Document:

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                              AMENDED AND RESTATED
                          REGISTRATION RIGHTS AGREEMENT

      This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the "Agreement")
is entered into as of April 28, 2000, by and among New Century Financial
Corporation, a Delaware corporation (the "Company"), and U.S. Bancorp, a
Delaware corporation ("USB") and U.S. Bank National Association ("US Bank").

      WHEREAS, the Company and USB are a party to the Amended and Restated
Registration Rights Agreement dated as of July 26, 1999 (the "Registration
Rights Agreement") relating to the Company's agreements to register under the
Securities Act the shares of the Company's Common Stock issuable upon conversion
of the Company's outstanding Series 1998A Convertible Preferred Stock and the
Series 1999A Convertible Preferred Stock.

      WHEREAS, in connection with a Subordinated Loan Agreement dated as of
April 28, 2000 between New Century Mortgage Corporation (a wholly owned
subsidiary of the Company) and US Bank, the Company has agreed to issue to US
Bank warrants to purchase up to an aggregate of 725,000 shares of the Company's
Common Stock, $.01 par value per share, upon the terms and subject to the
conditions set forth in the Warrant Issuance Agreement dated as of April 28,
2000 among the Company, USB and US Bank.

      WHEREAS, in connection with the issuance of such warrants, the Company and
USB desire to amend and restate the Registration Rights Agreement to include
certain arrangements with respect to the registration for public sale under the
Securities Act of 1933, as amended (the "Securities Act"), of the shares of the
Company's Common Stock issuable upon conversion of the warrants and to make US
Bank a party to such Agreement.

      NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company, USB and US Bank
hereby agree as follows:

      1. Definitions.

            1.1 "Affiliate" shall mean any person that directly or indirectly
controls or is controlled by, or is under common control with, another specified
person.

            1.2 "Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.

            1.3 "Company" shall mean New Century Financial Corporation, a
Delaware corporation.

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            1.4 "Common Shares" shall mean the shares of common stock, par value
$.01 per share, authorized by the Company's Certificate of Incorporation and any
additional shares of common stock which may be authorized in the future by the
Company, and any stock into which such Common Shares may hereafter be changed,
and shall also include capital stock of any other class of the Company which is
not preferred as to dividends or assets over any other class of stock of the
Company and which is not subject to redemption.

            1.5 "Founding Managers" shall mean Robert K. Cole, Brad A. Morrice,
Steven G. Holder and Edward F. Gotschall.

            1.6 "Other Shareholders" shall mean Paul B. Akers and Kirk Redding,
and their successors in interest, under that certain Merger Agreement, dated as
of December 17, 1997, among the Company, NC Acquisition Corp., PFW Corporation
and the shareholders named therein.

            1.7 "Preferred Stock" shall mean all outstanding shares of (a) the
Series 1999A Convertible Preferred Stock, par value $.01 per share, of the
Company, and any securities (other than Common Shares) into which such shares
may hereafter be changed and (b) the Series 1998A Convertible Preferred Stock,
par value $.01 per share, of the Company, and any Securities (other than the
Common Shares) into which such shares may hereafter be changed.

            1.8 "Public Offering" shall mean any offering of Common Shares to
the public, either on behalf of the Company or any of its security holders,
pursuant to an effective registration statement under the Securities Act.

            1.9 "Registrable Securities" shall mean (a) the Common Shares at any
time issued or subject to issuance upon the conversion of the Preferred Stock,
(b) the Common Shares at any time issued or subject to issuance upon exercise or
conversion of the Warrants, and (c) any additional securities issued with
respect to the above-described securities upon any stock split, stock dividend,
recapitalization, or similar event. Registrable Securities shall cease to be
Registrable Securities when (w) a registration statement with respect to the
sale of such securities shall have been declared effective under the Securities
Act and such securities shall have been disposed of in accordance with such
registration statement, (x) such securities shall be eligible to be distributed
pursuant to Rule 144(k) under the Securities Act, (y) such securities shall have
ceased to be outstanding, or (z) such securities are transferred in a
transaction in which the rights hereunder are not assigned as permitted by
Section 9.

            1.10 "Registration Expenses" shall mean the expenses described in
Section 5.

            1.11 "Securities Act" shall mean the Securities Act of 1933, as
amended.

            1.12 "Stock Purchase Agreement" shall mean the Preferred Stock
Purchase Agreement dated October 18, 1998 between the Company and USB.

            1.13 "USB" shall mean U.S. Bancorp, a Delaware corporation.

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            1.14 "Warrants" shall mean the warrants to purchase up to 725,000
Common Shares issued or to be issued pursuant to the Warrant Issuance Agreement
dated as of April 28, 2000 among the Company, USB and US Bank.

      2. Demand Registration.

            2.1 Subject to Sections 2.3, 2.4, 2.5 and 2.6, if at any time the
Company shall receive a written request therefor from the record holder or
holders of an aggregate of at least 51% of the Registrable Securities, the
Company shall prepare and file a registration statement under the Securities Act
covering such number of Registrable Securities as are the subject of such
request and shall use its best efforts to cause such registration statement to
become effective. Upon the receipt of a registration request meeting the
requirements of this Section 2.1, the Company shall promptly give written notice
to all other record holders of Registrable Securities that such registration is
to be effected. The Company shall include in such registration statement such
additional Registrable Securities as such other record holders request in
writing within fifteen (15) days after the date of the Company's written notice
to them. If (a) the holders of a majority of the Registrable Securities for
which registration has been requested pursuant to this Section 2.1 determine for
any reason not to proceed with the registration at any time before the related
registration statement has been declared effective by the Commission, (b) such
registration statement, if theretofore filed with the Commission, is withdrawn
and (c) the holders of the Registrable Securities subject to such registration
statement agree to bear their own Registration Expenses incurred in connection
therewith and to reimburse the Company for the Registration Expenses incurred by
it in such connection or if such registration statement, if theretofore filed
with the Commission, is withdrawn at the initiative of the Company, then the
holders of the Registrable Securities shall not be deemed to have exercised
their demand registration right pursuant to this Section 2.1.

            2.2 At the request of the holders of a majority of the Registrable
Securities to be registered, the method of disposition of all Registrable
Securities included in such registration shall be an underwritten Public
Offering. The managing underwriter of any such Public Offering shall be selected
by the majority of the Registrable Securities, provided that such managing
underwriter is reasonably acceptable to the Company.

            2.3 The Company shall be obligated to prepare, file and cause to be
effective not more than two registration statements pursuant to Section 2.1.

            2.4 Notwithstanding the foregoing, the Company may delay initiating
the preparation and filing of any registration statement requested pursuant to
Section 2.1 for a period not to exceed one hundred eighty (180) days if, in the
good faith judgment of the Company's Board of Directors, filing the registration
statement would reasonably be expected to have a Material Adverse Effect (as
defined in the Stock Purchase Agreement), which Material Adverse Effect could
reasonably be expected to be avoided by delaying such filing for such period.

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            2.5 Notwithstanding anything to the contrary contained herein, at
any time within thirty (30) days after receiving a demand for registration
pursuant to Section 2.1, the Company may elect to effect an underwritten primary
registration in lieu of the requested registration. If the Company so elects,
the Company shall give prompt written notice to all holders of Registrable
Securities of its intention to effect such a registration and shall afford such
holders the rights contained in Article 3 with respect to "piggyback"
registrations. In such event, the demand for registration pursuant to Section
2.1 shall be deemed to have been withdrawn.

            2.6 The Company shall not be obligated to effect a demand
registration within 180 days after the effective date of a previous demand
registration or a previous registration in which the holders of Registrable
Securities were given piggy-back registration rights pursuant to this Agreement
and in which there was no reduction in the number of Registrable Securities
requested to be included.

      3. Piggyback Registration.

            3.1 Each time the Company shall determine to proceed with the actual
preparation and filing of a registration statement under the Securities Act in
connection with the proposed offer and sale for money of any of its securities
by it or any of its security holders (other than a registration statement on
Form S-8, Form S-4 or other limited purpose form), the Company will give written
notice of its determination to all record holders of Registrable Securities.
Upon the written request of a record holder of any Registrable Securities given
within 15 days after the date of the receipt of any such notice from the
Company, the Company will, except as herein provided, use its best efforts to
cause all Registrable Securities the registration of which is requested to be
included in such registration statement, all to the extent requisite to permit
the sale or other disposition by the prospective seller or sellers of the
Registrable Securities to be so registered; provided, however, that nothing
herein shall prevent the Company from, at any time, abandoning or delaying in
its sole and absolute discretion any registration.

            3.2 If any registration pursuant to Section 3.1 is underwritten in
whole or in part, the Company may require that the Registrable Securities
included in the registration be included in the underwriting on the same terms
and conditions as the securities otherwise being sold through the underwriters.
If, in the good faith judgment of the managing underwriter of the Public
Offering, marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may exclude some or all of the
Registrable Securities from such registration and underwriting. Any reduction in
the number of securities of the Company included in such registration and
underwriting shall be borne (i) first by the Founding Managers and the Other
Shareholders pro rata based on the number of shares, if any, for which
registration was requested by the Founding Managers and the Other Shareholders,
(ii) second by the holders of Registrable Securities pro rata based on the
number of shares, if any, for which registration was requested by such holders,
and (iii) then equally by the other holders of securities of the Company
requested to be included in such registration and underwriting, as a group, pro
rata based on the number of shares for which registration was requested by such
holders. The Registrable Securities which are thus excluded from the
underwritten Public

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Offering shall be withheld from the market by the holders thereof for a period
which the managing underwriter reasonably determines is necessary in order to
effect the Public Offering.

