Document:

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                                                                   EXHIBIT 10.26

          THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN
          ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES MAY NOT
          BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
          OR AN EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE
          AGREEMENT COVERING THE PURCHASE OF THIS WARRANT AND RESTRICTING
          ITS TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST
          MADE BY THE HOLDER OF RECORD OF THIS WARRANT TO THE SECRETARY
          OF THE COMPANY.

Warrant No. 2002-1                                                  May 15, 2002

                          Hudson Respiratory Care Inc.
                             STOCK PURCHASE WARRANT

     This certifies that FS Equity Partners IV, L.P., a Delaware limited
partnership, or assigns (the "Holder"), for value received, is entitled to
purchase from Hudson Respiratory Care Inc., a California corporation, located at
27111 Diaz Road, P.O. Box 9020, Temecula, California 92589-9020 (the "Company"),
20,000,000 fully paid and nonassessable shares (subject to appropriate
adjustment for stock splits, stock dividends, combinations, recapitalizations
and the like) of common stock of the Company, $.01 par value per share ("Common
Stock") for a purchase price of $1.00 per share.

     The shares of the Company's Common Stock for which this Warrant is
exercisable are referred to herein as the "Warrant Shares" and the per share
purchase price of such Warrant Shares is referred to herein as the "Purchase
Price." Subject to earlier expiration as provided in Section 9 herein, this
Warrant may be exercised at any time or from time to time up to and including
5:00 p.m. (Pacific time) on May 15, 2009 (the "Expiration Date"), upon surrender
to the Company at its principal office (or at such other location as the Company
may advise Holder in writing) of this Warrant properly endorsed with the Form of
Subscription attached hereto duly filled in and signed and upon payment in cash
or by check of the aggregate Purchase Price for the number of Warrant Shares for
which this Warrant is being exercised determined in accordance with the
provisions hereof. The Purchase Price and the Warrant Shares are subject to
adjustment as provided in Section 4 of this Warrant.

     This Warrant is subject to the following terms and conditions:

     1.  Exercise; Issuance of Certificates; Payment for Shares. This Warrant is
exercisable at the option of the Holder of record hereof, at any time or from
time to time, up to the Expiration Date for all and any part of the Warrant
Shares (but not for a fraction of a share). At the option of the Holder, the
Purchase Price for the Warrant Shares being purchased upon any exercise may be
paid by (i) delivery of cash or a check, (ii) "net exercise" as provided in the

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following Section 2, or (iii) reduction (on a dollar for dollar basis) in the
principal balance of any indebtedness of the Company owned by the Holder. At the
time of any exercise of this Warrant, at the Holder's option, the Company shall
pay all accrued unpaid interest owing under the indebtedness being reduced to
Holder in cash or the Holder may apply such accrued unpaid interest to the
Purchase Price of the Warrant. The Holder shall surrender the instrument
evidencing the indebtedness being charged to the Company which shall issue a new
instrument reflecting the remaining principal balance thereof.

     The Company agrees that the Warrant Shares purchased under this Warrant
shall be and are deemed to be issued to the Holder hereof as the record owner of
such shares as of the close of business on the date on which this Warrant shall
have been surrendered and payment made for such shares. Certificates for the
Warrant Shares so purchased, together with any other securities or property to
which the Holder hereof is entitled upon such exercise, shall be delivered to
the Holder hereof by the Company at the Company's expense within a reasonable
time after the rights represented by this Warrant have been so exercised. Each
stock certificate so delivered shall be in such denominations as may be
requested by the Holder hereof and shall be registered in the name of such
Holder or such other name as shall be designated by such Holder. In case of a
purchase of less than all the Warrant Shares, the Company shall cancel this
Warrant and execute and deliver a new Warrant or Warrants of like tenor for the
balance of the Warrant Shares purchasable under the Warrant surrendered upon
such purchase to the Holder hereof within a reasonable time, not exceeding
fifteen (15) days after the date of such surrender.

