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                     AMENDED AND RESTATED SECURITY AGREEMENT

      AMENDED AND RESTATED SECURITY AGREEMENT (this "Security Agreement"), dated
as of April 30, 2000 by and between NC CAPITAL CORPORATION, a California
corporation ("NCCC" or a "Grantor"), NC RESIDUAL II CORPORATION , a Delaware
corporation ("NCRC" or a "Grantor" and together with NCCC, the "Grantors"), and
U.S. BANK NATIONAL ASSOCIATION, a national banking association ("USBNA"), as
collateral agent (in such capacity, together with any successor Agent hereunder,
the "Agent") for (A) the Lenders (as defined below), (B) U.S. Bancorp Leasing &
Financial, successor in interest to FBS Business Finance Corp. (the "Lessor"),
as lessor under any present or future leases of equipment by the Lessor, as the
lessor, to New Century Mortgage Corporation (the "Company") or New Century
Financial Corporation ("NCFC"), as lessee, or as lender under any present or
future loan by the Lessor, as lender, to the Company or NCFC, as Company,
secured by equipment, and (C) the Subordinated Noteholder (as defined below).

                                    RECITALS

      1. The Company, the lenders party thereto (the "Lenders") and the Agent
are party to the Fourth Amended and Restated Credit Agreement dated as of May
26, 1999 (as the same has heretofore been amended and as may hereafter be
amended, modified, extended or restated and in effect from time to time, the
"Credit Agreement").

      B. The Lessor has leased, and may from time to time hereafter lease,
equipment to the Company or NCFC, or make loans to the Company or NCFC secured
by equipment.

      C. USBNA has extended and has agreed to extend subordinated loans to the
Company under a Subordinated Loan Agreement (as the same may hereafter be
amended, modified, extended or restated and in effect from time to time, the
"Subordinated Loan Agreement") and a Second Amended and Restated Subordinated
Promissory Note in the principal amount of $40,000,000 (as the same may
hereafter be amended, modified, extended or restated and in effect from time to
time, the "Subordinated Note"), both of even date herewith.

      D. It is a condition precedent to the agreement of USBNA to loan or
advance additional monies under such Subordinated Loan Agreement and the
Subordinated Note that each Grantor and the Agent execute and deliver this
Security Agreement to amend and restate the Security Agreement dated as of
February 17, 2000 from the Grantors to the Agent (the "Existing Security
Agreement").

      E. NCCC is a wholly owned subsidiary of the Company and NCRC is a wholly
owned subsidiary of NCCC. Each Grantor participates with the Company in Company
Securitization Transactions, and has concluded that it is in its best interests
that the Company borrow the additional loans from USBNA.

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      Accordingly, each Grantor and the Agent hereby agree to amend and restate
the Existing Security Agreement as follows:

      Section 1. Defined Terms.

      Section 1.01. Terms Defined in Credit Agreement. All terms used herein
that are not otherwise defined herein but that are defined in the Credit
Agreement, including Exhibit E thereto, shall have the respective meanings
assigned to them therein unless otherwise expressly defined herein.

      Section 1.02. Definition of Certain Terms. As used herein, the following
terms shall have the following respective meanings (such terms to be equally
applicable to both the singular and plural forms of the terms defined):

      "Bankruptcy Code" shall mean 11 U.S.C.ss.101 et. seq., as amended from
time to time.

      "Collateral" shall mean all property and rights in property now owned or
hereafter at any time acquired by either Grantor in or upon which a Lien is
granted to the Agent by such Grantor under this Security Agreement or under any
other document or instrument executed by such Grantor pursuant to this Security
Agreement, including, without limitation, the property described in Section 2.

      "Company" shall have the meaning assigned to it in the introductory
paragraph hereof.

      "Financing Statement" shall have the meaning given to such term in Section
4(c).

      "GCFPI" shall mean Greenwich Capital Financial Products, Inc., a Delaware
corporation.

      "Grantor Address" shall mean 18400 Von Karman, Suite 1000, Irvine,
California 92612.

      "Lease Agreement" shall mean each and any agreement for the lease of
equipment or for the making of a loan secured by equipment now existing or at
anytime entered into between the Lessor, as lessor or lender, and the Company or
NCFC, as lessee or borrower.

      "Lease Obligations" shall mean all of the obligations now or hereafter
arising owed by the Company or NCFC to the Lessor in connection with any lease
of equipment or loan secured by equipment.

      "Proceeds" shall mean any consideration received from the sale, exchange,
lease or other disposition of any asset or property which constitutes
Collateral, any value received as a consequence of the possession of any
Collateral and any payment received from any insurer or other person or entity
as a result of the destruction, loss, theft, damage or other involuntary


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conversion of whatever nature of any asset or property which constitutes
Collateral, and shall include all cash and negotiable instruments received or
held on behalf of the Agent pursuant to this Security Agreement.

      "PWRESI" shall mean Paine Webber Real Estate Securities Inc., a Delaware
corporation.

      "Residual Financing" shall have the meaning assigned to it in Section
4(c).

      "SBI": Salomon Brothers International, Limited, an English corporation.