      4. Registration Procedures. If and whenever the Company is required by the
provisions of Article 2 or Article 3 to effect a registration of Registrable
Securities under the Securities Act, the Company will use its best efforts to
effect the registration and sale of such Registrable Securities in accordance
with the intended methods of disposition specified by the holders participating
therein. Without limiting the foregoing, the Company in each such case will, as
expeditiously as possible:

            4.1 In the case of a demand registration pursuant to Section 2.1,
prepare and file with the Commission the requisite registration statement to
effect such registration (including such audited financial statements as may be
required by the Securities Act or the rules and regulations thereunder) and use
its best efforts to cause such registration statement to become effective;
provided, however, that as far in advance as practical before filing such
registration statement or any amendment thereto, the Company will furnish
counsel for the requesting holders of Registrable Securities with copies of
reasonably complete drafts of all such documents proposed to be filed (including
exhibits), and any such holder shall have the opportunity to object to any
information pertaining solely to such holder that is contained therein and the
Company will make the corrections reasonably requested by such holder with
respect to such information prior to filing such registration statement or
amendment.

            4.2 Prepare and file with the Commission such amendments and
supplements to such registration statement and any prospectus used in connection
therewith as may be necessary to maintain the effectiveness of such registration
statement and to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities included in such registration
statement, in accordance with the intended methods of disposition thereof, until
the earlier of (a) such time as all of the Registrable Securities included in
such registration statement have been disposed of in accordance with the
intended methods of disposition by the holder or holders thereof as set forth in
such registration statement or (b) 180 days (or, if the filing was on a Form S-3
registration statement, 365 days) after such registration statement becomes
effective; provided, that, in the event the holder of Registrable Securities is
required to discontinue such holder's disposition of Registrable Securities
pursuant to Section 4.11 hereof, such 180-days (or 365 days, if applicable)
shall be extended for such additional period as is equal to the period during
which such holders was required to discontinue such disposition.

            4.3 Promptly notify each requesting holder and the underwriter or
underwriters, if any, of:

            (a) when such registration statement or any prospectus used in
connection therewith, or any amendment or supplement thereto, has been filed
and, with respect to such registration statement or any post-effective amendment
thereto, when the same has become effective;

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            (b) any written request by the Commission for amendments or
supplements to such registration statement or prospectus;

            (c) any notification received by the Company from the Commission
regarding the Commission's initiation of any proceeding with respect to, or of
the issuance by the Commission of, any stop order suspending the effectiveness
of such registration statement; and

            (d) the receipt by the Company of any notification with respect to
the suspension of the qualification of any Registrable Securities for sale under
the applicable securities or blue sky laws of any jurisdiction.

            4.4 Furnish to each holder of Registrable Securities included in
such registration statement such number of conformed copies of such registration
statement and of each amendment and supplement thereto, and such number of
copies of the prospectus contained in such registration statement (including
each preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 promulgated under the Securities Act relating to such
seller's Registrable Securities, and such other documents, as such holder may
reasonably request to facilitate the disposition of its Registrable Securities.

            4.5 Use its best efforts to register or qualify all Registrable
Securities included in such registration statement under the securities or "blue
sky" laws of such states as each holder of Registrable Securities shall
reasonably request within twenty (20) days following the original filing of such
registration statement and to keep such registration or qualification in effect
for so long as such registration statement remains in effect, and take any other
action which may be reasonably necessary or advisable to enable such holder to
consummate the disposition in such states of the Registrable Securities owned by
such holder, except that the Company shall not for any such purpose be required
(a) to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this Section 4.5
be obligated to be so qualified, (b) to consent to general service of process in
any such jurisdiction or (c) to subject itself to taxation in any such
jurisdiction by reason of such registration or qualification.

            4.6 Use its best efforts to cause all Registrable Securities
included in such registration statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to enable
each holder thereof to consummate the disposition of such Registrable
Securities.

            4.7 Notify each holder whose Registrable Securities are included in
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which any prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and at the request of any such holder promptly prepare and
furnish to such holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to each holder of such Registrable Securities, such

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prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

            4.8 Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission.

            4.9 Use its best efforts to cause all Registrable Securities
included in such registration statement to be listed, upon official notice of
issuance, on any securities exchange or quotation system on which any of the
securities of the same class as the Registrable Securities are then listed.

            4.10 The Company may require each holder whose Registrable
Securities are being registered to, and each such holder, as a condition to
including Registrable Securities in such registration statement, shall, furnish
the Company and the underwriters with such information and affidavits regarding
such holder and the distribution of such Registrable Securities as the Company
and the underwriters may from time to time reasonably request in writing in
connection with such registration statement. At any time during the
effectiveness of any registration statement covering Registrable Securities
offered by a holder, if such holder becomes aware of any change materially
affecting the accuracy of the information contained in such registration
statement or the prospectus (as then amended or supplemented) relating to such
holder, it will immediately notify the Company of such change.

            4.11 Upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 4.7, each holder will forthwith
discontinue such holder's disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until such holder
receives the copies of the supplemented or amended prospectus contemplated by
Section 4.7 and, if so directed by the Company, shall deliver to the Company all
copies, other than permanent file copies, then in such holder's possession of
the prospectus relating to such Registrable Securities.

            4.12 As used in this Agreement, the term "best efforts" shall not
mean efforts which require the performing party to do any act that is
unreasonable under the circumstances or to expend any funds other than
reasonable out-of-pocket expenses incurred in satisfying its obligations
hereunder, including but not limited to the fees, expenses and disbursements of
its accountants, counsel and other professionals.

      5. Expenses. With respect to any registration requested pursuant to
Article 2 (except as otherwise provided in such Article with respect to a
registration voluntarily terminated at the request of the requesting holders of
Registrable Securities) the Company shall bear all of the expenses
("Registration Expenses") incident to the Company's performance of or compliance
with its obligations under this Agreement in connection with such registration
including, without limitation, all registration, filing, securities exchange
listing and NASD fees, all registration, filing, qualification and other fees
and expenses or complying with state securities or "blue sky" laws, all word
processing, duplicating and printing expenses, messenger and delivery expenses,

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the fees and disbursements of counsel for the Company and of its independent
public accountants, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and compliance,
premiums and other costs of any policies of insurance against liabilities
arising out of the Public Offering of the Registrable Securities being
registered obtained by the Company (it being understood that the Company shall
have no obligation to obtain such insurance) and any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities; but excluding
underwriting discounts and commissions and transfer taxes, if any, in respect of
Registrable Securities and any fees and disbursements of counsel and accountants
to the holders of the Registrable Securities, which discounts, commissions,
transfer taxes, fees and disbursements shall in any registration be payable by
the holders of the Registrable Securities being registered, pro rata in
proportion to the number of Registrable Securities being sold by them.

      6. Indemnification.

            6.1 The Company will, to the full extent permitted by law, indemnify
and hold harmless each holder of Registrable Securities which are included in a
registration statement pursuant to the provisions of this Agreement, and its
directors, officers and partners and each other person, if any, who controls
such holder within the meaning of the Securities Act, from and against any and
all losses, claims, damages, expenses or liabilities, joint or several
(collectively, "Losses") to which such holder or any such director, officer,
partner or controlling person may become subject under the Securities Act or
otherwise, insofar as such Losses (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in a
registration statement prepared and filed hereunder, any preliminary, final or
summary prospectus contained therein or any amendment or supplement thereto or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, and the Company will reimburse the holder and each such director,
officer, partner and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
against any such Losses (or action or proceeding in respect thereof); provided,
however, that the Company will not be liable in any such case to the extent that
any such Losses arise out of or are based upon (a) an untrue statement or
alleged untrue statement or omission or alleged omission made in conformity with
written information furnished by such holder specifically for use in the
preparation of the registration statement or (b) such holder's failure to send
or give a copy of the final prospectus to the persons asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
person if such statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such holder or any such director, officer,
partner or controlling person of such holder and shall survive the transfer of
such securities by such holder. The Company shall also indemnify each other
person who participates (including as an underwriter) in the offering or sale of
Registrable Securities, their officers and directors, and partners, and each
other person, if any, who controls any such participating person

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within the meaning of the Securities Act to the same extent provided above with
respect to holders of Registrable Securities.

            6.2 Each holder of Registrable Securities which are included in a
registration pursuant to the provisions of this Agreement will, to the full
extent permitted by law, indemnify and hold harmless the Company, its officers,
directors and each other person, if any, who controls the Company within the
meaning of the Securities Act from and against any and all Losses to which the
Company or any such officer, director or controlling person may become subject
under the Securities Act or otherwise, insofar as such Losses (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue or alleged untrue statement of any material fact
contained in a registration statement prepared and filed hereunder, any
preliminary, final or summary prospectus contained therein or any amendment or
supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of a prospectus, in the
light of the circumstances under which they were made) not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was so made in reliance
upon and in strict conformity with written information furnished by such holder
specifically for use in the preparation of such registration statement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any such director, officer or controlling
person of the Company. The holder of Registrable Securities included in a
registration statement shall also indemnify each other person who participates
(including as an underwriter) in the offering or sale of Registrable Securities,
their officers and directors, and partners, and each other person, if any, who
controls any such participating person within the meaning of the Securities Act
to the same extent as provided above with respect to the Company. In no event
shall the liability of any holder under this Section 6.2 exceed the gross
proceeds received by such holder from the sale of their Registrable Securities.