     2.  Net Exercise.

          2.1  Net Exercise. In addition to, and without limiting, the other
rights of the Holder hereunder, the Holder shall have the right (the "Net
Exercise Right") to exercise this Warrant or any part hereof into Warrant Shares
at any time and from time to time during the term hereof. Upon exercise of the
Net Exercise Right, the Company shall deliver to the Holder, without payment by
the Holder of any Purchase Price or any cash or other consideration, that number
of Warrant Shares computed using the following formula:

         X=Y (A-B)
           -------
              A

Where:X= The number of Warrant Shares to be issued to the Holder

         Y=   The number of Warrant Shares purchasable pursuant to this Warrant

         A=   The Fair Market Value of one Warrant Share as of the Exercise Date

         B=   The Purchase Price

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     2.2  Method of Exercise. The Net Exercise Right may be exercised by the
Holder by the surrender of this Warrant to the Company at its principal office
at the address indicated on the first paragraph of this Warrant, together with a
written notice specifying that the Holder intends to exercise the Net Exercise
Right and indicating the number of Warrant Shares to be acquired upon exercise
of the Net Exercise Right. Such exercise shall be effective upon the Company's
receipt of this Warrant, together with the exercise notice, or on such later
date as is specified in the exercise notice (the "Exercise Date") and, at the
Holder's election, may be made contingent upon the closing of the Company's
initial public offering of any securities pursuant to a registration statement
(an "IPO") under the Securities Act of 1933, as amended (the "Securities Act")
or upon consummation of any merger in which shareholders of the Company prior to
such merger hold less than 50% of the voting power of the capital stock of the
surviving corporation after such merger, or the sale of all or substantially all
of the Company's assets, or a transaction, whether effected in a single
transaction or a series of related transactions, in which 50% or more of the
voting power of the capital stock of the Company is transferred (a "Change of
Control"). Certificates for the Warrant Shares so acquired shall be delivered to
the Holder within a reasonable time, not exceeding fifteen (15) days after the
Exercise Date. If applicable, the Company shall, upon surrender of this Warrant
for cancellation, deliver a new Warrant evidencing the rights of the Holder to
purchase the balance of the Warrant Shares which Holder is entitled to purchase
hereunder.

     2.3  Fair Market Value. "Fair Market Value" of a share of Warrant Shares or
Common Stock (issued upon net exercise thereof) as of a particular date means:
(a) if traded on an exchange or quoted on The NASDAQ National Market, then the
average closing prices of the Common Stock for the ten trading days ending with
the second prior trading day, (b) if exercise is effective as of the closing of
the Company's initial public offering of any securities pursuant to a
registration statement under the Securities Act, the "price to public" specified
for such shares in the final prospectus for such public offering, (c) if listed
by the National Daily Quotation Service "Pink Sheets," then the average of the
closing bid and ask prices of the Common Stock for the ten trading days ending
with the second prior trading day, and (d) otherwise, the price as determined in
good faith by the Board of Directors of the Company.

     3.  Shares to be Fully Paid; Reservation of Shares. The Company covenants
and agrees that all Warrant Shares (and shares of its Common Stock reserved for
issuance upon net exercise of such Warrant Shares) which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company shall take all steps necessary to cause a sufficient
number of shares of authorized but unissued capital stock (and shares of its
Common Stock for issuance on net exercise of such capital stock, if any) to be
authorized when and as required to provide for the exercise of the rights
represented by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of capital stock (and shares of Common
Stock for issuance on net

                                       3

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exercise of such capital stock, if any) may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of any
domestic securities exchange upon which the stock may be listed. The Company
will not take any action which would result in any adjustment of the Purchase
Price (as described in Section 4 hereof) if the total number of shares of
capital stock issuable after such action upon exercise of all outstanding
warrants, together with all shares of capital stock of the same class and series
as such capital stock then outstanding and all shares of capital stock of the
same class and series as such capital stock then issuable upon exercise of all
options and upon the conversion of all convertible securities then outstanding,
would exceed the total number of shares of capital stock of the same class and
series as the Warrant Shares then authorized by the Company's Articles of
Incorporation.

     4.  Adjustment of Purchase Price and Number of Shares. The Purchase Price
and the number of shares purchasable upon the exercise of this Warrant shall be
subject to adjustment from time to time upon the occurrence of certain events
described in this Section 4. Upon each adjustment of the Purchase Price, the
Holder of this Warrant shall thereafter be entitled to purchase, at the Purchase
Price resulting from such adjustment, the number of shares obtained by
multiplying the Purchase Price in effect immediately prior to such adjustment by
the number of shares purchasable pursuant hereto immediately prior to such
adjustment, and dividing the product thereof by the Purchase Price resulting
from such adjustment.

