8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): May 17, 2002

NEW CENTURY FINANCIAL CORPORATION

(Exact Name of Issuer as Specified in its Charter)

Delaware	000-22633	33-0683629
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

18400 Von Karman Avenue, Suite 1000, Irvine, California                                92612

                    (Address of Principal Executive Offices)                                         (Zip Code)

Registrant’s telephone number, including area code: (949) 440-7030                

ITEM 5.    OTHER EVENTS

We are filing this report on Form 8-K to disclose the following recent developments involving us, and to incorporate such disclosure into our Registration Statement on Form S-3 (Registration No. 333-66694) and our Registration Statement on Form S-3 (Registration Statement No. 333-83984):

(a)    Warehouse Agreements.  On May 10, 2002, we entered into a new $400 warehouse agreement with UBS Warburg Real Estate Securities Inc. Also, on May 10, 2002, we amended and restated our current warehouse agreement with CDC Mortgage Capital Inc. to provide for an additional custodial relationship with Deutsche Bank National Trust Company. On May 13, 2002, we entered into a new $500 million warehouse agreement with Bank of America, N.A. The agreements relating to these credit facilities are filed as Exhibits 99.1, 99.2, 99.3, 99.4 and 99.5 to this Current Report and are incorporated herein by reference.

ITEM 7.    EXHIBITS

(a)	Financial statements of business acquired.
	Not applicable.
(b)	Pro forma financial information.
	Not applicable.
(c)	Exhibits.
	Exhibit No.	Description
	99.1	Master Contribution Agreement, dated as of May 13, 2002, by and between New Century Mortgage Corporation and New Century Funding A.
	99.2	Master Repurchase Agreement, dated as of May 13, 2002, by and between Bank of America, N.A. and New Century Funding A.
	99.3	Amended and Restated Master Repurchase Agreement, dated as of May 10, 2002, by and among CDC Mortgage Capital Inc., New Century Mortgage Corporation and NC Capital Corporation.
	99.4	Committed Note Purchase Agreement and Security Agreement, dated as of May 10, 2002, by and among New Century Funding I, UBS Warburg Real Estate Securities Inc. and each person party thereto as a Purchaser or a Noteholder from time to time.

2

99.5	Loan Purchase Agreement, dated as of May 10, 2002, by and among New Century Mortgage Corporation, New Century Financial Corporation and New Century Funding I.
99.6	Waiver and Consent dated May 13, 2002 under the Subordinated Loan Agreement by and between New Century Mortgage Corporation and U.S. Bank National Association dated as of April 28, 2000.

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

NEW CENTURY FINANCIAL CORPORATION

June 3, 2002 /s/ Brad A. Morrice Brad A. Morrice, Vice Chairman, President and Chief Operating Officer

EX-99.1

                                                                    Exhibit 99.1

                          MASTER CONTRIBUTION AGREEMENT

             MASTER CONTRIBUTION AGREEMENT, dated as of May 13, 2002 (this
"Agreement"), by and between NEW CENTURY MORTGAGE CORPORATION, as guarantor and
contributor ("Contributor"), and NEW CENTURY FUNDING A, as Company ("Company").

             Contributor owns 100% of the outstanding equity of Company.
Contributor intends to contribute to the capital of Company, from time to time,
certain loans (the "Contributed Assets") in accordance with the terms hereof
(with respect to the Contributed Assets contributed on any such date, each a
"Closing Date"). Each of Contributor and Company has duly authorized the
execution, delivery and performance of this Agreement for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.

             In consideration of the mutual agreements herein contained,
Contributor and Company agree as follows:

         l.  All capitalized terms not defined herein shall have the meanings
assigned to them in the Master Repurchase Agreement, dated as of May 13, 2002
(the "Repurchase Agreement"), between Company and Bank of America, National
Association ("Buyer"), as amended or restated.