            6.3 Promptly after receipt by a party indemnified pursuant to the
provisions of Section 6.1 or Section 6.2 of notice of the commencement of any
action involving the subject matter of the foregoing indemnity provisions, such
indemnified party will, if a claim thereof is to be made against the
indemnifying party pursuant to the provisions of Section 6.1 or Section 6.2,
promptly notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve the indemnifying
party from any liability which it may have to any indemnified party except to
the extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against any indemnified party,
the indemnifying party shall have the right to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if the defendants in any action include both the
indemnified party and the indemnifying party and the indemnified party
reasonably concludes that there is a conflict of interest that would prevent
counsel for the indemnifying party from also representing the indemnified party,
the indemnified party shall have the right to select one separate counsel to
participate in the defense of such action on behalf of the indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party

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will not be liable to such indemnified party pursuant to the provisions of
Section 6.1 or Section 6.2 for any legal or other expense subsequently incurred
by such indemnified party in connection with the defense thereof unless (a) the
indemnified party shall have employed counsel in accordance with the proviso of
the preceding sentence, (b) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after the notice of the commencement
of the action or (c) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party. If
the indemnifying party is not entitled to, or elects not to, assume the defense
of a claim, it will not be obligated to pay the fees and expenses of more than
one counsel for the indemnified parties with respect to such claim, unless in
the reasonable judgment of any indemnified party a conflict of interest may
exist between such indemnified party and any other indemnified parties with
respect to such claim, in which event the indemnifying party shall be obligated
to pay the fees and expenses of additional counsel or counsels for the
indemnified parties, but only to the extent necessary to cure such conflict of
interest. No indemnifying party shall consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation without the consent of the
indemnified party. No indemnifying party shall be subject to any liability for
any settlement made without its consent. An indemnified party may at any time
elect to participate in the defense of any claim or proceeding at its own
expense.

      7. Underwritten Offerings. If a distribution of Registrable Securities
pursuant to a registration statement is to be underwritten, the holders whose
Registrable Securities are to be distributed by such underwriters shall be
parties to such underwriting agreement. No requesting holder may participate in
such underwritten offering unless such holder agrees to sell its Registrable
Securities on the basis provided in such underwriting agreement and completes
and executes all questionnaires, powers of attorney, indemnities and other
documents reasonably required under the terms of such underwriting agreement. If
any requesting holder disapproves of the terms of an underwriting, such holder
may elect to withdraw therefrom and from such registration by notice to the
Company and the managing underwriter, and each of the remaining requesting
holders shall be entitled to increase the number of Registrable Securities being
registered to the extent of the Registrable Securities so withdrawn in the
proportion which the number of Registrable Securities being registered by such
remaining requesting holder bears to the total number of Registrable Securities
being registered by all such remaining requesting holders.

      8. Stand-Off Agreement. Each holder of Registrable Securities agrees, so
long as such holder holds at least 5% of the Company's outstanding voting equity
securities, in connection with a Public Offering, upon request of the Company or
the underwriters managing such Public Offering, not to sell, make any short sale
of, loan, grant any option for the purchase of, or otherwise dispose of any
Common Shares of the Company without the prior written consent of the Company or
such underwriters, as the case may be, for such period of time (not exceeding
180 days) from the effective date of the registration statement relating to such
Public Offering as may be requested by the underwriters; provided, however, that
all other persons with registration rights (whether or not pursuant to this
Agreement) and all of the executive officers

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and directors of the Company who own stock of the Company must also agree to not
less onerous restrictions.

      9. Assignment of Registration Rights. The rights to cause the Company to
register the Registrable Securities pursuant to this Agreement may not be
assigned by USB or US Bank except (a) to an Affiliate of USB or US Bank without
limitation or (b) to a transferee or assignee of Registrable Securities
representing or convertible into 5% or more of the Company's outstanding Common
Shares. In the case of either (a) or (b) USB or US Bank shall, within a
reasonable time after such transfer or assignment, furnish to the Company
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned.
Any transferee asserting registration rights hereunder shall be bound by the
applicable provisions of this Agreement.

      10. Amendment. The Company shall not amend this Agreement without the
written consent of the holders of more than 50% of the Registrable Securities.

      11. Termination. This Agreement, and all of the Company's obligations
hereunder (other than its obligations pursuant to Article 6, which obligations
shall survive such termination), shall terminate upon the earlier to occur of
(i) the date on which there are no Registrable Securities outstanding and (ii)
April 28, 2005.

      12. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law but if any provision of this Agreement is held to be invalid,
illegal or unenforceable under any applicable law or rule, the validity,
legality and enforceability of the other provision of this Agreement will not be
affected or impaired thereby.

      13. Notices. All notices, consents, requests, instructions, approvals or
other communications provided for herein shall be in writing and delivered by
personal delivery, overnight courier, mail or electronic facsimile addressed to
the receiving party at the address set forth herein. All such communications
shall be effective when received.

                  (a) If to any holder of any Registrable Securities addressed
            to such holder at its address as shown on the books of the Company,
            or at such other address as such holder may specify by written
            notice to the Company, or

                  (b) if to the Company, at New Century Financial Corporation,
            18400 Von Karman, Suite 1000, Irvine, California 92612, Attention:
            Brad A. Morrice, Fax: 949-440-7033; or at such other address as the
            Company may specify by written notice to the holders of Registrable
            Securities hereunder.

      14. Counterparts. This Agreement may be executed concurrently in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile signatures
shall constitute original signatures for all purposes of this Agreement.

                                      -11-
<PAGE>

      15. Successors and Assigns. Except as otherwise provided herein, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties.

      16. Governing Law. This Agreement shall be governed by, interpreted under,
and construed and enforced in accordance with the internal laws, and not the
laws pertaining to the conflicts or choice of laws, of the State of Delaware.

      17. Entire Agreement; Effectiveness. This Agreement is intended by the
parties hereto to be the final expression of their agreement and constitutes and
embodies the entire agreement and understanding between the parties hereto with
regard to the subject matter hereof and is a complete and exclusive statement of
the terms and conditions thereof, and shall supersede any and all prior oral or
written correspondence, conversations, negotiations, agreements and
understandings relating to the same subject matter. This Agreement shall take
effect upon its execution by the Company, USB and US Bank and shall amend and
replace the Registration Rights Agreement. Upon the effectiveness of this
Agreement, the Registration Rights Agreement shall be of no further force and
effect.

                                      -12-
<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized representatives as of
the day and year first above written.

                                          NEW CENTURY FINANCIAL
                                              CORPORATION

                                          By /s/ Patrick Flanagan
                                             -----------------------------------

                                          Its Executive Vice President
                                              ----------------------------------

                                          U.S. BANCORP

                                          By    /s/  Edwin Jenkins
                                             -----------------------------------

                                          Its
                                              ----------------------------------

                                          U.S. BANK NATIONAL ASSOCIATION

                                          By    /s/  Edwin Jenkins
                                             -----------------------------------

                                          Its
                                              ----------------------------------

                                      -13-<PAGE>

               AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

      THIS AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT (this "Security
Agreement"), dated as of April 30, 2000, is by and between NEW CENTURY MORTGAGE
CORPORATION, a California corporation (the "Company"), 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, as
successor in interest to FBS Business Finance Corp. (the "Lessor"), as lessor
under any present or future leases of equipment by the Lessor, as lessor, to 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 borrower, secured by equipment, and (C) the Subordinated Noteholder (as
defined below).

                                    RECITALS:

      A. 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 the Company and the Agent execute and deliver this
Security Agreement to amend and restate the Pledge and Security Agreement dated
as of May 29, 1998, as amended, from the Grantors to the Agent (the "Existing
Pledge Agreement").

<PAGE>

      E. The Company finds it advantageous, desirable and in the Company's best
interest to comply with the requirement that the Existing Pledge Agreement be
amended and restated pursuant to this Security Agreement.

      Accordingly, the Company and the Agent hereby agree to amend and restate
the Existing Pledge Agreement as follows:

      Section 1. DEFINITIONS

            Each capitalized term used herein which is not otherwise defined
herein shall have the meaning ascribed to such term in the Credit Agreement,
including Exhibit E thereto. In addition, the following terms shall have the
following respective meanings:

            "Agreement to Pledge": an agreement to pledge substantially in the
      form of Attachment 1 hereto.

            "Bailee Letter": a letter substantially in the form of Attachment 2
      hereto.

            "Closing Agent": with respect to any Mortgage Loan, the title
      company or other Person performing the functions of a title company in
      connection with the closing of such Mortgage Loan.

            "Collateral": as defined in Section 2 hereof.

            "Collateral Identification Letter": a letter substantially in the
      form of Attachment 3 hereto.

            "Collections": as defined in Section 2(h) hereof.

            "FIRREA Qualifying Appraisal": with respect to any Pledged Mortgage
      Loan, an appraisal of the real estate securing such Pledged Mortgage Loan
      which meets the requirements of the applicable appraisal regulations under
      Title XI of the Financial Institutions Reform, Recovery and Enforcement
      Act of 1989, including, without limitation, the appraisal regulations
      applicable to mortgage warehousing loans (but if said regulations do not
      require an appraisal with respect to a Pledged Mortgage Loan, then no
      appraisal shall be required with respect thereto hereunder).

            "Lease Agreement": 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

<PAGE>

      into between the Lessor, as lessor or lender, and the Company or NCFC, as
      lessee or borrower.

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

            "Loan Detail Listing": a loan detail listing substantially in the
      form of Attachment 4 hereto, which data may be electronically transmitted.