          4.1  Subdivision or Combination of Stock. In the event the outstanding
shares of Common Stock shall, after the date of this Warrant, be subdivided
(split) or combined (reverse split), by reclassification or otherwise, the
Warrant Shares issuable upon exercise of this Warrant and the Purchase Price
shall, concurrently with the effectiveness of any such subdivision or
combination, be proportionately adjusted.

          4.2  Dividends, Reclassification. If at any time or from time to time
any holders of securities of the same class and series as the Warrant Shares
shall have received or become entitled to receive, without payment thereof,

               (A)  any shares of the Company's preferred stock, Common Stock or
any shares of stock or other securities which are at any time directly or
indirectly convertible into or exchangeable for Common Stock, or any rights or
options to subscribe for, purchase or otherwise acquire any of the foregoing by
way of dividend or other distribution;

               (B)  any cash paid or payable as a dividend; or

               (C)  any shares of the Company's preferred stock, Common Stock or
other or additional stock or other securities or property (including cash) by
way of spinoff, split-up, reclassification, combination of shares or similar
corporate rearrangement (other than shares of the same class and series as the
Warrant Shares issued as a stock split, adjustments in respect of which shall be
covered by the terms of Section 4.1 above),

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then and in each such case, the Holder hereof shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of such
capital stock receivable thereupon, and without payment of any additional
consideration therefor, the amount of stock and other securities and property
(including cash in the cases referred to in clauses (B) and (C) above) which
such Holder would hold on the date of such exercise had he or it been the Holder
of record of such capital stock as of the date on which holders of such capital
stock received or became entitled to receive such shares and/or all other
additional stock and other securities and property.

          4.3  Adjustment for Capital Reorganization, Merger or Consolidation.
In case of any capital reorganization of the capital stock of the Company (other
than a combination, reclassification, exchange or subdivision of shares
otherwise provided for herein), or any merger or consolidation of the Company
with or into another corporation, or the sale of all or substantially all the
assets of the Company then, as a part of such reorganization, merger or
consolidation, lawful provision shall be made so that the Holder of this Warrant
shall thereafter be entitled to receive upon exercise of this Warrant, during
the period specified herein and upon payment of the Purchase Price then in
effect, the number of shares of stock or other securities or property of the
Company resulting from such reorganization that a holder of the shares
deliverable upon exercise of this Warrant would have been entitled to receive in
such reorganization if this Warrant had been exercised immediately before such
reorganization, subject to further adjustment as provided in this Section 4. The
foregoing provisions of this Section 4.3 shall similarly apply to successive
reorganizations and to the stock or securities of any other corporation that are
at the time receivable upon the exercise of this Warrant. If the per-share
consideration payable to the Holder hereof for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Board. In
all events, appropriate adjustment (as determined in good faith by the Board)
shall be made in the application of the provisions of this Warrant with respect
to the rights and interests of the Holder after the transaction, to the end that
the provisions of this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.

          4.4  Other Notices. If at any time:

               (1)  the Company shall declare any cash dividend upon its shares
of the same class and series as the Warrant Shares;

               (2)  the Company shall declare any dividend upon its shares of
the same class and series as the Warrant Shares payable in stock or make any
special dividend or other distribution to the holders of its shares of the same
class and series as the Warrant Shares;

               (3)  there shall be any capital reorganization or
reclassification of the capital stock of the Company, or any Change of Control;

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               (4)  there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;

               (5)  the Company shall take or propose to take any other action,
notice of which is actually provided to or is required to be provided, pursuant
to any written agreement, to holders of its shares of the same class and series
as the Warrant Shares; or

               (6)  there shall be an IPO;

then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the Holder of this Warrant at the address of
such Holder as shown of the books of the Company, (a) at least 10 days prior
written notice of the date on which the books of the Company shall close or a
record shall be taken for such dividends or distribution rights or for
determining rights to vote in respect of any such reorganization,
reclassification, Change of Control, dissolution, liquidation or winding-up, and
(b) in the case of any such reorganization, reclassification, Change of Control,
dissolution, liquidation or winding-up, at least 10 days prior written notice of
the date when the same is reasonably expected to take place. Any notice given in
accordance with the foregoing clause (a) shall also specify, in the case of any
such dividend, distribution or subscription rights, the date on which the
holders of shares of the same class and series as the Warrant Shares shall be
entitled thereto. Any notice given in accordance with the foregoing clause (b)
shall also specify the date on which the holders of shares of the same class and
series as the Warrant Shares are reasonably expected to be entitled to exchange
their stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, Change of
Control, dissolution, liquidation or winding-up, as the case may be.