         2.  On the Business Day preceding each Closing Date, Contributor shall
deliver a Transaction Notice in accordance with the provisions of the Repurchase
Agreement. Contributor hereby agrees that the Purchased Assets identified in
each such Transaction Notice shall be Contributed Assets hereunder. On or before
each Closing Date, Contributor shall execute and deliver to the Custodian, on
behalf of Company and Buyer, a Confirmation of Contribution in substantially the
form of Exhibit 1 hereto with respect to the related Contributed Assets, whereby
Contributor shall contribute to the capital of, assign, transfer, set over and
otherwise convey to Company, without recourse, all of the right, title and
interest in, to and under such Contributed Assets, including without limitation
all amounts distributable in respect of such Contributed Assets payable after
such Closing Date; provided, however, that notwithstanding the failure of
Contributor to execute such Confirmation of Contribution, if a Transaction is
entered into pursuant to the Repurchase Agreement, the contribution of the
related Purchased Assets shall be conclusively deemed to have occurred on the
initial Purchase Date of such Purchased Assets. In accordance with the terms of
the Repurchase Agreement, Contributor agrees to remit, or cause to be remitted,
to Buyer or the Custodian, as appropriate, immediately upon receipt thereof, any
amount in respect of any Contributed Asset distributed directly to or otherwise
received by Contributor after the related Closing Date.

         3.  The parties hereto acknowledge that Company intends to sell and
transfer the Contributed Assets to Buyer pursuant to the terms of the Repurchase
Agreement. Accordingly, Company hereby instructs Contributor to deliver the
Contributed Assets directly to Buyer, or its designee, as designee of Company,
in accordance with the terms and provisions of the

                                       1



Repurchase Agreement and the Custody Agreement.

         4.  It is intended that the conveyance of the Contributed Assets by
Contributor to Company as provided hereby be, and be construed as, an absolute
contribution of the Contributed Assets to the capital of Company by Contributor.
Furthermore, it is not intended that such conveyance be deemed a pledge of such
Contributed Assets by Contributor to Company to secure a debt or other
obligation of Contributor. However, in the event that, notwithstanding the
intent of the parties, such Contributed Assets are held to be property of
Contributor, or if for any reason this Agreement is held or deemed to create a
security interest in such Contributed Assets, then it is intended that:

             (a) this Agreement shall also be deemed a security agreement within
         the meaning of Articles 8 and 9 of the New York Uniform Commercial Code
         and the Uniform Commercial Code of any other applicable jurisdiction;

             (b) the conveyance provided for in this Section shall be deemed to
         be a grant by Contributor to Company of a security interest in all of
         Contributor's right (including the power to convey title thereto),
         title and interest, whether now owned or hereafter acquired in, to and
         under the Contributed Assets, and all payments and other distributions
         thereon after the Closing Date, and all proceeds of the foregoing;

             (c) the possession by Company (or any subsequent assignee,
         including, without limitation, Buyer) or its agent of the Contributed
         Assets or such other items of property as constitute instruments,
         money, negotiable documents or chattel paper shall be deemed to be
         "possession by the secured party," or possession by a purchaser or a
         person designated by such secured party, for purposes of perfecting the
         security interest pursuant to the New York Uniform Commercial Code and
         the Uniform Commercial Code of any other applicable jurisdiction
         (including, without limitation, Sections 9-313, 8-313 or 8-321
         thereof); and

             (d) notifications to persons holding such property, and
         acknowledgments, receipts or confirmations from persons holding such
         property, shall be deemed notifications to, or acknowledgments,
         receipts or confirmations from, financial intermediaries, bailees or
         agents (as applicable) of Company (or any subsequent assignee,
         including, without limitation, the Custodian) for the purpose of
         perfecting such security interest under applicable law.

             Contributor shall take such actions as may be reasonably deemed
necessary to ensure that, if this Agreement were deemed to create a security
interest in such Contributed Assets and other property described above, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement and the Repurchase Agreement; provided, however, that absent
notice from Buyer to the contrary, Contributor shall be conclusively deemed to
have satisfied the provisions of this paragraph as to any Contributed Asset that
is subject to a

                                       2



Transaction (as such term is defined in the Repurchase Agreement) if with
respect to such Contributed Asset, Contributor has performed all of
Contributor's obligations as set forth in the Repurchase Agreement and the
Custody Agreement as the same may be amended from time to time.

         5.  Contributor hereby covenants and agrees that:

             (a)  it will pay from its own funds and assets (and not Company's)
         all obligations and indebtedness incurred by it;

             (b)  it will not conduct its business in the name of Company;

             (c)  it will not operate or purport to operate as an integrated,
         single economic unit with respect to Company or seek or obtain credit
         or incur any obligation to any third party based on the assets of
         Company or induce any such third party to reasonably rely on the
         creditworthiness of Company in connection therewith;

             (d)  the accounting records of Contributor will disclose the effect
         of the transactions contemplated hereby in accordance with generally
         accepted accounting practices and relevant pronouncements; and

             (e)  Immediately prior to its transfers provided for herein,
         Contributor had good title to, and was the sole owner of, each
         Contributed Asset, free and clear of any pledge, lien, encumbrance or
         security interest.