      "Secured Parties" shall mean the Agent, the Lenders, the Lessor, and the
Subordinated Noteholder.

      "Securitization Documents" shall mean all agreements, instruments,
certificates, and other documents executed and delivered in connection with any
Company Securitization Transaction, as the same may be amended, modified,
extended or restated and in effect from time to time.

      "Subordinated Note" shall have the meaning assigned to it in the Recital C
hereto.

      "Subordinated Note Obligations" shall mean the obligations of the Company
to pay principal and interest on the Subordinated Note and all fees, costs,
expenses and indemnities for which the Company is liable in connection
therewith.

      "Subordinated Noteholder" shall mean USBNA and any subsequent holder of
the Subordinated Note.

      Section 1.03. Terms Defined in Uniform Commercial Code. All other terms
used in this Agreement that are not specifically defined herein or the
definitions of which are not incorporated herein by reference shall have the
meaning assigned to such terms in the Uniform Commercial Code in effect in the
State of Minnesota as of the date first above written (the "Uniform Commercial
Code") to the extent such other terms are defined therein.

      Section 1.04. Rules of Interpretation. Unless the context of this Security
and Agreement otherwise clearly requires, references to "or" has the inclusive
meaning represented by the phrase "and/or." The words "hereof," "herein,"
"hereunder," and similar terms in this Security Agreement refer to this Security
Agreement as a whole and not to any particular provision of this Security
Agreement. References to Sections, Attachments and Schedules are references to
Sections in, and Attachments and Schedules to, this Security Agreement unless
otherwise provided.

      Section 2. Grant of Security Interest. As security for the payment and
performance of all of the Obligations (as defined in the Credit Agreement),
Lease Obligations, and Subordinated


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Note Obligations, each Grantor hereby assigns and pledges to the Agent for the
benefit of the Secured Parties and their respective successors and assigns, and
hereby grants to the Agent for the benefit of the Secured Parties and their
respective successors and assigns, a security interest in and to, all of such
Grantor's right, title, and interest in and to the following:

            (a) all Junior Securitization Interests described on Schedules 1, 2
      and 3 hereto, and all Junior Securitization Interests hereafter arising
      (the "Pledged Junior Securitization Interests");

            (b) all rights, remedies and other interests of such Grantor to and
      under any agreement pursuant to which any Pledged Junior Securitization
      Interest was, is or may be acquired, sold or financed, either before or
      after the date hereof;

            (c) all rights, remedies and other interests of such Grantor in any
      Securitization Documents related to the Pledged Junior Securitization
      Interests;

            (d) all sums paid or payable to such Grantor under or by virtue of
      any Pledged Junior Securitization Interests;

            (e) all books, correspondence, credit files, records, invoices,
      bills of lading, and other documents, including, without limitation, all
      tapes, cards, computer runs, and other papers and documents in the
      possession or control of such Grantor or any computer bureau from time to
      time acting for such Grantor relating to the foregoing;

            (f) any and all Hedging Arrangements related to the Pledged Junior
      Securitization Interests or the Mortgage Loans backing the related Company
      Securitization Transactions, and any and all rights, remedies and other
      interests of such Grantor therein or thereunder;

            (g) any and all balances, credits, deposits, accounts or moneys of,
      or in the name of, such Grantor representing or evidencing the foregoing
      or any proceeds thereof; and

            (h) all Proceeds of any of the foregoing;

provided, however, that with respect to the Junior Securitization Interests
listed on Schedule 1 hereto, and any related Collateral described in clauses
(b), (c), (d), (e), (f), (g) and (h) above, such security interest shall not
take effect until consented to by GCFPI, and with respect to the Junior
Securitization Interests listed on Schedule 3 hereto, and any related Collateral
described in clauses (b), (c), (d), (e), (f), (g) and (h) above, such security
interest shall not take effect until consented to by PWRESI.


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      Section 3. The Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Security Agreement had not been executed, (b) the exercise by the Agent of any
of the rights hereunder shall not release either Grantor from any of its duties
or obligations under the contracts and agreements included in the Collateral,
and (c) none of the Agent or the Secured Parties shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Security Agreement, nor shall the Agent or the Secured Parties be
obligated to perform any of the obligations or duties of either Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.

      Section 4. Representations and Warranties. Each Grantor represents and
warrants as follows:

            (a) The chief place of business and the office where each Grantor
      keeps its books and records concerning the Collateral is located at the
      Grantor Address. The chief executive office of each Grantor is located at
      the Grantor Address.

            (b) Each Junior Securitization Interest described in Schedule 1, 2
      or 3, or which is at any time hereafter created or acquired by either
      Grantor is, or upon the creation or acquisition thereof by such Grantor
      will be, in full force and effect without modification or amendment of any
      kind.