     5.  Issue Tax. The issuance of certificates for shares of the Warrant
Shares shall be made without charge to the Holder of the Warrant for any issue
tax in respect thereof; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any certificate in a name other than that of the
then Holder of the Warrant being transferred.

     6.  Enforceability. This Warrant has been duly authorized and executed by
the Company and is a valid and binding obligation of the Company enforceable in
accordance with its terms.

     7.  Closing of Books. The Company will at no time close its transfer books
against the transfer of any Warrant or of any shares of Warrant Shares in any
manner which interferes with the timely exercise of this Warrant.

     8.  No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a shareholder in
respect of meetings of shareholders for the election of directors of the Company
or any other matters or any rights whatsoever as a shareholder of the

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Company. No dividends or interest shall be payable or accrued in respect of this
Warrant or the interest represented hereby or the shares purchasable hereunder
until, and only to the extent that, this Warrant shall have been exercised. No
provisions hereof, in the absence of affirmative action by the Holder to
purchase shares of capital stock, and no mere enumeration herein of the rights
or privileges of the Holder hereof, shall give rise to any liability of such
Holder for the Purchase Price or as a shareholder of the Company, whether such
liability is asserted by the Company or by its creditors.

     9.  Expiration. This Warrant shall expire upon the earliest of (a) at 5:00
PM on May 15, 2009, (b) one business day prior to an IPO, and (c) one business
day prior to consummation of a Change of Control.

     10.  Warrant Transferable. This Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the Holder hereof (except
for transfer taxes), upon surrender of this Warrant properly endorsed. Each
Holder of this Warrant, by taking or holding the same, consents and agrees that
this Warrant, when endorsed in blank, shall be deemed negotiable, and that the
Holder hereof, when this Warrant shall have been so endorsed, may be treated by
the Company and all other persons dealing with this Warrant as the absolute
owner hereof for any purpose and as transferee hereof on the books of the
Company any notice to the contrary notwithstanding, but, until such transfer on
such books, the Company may treat the registered owner hereof as the owner for
all purposes.

     11.  Modification and Waiver. This Warrant and any provision hereof may
only be amended, waived or modified upon written consent of the Company and
holders of in excess of 50% in interest of the Warrants issued under this form
of Stock Purchase Warrant, provided that all such Warrants, are amended, waived
or modified in a like manner.

     12.  Notices. Any notice, request or other document required or permitted
to be given or delivered to the Holder hereof or the Company shall be delivered
or shall be sent by certified or registered mail, postage prepaid, to the Holder
at its address as shown on the books of the Company or to the Company at the
address indicated on the first paragraph of this Warrant.

     13.  Descriptive Headings and Governing Law. The descriptive headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California, without giving effect to
the conflict of laws principles thereof.

     14.  Lost Warrant or Stock Certificates. The Company agrees with the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of any Warrant or stock certificate
and, in the case of any such loss, theft or destruction, upon receipt of an
indemnity reasonably satisfactory to the Company, or in the case of any such
mutilation upon surrender and cancellation of such Warrant or stock

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certificate, the Company at its expense will make and deliver a new Warrant or
stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant or stock certificate.

     15.  Fractional Shares. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the Holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Purchase Price.

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     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by its duly authorized officers, effective as of the date first written above.

COMPANY:                          HUDSON RESPIRATORY CARE INC.

                                  By:
                                        ----------------------------------------

                                  Name:
                                        ----------------------------------------

                                  Title:
                                        ----------------------------------------

                            SIGNATURE PAGE TO WARRANT

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                              FORM OF SUBSCRIPTION
                  (To be signed only upon exercise of Warrant)

To:
    ---------------------------

     The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _____________ ____________________________ (_____________)
shares of ____________ Stock of Hudson Respiratory Care Inc. and herewith makes
payment of ____________________ Dollars ($__________) thereof, and requests that
the certificates for such shares by issued in the name of, and delivered to
________________________________, whose address is __________________________
____________.

     The undersigned represents that it is acquiring such ________________ Stock
for its own account for investment and not with a view to or for sale in
connection with any distribution thereof (subject, however, to any requirement
of law that the disposition thereof shall at all times by within its control).