         6.  With respect to each Contributed Asset, Contributor hereby makes
all of the applicable representations and warranties set forth in Appendix A to
the Custody Agreement as of the related Closing Date and the date the Loan File
is delivered to the Custodian in accordance with the Custody Agreement.
Contributor hereby acknowledges that Buyer is relying upon the representations,
warranties and covenants made by it in this Agreement, the Repurchase Agreement
and the Custody Agreement, and agrees that Buyer and its successors and assigns
are entitled to enforce the remedies for a material breach of such
representations, warranties and covenants directly against Contributor. In
addition, Contributor agrees to make the representations and warranties set
forth in Appendix A to the Custody Agreement as of the "cut-off date" of the
securitization or whole loan sale of the related Loans by Company or Buyer, as
applicable; provided, however, that to the extent that Contributor has at the
time of such securitization or whole loan sale actual knowledge of any facts or
circumstances that would render any of such representations and warranties
materially false, Contributor shall have no obligation to make such materially
false representation and warranty.

         7.  This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns. Buyer is an
intended third party beneficiary of this Agreement, entitled to enforce the
provisions hereof as if a party hereto.

                                       3



         8.  Except as provided herein, any notice required or permitted by this
Agreement shall be in writing and shall be effective and deemed delivered only
when received by the party to which it is sent; provided, however, that a
facsimile transmission shall be deemed to be received when transmitted so long
as the transmitting machine has provided an electronic confirmation (without
error message) of such transmission. Any such notice shall be sent to a party at
the address or facsimile transmission number set forth below:

         if to Contributor,
         -----------------

                 New Century Mortgage Corporation
                 18400 Von Karman
                 Irvine, California 92612
                 Attention:  Stergios Theologides, Esq.
                         Telephone:  (949) 863-7243
                         Facsimile:  (949) 440-7033

         if to Company,
         -------------

                 New Century Funding A
                      c/o Christiana Bank & Trust Company
                 1314 King Street
                 Wilmington, Delaware 19801
                         Attention:  Corporate Trust Administration

                 with a copy to:

                 New Century Funding Corporation
                 as administrator of New Century Funding A
                 18400 Von Karman
                 Irvine, California 92612
                 Attention:  Stergios Theologides, Esq.
                         Telephone:  (949) 863-7243
                         Facsimile:  (949) 440-7033

         9.      THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICT OF LAWS PROVISIONS
THEREOF, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

         10.     Neither this Agreement nor any term hereof may be changed,
waived discharged or terminated except by a writing signed by the party against
whom enforcement of such change, waiver, discharge or termination is sought.
This Agreement may be signed in any number of counterparts, each of which shall
be deemed an original, and which taken together shall

                                       4



constitute one and the same instrument.

       11.   This Agreement shall remain in full force and effect until the
Termination Date of the Repurchase Agreement.

       12.   It is expressly understood and agreed by the parties hereto that
(a) this side letter is executed and delivered by Christiana Bank & Trust
Company, not individually or personally but solely as trustee of the Seller, in
the exercise of the powers and authority conferred and vested in it, (b) each of
the representations, undertakings and agreements herein made on the part of the
Seller is made and intended not as personal representations, undertakings and
agreements by Christiana Bank & Trust Company but is made and intended for the
purpose for binding only the Seller, (c) nothing herein contained shall be
construed as creating any liability on the Christiana Bank & Trust Company,
individually or personally, to perform any covenant either expressed or implied
contained herein, all such liability, if any, being expressly waived by the
parties hereto and by any Person claiming by, through or under the parties
hereto and (d) under no circumstances shall the Christiana Bank & Trust Company
be personally liable for the payment of any indebtedness or expenses of the
Seller or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Seller under this side letter or
any other related documents.

                            [signature page follows]

                                       5



             IN WITNESS WHEREOF, Contributor and Company have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.