            (c) Each Grantor is the legal and beneficial owner of the Collateral
      free and clear of any Lien except for the security interests created by
      this Security Agreement and (i) in the case of Junior Securitization
      Interests listed on Schedule 1, a Lien in favor of GCFPI, (ii) in the case
      of Junior Securitization Interests listed on Schedule 2, a Lien in favor
      of SBI, (iii) in the case of Junior Securitization Interests listed on
      Schedule 3, a Lien in favor of PWRESI, and (iv) in the case of future
      Junior Securitization Interests, a Lien in favor of the Person(s)
      providing financing described in Section 4.08(d) of the Credit Agreement
      ("Residual Financing") secured by such Junior Securitization Interests. No
      effective financing statement or other similar document used to perfect
      and preserve a security interest under the laws of any jurisdiction (a
      "Financing Statement") covering all or any part of the Collateral is on
      file in any recording office, except such as may have been filed in favor
      of the Agent relating to this Security Agreement or to perfect permitted
      Liens as described above.


                                       5
<PAGE>

            (d) Each Grantor has good right, power and lawful authority to
      pledge, assign and deliver the Collateral in the manner hereby done or
      contemplated.

            (e) No consent or approval of any governmental body, regulatory
      authority, person, trust, or entity is or will be (i) necessary to the
      validity of the rights created hereunder or (ii) required prior to the
      assignment, transfer and delivery of any of the Collateral to the Agent,
      except for the consent of SBI to the Agent's security interest in the
      Junior Securitization Interests listed on Schedule 2, which has been
      obtained.

            (f) To each Grantor's knowledge, no material dispute, right of
      setoff, counterclaim or defense exists with respect to all or any part of
      the Collateral.

            (g) This Security Agreement constitutes the legal, valid and binding
      obligation of each Grantor enforceable against such Grantor and the
      Collateral in accordance with its terms (subject to limitations as to
      enforceability which might result from bankruptcy, reorganization,
      arrangement, insolvency or other similar laws affecting creditors' rights
      generally and general principles of equity).

            (h) Immediately upon the acquisition by either Grantor of rights in
      the Collateral and the filing of an appropriate financing statement in the
      appropriate filing office or offices, the Agent shall have a valid,
      perfected security interest and lien in the Collateral, subject to no
      other security interest or lien except as provided in this Security
      Agreement.

            (i) Neither Grantor has used any trade names and styles in its
      business during the last five years. No such trade names or styles and no
      trademarks or other similar marks owned by either Grantor are or have been
      registered with any governmental unit during the last five years.

      Section 5. Covenants of the Grantors.

            (a) Name Change. Without the prior written consent of the Agent,
      neither Grantor will change its name from that set forth in the first
      paragraph of this Security Agreement nor use any other name.

            (b) Change of Location or Jurisdiction of Organization. Each Grantor
      shall give at least 30 days' prior written notification to the Agent of
      the opening of a new place of business where any of the Collateral or
      records relating thereto are


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<PAGE>

      to be located, any other change in the location of the office where it
      keeps its books and records concerning the Collateral, and of any change
      in the location of its chief executive office. Neither Grantor will take
      any action that would cause its jurisdiction of organization to change
      without giving at least 30 days' prior written notification of such change
      to the Agent and executing and delivering such financing statements
      covering the Collateral as the Agent may request in connection therewith.

            (c) Use of Trade Names or Styles. Neither Grantor will, except after
      giving at least 30 days' prior written notice to the Agent, use any trade
      names or styles in its business in any state.

            (d) Inspection and Verification of Books Records and Collateral. The
      Agent, or any persons designated by the Agent, shall have the right, at
      reasonable times, without hindrance or delay, to inspect the books and
      records of each Grantor relating to the Collateral. The Agent, or any
      persons designated by the Agent, shall have the right to make such
      verifications concerning each Grantor's business and the Collateral as may
      be reasonable.

            (e) Marking Collateral and Records. Promptly upon the request of the
      Agent, each Grantor will mark, or will permit the Agent to mark in a
      reasonable manner, such Grantor's books, records and accounts showing or
      dealing with the Collateral with a notation clearly setting forth that a
      security interest in the Collateral has been granted to the Agent for the
      benefit of the Secured Parties, which notations shall be in form and
      substance reasonably satisfactory to the Agent.

            (f) Reports and Schedules. Each Grantor will from time to time as
      the Agent may reasonably request, deliver to the Agent such schedules and
      such certificates and reports respecting all or any of the Collateral, and
      the items or amounts received by such Grantor in full or partial payment,
      or otherwise as proceeds of any of the Collateral, all to such extent as
      the Agent may reasonably request. Any such schedule, certificate or report
      shall be executed by a duly authorized officer of such Grantor and shall
      be in such form and detail as the Agent may reasonably specify. Each
      Grantor will also furnish the Agent such additional information concerning
      the Collateral as it may from time to time reasonably request.


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<PAGE>

            (g) Maintenance of Security Interest. Each Grantor will do all acts
      and things, and will execute and file or record all instruments
      (including, but not limited to, mortgages, pledges, assignments, security
      agreements, financing statements, amendments to financing statements,
      continuation statements, etc.) required, or reasonably requested by the
      Agent, to establish, perfect, maintain and continue the perfection and
      priority of the interests of the Agent in the Collateral. Each Grantor
      will also pay the costs and expenses of: all filings and recordings,
      including taxes thereon; all searches necessary, or reasonably deemed
      necessary by the Agent, to establish and determine the validity and the
      priority of such interests; and also to satisfy all other liens which in
      the reasonable opinion of the Agent might prejudice, imperil or otherwise
      affect the Collateral or the existence or priority of such interests. A
      carbon, photographic or other reproduction of this Security Agreement or
      of a financing statement shall be sufficient as a financing statement and
      may be filed in lieu of the original in any or all jurisdictions which
      accept such reproductions. On or before May 31, 2000, the Grantors shall
      cause GCFPI and PWRESI to enter into intercreditor and agency agreements,
      on terms reasonably acceptable to the Agent, concerning the Agent's
      security interest in the Junior Securitization Interests described in
      Schedules 1 and 3.

