cloyd

Title:

 

Executive Vice President

By:   /s/ Brad A. Morrice

Name:

 

Brad A. Morrice

Title:

 

Vice Chairman, President and Chief

Operating Officer