                                           NEW CENTURY MORTGAGE CORPORATION


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



                                           NEW CENTURY FUNDING A

                                           By: Christiana Bank & Trust Company,
                                           not in its individual capacity but
                                           solely as trustee


                                           By:         /s/ Debra A. Balliet
                                              --------------------------------
                                               Name:
                                                    --------------------------
                                               Title:  Trust Officer
                                       6             -------------------------

EX-99.2

                                                                    Exhibit 99.2

                           MASTER REPURCHASE AGREEMENT

                                                        Dated as of May 13, 2002

BETWEEN:

Bank of America, N.A., as buyer ("Buyer", which term shall include any
"Principal" as defined and provided for in Annex I), or as agent pursuant hereto
("Agent"), and

New Century Funding A, as seller ("Seller").

1.       APPLICABILITY
         -------------

         Buyer shall, from time to time, upon the terms and conditions set forth
         herein, agree to enter into transactions in which Seller transfers to
         Buyer Eligible Assets against the transfer of funds by Buyer, with a
         simultaneous agreement by Buyer to transfer to Seller such Purchased
         Assets at a date certain, against the transfer of funds by Seller. Each
         such transaction shall be referred to herein as a "Transaction", and,
         unless otherwise agreed in writing, shall be governed by this
         Agreement.

2.       DEFINITIONS AND INTERPRETATION
         ------------------------------

         a.       Defined Terms.

         "Additional Purchased Assets" shall have the meaning assigned thereto
          ---------------------------
in Section 6(a) hereof.

         "Adjusted Tangible Net Worth" means shall mean at any date:
          ----------------------------

                  (a) Book Net Worth, minus

                  (b) The sum of (1) all assets which would be classified as
         intangible assets of a Guarantor and its consolidated Subsidiaries
         under GAAP, including, without limitation, advances to shareholders,
         officers and Affiliates, investments in Affiliates, deferred taxes,
         capitalized general and administrative costs, capitalized deal costs,
         all goodwill (whether representing the excess cost over book value of
         assets acquired or otherwise), patents, trademarks, trade names,
         copyrights, franchises and deferred charges (including, without
         limitation, unamortized debt discount and expense, organization costs
         and research and product development costs) plus (2) all receivables
         from directors, officers and shareholders of such Guarantor and its
         consolidated Subsidiaries.

         "Affiliate" means, with respect to any specified Person, any other
          ---------
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" means the power to direct
the management and policies of such Person, directly or indirectly, whether
through the ownership of voting equity, by contract or otherwise.

         "Agent" means Bank of America, N.A. or any successor.
          -----



         "Agreement" means this Master Repurchase Agreement, as it may be
         ----------
amended, supplemented or otherwise modified from time to time.

         "Book Net Worth" shall mean the excess of total assets of a Person and
         ---------------
its consolidated Subsidiaries over Total Liabilities of such Guarantor and its
consolidated Subsidiaries determined in accordance with GAAP.

         "Borrower" means the obligor or obligors on a Note, including any
         ---------
Person that has acquired the related collateral and assumed the obligations of
the original obligor or obligors under the Note.

         "Breakage Costs" shall have the meaning assigned thereto in Section
          --------------
3(c) herein.

         "Business Day" means any day other than (i) a Saturday or Sunday or
         -------------
(ii) a day upon which the New York Stock Exchange, the Federal Reserve Bank of
New York or the Custodian is obligated by law or executive order to be closed.

         "Buyer's Margin Amount" means, with respect to any Transaction as of
          ---------------------
any date of determination, the amount obtained by application of Buyer's Margin
Percentage to the Repurchase Price for such Transaction as of such date.

         "Buyer's Margin Percentage" shall have the meaning assigned thereto in
          -------------------------
the Side Letter.

         "Cash Equivalents" shall mean (a) securities with maturities of 180
          ----------------
days or less from the date of acquisition issued or fully guaranteed or insured
by the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of 180 days or less from
the date of acquisition and overnight bank deposits of any commercial bank
having capital and surplus in excess of $500,000,000, (c) repurchase obligations
of any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than thirty days with respect to
securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least "A-1" or
the equivalent thereof by Standard & Poor's Ratings Services ("S&P") or "P-1" or
                                                              -----
the equivalent thereof by Moody's Investors Service, Inc. ("Moody's") and in
                                                           --------
either case maturing within 180 days after the day of acquisition, (e)
securities with maturities of 180 days or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least "A" by S&P or "A" by
Moody's, (f) securities with maturities of 180 days or less from the date of
acquisition backed by standby letters of credit issued by any commercial bank
satisfying the requirements of clause (b) of this definition, or (g) shares of
money market, mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition.

