Exhibit 10.2

 

Execution Version

 

A M E N D M E N T NO. 3

 

TO

 

LOAN PURCHASE AGREEMENT

 

The LOAN PURCHASE AGREEMENT, dated as of May 10, 2002 (the “Agreement”), among
NEW CENTURY FUNDING I, a Delaware statutory trust, NEW CENTURY MORTGAGE
CORPORATION, a California corporation (the “Seller”), NC CAPITAL CORPORATION, a
California corporation (“NCCC”) and NEW CENTURY FINANCIAL CORPORATION, a
Delaware corporation (“New Century Financial” and together with the Seller and
NCCC, the “New Century Parties”), as previously amended by Amendment No. 1
thereto dated as of November 21, 2002 and by Amendment No. 2 dated as of June
23, 2003, is hereby being further amended by this Amendment No. 3 dated as of
June 18, 2004 (the “Amendment”) as follows:

 

1. Amended Terms. The Agreement is hereby amended as follows:

 

(a) Section 3.01(a) (xii) of the Agreement is hereby amended to read as follows:

 

“Tangible Net Worth. As of December 31, 2003, the aggregate Tangible Net Worth
of New Century Financial is not less than (a) $400,000,000 plus (b) ninety
percent (90%) of capital contributions made during such fiscal year plus (c)
fifty percent (50%) of positive year-to-date net income minus (d) the amount of
repurchases of New Century Financial stock after December 31, 2003 in an amount
not to exceed the lesser of: (i) the dollar equivalent of 1,800,000 shares (or
share equivalents in the case of any stock splits/reverse splits), or (ii)
$40,000,000. As used in this Agreement, “Tangible Net Worth” shall mean, with
respect to any Person, as of any date of determination, the consolidated Net
Worth of such Person and its subsidiaries, less the consolidated net book value
of all assets of such Person and its subsidiaries (to the extent reflected as an
asset on the balance sheet of such Person or any subsidiary of such Person at
such date) which will be treated as intangibles under GAAP, including, without
limitation, such items as deferred financing expenses, net leasehold
improvements, goodwill, trademarks, trade names, service marks, copyrights,
patents, licenses and unamortized debt discount and expense; provided, that,
residual securities owned by such Person shall not be treated as intangibles for
purposes of this definition.”

 

(b) Section 4.01(h) of the Agreement is hereby amended as follows:

 

“Limitation on Guarantees. The New Century Parties shall not create, incur,
assume or suffer to exist any Guarantees by any of them of the obligations of
others, in excess of $100,000 in the aggregate, except as otherwise listed on
Schedule 4 hereto. As used in this Section 4.01(h), a “Guarantee” shall not
include a guarantee by one or more of the New Century Parties of an obligation
(including a capitalized lease obligation) of one or more other New Century
Parties or any or any of their respective wholly-owned subsidiaries.”

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(c) Section 4.01(i) of the Agreement is hereby amended as follows:

 

“Maintenance of Tangible Net Worth. As of the end of each calendar quarter
following December 31, 2003, the aggregate Tangible Net Worth of New Century
Financial shall be at least (w) $400,000,000 plus (x) ninety percent (90%) of
capital contributions made during such fiscal year plus (y) fifty percent (50%)
of positive year-to-date net income minus (z) the amount of repurchases of New
Century Financial stock after December 31, 2003 in an amount not to exceed the
lesser of: (i) the dollar equivalent of 1,800,000 shares (or share equivalents
in the case of any stock splits/reverse splits), or (ii) $40,000,000.”

 

(d) Section 4.01(j) of the Agreement is hereby amended as follows:

 

“Maintenance of Ratio of Total Indebtedness to Book Equity: Liquidity. New
Century Financial (i) shall not permit the consolidated ratio of aggregate Total
Indebtedness to Tangible Net Worth to be greater than 15:1 as measured as of the
last day of each fiscal quarter and (ii) shall provide to the Agent on the last
day of each fiscal quarter a tabulation of all borrowings pursuant to the Other
Financing Documents. At no time following the Effective Date shall New Century
Financial have, on a consolidated basis, Liquidity of less than $60,000,000.”

 

(e) The following new paragraph (aa) is added to Section 4.01 of the Agreement:

 

“4.01(aa) Officer’s Certificate. New Century Financial shall deliver to the
Agent, as soon as available and in any event by the thirtieth Business Day
following the end of each fiscal quarter and upon request, a certificate of the
chief financial officer and secondary marketing director of New Century
Financial substantially in the form of Annex A.”