            "Obligor": a person or other entity who now or hereafter is or
      becomes liable to the Company with respect to any of the Collateral.

            "Pledged Mortgage Loans": Mortgage Loans deemed to have been
      delivered to the Agent as provided in Section 4.01 hereof and Mortgage
      Loans delivered to the Agent as provided in Section 4.02 hereof.

            "Related Mortgage-backed Security": a Mortgage-backed Security,
      whether certificated or uncertificated, that represents an interest in, or
      is secured by, any Mortgage Loans that were Pledged Mortgage Loans at the
      time of formation of the related pool, unless the Agent's security
      interest for the benefit of the Secured Parties in such Pledged Mortgage
      Loan is released as provided herein prior to or simultaneously with the
      issuance of such Mortgage-backed Security.

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

            "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.

            "Transmittal Letter": a transmittal letter substantially in the form
      of Attachment 5 hereto.

                                       3
<PAGE>

            "Trust Receipt": a trust receipt substantially in the form of
      Attachment 6 hereto.

            "Wet Funding Clearing Account": such accounts of the Company with
      the Agent as may be designated from time to time by the Agent, which shall
      be under the sole dominion and control of the Agent.

      Section 2. PLEDGE

            As collateral security for the due and punctual payment and
performance of all of the Obligations, Lease Obligations and Subordinated Note
Obligations, the Company does hereby pledge, hypothecate, assign, transfer and
convey to the Agent, for the benefit of the Secured Parties, and grants to the
Agent, for the benefit of the Secured Parties, a security interest in and to,
the following described property (the "Collateral"):

            (a) all right, title and interest of the Company in and to the
      Pledged Mortgage Loans and Related Mortgage-backed Securities and all
      promissory notes, participation agreements, participation certificates, or
      other instruments or agreements which evidence the Pledged Mortgage Loans
      and Related Mortgage-backed Securities;

            (b) all right, title and interest of the Company in and to all
      Mortgage Notes, Mortgages and other notes, real estate mortgages, deeds of
      trust, security agreements, chattel mortgages, assignments of rent and
      other security instruments whether now or hereafter owned, acquired or
      held by the Company which evidence or secure (or constitute collateral for
      any note, instrument or agreement evidencing or securing) any of the
      Pledged Mortgage Loans;

            (c) all right, title and interest of the Company in and to all
      financing statements perfecting any security interest securing any Pledged
      Mortgage Loan or property securing any Pledged Mortgage Loan;

            (d) all right, title and interest of the Company in and to all
      guaranties, mortgage insurance policies and other instruments by which the
      persons or entities executing the same guarantee or insure, among other
      things, the payment or performance of the Pledged Mortgage Loans;

                                       4
<PAGE>

            (e) all right, title and interest of the Company in and to all title
      insurance policies, title insurance binders, commitments or reports
      insuring or relating to any Pledged Mortgage Loan or property securing any
      Pledged Mortgage Loan;

            (f) all right, title and interest of the Company in and to all
      surveys, bonds, hazard and liability insurance policies, participation
      agreements and any other agreement, instrument or document pertaining to,
      affecting, obtained by the Company in connection with, or arising out of,
      the Pledged Mortgage Loans;

            (g) all right, title and interest of the Company in and to all
      Take-Out Commitments and other agreements to purchase any Pledged Mortgage
      Loans or Related Mortgage-backed Securities;

            (h) all right, title and interest of the Company in and to all
      collections on, and proceeds of or from, any and all of the foregoing
      (hereinafter collectively called "Collections");

            (i) all right, title and interest of the Company in and to any other
      asset of the Company which has been or hereafter at any time is delivered
      to the Agent or any Secured Party for the purpose of being pledged
      hereunder;

            (j) all files, surveys, certificates, correspondence, appraisals,
      computer programs, tapes, discs, cards, accounting records, and other
      records, information, and data of the Company relating to the Pledged
      Mortgage Loans and Related Mortgage-backed Securities (including all
      information, data, programs, tapes, discs and cards necessary to
      administer and service the Pledged Mortgage Loans and Related
      Mortgage-backed Securities);

            (k) all balances, credits and deposits of the Company contained in
      the Collateral Account and in the Wet Funding Clearing Account;

            (l) all right, title and interest of the Company in and to any
      Hedging Arrangements entered into to protect the Company against changes
      in the value of any of the Pledged Mortgage Loans or changes in the
      interest rate applicable to the Loans, including, without limitation, all
      rights to payment arising under such Hedging Arrangements; and

            (m) any and all balances, credits, deposits, accounts or moneys of,
      or in the name of, the Company representing or evidencing the foregoing or
      any proceeds thereof, and any and all proceeds of any of the foregoing.

                                       5
<PAGE>

      Section 3. REPORTS CONCERNING EXISTING COLLATERAL AND HEREAFTER ACQUIRED
                 COLLATERAL

            From time to time hereafter as reasonably requested by the Agent,
the Company will promptly give a written report to the Agent describing and
listing each document, instrument or other paper which evidences, secures,
guarantees, insures or pertains to any item of the Collateral whether now or
hereafter owned, acquired or held by the Company. Such written report shall
contain sufficient information to enable the Agent to identify each such
document, instrument or other paper. The Company (a) upon the request of the
Agent, shall promptly provide additional information concerning, or a more
complete description of, each such document, instrument or other paper and (b)
at the request of the Agent, shall promptly deliver the same to the Agent.

      Section 4. DELIVERY OF COLLATERAL DOCUMENTS

            4.01 Delivery of Mortgage Loans. A Mortgage Loan shall be deemed to
have been delivered and pledged to the Agent for the benefit of the Secured
Parties under this Security Agreement when:

            (a) the Agent has received, with respect to such Mortgage Loan, (i)
      an Agreement to Pledge, duly completed and executed by the Company, (ii) a
      Collateral Identification Letter duly completed and executed by the
      Company and (iii) a Loan Detail Listing, duly completed; and

            (b) either

                  (i) a wire transfer of funds from the Wet Funding Clearing
            Account has been initiated for the purpose of funding the
            origination or purchase of such Mortgage Loan;

                  (ii) a draft drawn upon the Agent for the purpose of funding
            the origination or purchase of such Mortgage Loan has been received
            by the Agent and has cleared the Agent's payment process; or

                  (iii) a draft drawn upon the Agent for the purpose of funding
            the origination or purchase of such Mortgage Loan

                                       6
<PAGE>

            has been accepted by the Agent, or the Agent has otherwise assured
            payment thereof.

The documents referred to in clause (a) of the preceding sentence shall be
transmitted to the Agent by telecopier or electronic data transmission not later
than 3:30 p.m. (Minneapolis time) on the applicable Borrowing Date selected for
funding such Mortgage Loan, and the originally executed copies of such documents
shall be delivered to the Agent by courier on the following Business Day.

            4.02 Delivery of Pledged Mortgage Loan Documentation. The Company
shall deliver to the Agent, with respect to each Pledged Mortgage Loan, the
following described instruments and documents within seven Business Days after
the Borrowing Date on which the applicable Warehousing Loan was made for the
purpose of funding such Mortgage Loan:

            (a) the original Mortgage Note evidencing such Pledged Mortgage
      Loan,duly endorsed in blank as follows:

                                          "Pay to the order of

                                          _____________________________________,
                                          without recourse

                                          NEW CENTURY MORTGAGE CORPORATION

                                          By
                                             -----------------------------------

                                          Title                                "
                                                -------------------------------

            (b) a copy of the Mortgage securing such Pledged Mortgage Loan,
      certified by the Closing Agent to be a true and exact copy of the original
      Mortgage as submitted for recording;

            (c) a duly executed appropriate assignment of said Mortgage in blank
      and in recordable form;

            (d) if there are any intermediate assignments of said Mortgage, two
      copies of each such assignment, certified by the Closing Agent or the
      Company to be a true and exact copy of the original thereof as submitted
      for recording;

            (e) if any of the foregoing documents was executed on behalf of a
      party thereto by another Person under a power of attorney, a copy of the
      original

                                       7
<PAGE>

      executed copy of such power of attorney, certified by the Closing Agent to
      be a true and exact copy of the original thereof;

            (f) if requested by the Agent, a copy of the Company's closing
      instructions to the Closing Agent for such Pledged Mortgage Loan,
      containing the language set forth on Exhibit G to the Credit Agreement,
      and a Transmittal Letter listing all documents being delivered to the
      Agent;

            (g) if requested by the Agent, a copy of the Closing Agent's
      Settlement Statement for such Mortgage Loan; and

            (h) if requested by the Agent, a completed Company Worksheet
      Concerning Applicability of Section 32 of Regulation Z (12 CFR Section
      226.32) and, if said Section 32 applies, copies of the disclosure and
      other related documentation delivered to the mortgagor, or executed by the
      mortgagor, evidencing compliance with said Section 32.

In the event the Company complies with all of the requirements of this Section
4.02 with respect to a Mortgage Loan, such Mortgage Loan shall be deemed pledged
to the Agent for the benefit of the Secured Parties under this Security
Agreement even if the requirements of Section 4.01 hereof have not been
satisfied.