            (h) Collections. Until notified in writing by the Agent to the
      contrary, each Grantor shall, at its own expense, endeavor to collect as
      and when due, all amounts due with respect to amounts payable under or
      with respect to the Collateral, including the taking of such action with
      respect to collection as such Grantor may deem advisable. Whenever an
      Event of Default shall have occurred and be continuing, all collections of
      the Collateral received by either Grantor shall be held in trust for the
      Agent and shall be promptly remitted to the Agent in the form received,
      properly endorsed, or as the Agent may otherwise direct in writing.

            (i) Indemnity. Each Grantor will indemnify and save and hold the
      Secured Parties harmless from and against any and all claims, damages,
      losses, liability or judgments which may be incurred or sustained by, or
      asserted against, any one or more of the Secured Parties, directly or
      indirectly, in connection with the existence of or the exercise of any of
      its or their rights under this Security Agreement; provided, that such
      Grantor shall not be liable to any Secured Party for any portion of such
      claims, damages, losses, liabilities or judgments resulting from (i) the
      gross negligence or willful misconduct of the Secured Party seeking
      indemnification, (ii) any breach by the Secured Party seeking
      indemnification of the terms of the Loan Documents to which such Secured
      Party is a party, or (iii) any violation of law by the Secured Party
      seeking indemnification.


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<PAGE>

            (j) Third-Party Claims. Each Grantor will defend the Collateral and
      the security interests therein against all claims and demands of all
      Persons, at any time claiming any adverse interest with respect thereto,
      except for claims of (i) GCFPI with respect to the Junior Securitization
      Interests listed on Schedule 1, (ii) SBI with respect to the Junior
      Securitization Interests listed on Schedule 2, (iii) PWRESI with respect
      to the Junior Securitization Interests listed on Schedule 3, and (iv) in
      the case of future Junior Securitization Interests, the Person(s)
      providing Residual Financing secured by such Junior Securitization
      Interests.

            (k) Taxes. Each Grantor will promptly pay any and all taxes,
      assessments and governmental charges upon the Collateral prior to the date
      that penalties are attached thereto or the same become a lien on any of
      the Collateral, except to the extent that such taxes, assessments and
      charges shall be contested by such Grantor in good faith and through
      appropriate proceedings.

            (l) Additional Junior Securitization Interests. With respect to any
      Junior Securitization Interests created or acquired after the date hereof,
      the Grantors will promptly deliver the following documents to the Agent:
      (i) copies of all Securitization Documents relating thereto, (ii) such
      amendments to this Security Agreement and the related financing statements
      as the Agent may deem necessary to describe more fully such Junior
      Securitization Interests and any related Hedging Arrangements or other
      Collateral, and (iii) an intercreditor and agency agreement with the
      Person providing Residual Financing to either Grantor, on terms reasonably
      acceptable to the Agent, with respect to such Junior Securitization
      Interests.

            (m) Disposition of Collateral. Neither Grantor will sell or offer to
      sell or otherwise assign, transfer or dispose of any of the Collateral or
      any interest therein except as and to the extent permitted under the
      Credit Agreement.

      Section 6. Remedies.

            (a)   Collections.

                  (i) Each Grantor shall have the right to collect all amounts
            payable under the Collateral in the ordinary course of its business;
            provided, however, that during the occurrence and continuation of an
            Event of Default, each Grantor agrees, upon the request of the
            Agent, promptly to


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            deposit all payments received by such Grantor on account of the
            Collateral, whether in the form of cash, checks, notes, drafts,
            bills of exchange, money orders or otherwise, in one or more
            accounts designated by the Agent in precisely the form received (but
            with any endorsements of such Grantor necessary for deposit or
            collection), subject to withdrawal by the Agent only, as hereinafter
            provided, and until they are deposited, such payments shall be
            deemed to be held in trust by such Grantor for and as the property
            of the Secured Parties and shall not be commingled with any of such
            Grantor's other funds. Notwithstanding the occurrence and
            continuation of an Event of Default, each Grantor agrees to perform
            under all Securitization Documents in accordance with its normal
            collection practices, whether the remittances received in connection
            with the Junior Subordination Interests are transferred to an
            account for the benefit of the Agent or otherwise.