 

(f) Exhibit A attached hereto is hereby attached to the Agreement as Annex A.

 

(g) NC Residual II Corporation is hereby added as a party to the Agreement as an
additional seller (together with New Century Mortgage Corporation, jointly and
severally, the “Sellers”) and as a “New Century Party”. The defined term “New
Century Parties” is hereby defined to refer, collectively, to New Century
Financial Corporation, New Century Mortgage Corporation, NC Capital Corporation
and NC Residual II Corporation. All references in the Agreement to “the Seller”
in the singular shall be to the Sellers in the plural or to “the related
Seller,” as appropriate.

 

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2. Representations and Warranties. Each of the New Century Parties hereby
represents and warrants to the Agent that, after giving effect to the amendments
provided for herein, the representations and warranties contained in the
Agreement and the other Note Documents will be true and correct in all material
respects as if made on and as of the date hereof and that no Default or Event of
Default will have occurred and be continuing.

 

3. No Other Amendments, Effective Date.

 

(a) Except and to the extent expressly amended herein, the Agreement shall
remain in full force and effect, without any waiver, or additional amendment or
modification of any other provision thereof.

 

(b) The amendments effected hereby shall be deemed to apply prospectively from
and after the date hereof.

 

4. Expenses. The New Century Parties agree to pay and reimburse the Agent for
all of the reasonable out-of pocket costs and expenses incurred by the Agent in
connection with the preparation, execution and delivery of this Amendment,
including, without limitation, the reasonable fees and disbursements of Dewey
Ballantine LLP, counsel to the Agent.

 

5. Governing Law. This Amendment, in all respects, shall be governed by, and
construed in accordance with, the laws of the State of New York, including all
matters of construction, validity and performance, without regard to principles
of conflicts of law.

 

6. Counterparts. This Amendment may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts together shall constitute but one and the
same instrument.

 

7. Merger and Integration. Upon execution of this Amendment by the parties to
the Agreement, this Amendment shall be incorporated into and merged together
with the Agreement. Except as provided herein, all provisions, terms and
conditions of the Agreement shall remain in full force and effect and the
Agreement as hereby amended is further ratified and reconfirmed in all respects.

 

8. Capitalized Terms. Capitalized terms used herein and not defined herein have
their respective meanings as set forth in the Agreement and if not therein then
by reference therein to terms in the Note Purchase Agreement.

 

9. Voting Rights. For the convenience of cross-referencing, reference is hereby
made to that certain direction letter of even date herewith (the “Direction
Letter”) wherein New Century Mortgage Corporation, as the Administrator of New
Century Funding I under the Administration Agreement and the Depositor under the
Trust Agreement, (a) directs Wilmington Trust Company to take all such action
with respect to the Trust as is consistent with the terms and conditions of each
of the Agreement and the Trust Agreement and (b) thereby represents and warrants
that (i) it is the holder of the majority of Voting Rights (as defined in the
Trust Agreement) and (ii) the actions to be taken by Wilmington Trust Company
pursuant to the Direction Letter and hereunder are authorized by, and do not
conflict with, the Transaction Documents.

 

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10. Liability. It is expressly understood and agreed by the parties that (a)
this Amendment is executed and delivered by Wilmington Trust Company, not
individually or personally, but solely as Owner Trustee, in the exercise of the
powers and authority conferred and vested in it, pursuant to the Trust
Agreement, (b) each of the representations, undertakings and agreements herein
made on the part of the Trust is made and intended not as personal
representations, undertakings and agreements by Wilmington Trust Company but is
made and intended for the purpose of binding the Trust with respect thereto, (c)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressly or impliedly contained herein, and the right to claim any and
all such liability, if any, being expressly waived by the parties hereto and by
any person claiming by, through or under the parties hereto, and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust hereunder or under any other related documents. Nothing
expressed or implied in the preceding sentence, however, shall alter the terms
and conditions of Section 5.1 of the Trust Agreement.

 

[Remainder of page intentionally left blank.]

 

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Exhibit 10.2

 

Execution Version

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to the
Agreement to be duly executed and delivered as of the date specified above.