         "Change in Control" shall mean the acquisition by any Person, or two or
          -------------------
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities



and Exchange Commission under the Securities Exchange Act of 1934) of
outstanding shares of voting stock of an entity at any time if after giving
effect to such acquisition such Person or Persons owns fifty percent (50%) or
more of such outstanding voting stock.

         "Change in Law" means (a) the adoption of any law, rule or regulation
          -------------
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by Buyer (or any Affiliate of
Buyer) with any request, guideline or directive (whether or not having the force
of law) of any Governmental Authority made or issued after the date of this
Agreement.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.
          ----

         "Collateral" shall have the meaning assigned thereto in Section 8
          ----------
hereof.

         "Computer Medium" means a computer or other electronic medium generated
          ---------------
by or on behalf of Seller and delivered or transmitted to Buyer and Custodian
which provides information relating to the Purchased Assets, including the
identity of the related servicer with respect to each Loan and the information
set forth in the Loan Schedule, in a format reasonably acceptable to Buyer.

         "Confirmation" shall have the meaning assigned thereto in Section 4(b)
          ------------
hereof.

         "Custodian" means Deutsche Bank National Trust Company, or its
          ---------
successors and permitted assigns.

         "Custody Agreement" means the Custodial Agreement, dated as of May 13,
          -----------------
2002 among Seller, Buyer, NCMC and Custodian.

         "Default" means any event, that, with the giving of notice or the
         --------
passage of time or both, would constitute an Event of Default.

         "Default Rate" means, as of any date of determination, the lesser of
          ------------
(i) the Pricing Rate plus 4% and (ii) the maximum rate permitted by applicable
law.

         "Effective Date" shall mean the date set forth on the top of the first
          --------------
page of this Agreement.

         "Eligible Asset" shall have the meaning assigned thereto in the Side
          --------------
Letter.

         "Eligible Loan" shall have the meaning assigned thereto in the Side
          -------------
Letter.

         "Event of Default" shall have the meaning assigned thereto in Section
          ----------------
18 hereof.

         "Facility Enlargement Fee Amount" shall have the meaning assigned
         --------------------------------
thereto in the Side Letter.



         "Facility Fee Amount" shall have the meaning assigned thereto in the
          -------------------
Side Letter.

         "Funded Debt" shall mean as of any date of determination with respect
          -----------
to NCFC (and its subsidiaries) amounts outstanding to third parties such as, but
not limited to, warehouse lines of credit and repurchase lines, notes payable,
securitizations held on balance sheet, subordinated debt and financing of
residuals, but excluding accounts and similar payables and accrued liabilities.

         "GAAP" shall mean generally accepted accounting principles in the
          ----
United States of America in effect from time to time.

         "Governmental Authority" shall mean any nation or government, any state
          ----------------------
or other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions over Seller or
Guarantor.

         "Guarantee" means, as to any Person, any obligation of such Person
          ----------------
directly or indirectly guaranteeing any Indebtedness of any other Person or in
any manner providing for the payment of any Indebtedness of any other Person.

         "Guarantors" means each of NCFC and NCMC, or any successors thereto.
          ----------

         "Guaranty" means the Guaranty and Pledge Agreement of the Guarantors in
          --------
favor of the Buyer, dated as of May 13, 2002.

         "Hedge Counterparty": A Person (i) (A) with long-term and commercial
          ------------------
paper or short-term deposit ratings of "P-1" by Moody's Investors Service and
"A-1" by Standard & Poor's and (B) which shall agree in writing that, in the
event that any of its long-term or commercial paper or short-term deposit
ratings cease to be at or above "A-2" by Moody's and "A" by Standard & Poor's,
it shall secure its obligations in accordance with the request of the Buyer or
Buyer shall have the option to treat such failure as an Early Termination Event
(as defined in the ISDA Master Agreement) by such Hedge Counterparty, and (ii)
that has entered into a Hedge Instrument.

         "Hedge Instrument" means any interest rate cap agreement, interest rate
          ----------------
floor agreement, interest rate swap agreement or other interest rate hedging
agreement entered into by the Seller or a Guarantor with a Hedge Counterparty
that relates to or applies to the Purchased Assets or assets similar to the
Purchased Assets.

         "Income" means, with respect to any Purchased Asset at any time, any
          ------
principal and/or interest thereon and all dividends, sale proceeds and other
collections and distributions thereon, but not including any commitment fees,
origination fees and/or servicing fees (with respect to third party servicers
that are not an Affiliate of Seller or any Guarantor).

         "Indebtedness" shall mean, for any Person: (a) all obligations for
          -------------
borrowed money; (b) obligations of such Person to pay the deferred purchase or
acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are



payable and paid within ninety (90) days of the date the related invoice is
received for the respective goods delivered or the respective services rendered;
(c) indebtedness of others secured by a lien on the Property of such Person,
whether or not the respective indebtedness so secured has been assumed by such
Person; (d) obligations (contingent or otherwise) of such Person in respect of
letters of credit or similar instruments issued for account of such Person; (e)
capital lease obligations of such Person; (f) obligations of such Person under
repurchase agreements or like arrangements; (g) indebtedness of others
guaranteed on a recourse basis by such Person; (h) all obligations of such
Person incurred in connection with the acquisition or carrying of fixed assets
by such Person; (i) indebtedness of general partnerships of which such Person is
a general partner; and (j) any other contingent liabilities of such Person.

         "Interest Coverage Ratio" shall mean with respect to NCFC (and its
          -----------------------
subsidiaries) as of the end of each financial quarter and measured with respect
to such financial quarter and the immediately preceding 3 quarters, an amount
equal to fraction (expressed as a decimal) as follows:

                  (a) the numerator of which is the sum of (i) the aggregate
         earnings before interest and taxes, plus (ii) the aggregate of all
                                             ----
         interest expenses, minus (iii) the aggregate of all gains on
                            -----
         net-interest residuals, minus (iv) the aggregate of all servicing
                                 -----
         gains, plus (v) the aggregate of all depreciation and amortization,
                ----
         minus (vi) the aggregate of all initial deposits into
         -----
         over-collateralization accounts, minus (vii) the aggregate accretion of
                                          -----
         net-interest residuals, plus (viii) the aggregate of all cash received
                                 ----
         with respect to residual interests; and

                  (a) the denominator of which is the sum of (i) the aggregate
         of all interest expense, plus (ii) the aggregate of all mandatory
                                  ----
         repayments of residual secured financings.

         "Interim Servicer" means (i) Ocwen Federal Bank, FSB, or (ii) any other
          ----------------
 servicer approved by Buyer in its sole discretion exercised in good faith.

         "Investment Company Act" means the Investment Company Act of 1940, as
          ----------------------
amended, including all rules and regulations promulgated thereunder.

         "Jumbo Loan" means a Loan with an original unpaid principal balance
          ----------
greater than $350,000.


         "LIBOR" shall mean, for each day, the rate determined by the Buyer on
          -----
such date (or, in the event such day is not a Business Day, the prior Business
Day) on the basis of the offered rate for one-month or overnight U.S. dollar
deposits (as applicable), as such rate appears on Telerate Page 3750 as of 11:00
a.m. (London time) on such date; provided that if such rate does not appear on
Telerate Page 3750, the rate for such date will be determined on the basis of
the offered rates of the Reference Banks for one-month or overnight U.S. dollar
deposits (as applicable), as of 11:00 a.m. (London time) on such date. In such
event, the Buyer will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If on such date, two or more
Reference Banks provide such offered quotations, LIBOR shall be the arithmetic
mean of all such offered quotations (rounded to the nearest whole multiple of
1/16%).



If on such date, fewer than two Reference Banks provide such offered quotations,
LIBOR shall be the higher of (i) LIBOR as determined on the previous LIBOR
determination date and (ii) the Reserve Interest Rate. With respect to each
transaction, on the related Purchase Date and for each day that such Transaction
is outstanding, LIBOR shall be calculated at the overnight rate unless otherwise
elected by the Seller in writing on the related Purchase Date.

         "Liquid Assets" shall mean the sum of all of NCMC's cash, Cash
          -------------
Equivalents, and the market value of its U.S. Treasury securities and the amount
available under any committed secured financing facility or committed repurchase
facility between NCMC and a third party acceptable to the Buyer (but only to the
extent that NCMC has unencumbered assets to pledge, net of any applicable
haircut, or has excess borrowing capacity arising from assets already pledged).

         "Loan" means (i) a first or second lien single family (one-to-four
          ----
units) non-conforming residential loan, (ii) such other type of loan, lease or
other receivable as shall be agreed upon by the parties as evidenced by Appendix
A to the Custody Agreement, as amended or supplemented by mutual agreement of
the parties, or (iii) any interest in, or secured by, any such loan, lease or
other receivable.