     DATED:
            -----------------------

                                    --------------------------------------------
                                    (Signature must conform in all respects to
                                    name of Holder as specified on the face of
                                    the Warrant)

                                    --------------------------------------------

                                    --------------------------------------------
                                    (Address)

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                                   ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned, the Holder of the within Warrant,
hereby sells, assigns and transfers all of the rights of the undersigned under
the within Warrant, with respect to the number of shares of ________________
Stock covered thereby set forth herein below, unto:

Name of Assignee                     Address                      No. of Shares
----------------                     -------                      -------------

                                    DATED:
                                           ---------------------------

                                    --------------------------------------------
                                    (Signature must conform in all respects to
                                    name of Holder as specified on the face of
                                    the Warrant)<PAGE>

                                                                    EXHIBIT 10.1

                            FIRST AMENDMENT TO LEASE

I.   PARTIES AND DATE.

     This Amendment to Lease (the "Amendment") dated May 1, 2000, is by and
between THE IRVINE COMPANY ("Landlord"), and NEW CENTURY FINANCIAL CORPORATION,
a Delaware corporation ("Tenant").

II.  RECITALS.

     Landlord and Tenant entered into an undated lease ("Lease") for space in
two (2) buildings located at 340 Commerce ("340 Commerce Premises") and 350
Commerce, Suite 200 ("350 Commerce Premises") in Irvine, California.

     Landlord and Tenant each desire to modify the Lease to add approximately
25,277 rentable square feet of space within the building located at 350
Commerce, which is more particularly described on EXHIBIT A attached to this
Amendment and herein referred to as "Suites 100 and 250", extend the Lease Term
as to the 350 Commerce Premises (but not as to the 340 Commerce Premises),
adjust the Basic Rent, and make such other modifications as are set forth in
"III. MODIFICATIONS" next below.

III. MODIFICATIONS.

     A. Basic Lease Provisions. The Basic lease Provisions are hereby amended as
follows:

          1. Item 1 is hereby deleted in its entirety and substituted therefor
          shall be the following:

          "1. Premises: The Premises (more particularly described in Section
          2.1) consists of space located in two (2) buildings, commonly known
          as:

          "Building 1 -- 340 Commerce, Irvine, California
          "Building 2 -- 350 Commerce, Suites 100, 200 and 250, Irvine,
          California"

          2. Item 5 is hereby amended to extend the Term of this Lease as to the
          350 Commerce Premises (but not as to the 340 Commerce Premises) to
          that date (the "New Expiration Date") which is sixty (60) months, plus
          such additional days as may be required to cause this Lease to
          terminate on the final day of the calendar month, from and after the
          "Commencement Date for Suites 100 and 250" (as defined in Article
          III.C of this Amendment). The Term of this Lease as to the 340
          Commerce Premises shall not be extended to the New Expiration Date but
          instead shall expire on the original Expiration Date of the Lease.

          Subject to the terms and conditions of Section 3.3 of the Lease,
          Tenant shall have two (2) separate rights to extend the Term of this
          Lease for single extension periods of sixty (60) months each, one (1)
          of such periods as to the 350 Commerce Premises and Suites 100 and
          250, collectively. Tenant's right to extend the Term as to the 340
          Commerce Premises shall be as set forth in Section 3.3 of the Lease,
          without amendment. Consequently, Tenant's 9 to 12 month window for
          exercising of its option as to the 340 Commerce Premises contained in
          the first paragraph of Section 3.3(a) shall be not less than nine (9)
          months or more than twelve (12) months prior to the original
          Expiration Date of the Lease, and Tenant's 12 to 15 month "window" for
          requesting a rental quote from Landlord for the 340 Commerce Premises
          contained in the first paragraph of Section 3.3(b) shall be not less
          than twelve (12) months or more than fifteen (15) months prior to the
          original Expiration Date.

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     Notwithstanding the provisions of the last sentence of Section 3.3(c) of
     the Lease, Tenant's right to extend the Term provided in Section 3.3(a) as
     to the 350 Commerce Premises and as to Suites 100 and 250 shall extend from
     and after the new Expiration Date. Consequently, Tenant's 9 to 12 month
     "window" for exercising of its option as to the 350 Commerce Premises and
     Suites 100 and 250 contained in the first paragraph of Section 3.3(a) shall
     be not less than nine (9) months or more than twelve (12) months prior to
     the New Expiration Date, and Tenant's 12 to 15 month "window" for
     requesting a rental quote for the 350 Commerce Premises and for Suites 100
     and 250 from Landlord contained in the first paragraph of Section 3.3(b)
     shall be not less than twelve (12) months or more than fifteen (15) months
     prior to the New Expiration Date.