                  (ii) Upon receipt by the Agent of notice that an Event of
            Default has occurred and is continuing, the Agent shall have the
            right, as the true and lawful agent of each Grantor, with power of
            substitution for each Grantor and in either Grantor's name, the
            Agent's name or otherwise, for the use and benefit of the Secured
            Parties, (A) to receive, endorse, assign and/or deliver any and all
            notes, acceptances, checks, drafts, money orders or other evidences
            of payment relating to the Collateral or any part thereof; (B) to
            demand, collect, receive payment of, give receipt for and give
            discharges and releases of all or any of the Collateral; (C) to sign
            the name of either Grantor on any invoice or bill of lading relating
            to any of the Collateral; (D) to commence and prosecute any and all
            suits, actions or proceedings at law or in equity in any court of
            competent jurisdiction to collect or otherwise realize on all or any
            of the Collateral or to enforce any rights in respect of any
            Collateral; (E) to settle, compromise, compound, adjust or defend
            any actions, suits or proceedings relating to all or any of the
            Collateral; (F) to notify, or to require either Grantor to notify,
            the Person obligated on any of or all the Collateral to make payment
            thereof directly to the Agent; and (G) to use, sell, assign,
            transfer, pledge, make any agreement with respect to or otherwise
            deal with all or any of the Collateral, and to do all other acts and
            things necessary to carry out the purposes of this Security
            Agreement, as fully and completely as though the Agent were the
            absolute owner of the Collateral for all purposes; provided,
            however, that nothing herein contained shall be construed as
            requiring or obligating the Agent or the Secured Parties to make any
            commitment or to make any inquiry as to the nature or sufficiency of
            any payment received by the Agent or the Secured Parties, or to
            present or file any claim or notice, or to take any action with
            respect to the Collateral or any part thereof or the moneys due or
            to become due in respect thereof or any property covered thereby,
            and no action taken or omitted to be taken by the Agent or the
            Secured


                                       10
<PAGE>

            Parties with respect to the Collateral or any part thereof shall
            give rise to any defense, counterclaim or offset in favor of either
            Grantor or to any claim or action against the Agent or the Secured
            Parties. It is understood and agreed that the appointment of the
            Agent as the agent of each Grantor for the purposes set forth above
            is coupled with an interest and is irrevocable. The provisions of
            this Section 6(a) shall in no event relieve either Grantor of any of
            its obligations hereunder or under any of the other Loan Documents
            with respect to the Collateral or any part thereof or impose any
            obligation on the Agent or the Secured Parties to proceed in any
            particular manner with respect to the Collateral or any part
            thereof, or in any way limit the exercise by the Agent or any
            Secured Party of any other or further right which it may have on the
            date of this Security Agreement or hereafter, whether hereunder,
            under any Loan Documents or by law or otherwise.

                  (iii) the rights of the Agent set forth in clauses (i) and
            (ii) above, in Section 5(h) above and in Section 6(c) below are
            subject to (A) with respect to the Junior Securitization Interests
            described on Schedule 1, the rights of GCFPI, (B) with respect to
            the Junior Securitization Interests described on Schedule 2, the
            rights of SBI, (C) with respect to the Junior Securitization
            Interests described on Schedule 3, the rights of PWRESI, and (D)
            with respect to future Junior Securitization Interests, the rights
            of the Person providing Residual Financing therefor.

            (b) Right to Use Certain Assets of the Grantors. Upon receipt by the
      Agent of notice that an Event of Default has occurred and is continuing,
      the Agent and any representatives of the Agent shall have, in addition to
      all its other rights under this Security Agreement, the right to obtain
      access to each Grantor's data processing equipment, computer hardware and
      software relating to the Collateral and to use all of the foregoing and
      the information contained therein in any manner the Agent deems necessary
      for the purpose of effectuating its rights under this Security Agreement
      and any other Loan Documents. Each Grantor agrees that the Agent has no
      obligation to preserve rights to the Collateral against any other parties.
      The Agent is hereby granted a license or other right to use, without
      charge, each Grantor's labels, patents, copyrights, rights of use of any
      name, trade secrets, trade names, trademarks, service marks and
      advertising matter, or any


                                       11
<PAGE>

      property of a similar nature, as it pertains to the Collateral, in
      advertising for sale and selling any Collateral and each Grantor's rights
      under all licenses and all franchise agreements shall inure to the Agent's
      benefit until the Obligations are paid in full.