            4.03 Delivery of Additional Mortgage Loan Documents Upon Request.
Within five Business Days after receiving a written request from the Agent to
deliver the same with respect to any Pledged Mortgage Loan, the Company shall
deliver to the Agent the following:

            (a) All original guaranties, assignments of rents and other
      instruments and documents relating to security for and payment of such
      Pledged Mortgage Loan, together with duly executed assignments thereof;

            (b) A mortgagee's title insurance policy (or commitment therefor) in
      the form of an American Land Title Association standard policy (revised
      coverage, most recent form) from a substantial and reputable title
      insurance company acceptable to the Agent in favor of the Company insuring
      the lien of the Mortgage securing such Pledged Mortgage Loan (subject only
      to such liens and encumbrances as are generally acceptable to reputable
      lending institutions, mortgage investors and securities dealers) or, if
      such a mortgagee's title policy (or commitment therefor) is generally not
      available in the state in which the real

                                       8
<PAGE>

      property subject to such Mortgage is located, an opinion of an attorney
      reasonably acceptable to the Agent to the effect that the Mortgage
      securing such Pledged Mortgage Loan is a valid first lien free and clear
      of all other liens, encumbrances and restrictions except such as are
      generally acceptable to reputable lending institutions, mortgage investors
      and securities dealers;

            (c) Evidence satisfactory to the Agent that the premises covered by
      the Mortgage securing such Pledged Mortgage Loan is insured against fire
      and perils of extended coverage for an amount at least equal to the lesser
      of (i) 80% of the outstanding principal balance of such Pledged Mortgage
      Loan or (ii) the full replacement cost of such premises;

            (d) With respect to such Pledged Mortgage Loan and each Related
      Mortgage-backed Security, copies of the applicable Take-Out Commitment and
      all documents and instruments called for thereunder, together with a
      certificate signed by an officer of the Company that, as of the date of
      delivery thereof, such Pledged Mortgage Loan and all documentation
      therefor satisfies all requirements and conditions of the applicable
      Take-Out Commitment;

            (e) Originals, or photocopies, as the Agent may request, of surveys
      (or plat maps, if surveys are not available) and all other instruments,
      documents and other papers pertaining to such Pledged Mortgage Loan which
      are in the possession or control of the Company or which the Company has
      the right to possess or control;

            (f) The original of each Mortgage referred to Section 4.02(b)
      hereof, together with satisfactory evidence of its recordation, or, if the
      original recorded Mortgage has not been returned to the Company by the
      applicable recording officer, a copy of the original recorded Mortgage
      certified as a true and exact copy thereof by the applicable recording
      officer;

            (g) Evidence satisfactory to the Agent that the Company has obtained
      and maintains in its files, as agent for the Agent and the Secured
      Parties, a FIRREA Qualifying Appraisal with respect to such Pledged
      Mortgage Loan, which evidence may include, but is not limited to, a copy
      of such FIRREA Qualifying Appraisal certified by the Company to be a true
      and exact copy of the original thereof as maintained in the Company's
      files; and

            (h) copies of all truth-in-lending disclosures showing compliance
      with Regulation Z of the Board of Governors of the Federal Reserve System
      and copies

                                       9
<PAGE>

      of all disclosures under the Real Estate Settlement Procedures Act of
      1974, as amended.

            4.04 Form of Assignments. All assignments executed and delivered by
the Company pursuant to this Section 4 shall be in form satisfactory for
recording in the real estate records of the applicable jurisdiction and in form
and substance acceptable to and approved by the Agent.

            4.05 Effect of Transmittal Letters. Any Transmittal Letter delivered
to the Agent hereunder, together with the documents accompanying such
Transmittal Letter, shall conclusively be presumed to have been delivered to the
Agent on behalf of the Company notwithstanding that such Transmittal Letter
shall not have been signed or submitted by a person who has been authorized in
writing to do so by the Company through its Board of Directors or otherwise.

            4.06 Endorsement and Delivery of Checks, Etc. The Company will from
time to time whenever an Event of Default exists, upon the request of the Agent,
endorse and deliver to the Agent any draft, check, note or other writing which
evidences a right to the payment of money which constitutes Collateral.

            4.07 Defects in Collateral Documentation; Loss of Collateral Value.
A Pledged Mortgage Loan which has been delivered to the Agent under this
Security Agreement in accordance with Section 4.01 or Section 4.02 hereof shall
be and remain Collateral which is subject to the lien and security interest
granted to the Agent under Section 2 hereof until such Pledged Mortgage Loan is
sold to an Investor in accordance with Sections 10.02 and 10.03 hereof (in which
case the proceeds thereof, including, without limitation, any Related
Mortgage-backed Security, shall constitute Collateral) or released pursuant to
Section 10.04 hereof or until this Security Agreement terminates in accordance
with Section 21 hereof, notwithstanding (a) any defect in any document delivered
to the Agent pursuant to Section 4.01, 4.02, or 4.03 hereof, (b) the failure of
such Pledged Mortgage Loan to have or continue to have Warehousing Collateral
Value, (c) the failure of the Company to make timely delivery of any document
required to be delivered to the Agent under Section 4.02 hereof, (d) the failure
of the Company to make timely delivery of any document required to be delivered
to the Agent under Section 4.03 hereof, or (e) any other fact, circumstance,
condition or event whatsoever. For purposes of the preceding sentence, the
funding of the origination or purchase of a Pledged Mortgage Loan from the
proceeds of a Warehousing Loan and/or the assignment of Warehousing Collateral
Value to such Pledged Mortgage Loan by the Agent shall be deemed to be
conclusive evidence of the delivery of such Pledged Mortgage Loan under

                                       10
<PAGE>

Section 4.01 hereof, notwithstanding any subsequent determination by the Agent
that the documentation delivered for such Pledged Mortgage Loan was incomplete
or defective in any respect or that such Pledged Mortgage Loan should not have
been assigned Warehousing Collateral Value.

      Section 5. REPRESENTATIONS AND WARRANTIES

            The Company hereby represents and warrants that: (a) all of the
representations and warranties set forth in the Credit Agreement and the
Subordinated Loan Agreement are true and correct; (b) the Company is or will be
the legal and equitable owner of the Collateral and its interests therein are or
will be free and clear of all liens, security interests, charges and
encumbrances of every kind and nature (other than as created hereunder or under
Take-Out Commitments or under assignments to purchasers under such Take-Out
Commitments); (c) no financing statement or other evidence of lien covering any
of the Collateral is or will be on file in any public office other than
financing statements filed with respect to the Company as debtor and the Agent,
for the benefit of the Secured Parties, as secured party; (d) the Company 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 or enforceability of the rights created
hereunder or (ii) required prior to the assignment, transfer and delivery of any
of the Collateral to the Agent; (f) to the Company'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 the Company enforceable against the Company 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); (h) in
making and closing each Pledged Mortgage Loan, the Company has or will have
fully complied in all material respects with, and all collateral documents
delivered with respect to such Pledged Mortgage Loan comply or will comply in
all material respects with, all applicable federal, state and local laws,
regulations and rules, including, but not limited to, (i) usury laws, (ii) the
Real Estate Settlement Procedures Act of 1974, (iii) the Equal Credit
Opportunity Act, (iv) the Federal Truth in Lending Act, (v) Regulation Z of the
Board of Governors of the Federal Reserve System (including, without limitation,
Section 32 thereof, to the extent applicable) and (vi) all other consumer
protection and truth-in-lending laws which may apply, and in each case with the
regulations promulgated in connection therewith, as the same may be amended from
time to time; and the Company shall maintain sufficient

                                       11
<PAGE>

documentary evidence in its files with respect to such Pledged Mortgage Loans to
substantiate such compliance; (i) the Company has obtained or will obtain prior
to the delivery of any Mortgage Loan to the Agent in accordance with Section
4.01 hereof, and will maintain in its files as agent for the Agent and the
Secured Parties, a FIRREA Qualifying Appraisal with respect to such Mortgage
Loan; (j) immediately upon (i) the execution and delivery of the Credit
Agreement, the Notes and the other Loan Documents, (ii) the acquisition by the
Company of rights in a Mortgage Loan funded by a Warehousing Loan, and (iii) the
execution and delivery to the Agent of an Agreement to Pledge and related
Collateral Identification Letter and Loan Detail Listing in connection with such
Mortgage Loan, the Agent, for the benefit of the Secured Parties, will have a
valid and perfected first priority security interest in such Mortgage Loan and
in the related Mortgage Note and Mortgage evidencing and securing such Mortgage
Loan (without the Agent taking possession of said Mortgage Note) for a period of
21 days from the date such Warehousing Loan is made for the purpose of funding
such Mortgage Loan; (k) upon the delivery of the Mortgage Note evidencing a
Pledged Mortgage Loan to the Agent as contemplated by Section 4.02 hereof, the
Agent, for the benefit of the Secured Parties, shall have a valid and perfected
first priority security interest in such Pledged Mortgage Loan, without regard
to the 21-day temporary perfection period referred to in clause (j) of this
sentence; (l) immediately upon (i) the execution and delivery of the Credit
Agreement, the Notes and the other Loan Documents, (ii) the acquisition by the
Company of rights in such Collateral and (iii) the filing with the Secretary of
State of California of a financing statement showing the Company as debtor and
the Agent for the benefit of the Secured Parties as secured party and describing
the Collateral, the Agent, for the benefit of the Secured Parties, shall have a
valid and perfected first priority security interest in the Collateral which is
other than as described in clauses (j) and (k) of this Section 5, to the extent
that a security interest in such other Collateral can be perfected by filing a
financing statement; (m) each Pledged Mortgage Loan has been fully advanced and
is a first lien on the premises described therein; (n) each Pledged Mortgage
Loan complies with all requirements of this Security Agreement and the Credit
Agreement applicable thereto; (o) except as described in the reports provided by
the Company to the Agent and the Lenders pursuant to Section 4.01 of the Credit
Agreement, or as otherwise disclosed to the Agent and the Secured Parties, there
is no monetary default existing under any Pledged Mortgage Loan that remains in
effect on the date the Compliance/Borrowing Base Certificate for the month in
which such default occurred is required to be delivered to the Agent and the
Lenders pursuant to Section 4.01(c)(ii) of the Credit Agreement and, to the
knowledge of the Company, there is no other default existing under any Pledged
Mortgage Loan; and (p) all Pledged Mortgage Loans secured by properties located
in special flood hazard areas designated by the Secretary of Housing

                                       12
<PAGE>

and Urban Development are and shall continue to be covered by flood insurance
under the National Flood Insurance Program.

      Section 6. POSSESSION OF COLLATERAL; STANDARD OF CARE

            The Agent shall exercise reasonable care in the custody and
preservation of the Collateral, shall keep the documents delivered to it in
connection with Pledged Mortgage Loans at a facility protected against fire and
shall keep the Collateral separate from similar collateral furnished by third
parties. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any of the Collateral in its possession if it takes
such action for that purpose as the Company requests in writing, but failure of
the Agent to comply with any such request shall not itself be deemed a failure
to exercise reasonable care, and no failure of the Agent to preserve or protect
any rights with respect to such Collateral not so requested by the Company shall
be deemed a failure to exercise reasonable care in the custody or preservation
of such Collateral. The Agent shall also be deemed to have exercised reasonable
care in the custody and preservation of any Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which the Agent
accords its own property of like kind.

      Section 6A. AGENT'S DUTIES

            The powers conferred on the Agent hereunder are solely to protect
its interest in the Collateral, for the benefit of the Secured Parties, and
shall not impose any duty upon it to exercise any such powers. Except for the
safekeeping of any Collateral in its possession and the accounting for monies
and for other properties actually received by it hereunder, the Agent shall have
no duty, as to any Collateral, as to ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters relative
to any Collateral, whether or not the Agent has or is deemed to have knowledge
of such matters, or as to the taking of any necessary steps to preserve rights
against any Persons or any other rights pertaining to any Collateral.

      Section 7. COLLECTIONS ON COLLATERAL BY THE COMPANY; ACCOUNTING

            Until the Agent gives notice to the Company pursuant to the
penultimate sentence of this Section 7 or exercises its rights under Section 8
or 13 hereof, the Company shall be entitled to receive all Collections and use
the same in the normal course of business. Upon notice from the Agent to the
Company given after the occurrence and during the continuation of an Event of

                                       13
<PAGE>

Default or an Unmatured Event of Default, the Company shall furnish to the Agent
not later than the tenth Business Day after the end of each month a report on
all Collections received during the preceding month and provide the same
accounting therefor as the Company customarily furnishes the permanent investors
therein, including with respect to Collections on each Pledged Mortgage Loan:
(a) the name of the Obligor(s), (b) the Company's loan number for such Pledged
Mortgage Loan, (c) the current principal balance of such Pledged Mortgage Loan,
(d) the current escrow balance with respect to such Pledged Mortgage Loan, (e)
the number and amount of past due payments on such Pledged Mortgage Loan and (f)
the amount of the collections received during such month with respect to such
Pledged Mortgage Loan, itemized to show (i) principal portion, (ii) interest
portion and (iii) portion thereof representing amounts paid in escrow for real
estate taxes and insurance.

            Upon notice from the Agent to the Company given after the occurrence
and during the continuation of an Event of Default or of an Unmatured Event of
Default, the Company shall hold all collections representing principal payments
and prepayments and interest and escrows for real estate taxes and insurance in
trust for the Secured Parties and shall promptly remit the same to the Agent.
All amounts representing the principal payments and prepayments and interest
delivered to the Agent pursuant to the preceding sentence shall be deposited in
the Collateral Account and all amounts representing real estate taxes and
insurance escrows delivered to the Agent pursuant to the preceding sentence
shall be deposited in an escrow account with any bank satisfactory to the
Company and the Agent, to be held as Collateral for, or applied to, the
Obligations, the Lease Obligations and the Subordinated Note Obligations.

            Section 8. COLLECTIONS ON COLLATERAL BY THE AGENT

            Upon the occurrence and during the continuation of an Event of
Default or an Unmatured Event of Default, the Agent may at any time and from
time to time, notify and direct any or all Obligors with respect to any of the
Collateral thereafter to make all payments on such Collateral directly to the
Agent, regardless of whether the Company was previously making collections
thereon. The Agent shall promptly account to the Company for all such payments
received by the Agent. Each Obligor making such payment to the Agent shall be
fully protected in relying on the written statement of the Agent that the Agent
then holds the security interests herein granted and assigned, which entitle the
Agent to receive such payment, and the receipt of the Agent for such payment
shall be full acquittance therefor to the Obligor making such payment.

                                       14
<PAGE>

            Section 9. DEFAULTED LOANS; COLLECTION AND FORECLOSURE PROCEEDINGS

            If the Company wishes to institute collection or foreclosure
proceedings with respect to a Pledged Mortgage Loan, it shall substitute other
Collateral so that it is entitled pursuant to the terms of the Credit Agreement
to a release of such Pledged Mortgage Loan. If the Company does not own
sufficient other Collateral to obtain a release of such Pledged Mortgage Loan,
then so long as an Event of Default or an Unmatured Event of Default has not
occurred and is continuing, the Agent, upon written request of the Company, will
deliver, upon such terms and conditions as the Agent in its sole discretion may
establish, to an attorney at law, as the agent of the Agent, to the extent
necessary for the purpose of enabling said attorney to institute, in the name of
the Company or the Agent, or in their names or in the names of their nominees,
as the Agent may determine, collection and/or foreclosure proceedings on any
Pledged Mortgage Loan in default the following: (a) the promissory note or other
instrument evidencing such Pledged Mortgage Loan in default and (b) the mortgage
or deed of trust, if any, that secures such promissory note, or other Collateral
needed by said attorney in connection with such collection and/or foreclosure
proceedings in such manner and in such form as the Agent deems necessary or
desirable to preserve its security interest for the benefit of the Secured
Parties in such Collateral, provided such Collateral and all proceeds of any
such collection and/or foreclosure efforts shall remain subject to this Security
Agreement and the security interests granted herein and all such proceeds shall
be delivered to the Agent as and when and in the form received to the extent
required by the terms of the Credit Agreement. The Company hereby covenants and
agrees that, without first obtaining the prior written consent of the Agent, it
will not request or accept any discount on, or any conveyance, endorsement,
transfer or assignment of any right, title or interest in and to any of the
real, personal or mixed properties sold, pledged, mortgaged, hypothecated,
assigned, transferred, set over or conveyed to the Agent for the benefit of the
Secured Parties as security for any of the promissory notes or other instruments
or agreements which evidence Pledged Mortgage Loans in lieu of foreclosure
proceedings if, after giving effect to any such proposed transaction, the
Borrowing Base would be less than the aggregate unpaid principal amount of the
outstanding Warehousing Loans. At such time as such delivery of the Collateral
is no longer required in connection with said collection and/or foreclosure
efforts, to the extent such Collateral has not been released pursuant to this
Security Agreement, the same shall be reassigned and redelivered to the Agent.

            Section 10. SALES AND RELEASES OF COLLATERAL

                                       15
<PAGE>

            10.01 Redelivery of Collateral for Correction. If no Event of
Default or Unmatured Event of Default exists, the Agent may redeliver to the
Company, for correction, any instrument or document which constitutes or relates
to any of the Collateral; provided, that any such redelivery shall be made
against a Trust Receipt duly completed and executed by the Company requiring,
within 21 days after the redelivery thereof to the Company, the return to the
Agent of each such instrument and document. The Company shall deliver to the
Agent each such instrument and document as soon as it has completed the
correction thereof and, in any event, within 21 days after its receipt thereof.

            10.02 Delivery for Sale of Pledged Mortgage Loans. If no Event of
Default or Unmatured Event of Default exists, the Company may direct the Agent
to, and the Agent will, transmit on behalf of the Company Pledged Mortgage
Loans, accompanied by a duly completed and executed Bailee Letter, to an
Investor who has issued a Take-Out Commitment or a custodian for such Investor
that is acceptable to the Agent. All sale proceeds transferred to the Agent
pursuant to such Bailee Letter and all Mortgage Notes and other documents
returned to the Agent pursuant to such Bailee Letter shall remain a part of the
Collateral unless and until released pursuant to Section 10.04 of this Security
Agreement. If required by the applicable Take-Out Commitment, Pledged Mortgage
Loans may be duly assigned of record to the issuer of such Take-Out Commitment
subject to reassignment if not purchased and with beneficial title to any such
assigned Pledged Mortgage Loans being subject to the above-stated escrow
condition. All Pledged Mortgage Loans which are so transmitted or otherwise
delivered but not paid for shall constitute Collateral and shall, subject to the
limits contained herein, be included in determining the Borrowing Base. The
proceeds received by the Agent from the sale of any Pledged Mortgage Loans
pursuant to this Section 10.02 shall be deposited by the Agent in the Collateral
Account and shall be promptly applied to the payment of principal of the Notes;
provided, however, that if an Event of Default has occurred and is continuing,
such proceeds shall be applied in accordance with Section 17 hereof.

            10.03 Formation of Pools. The Agent may, from time to time in its
sole discretion, at the request of the Company, transmit Pledged Mortgage Loans
to a custodian that is acceptable to the Agent in connection with the issuance
of Mortgage-backed Securities and the formation of pools of Mortgage Loans,
subject, however, to the provisions of Sections 6A and 22 hereof. The Agent and
its designated agent shall be entitled to rely on the written instructions of
the Company in this regard and shall have no obligation to act in the absence of
such written instructions.

                                       16
<PAGE>

            10.04 Release of Particular Collateral.

            (a) If no Event of Default or Unmatured Event of Default has
      occurred which is continuing, the Agent shall, at the written request of
      the Company, release its security interest for the benefit of the Lenders
      in any item of Collateral specified by the Company in such written
      request, provided that, after giving effect to such requested release, the
      Borrowing Base (including therein the Warehousing Collateral Value of any
      Collateral given in substitution for the Collateral to be released) shall
      not be less than the aggregate principal amount outstanding under the
      Notes. If the Company requests and is entitled to a release of a Pledged
      Mortgage Loan pursuant to the preceding sentence, the Agent shall promptly
      redeliver to the Company or its designee (i) the Mortgage Note evidencing
      such Pledged Mortgage Loan endorsed without recourse upon, or
      representation or warranty by, the Agent or any Secured Party and (ii) a
      reassignment, without recourse upon, or representation or warranty by, the
      Agent or any Secured Party, of any part of the Collateral that secures
      such Mortgage Note.

            (b) Whether or not the Company, by the terms of this Section 10.04,
      is entitled to a release of the Agent's security interest for the benefit
      of the Secured Parties in the Collateral, the Agent shall release such
      security interest in any Pledged Mortgage Loan to the extent necessary to
      permit the Company to execute any full or partial release of any mortgage,
      deed of trust, security agreement, financing statement or other security
      instrument or deed which the Company is contractually obligated to release
      upon payment thereof or of a minimum release price, provided the Company
      arranges to have such payment remitted directly by the applicable Obligor
      or closing agent to the Agent for application upon the unpaid principal
      amount outstanding under the Notes, unless an Event of Default has
      occurred which is continuing, in which case such payment shall be applied
      as provided in Section 17 hereof.

            (c) Upon the Agent's receipt of the proceeds from the sale of a
      Pledged Mortgage Loan delivered to an Investor pursuant to Section 10.02
      hereof or to a pool custodian pursuant to Section 10.03 hereof, the
      security interest of the Agent for the benefit of the Secured Parties in
      such Pledged Mortgage Loan and in the Mortgage Note and other documents
      related thereto shall terminate without further action by the Agent.

            (d) Upon the Agent's receipt of the proceeds from the sale of a
      Related Mortgage-backed Security representing an interest in, or which is
      secured by, Pledged Mortgage Loans delivered pursuant to Section 10.03
      hereof, the security

                                       17
<PAGE>

      interest of the Agent for the benefit of the Secured Parties in such
      Related Mortgage-backed Security and in such Pledged Mortgage Loans shall
      terminate without further action by the Agent.

            Section 11. FURTHER ASSURANCES

            The Company, upon the request of the Agent, will promptly correct
any patent defect, error or omission which may be discovered in the contents of
this Security Agreement or in the execution hereof and will do such further acts
and things, and execute, acknowledge, endorse and deliver such further
instruments, agreements, schedules and certificates, including, but not limited
to, notes, mortgages, deeds of trust, assignments, chattel mortgages, security
agreements and financing statements covering the title to any real, personal or
mixed property now owned or hereafter acquired by the Company and now or
hereafter constituting Collateral, schedules and certificates respecting all or
any of the Collateral at the time subject to the security interest hereunder,
the items or amounts received by the Company in full or partial payment, or
otherwise as proceeds, of any of the Collateral and supplements to and
amendments of this Security Agreement, that the Agent may at any time and from
time to time reasonably request in connection with the administration or
enforcement of this Security Agreement or related to the Collateral or any part
thereof or in order to assure and confirm unto the Agent the rights, powers and
remedies hereunder or to subject all of the real, personal or mixed properties
now owned or hereafter acquired by the Company and now or hereafter constituting
Collateral to, or to confirm or clearly establish that all of said properties
are subject to and encumbered by, a lien to secure the due and punctual payment
of the Obligations, any Lease Obligations or the Subordinated Note Obligations.
Any such instrument, agreement, schedule or certificate shall be executed by a
duly authorized officer of the Company and shall be in such form and detail as
the Agent may reasonably specify. Promptly upon the request of the Agent, the
Company will mark, or permit the Agent to mark in a reasonable manner, the
Company's books, records and accounts showing or dealing with the Collateral
with a notation clearly setting forth that the Collateral has been assigned to
the Agent, for the benefit of the Secured Parties, which notation shall be in
form and substance satisfactory to the Agent.

            The Company will do all acts and things, and will execute and file
or record all instruments (including 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
security interest of the Agent, for the benefit of the Secured Parties, in the
Collateral and will pay the costs and expenses of: all filings and recordings,
including taxes thereon; all searches necessary or reasonably deemed

                                       18
<PAGE>

necessary by the Agent to establish and determine the validity and the priority
of such security interest of the Agent; and also to satisfy all other liens
which in the reasonable opinion of the Agent prejudice, imperil or otherwise
affect the Collateral or the existence or priority of such security interest. 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.

            The Company 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 to be located and of any change in
the location of its chief executive office. The Company will not permit any
Collateral to be located in any state (and, if any county filing is required, in
any county) in which a financing statement covering such Collateral is required
to be, but has not in fact been, filed to perfect the Agent's security interest,
for the benefit of the Secured Parties, in such Collateral.

            Section 12. COVENANTS OF THE COMPANY

            So long as this Security Agreement shall remain in effect, the
Company will (a) defend the right, title and interest of the Agent, for the
benefit of the Secured Parties, in the Collateral against the claims and demands
of all Persons; (b) not amend, modify, or waive any of the terms and conditions
of, or settle or compromise any claim in respect of, any Collateral in a manner
which would materially adversely affect the interests of the Agent, for the
benefit of the Secured Parties; (c) not sell, assign, transfer, or otherwise
dispose of, or grant any option with respect to, or pledge or otherwise
encumber, or release, any of the Collateral or any interest therein except in a
manner whereby the Agent alone would be entitled to receive the proceeds
therefrom; (d) notify the Agent and the Secured Parties monthly of any default
that continues beyond any applicable notice or grace period under any Pledged
Mortgage Loan which has Warehousing Collateral Value; (e) maintain, or cause to
be maintained, in its chief executive office or in the offices of a computer
service bureau approved by the Agent, for the processing of Mortgage Notes and
Mortgage-backed Securities, originals, or copies if the original has been
delivered to the Agent, of its Mortgage Notes and all files, surveys,
certificates, correspondence, appraisals, computer programs, tapes, discs,
cards, accounting records and other records, information and data, relating to
the Collateral, and give the Agent written notice of the place where such
records, information and data will be maintained; and (f) maintain sufficient
documentary evidence in its files with respect to each Pledged Mortgage Loan to
substantiate compliance with all applicable federal,

                                       19
<PAGE>

state and local laws, regulations and rules, including but not limited to those
specified in Section 5(h) hereof.

            Section 13. AGENT APPOINTED ATTORNEY-IN-FACT

            The Company hereby appoints the Agent the Company's
attorney-in-fact, with full power of substitution, to submit any Pledged
Mortgage Loan or Mortgage-backed Security which constitutes Collateral and
related documents to a purchaser under a Take-Out Commitment and for the purpose
of carrying out the provisions of this Security Agreement and taking any action
and executing in the name of the Company without recourse to the Agent or any
Lender any instrument, including, but not limited to, the instruments described
in Section 2 hereof, which the Agent may deem necessary or advisable to
accomplish the purpose hereof, which appointment is irrevocable and coupled with
an interest. Without limiting the generality of the foregoing, the Agent shall
have the right and power to receive, endorse and collect checks and other orders
for the payment of money made payable to the Company representing any payment or
reimbursement made under, or pursuant or with respect to, the Collateral or any
part thereof and to give full discharge for the same. The Agent agrees that it
shall not, without further instructions of the Company, exercise the foregoing
power of attorney unless an Event of Default or Unmatured Event of Default has
occurred and is continuing. Whether or not an Event of Default or an Unmatured
Event of Default shall have occurred or be continuing, the Company hereby
authorizes the Agent in its discretion at any time and from time to time to (i)
complete or cause to be completed any assignment of real estate mortgage or deed
of trust which heretofore was, or hereafter at any time may be, executed and
delivered by the Company to the Agent so that such assignment describes a real
estate mortgage or deed of trust which is security for any Pledged Mortgage Loan
now or hereafter at any time constituting Collateral and (ii) complete or cause
to be completed any other assignment or endorsement that was delivered in blank
hereunder.