     3.   Item 6 is hereby amended by adding the following:

          "Basic Rent for Suites 100 and 250: Commencing on the Commencement
          Date of Suites 100 and 250, the Basic Rent for Suites 100 and 250
          shall be Forty Thousand Four Hundred Forty-Three Dollars ($40,443.00)
          per month, based on $1.60 per rentable square foot.

          Basic Rent for Suites 100 and 250 is subject to adjustment as follows:

          Commencing twelve (12) months following the Commencement Date of
          Suites 100 and 250, the Basic Rent for Suites 100 and 250 shall be
          Forty One Thousand Seven Hundred Seven Dollars ($41,707.00) per month,
          based on $1.65 per rentable square foot.

          Commencing twenty-four (24) months following the Commencement Date of
          Suites 100 and 250, the Basic Rent for Suites 100 and 250 shall be
          Forty Two Thousand Nine Hundred Seventy-One Dollars ($42,971.00) per
          month, based on $1.70 per rentable square foot.

          Commencing thirty-six (36) months following the Commencement Date of
          Suites 100 and 250, the Basic Rent for Suites 100 and 250 shall be
          Forty Four Thousand Two Hundred Thirty-Five Dollars ($44,235.00) per
          month, based on $1.75 per rentable square foot.

          Commencing forty-eight (48) months following the Commencement Date of
          Suites 100 and 250, the Basic Rent for Suites 100 and 250 shall be
          Forty Five Thousand Four Hundred Ninety-Nine Dollars ($45,499.00) per
          month, based on $1.80 per rentable square foot.

          Basic Rent for the 340 Commerce Premises and for the 350 Commerce
          Premises shall continue to be payable during Term as extended by this
          Amendment in accordance with the schedule set forth in Item 6 of Basic
          Lease provisions of the Lease."

     4.   Effective as of the Commencement Date for Suites 100 and 250, Item 8
     shall be deleted in its entirety and substituted therefor shall be the
     following:

          "8. Floor Area of Premises: Approximately 92,558 rentable square feet
          broken down as follows:

          340 Commerce Premises -- 53,360 rentable square feet

          350 Commerce Premises -- 13,921 rentable square feet

          Suites 100 and 250 -- 25,277 rentable square feet"

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<PAGE>

          5. Item 9 is hereby deleted in its entirety and substituted therefor
          shall be the following:

             "9. Security Deposit: $183,266.00"

          6. Effective as of the Commencement Date for Suites 100 and 250, Item
          14 shall be deleted in its entirety and substituted therefor shall be
          the following:

             "14. Vehicle Parking Spaces: Three Hundred Seventy-Three (373)"

     B. Security Deposit. Concurrently with Tenant's delivery of this Amendment,
Tenant shall deliver the sum of Fifty Thousand Forty Nine Dollars ($50,049.00)
to Landlord, which sum shall be added to the Security Deposit presently being
held by Landlord in accordance with Section 4.3 of the Lease.

     C. Building 2 Signage. Landlord confirms and agrees that the non-exclusive
building-top sign on Building 2 referred to in the second sentence of Section
5.2 of the Lease is available for Tenant, and that, subject to that occupancy
requirement therein contained, Tenant shall have the right to install such
building-top signage in lieu of Tenant's existing exterior eyebrow sign on
Building 2. Further, the fourth sentence of Section 5.2 is amended to add "Loan
Trader" to the list of names which may appear on Tenant's building-top signage
(provided that such entity is in fact conducting business within the Premises).

     D. Floor Plan of Suites 100 and 250. As used herein, "Suites 100 and 250"
shall mean the space described on Exhibit A attached to this Amendment. From and
after the date of this Amendment, Suites 100 and 250 collectively with the 340
Commerce Premises described on EXHIBIT A attached to the Lease and the 350
Commerce Premises described on EXHIBIT A-1 attached to the Lease, shall
constitute the "Premises" as defined in Section 2.1 of the Lease.