            (c) Other Remedies. Upon receipt by the Agent of notice that an
      Event of Default has occurred and is continuing, the Agent may, in
      addition to any other right or remedy available to the Agent or the
      Secured Parties under any Loan Documents, exercise any and all rights and
      remedies available to it and/or the Secured Parties under the Uniform
      Commercial Code as in effect in the State of Minnesota and any other
      applicable law to the fullest extent permitted thereby. Without limiting
      the foregoing, upon receipt of notice by the Agent that an Event of
      Default has occurred and is continuing, the Agent may exercise any of the
      following rights and remedies: (a) in the name of either Grantor, any
      Secured Party or otherwise, to demand, collect, receive and receipt for,
      compound, compromise, settle and give acquittance for, and prosecute and
      discontinue any suits or proceedings in respect of any or all of the
      Collateral; (b) upon written notice to either Grantor and any other Person
      entitled to receive such notice under any Junior Securitization Interest
      or the related Securitization Documents, specifying the effective date of
      any assumption thereof, to assume, become bound by, and agree to perform
      and observe the covenants, agreements, obligations and conditions to be
      performed and observed under any Servicing Contract specified in such
      notice and to exercise all of the rights, powers and privileges of such
      Grantor thereunder; (c) to sell and assign to any other Person or Persons
      the right, title and interest of either Grantor in any Servicing Contract
      or Servicing Rights; (d) to require each Grantor to, and each Grantor
      hereby agrees that it will at its expense and upon request of the Agent
      forthwith, assemble all or part of the Collateral as directed by the Agent
      and make it available to the Agent at a place to be designated by the
      Agent that is reasonably convenient to both the Agent and the Grantors;
      (e) without notice except as specified below, to sell the Collateral or
      any part thereof in one or more parcels at public or private sale, at any
      of the Agent's offices or elsewhere, for cash, on credit, or for future
      delivery, and upon such other terms as the Agent may reasonably believe
      are commercially reasonable; (f) to occupy any premises owned or leased by
      either Grantor where the Collateral or any part thereof or any books and
      records relating thereto is assembled for a reasonable period in order to
      effectuate the Agent's rights and remedies hereunder or under law, without
      obligation to compensate such Grantor for such occupation; (g) to take any
      action which the Agent may reasonably deem necessary or desirable in order
      to realize on the Collateral, including, the power to endorse in


                                       12
<PAGE>

      the name of either Grantor any checks, drafts, notes or other instruments
      or documents received in payment of or on account of the Collateral; and
      (h) to exercise any and all rights and remedies of either Grantor under or
      in connection with the Collateral. Each Grantor agrees that, to the extent
      notice of sale shall be required by law, at least ten days' prior written
      notice to such Grantor (which such Grantor agrees is reasonable
      notification within the meaning of Section 9-504(3) of the Uniform
      Commercial Code) of the time and place of any public sale or the time
      after which any private sale is to be made shall constitute reasonable
      notification. The Agent shall not be obligated to make any sale of
      Collateral regardless of notice of sale having been given. The Agent may
      adjourn any public or private sale from time to time by announcement at
      the time and place fixed therefor, and such sale may, without further
      notice, be made at the time and place to which it was so adjourned. The
      Agent may, but shall not be obligated to, advance any sums or do any act
      or thing necessary to uphold and enforce its security interest hereunder,
      including, without limitation, payment of amounts secured by prior Liens,
      delinquent taxes or assessments and insurance premiums. All advances,
      charges, costs and expenses, including reasonable attorneys' fees and
      disbursements, incurred or paid by the Agent in exercising any right,
      power or remedy conferred by this Agreement, or in the enforcement hereof,
      together with interest thereon, at a rate per annum equal to the Reference
      Rate plus the Applicable Margin plus 2.0%, from the time of payment until
      repaid, shall become a part of the Obligations secured hereby.

            (d) Waiver of Certain Claims. Each Grantor acknowledges that because
      of present or future circumstances, a question may arise under the
      Securities Act of 1933, as from time to time amended (the "Securities
      Act"), with respect to any disposition of the Collateral permitted
      hereunder. Each Grantor understands that compliance with the Securities
      Act may very strictly limit the course of conduct of the Agent if the
      Agent were to attempt to dispose of all or any portion of the Collateral
      and may also limit the extent to which or the manner in which any
      subsequent transferee of the Collateral or any portion thereof may dispose
      of the same. There may be other legal restrictions or limitations
      affecting the Agent in any attempt to dispose of all or any portion of the
      Collateral under the applicable Blue Sky or other securities laws or
      similar laws analogous in purpose or effect. The Agent may be compelled to
      resort to one or more private sales to a restricted group of purchasers
      who will be obliged to agree, among other things, to acquire such
      Collateral for their own account for investment only and not to engage in
      a distribution or resale thereof. Each Grantor agrees that the Agent shall
      not incur any liability, and any liability of either Grantor for any
      deficiency shall not be


                                       13
<PAGE>

      impaired, as a result of the sale of the Collateral or any portion thereof
      at any such private sale in a manner that in all other respects is
      commercially reasonable (within the meaning of Section 9-504(3) of the
      Uniform Commercial Code). Each Grantor hereby waives any claims against
      the Agent arising by reason of the fact that the price at which the
      Collateral may have been sold at such sale was less than the price that
      might have been obtained at a public sale or was less than the aggregate
      amount of the Obligations, even if the Agent shall accept the first offer
      received and does not offer any portion of the Collateral to more than one
      possible purchaser. Each Grantor further agrees that the Agent has no
      obligation to delay sale of any Collateral for the period of time
      necessary to permit the issuer of such Collateral to qualify or register
      such Collateral for public sale under the Securities Act, applicable Blue
      Sky laws and other applicable state and federal securities laws, even if
      said issuer would agree to do so. Without limiting the generality of the
      foregoing, the provisions of this Section would apply if, for example, the
      Agent were to place all or any portion of the Collateral for private
      placement by an investment banking firm, or if such investment banking
      firm purchased all or any portion of the Collateral for its own account,
      or if the Agent placed all or any portion of the Collateral privately with
      a purchaser or purchasers.

      Section 7. Application of Proceeds. The Agent shall apply the proceeds of
any collection, sale or other disposition of the Collateral as follows:

            FIRST, ratably to the payment of the costs and expenses of the Agent
      and the Secured Parties in connection with the enforcement of this
      Security Agreement (including, without limitation, any costs or expenses
      related to the sale or other disposition of the Collateral and any
      advances made by the Agent pursuant to section 6(c) hereof) and the
      reasonable fees and out of pocket expenses of counsel employed in
      connection therewith, to the payment of all costs and expenses incurred by
      the Agent in connection with the administration of this Security Agreement
      and to the payment of all advances made by the Agent and the Secured
      Parties for the account of the Company hereunder, to the extent that such
      costs, expenses and advances have not been reimbursed to the Agent and the
      Secured Parties, as the case may be;

            SECOND, to the payment in full of the principal of and any Balances
      Deficiency Fees, Usage Fees, facility fees and interest on the Notes;

            THIRD, to the payment of all other Obligations, as provided in the
      Credit Agreement, as the Agent or the Lenders may determine;


                                       14
<PAGE>

            FOURTH, to the payment in full of the Lease Obligations, as provided
      in the Lease Agreements, or otherwise, in such order as the Lessor may
      determine;

            FIFTH, to the payment in full of the Subordinated Note Obligations
      until all of the Subordinated Note Obligations have been paid in full;

            SIXTH, the balance (if any) of such proceeds shall be paid to the
      Grantors, their successors or assigns, or as a court of competent
      jurisdiction may direct; provided, that if such proceeds are not
      sufficient to satisfy the Obligations, the Lease Obligations and the
      Subordinated Note Obligations in full, the Company shall remain liable to
      the Agent, the Lenders, the Lessor and the holder(s) of the Subordinated
      Note, as applicable, for any deficiency.

The Company hereby agrees to pay all expenses incurred by the Agent or the
Secured Parties in the collection of the Collateral, including the reasonable
attorneys' fees incurred in connection therewith by the Agent or the Secured
Parties.

The Agent shall apply any such proceeds, moneys or balances in accordance with
this Security Agreement as promptly as is reasonably practicable. Upon any sale
of the Collateral by the Agent (including, pursuant to a power of sale granted
by statute or under a judicial proceeding), the receipt of the Agent or of the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Agent or such officer or be answerable in any way for the
misapplication thereof.

      Section 8. Amendments and Modifications. No amendment to this Security
Agreement, waiver of any provision of this Security Agreement or consent to any
departure by the Grantors therefrom shall in any event be effective unless the
same shall be in writing and signed or consented to in writing by the Agent
(with the consent of the Required Lenders, the Lessor and the Subordinated
Noteholder), and any such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.

      Section 9. Notices. Except as otherwise specifically provided for herein,
all notices and other communications provided for herein shall be in writing
(including teletransmission communication) and, unless otherwise required herein
or by law, shall be teletransmitted, mailed or delivered to the intended
recipient at the "Address for Notices" specified (i) in the case of the Agent or
the Lenders, in the Credit Agreement, (ii) in the


                                       15
<PAGE>

case of the Grantors, for the Company in the Credit Agreement, (iii) in the case
of the Lessor, by the Lessor to the Company from time to time, and (iv) in the
case of the Subordinated Noteholder, in the Subordinated Loan Agreement. All
notices and other communications hereunder shall be effective when transmitted
by telex or telecopier, delivered or, in the case of a mailed notice or notice
sent by overnight courier, upon receipt thereof as conclusively evidenced by the
signed receipt therefor, in each case given or addressed as aforesaid.

      Section 10. Indemnification and Costs and Expenses. The Grantors will (a)
pay all reasonable out-of-pocket expenses incurred by the Agent or the Secured
Parties in connection with (i) the administration of this Security Agreement
(whether or not the transactions hereby contemplated shall be consummated), and
(ii) the enforcement of the rights of the Agent and the Secured Parties in
connection with this Security Agreement; (b) pay, and hold the Agent and the
Secured Parties harmless from and against, any and all present and future stamp
and other similar taxes with respect to the foregoing matters, and save the
Agent and the Secured Parties harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or omission to pay such
taxes; and (c) pay, and indemnify and hold harmless the Agent and the Secured
Parties from and against, any and all liabilities, obligations, losses, damages,
penalties, judgments, suits, costs, expenses and disbursements of any kind
whatsoever (the "Indemnified Liabilities") which may be imposed on, incurred by
or asserted against any of them in any way relating to or arising out of this
Security Agreement or any of the transactions contemplated hereby or thereby,
WHETHER OR NOT THE SAME ARE CAUSED BY THE SIMPLE NEGLIGENCE OF THE AGENT OR ANY
SECURED PARTY, unless the same are caused by the gross negligence or willful
misconduct of the Agent or such Secured Party, as the case may be. The
undertakings of the Company set forth in this Section 10 shall survive the
payment in full of the Obligations, the Lease Obligations, the Subordinated Note
Obligations, and the termination of this Security Agreement, the Credit
Agreement, the other Loan Documents, all Lease Agreements and the Subordinated
Note.


                                       16
<PAGE>

      Section 11. Termination. This Security Agreement shall terminate when all
the Obligations, Lease Obligations and Subordinated Note Obligations have been
fully and indefeasibly paid and performed and the Commitments, all Lease
Agreements and the Subordinated Loan Agreement have expired, at which time the
Agent shall reassign and redeliver, without recourse upon, or representation or
warranty by, the Agent or any Secured Party and at the expense of the Grantors,
to the Grantors or to such other Person or Persons as the Grantors shall
designate, against receipt, such of the Collateral (if any) as shall not have
been sold or otherwise disposed of by the Agent pursuant to the terms hereof,
and shall still be held by the Agent, together with appropriate instruments of
reassignment and release; provided, however, that this Security Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Obligations, the Lease Obligations, or the
Subordinated Note Obligations is rescinded or must otherwise be returned by the
Agent, any Secured Party or any other Person upon the insolvency, bankruptcy or
reorganization of either Grantor or otherwise, all as though such payment had
not been made.

      Section 12. Waivers, etc. No failure on the part of the Agent to exercise
and no delay in exercising, any power or right hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any power or right
preclude any other or further exercise thereof or the exercise of any other
power or right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.

      Section 13. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.
THIS SECURITY AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAW, BUT NOT THE LAW OF CONFLICTS, OF
THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES
THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. THE
GRANTORS HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION AND VENUE
OF ANY MINNESOTA STATE OR FEDERAL COURT SITTING IN HENNEPIN OR RAMSEY COUNTIES,
STATE OF MINNESOTA, FOR ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS SECURITY AGREEMENT, AND THE GRANTORS HEREBY IRREVOCABLY AGREE THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH MINNESOTA STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT. THE GRANTORS HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY
MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM AND VENUE OBJECTIONS
TO THE


                                       17
<PAGE>

MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING. THE GRANTORS HEREBY WAIVE PERSONAL
SERVICE OF PROCESS AND CONSENT THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED
OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 9 OF THIS SECURITY
AGREEMENT, AND SERVICE SO MADE SHALL BE DEEMED COMPLETED ON THE THIRD BUSINESS
DAY AFTER SUCH SERVICE IS DEPOSITED IN THE MAIL. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENT, ANY SECURED PARTY OR ANY OTHER INDEMNIFIED PERSON TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. THE GRANTORS AND THE AGENT HEREBY
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

      Section 14. Miscellaneous.

            (a) Benefit of Agreement. This Security Agreement shall be binding
      upon and inure to the benefit of each Grantor and the Agent and their
      respective successors and assigns, and shall inure to the benefit of the
      Secured Parties and their respective successors and assigns, except that
      neither Grantor may assign or transfer any of its rights or obligations
      under this Security Agreement without the prior written consent of the
      Secured Parties.

            (b) Successor Collateral Agent. In the event a successor Agent is
      appointed pursuant to the Credit Agreement, such successor Agent shall
      also succeed to the duties and responsibilities of the Agent hereunder.
      From and after the payment in full of all of the Obligations and the
      termination of the Commitments, the Agent under the Credit Agreement at
      the time of such payment and termination shall remain the Agent hereunder
      until the Lease Obligations and the Subordinated Note Obligations have
      been paid in full and all Lease Agreements and the Subordinated Note
      Agreement have been terminated; provided, however, that if any Person
      other than USBNA is the Agent hereunder at such time, USBNA may direct
      that such Person resign as Agent and appoint USBNA as successor Agent
      hereunder.

            (c) No Commitment by Lessor or Subordinated Noteholder. Nothing in
      this Security Agreement shall be construed as a commitment on the part of
      the Lessor to lease any equipment or make any loan, or on the part of the
      Subordinated Noteholder to extend any loan pursuant to the Subordinated


                                       18
<PAGE>

      Loan Agreement or the Subordinated Note, to or for the account of the
      Company or NCFC.

            (d) Survival of Representations, Warranties and Covenants. All
      representations, warranties and covenants made by either Grantor to the
      Agent or the Secured Parties in connection with this Security Agreement
      shall survive the execution and delivery of this Security Agreement. All
      statements contained in any certificate or other instrument delivered to
      the Agent or the Secured Parties pursuant to this Security Agreement shall
      be deemed representations, warranties and covenants hereunder of such
      Grantor.

            (e) Headings. Section headings in this Security Agreement are for
      convenience of reference only, and shall not govern the interpretation of
      any of the provisions of this Security Agreement.

            (f) Execution in Counterparts. This Security Agreement may be
      executed in any number of counterparts, all of which taken together shall
      constitute one and the same instrument and either of the parties hereto
      may execute this Security Agreement by signing any such counterpart.


                                       19
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have duly executed this
Security Agreement as of the day and year first above written.


                                          NC CAPITAL  CORPORATION

                                          By: /s/ Patrick Flanagan
                                              ----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title: President
                                                 -------------------------------


                                          NC RESIDUAL II  CORPORATION

                                          By: /s/ Patrick Flanagan
                                              ----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title: President
                                                 -------------------------------


                                          U.S. BANK NATIONAL ASSOCIATION, as
                                          Agent

                                          By:   /s/ Edwin Jenkins
                                              ----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                 -------------------------------

           [Signature Page to Amended and Restated Security Agreement]