            Section 14. EVENTS OF DEFAULT; REMEDIES

            If one or more Events of Default shall occur and be continuing, then
the Agent, in addition to any and all other rights and remedies which it may
then have hereunder, under the Credit Agreement or any other Loan Document, or
under any other instrument, or which the Agent or the Secured Parties may have
at law, in equity or otherwise, may, at its option, (a) in the name of the
Company, or otherwise, 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) take any
action which the Agent may deem necessary or desirable in order

                                       20
<PAGE>

to realize on the Collateral, including, without limitation, the power to
perform any contract, endorse in the name of the Company without recourse to the
Company any checks, drafts, notes or other instruments or documents received in
payment of or on account of the Collateral; (c) enter upon the premises where
any of the Collateral not in the possession of the Agent is located and take
possession thereof and remove the same, with or without judicial process; (d)
reduce the claims of the Agent or the Secured Parties to judgment or foreclosure
or otherwise enforce the security interests herein granted and assigned, in
whole or in part, by any available judicial procedure; (e) after notification,
if any, provided for herein (the Company agreeing that, to the extent notice of
sale shall be required at law, at least ten days' prior notice to the Company 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), sell, lease, or
otherwise dispose of, at the office of the Agent, on the premises of the
Company, or elsewhere, all or any part of the Collateral, in its then condition
or following any commercially reasonable preparation or processing, and any such
sale or other disposition may be as a unit or in parcels, by public or private
proceedings, and by way of one or more contracts at any exchange, broker's
board, or at any of the Agent's offices or elsewhere, for cash, or credit, or
for future delivery, without assumption of any credit risk, and upon such other
terms as the Agent may deem commercially reasonable (it being agreed that the
sale of any part of Collateral shall not exhaust the power of sale granted
hereby, but sales may be made from time to time, and at any time, until all the
Collateral has been sold or until all Obligations, Lease Obligations and
Subordinated Note Obligations have been fully paid and performed, and it being
further agreed that the Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given, and that 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 adjourned), and at any such sale it
shall not be necessary to exhibit any of the Collateral; (f) at its discretion,
surrender any policies of insurance on the Collateral consisting of real or
personal property owned by the Company and receive the unearned premiums, and in
connection therewith the Company hereby appoints the Agent as the agent and
attorney-in-fact for the Company to collect such premiums; (g) at its
discretion, retain the Collateral in satisfaction of the Obligations, the Lease
Obligations and the Letter of Credit Obligations whenever the circumstances are
such that the Agent and the Secured Parties are entitled to do so under the Code
(as defined below) or otherwise; (h) exercise any and all other rights, remedies
and privileges which the Agent may have under this Security Agreement, or any of
the other promissory notes, assignments, mortgages, deeds of trust, chattel
mortgages, security agreements, transfers of lien, and any other instruments,
documents, and agreements executed and delivered pursuant to the terms hereof or
pursuant to the terms of the Credit Agreement; and (i) exercise any other remedy

                                       21
<PAGE>

available to it as a secured party under the Uniform Commercial Code of the
State of Minnesota or of any other pertinent jurisdiction (the "Code"). The
Company acknowledges and agrees that (x) a private sale of the Collateral
pursuant to any Take-Out Commitment or other arrangement entered into by the
Company shall be deemed to be a sale of the Collateral in a commercially
reasonable manner and (y) the Collateral is intended to be sold and none of the
Collateral is a type or kind intended by the Company to be held for investment
or any purpose other than for sale.

            Section 15. WAIVERS

            The Company, for itself and all who may claim under the Company, as
far as the Company now or hereafter lawfully may, also waives all right to have
all or any portion of the Collateral marshalled upon any foreclosure hereof and
agrees that any court having jurisdiction over this Security Agreement may order
the sale of all or any portion of the Collateral as an entirety. Any sale of, or
the grant of options to purchase (for the option period thereof or after
exercise thereof), or any other realization upon, all or any portion of the
Collateral under clause (e) of Section 14 hereof shall operate to divest all
right, title, interest, claim and demand, either at law or in equity, of the
Company in and to the Collateral so sold, optioned or realized upon, and shall
be a perpetual bar both at law and in equity against the Company and against any
and all persons claiming or attempting to claim the Collateral so sold, optioned
or realized upon or any part thereof, from, through and under the Company. No
delay on the part of the Agent in exercising any power of sale, lien, option or
other right hereunder and no notice or demand which may be given to or made upon
the Company with respect to any power of sale, lien, option or right hereunder
shall constitute a waiver thereof, or limit or impair the right of the Agent,
any Lender, the Lessor or the Subordinated Noteholder to take any action or to
exercise any power of sale, lien, option or any other right under this Security
Agreement, the Credit Agreement, any other Loan Document, any lease agreement,
the Subordinated Loan Agreement, the Subordinated Note or otherwise, nor shall
any single or partial exercise thereof, or the exercise of any power, lien,
option or other right under this Security Agreement or otherwise, all without
notice or demand (except as otherwise provided by the terms of this Security
Agreement), prejudice their rights against the Company in any respect. Each and
every remedy given the Agent or any Secured Party shall, to the extent permitted
by law, be cumulative and shall be in addition to any other remedy given
hereunder or now or hereafter existing at law or in equity or by statute.

            Section 16. NOTICE OF SALE OF COLLATERAL

                                       22
<PAGE>

            The Company acknowledges and agrees that Mortgage Loans and
Mortgage-backed Securities are property of a type customarily sold on a
recognized market, and that accordingly the Agent may (a) sell or otherwise
dispose of the Collateral without notification, advertisement, or other notice
of any kind, and (b) purchase the Collateral at a private sale thereof. To the
extent notice of sale or other disposition of any of the Collateral is required
by law, it is agreed that notice sent or given not less than ten (10) calendar
days prior to the taking of the action to which the notice relates is reasonable
notification and notice of the purposes of this Section 16. All notices and
other communications provided for in this Security Agreement shall be given to
the parties at their respective addresses described in Section 19.

            Section 17. APPLICATION OF PROCEEDS

            Until the Company has paid all Obligations, Lease Obligations and
Subordinated Note Obligations in full, any and all proceeds ever received by the
Agent from any sale or other disposition of the Collateral, or any part thereof,
or the exercise of any other remedy pursuant to Section 8 hereof or by virtue of
Section 14 hereof, shall be applied by the Agent 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 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;

            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;

                                       23
<PAGE>

            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
      Company, its 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.

            Section 18. AMENDMENTS AND MODIFICATIONS.

            No amendment to this Security Agreement, waiver of any provision of
this Security Agreement or consent to any departure by the Company 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 19. 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 case of 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 20. INDEMNIFICATION AND COSTS AND EXPENSES

                                       24
<PAGE>

            The Company will (a) pay all reasonable out-of-pocket expenses,
including, without limitation, any recording or filing fees, fees of title
insurance companies in connection with records or filings, costs of mortgage
insurance policies and endorsements thereof and mortgage registration taxes (or
any similar fees or taxes), incurred by the Agent or any Secured Party in
connection with (i) the enforcement and 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, including, without
limitation, the reasonable fees and disbursements of counsel for the Agent and
the Secured Parties; (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 20 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, the Subordinated Loan Agreement and the
Subordinated Note.

            Section 21. 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 Company, to the
Company, or to such other Person or Persons as the Company 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, of the Credit
Agreement, the other Loan Documents, any Lease Agreement, the Subordinated Loan
Agreement and the Subordinated Note, and shall still be held by the Agent,
together

<PAGE>

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 or any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, all as
though such payment had not been made.

            Section 22. NON-ASSUMPTION OF LIABILITY; NO FIDUCIARY RESPONSIBILITY

            Nothing herein contained shall relieve the Company from performing
any covenant, agreement or obligation on the part of the Company to be performed
under or in respect of any of the Collateral or from any liability to any party
or parties having an interest therein or impose any liability on the Agent or
any Secured Party for the acts or omissions of the Company in connection with
any of the Collateral. The Agent and the Secured Parties shall not assume or
become liable for, nor shall any of them be deemed or construed to have assumed
or become liable for, any obligation of the Company with respect to any of the
Collateral, or otherwise, by reason of the grant to the Agent, for the benefit
of the Secured Parties, of security interests in the Collateral. While the Agent
shall use reasonable care in the custody and preservation of the Collateral as
provided in Section 6 hereof, the Agent shall not have any fiduciary
responsibility to the Company with respect to the holding, maintenance or
transmittal of the Collateral delivered hereunder.

            Section 23. 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 24. 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

<PAGE>

MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. THE COMPANY HEREBY
IRREVOCABLY SUBMITS 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 COMPANY HEREBY IRREVOCABLY AGREES 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 COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO, THE DEFENSE OF AN INCONVENIENT FORUM AND VENUE OBJECTIONS TO THE
MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING. THE COMPANY HEREBY WAIVES PERSONAL
SERVICE OF PROCESS AND CONSENTS 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 19 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 LENDER, THE LESSOR, THE SUBORDINATED NOTEHOLDER OR ANY
OTHER INDEMNIFIED PERSON TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
THE COMPANY 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 25. MISCELLANEOUS

            (a) Benefit of Agreement. This Security Agreement shall be binding
      upon and inure to the benefit of the Company 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
      the Company may not assign or transfer any of its rights or obligations
      under this Security Agreement without the prior written consent of the
      Secured Parties.

<PAGE>

            (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
      Loan Agreement or the Subordinated Note, under any existing agreement or
      otherwise, to or for the account of the Company or NCFC.

            (d) Survival of Representations, Warranties and Covenants. All
      representations, warranties and covenants made by the Company to the Agent
      or any Secured Party 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 any Secured Party pursuant to this Security Agreement shall
      be deemed representations, warranties and covenants hereunder of the
      Company.

            (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.

<PAGE>

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

                                          NEW CENTURY MORTGAGE
                                            CORPORATION

                                          By /s/ Patrick Flanagan
                                             -----------------------------------

                                          Its EVP/COO
                                              ----------------------------------

                                          U.S. BANK NATIONAL ASSOCIATION,
                                            as Agent

                                          By /s/ Edwin Jenkins
                                             -----------------------------------

                                          Its
                                              ----------------------------------

     [Signature Page to Amended and Restated Pledge and Security Agreement]

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