 

NEW CENTURY FUNDING I

By:

 

WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Owner
Trustee under the Trust Agreement

By:

 

/s/    MARY KAY PUPILLO        

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Name: Mary Kay Pupillo

   

Title: Assistant Vice President

NEW CENTURY MORTGAGE CORPORATION

By:

 

/s/    KEVIN CLOYD        

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Name: Kevin Cloyd

   

Title: Executive Vice President

NEW CENTURY FINANCIAL
CORPORATION

By:

 

/s/    KEVIN CLOYD        

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Name: Kevin Cloyd

   

Title: Executive Vice President

NC CAPITAL CORPORATION

By:

 

/s/    KEVIN CLOYD        

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Name: Kevin Cloyd

   

Title: President

NC RESIDUAL II CORPORATION

By:

 

/s/    KEVIN CLOYD        

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Name: Kevin Cloyd

   

Title: Executive Vice President

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EXHIBIT A

 

Annex 1

 

OFFICER’S CERTIFICATE

 

Each of                      and                     , hereby certify that they
are the duly elected                      and                      ,
respectively, of New Century Financial Corporation, a Delaware corporation (the
“NCFC”), and further certify on behalf of NCFC as follows:

 

This officer’s certificate is made in connection with the Loan Sale Agreement,
dated as of May 10, 2002 (the “Agreement”) by and among NCFC, NC Capital
Corporation, (“NCCC”), NC Residual II Corporation (“NCRII”), New Century
Mortgage Corporation (“New Century” and together with the NCFC, NCCC and NCRII,
the “New Century Parties”) and New Century Funding I (the “Trust”), as amended
by Amendment No. 1 thereto, dated as of November 21, 2002, by Amendment No. 2
thereto, dated as of June 23, 2003, and by Amendment No. 3 thereto, dated as of
June 18, 2004.

 

The [Chief Financial Officer] further certifies on behalf of NCFC as follows:

 

1. As of December 31, 20[    ], the aggregate Tangible Net Worth of the NCFC is
not less than (a) $400,000,000 plus (b) ninety percent (90%) of capital
contributions made during such fiscal year plus (c) fifty percent (50%) of
positive year-to-date net income minus (d) the amount of repurchases of NCFC’s
stock after December 31, 20[    ] in an amount not to exceed the lesser of: (i)
the dollar equivalent of 1,800,000 shares (or share equivalents in the case of
any stock splits/reverse splits), or (ii) $40,000,000.

 

2. NCFC’s consolidated ratio of Total Indebtedness to Tangible Net Worth is
[                ], which is not greater than 15:1.

 

3. NCFC’s Net Income for the last Test Period, before income taxes for such Test
Period and distributions made during such Test Period is
$[                    ], which is not less than $1.00.

 

4. Neither NCFC nor its partners, principal shareholders and owners, guaranty,
endorse or are otherwise in any way responsible for any obligations of NCFC or
any other Person.

 

5. There has been no change in the articles of incorporation and by-laws of NCFC
since the date such documents were provided to the Trust and such documents are
in full force and effect on the date hereof.

 

6. No event has occurred since the date of the last good standing certificate of
NCFC provided to the Purchaser which has affected the good standing of NCFC
under the laws of the State of Delaware.

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7. All of the representations and warranties of NCFC contained in the
Transaction Documents to which it is a party are true and correct in all
material respects as of the date hereof and NCFC has complied with the
Transaction Documents to which it is a party and satisfied all of the conditions
on its part to be performed or satisfied at or prior to the date hereof.

 

8. NCFC has performed all of its duties and has satisfied all the material
conditions on its part to be performed or satisfied pursuant to the Transaction
Documents to which it is a party on or prior to the date hereof.

 

9. There are no actions, suits or proceedings pending or, to my knowledge,
threatened, against or affecting NCFC which, if adversely determined either
individually or in the aggregate, would adversely affect NCFC’s obligations
under the Transaction Documents to which it is a party.

 

10. No proceedings that could result in the liquidation or dissolution of NCFC
are pending or contemplated.

 

11. To the best of my knowledge after due inquiry and investigation, no Event of
Default has occurred prior to the date hereof or is occurring on the date
hereof.

 

All capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Agreement.

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IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
NCFC.

 

Dated:                         ,            

                    [Seal]

           

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By:

 

 

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Name:

       

Title:

 

Chief Financial Officer

             

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By:

 

 

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Name:

       

Title:

 

Secondary Marketing Director

 

I,                     , [Assistant] Secretary of                     , hereby
certify that                      and                      are the duly elected,
qualified and acting Chief Financial Officer and Secondary Marketing Director,
respectively, of New Century Financial Corporation and that the signature
appearing above is the genuine signature of such person.

 

IN WITNESS WHEREOF, I have hereunto signed my name.

 

Dated:                         ,                 

                    [Seal]

           

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              By:  

 

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    Name: