EXHIBIT 10.2

 

FIRST SUPPLEMENTAL INDENTURE

 

THIS FIRST SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) is entered
into as of September 30, 2004, by and among New Century Financial Corporation, a
Delaware corporation (“New Century Financial”), New Century REIT, Inc., a
Maryland corporation (“New Century REIT”), and Wells Fargo Bank, a national
banking association, as trustee (the “Trustee”).

 

THE PARTIES TO THIS SUPPLEMENTAL INDENTURE enter into this Supplemental
Indenture on the basis of the following facts, intentions and understandings:

 

A. New Century Financial and the Trustee are parties to the Indenture dated as
of July 8, 2003 (the “Indenture”), pursuant to which New Century Financial
issued $210,000,000 in aggregate principal amount of 3.50% Convertible Senior
Notes due 2008 (the “Securities,” and each one in principal amount of $1,000, a
“Security”).

 

B. New Century Financial, New Century REIT, and NC Merger Sub, Inc., a Delaware
corporation and wholly-owned subsidiary of New Century REIT (“Merger Sub”), have
entered into that certain Agreement and Plan of Merger dated as of April 21,
2004 (the “Merger Agreement”), pursuant to which (i) Merger Sub will merge with
and into New Century Financial (the “Merger”), with New Century Financial as the
surviving corporation in the Merger, (ii) each outstanding share of Common Stock
will be converted into the right to receive on a one-for-one basis one share of
common stock, par value $0.01 per share, of New Century REIT (“REIT Common
Stock”), (iii) New Century Financial will become a wholly-owned subsidiary of
New Century REIT and will change its name to “New Century TRS Holdings, Inc.;”
and (iv) New Century REIT will change its name to “New Century Financial
Corporation.”

 

C. In accordance with Section 413 of the Indenture, it is a condition precedent
to the consummation of the Merger that New Century Financial and New Century
REIT execute and deliver to the Trustee a supplemental indenture that (i)
provides that the Holder of each Security then Outstanding shall have the right
to convert such Security into the kind and amount of shares of stock and other
securities and property receivable in the Merger by a holder of the number of
shares of Common Stock deliverable upon conversion of such Security immediately
prior to the Merger, and (ii) contains such additional provisions to protect the
interests of the Holders of the Securities as the Board of Directors of New
Century Financial shall reasonably consider necessary by reason of the
foregoing.

 

D. The Board of Directors of New Century Financial has determined that the
amendments to the Indenture set forth in this Supplemental Indenture are
reasonably necessary to protect the interests of the Holders of the Securities.

 

E. New Century Financial and New Century REIT desire to modify and amend the
Indenture to the extent and as set forth in this Supplemental Indenture.

 

F. New Century Financial and New Century REIT are duly authorized pursuant to
the terms of the Indenture to execute and deliver this Supplemental Indenture
and to modify and amend the Indenture as provided herein.

 

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NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

ARTICLE 1

AMENDMENTS TO INDENTURE

 

Section 1.1 Amendment of Section 101.

 

(a) Section 101 of the Indenture is hereby amended by deleting the definitions
of “Company” and “Volume Weighted Average Price” in their entirety and replacing
them with the following definitions:

 

“Company” means New Century Financial; provided, that, after the Effective Time,
“Company” means (i) New Century Financial, in the case of the Indenture
Obligations and the obligations of the Company to repurchase Securities upon a
Fundamental Change, (ii) New Century REIT, in the case of the Conversion
Obligations and related obligations to make adjustments to the Conversion Rate
(including, without limitation, those arising under ARTICLE FOUR), and as used
in the definitions of “Board of Directors” and “Common Stock,” and (iii) New
Century Financial and/or New Century REIT, as appropriate, in order to protect
the interests of the Holders of the Securities; and provided further, that if a
successor Person shall have become such pursuant to the applicable provisions of
this Indenture, thereafter “Company” shall mean such successor Person.

 

“Volume Weighted Average Price” per share on any trading day will be the volume
weighted average price as displayed on Bloomberg on the New York Stock Exchange
or any other national or regional securities exchange, the Nasdaq National
Market or other over-the-counter market or such other market on which the Common
Stock is then listed or quoted, from 9:30 AM to 4:00 PM (New York City time) on
that Trading Day (or if such volume weighted average price is not available, the
market value of one share on such Trading Day as the Company determines in good
faith using a volume weighted method).

 

(b) Section 101 of the Indenture is further amended hereby by inserting the
following definitions, which shall be inserted in alphabetical order:

 

“Effective Time” means the date and time that the Merger is consummated in
accordance with the terms and conditions of the Merger Agreement.

 

“Merger” means the merger of Merger Sub with and into New Century Financial
pursuant to the terms and conditions of the Merger Agreement.

 

“Merger Agreement” means that certain Agreement and Plan of Merger dated as of
April 21, 2004, by and among New Century Financial, New Century REIT and Merger
Sub.

 

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“Merger Sub” means NC Merger Sub, Inc., a corporation incorporated under the
laws of Delaware and a wholly-owned subsidiary of New Century REIT.

 

“New Century Financial” means New Century TRS Holdings, Inc., a corporation
incorporated under the laws of Delaware (formerly known as “New Century
Financial Corporation”).

 

“New Century REIT” means New Century Financial Corporation, a corporation
incorporated under the laws of Maryland (formerly known as “New Century REIT,
Inc.”).

 

ARTICLE 2

MISCELLANEOUS

 

Section 2.1 Effect of Supplemental Indenture; Timing of Amendments. This
Supplemental Indenture is a supplemental indenture pursuant to Section 901(a) of
the Indenture. Upon execution and delivery of this Supplemental Indenture, the
Indenture shall be amended and supplemented in accordance herewith, the terms
and conditions of this Supplemental Indenture shall be part of the terms and
conditions of the Indenture for any and all purposes, and all the terms and
conditions of both shall be read together as though they constitute one and the
same instrument, except that in the case of conflict, the provisions of this
Supplemental Indenture will control. Notwithstanding an earlier execution date,
the amendments contained in Article 1 of this Supplemental Indenture shall not
become operative unless and until the date and time the Merger is consummated in
accordance with the terms and conditions of the Merger Agreement. In the event
that the Merger is not consummated, Article 1 of this Supplemental Indenture
shall be null and void and of no force or effect.

 

Section 2.2 Definitions. Capitalized terms used and not otherwise defined in
this Supplemental Indenture shall have the meanings given such terms in the
Indenture.

 

Section 2.3 Joinder; Continuing Obligations of New Century Financial.

 

(a) By executing this Supplemental Indenture, New Century REIT agrees, as of the
Effective Time, to join the Indenture and the Securities, as amended and
supplemented by this Supplemental Indenture, as a party, only with respect to
the provisions set forth in Article 1 of this Supplemental Indenture.

 

(b) Except as specifically provided in this Supplemental Indenture, New Century
Financial shall remain obligated to perform, and be bound by, all of New Century
Financial’s obligations under the Securities and the Indenture.

 

Section 2.4 Full Force and Effect. Except to the extent expressly modified or
amended by this Supplemental Indenture, which modifications and amendments are
deemed necessary to cure ambiguities and correct or supplement any provisions in
the Indenture which are defective or inconsistent with any other provisions
therein, the Indenture and all of its covenants, agreements and other provisions
remain in full force and effect, and all references to the Indenture in the
Indenture shall be deemed to mean the Indenture as supplemented and amended
pursuant hereto.

 

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Section 2.5 Severability. In case any provision in this Supplemental Indenture
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

 

Section 2.6 Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO CONFLICTS OF LAWS PRINCIPLES THEREOF).

 

Section 2.7 Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

 

Section 2.8 Effect of Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.

 

Section 2.9 Trustee. The Trustee makes no representation as to the validity or
sufficiency of this Supplemental Indenture. The recitals and statements made
herein are deemed to be those of New Century Financial and New Century REIT and
not of the Trustee.

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed as of the date first above written.

 

“New Century Financial”

 

NEW CENTURY FINANCIAL CORPORATION,

a Delaware corporation

By:  

/S/    ROBERT K. COLE

Name:

 

Robert K. Cole

Title:

 

Chairman and Chief Executive Officer

“New Century REIT”

 

NEW CENTURY REIT, INC.,

a Maryland corporation

By:  

/S/    ROBERT K. COLE

Name:

 

Robert K. Cole

Title:

 

Chairman and Chief Executive Officer

 

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“Trustee”

 

WELLS FARGO BANK, N.A.,

a national banking association, as Trustee

By:  

/S/    MADDY HALL

Name:

 

Maddy Hall

Title:

 

Trust Officer

 

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