     E. Tenant Improvements. Landlord hereby agrees to complete the Tenant
Improvements for Suites 100 and 250 in accordance with the provisions of Exhibit
X-1, Work Letter, attached to this Amendment. Landlord estimates that this Lease
as to Suites 100 and 250 shall commence on or about July 14, 2000 (the
"Estimated Commencement Date for Suites 100 and 250"), but Landlord makes no
representation or warranty as to such date, and this Lease as to Suites 100 and
250 shall commence on the actual Commencement Date for Suites 100 and 250, as
hereinafter defined. As used herein, "Commencement Date for Suites 100 and 250"
shall mean the earlier of (a) Landlord's tender of possession of Suites 100 and
250 to Tenant with the "Tenant Improvements" (as defined in the Work Letter
attached hereto) for Suites 100 and 250 substantially completed but for minor
punch list items, or (b) the date Tenant acquires possession or commences use of
Suites 100 and 250 is tendered to Tenant, the parties shall memorialize on a
form provided by Landlord the actual Commencement Date for Suites 100 and 250,
provided that Tenant's failure to execute that form shall not affect the
validity of Landlord's determination of said date.

     If for any reason other than "Tenant Delays" (as defined in the Work Letter
attached to this Amendment) or other matters beyond Landlord's reasonable
control, the Commencement Date for Suites 100 and 250 has not occurred by the
date that is ninety (90) days following the Estimated Commencement Date for
Suites 100 and 250, then Tenant may, by written notice to Landlord given at any
time thereafter but prior to the actual occurrence of the Commencement Date for
Suites 100 and 250, elect to terminate this Amendment. Notwithstanding the
foregoing, if at any time during the construction period, Landlord reasonably
believes that the Commencement Date for Suites 100 and 250 will not occur on or
before ninety (90) days following the Estimated Commencement Date for Suites 100
and 250, Landlord shall notify Tenant in writing of such fact and of a new
outside date on or before which the Commencement Date for Suites 100 and 250
will occur, and Tenant must elect within ten (10) days of receipt of such notice
to either terminate this Amendment or waive its right to terminate this
Amendment provided the Commencement Date for Suites 100 and 250 occurs on or
prior to

                                       3

<PAGE>

the new outside date established by Landlord in such notice to Tenant. Tenant's
failure to elect to terminate this Amendment within such ten (10) day period
shall be deemed Tenant's waiver of its right to terminate this Amendment as
provided in this paragraph as to the previous outside date, but not as to the
new outside date established by said notice.

     F. Right of First Refusal. Section 2.4 Right of First Refusal of the Lease
is hereby deleted in its entirety and shall have no further force or effect.

IV.  GENERAL.

     A. Effect of Amendments. The Lease shall remain in full force and effect
except to the extent that it is modified by this Amendment.

     B. Entire Agreement. This Amendment embodies the entire understanding
between Landlord and Tenant with respect to the modifications set forth in "III.
MODIFICATIONS" above and can be changed only by a writing signed by Landlord and
Tenant.

     C. Counterparts. If this Amendment is executed in counterparts, each is
hereby declared to be an original; all, however, shall constitute but one and
the same amendment. In any action or proceeding, any photographic, photostatic,
or other copy of this Amendment may be introduced into evidence without
foundation.

     D. Defined Terms. All words commencing with initial capital letters in this
Amendment and defined in the Lease shall have the same meaning in this Amendment
as in the Lease, unless they are otherwise defined in this Amendment.

     E. Corporate and Partnership Authority. If Tenant is a corporation or
partnership, or is comprised of either or both of them, each individual
executing this Amendment for the corporation or partnership represents that he
or she is duly authorized to execute and deliver this Amendment on behalf of the
corporation or partnership and that this Amendment is binding upon the
corporation or partnership in accordance with its terms.

     F. Attorneys' Fees. The provisions of the Lease respecting payment of
attorneys' fees shall also apply to this Amendment.

V.  EXECUTION.

     Landlord and Tenant executed this Amendment on the date as set forth in "I.
PARTIES AND DATE." above.

LANDLORD:                              TENANT:

THE IRVINE COMPANY       [Legal            NEW CENTURY FINANCIAL CORPORATION,
                        Approval           a Delaware corporation
                          Seal]

By /s/ ROBERT E. WILLIAMS, JR.             By /s/ Edward F. Gotschall
       -----------------------                    ----------------------
       Robert E. Williams, Jr., President
       Irvine Industrial Company, a        Title  Vice Chairman
       division of The Irvine Company             ----------------------

By /s/ NANCY E. TRUJILLO                   By /s/ Stegios Theologides
       -----------------------                    ----------------------
       Nancy E. Trujillo,
       Assistant Secretary                 Title  Secretary
                                                  ----------------------

                                       4

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