         "Loan Documents" shall have the meaning assigned thereto in the Custody
          --------------
Agreement.

         "Loan File" shall have the meaning assigned thereto in the Custody
         ---------
Agreement.

         "Loan Schedule" means the list of Loans delivered by a Guarantor or the
          -------------
Seller to Buyer and Custodian together with each Transaction Notice and attached
by the Custodian to the related Trust Receipt. Each Loan Schedule shall set
forth as to each Loan the related Borrower name, the address of the related
Mortgaged Property and the outstanding principal balance of the Loan as of the
initial Purchase Date, together with any other information specified by Buyer
from time to time in good faith.

         "Margin Call" As defined in Section 6(a).
          -----------

         "Margin Deficit" shall have the meaning assigned thereto in Section
          ---------------
6(a) hereof.

         "Market Value" means (i) with respect to any Purchased Asset that is an
          ------------
Eligible Asset, as of any date of determination, the value ascribed to such
asset by Buyer in its sole discretion, and (ii) with respect to a Purchased
Asset that is not an Eligible Asset, zero.

         "Master Contribution Agreement" means the Master Contribution
          -----------------------------
Agreement, dated as of May 13, 2002 between NCMC and Seller.

         "Master Netting Agreement" means the Master Collateral Security and
          ------------------------
Master Netting Agreement dated as of May 13, 2002 among Buyer and certain
Affiliates and the Guarantors and certain Affiliates.



         "Material Adverse Change" means, with respect to a Person, any material
          -----------------------
adverse change in the business, condition (financial or otherwise), operations,
performance, properties or prospects taken as a whole or prospects of such
Person.

         "Material Adverse Effect" means (a) a Material Adverse Change with
          -----------------------
respect to a Guarantor or such Guarantor and its Affiliates that are party to
any Program Document taken as a whole; (b) a material impairment of the ability
of a Guarantor or any Affiliate that is a party to any Program Document to
perform under any Program Document and to avoid any Event of Default; (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability of any Program Document against either Guarantor or any Affiliate
that is a party to any Program Document; or (d) a material adverse effect upon
the value or marketability of a material portion of the Purchased Assets.

         "Maximum Aggregate Purchase Price" means the amount set forth in
          --------------------------------
Section 37 hereof.

         "Mortgage" means a mortgage, deed of trust, or other instrument that
          --------
creates a lien on the related Mortgaged Property and secures a Note.

         "Mortgaged Property" means, with respect to a Loan, the related
          ------------------
Borrower's fee interest in real property or leasehold interest in real property
and all other collateral securing repayment of the debt evidenced by the related
Note.

         "NCFC" means New Century Financial Corporation, or any successor
          ----
thereto.

         "NCMC" means New Century Mortgage Corporation, or any successor
          ----
thereto.

         "Note" means, with respect to any Loan, the related promissory note
          ----
together with all riders thereto and amendments thereof or other evidence of
indebtedness of the related Borrower.

         "Notice Date" shall have the meaning assigned thereto in Section 4
          -----------
hereof.

         "Obligations" means (a) all of Seller's and Guarantors' obligation to
          -----------
pay the Repurchase Price on the Repurchase Date and other obligations and
liabilities of Seller and Guarantors to Buyer, its Affiliates or Custodian
arising under, or in connection with, the Program Documents or directly related
to the Purchased Assets, whether now existing or hereafter arising; (b) any and
all sums paid by Buyer or on behalf of Buyer pursuant to the Program Documents
in order to preserve any Purchased Asset or its interest therein; (c) in the
event of any proceeding for the collection or enforcement of any of Seller's or
Guarantors' indebtedness, obligations or liabilities referred to in clause (a),
the reasonable expenses of retaking, holding, collecting, preparing for sale,
selling or otherwise disposing of or realizing on any Purchased Asset, or of any
exercise by Buyer or such Affiliate of its rights under the Program Documents,
including without limitation, reasonable attorneys' fees and disbursements and
court costs; and (d) all of Seller's and Guarantor's obligations to Buyer,
Custodian or any other Person pursuant to the Program Documents.



         "Person" shall mean any legal person, including any individual,
          ------
corporation, partnership, association, joint-stock company, trust, limited
liability company, unincorporated organization, governmental entity or other
entity of similar nature.

         "Price Differential" means, with respect to each Transaction as of any
          ------------------
date, the aggregate amount obtained by daily application of the Pricing Rate for
such Transaction to the Purchase Price on a 360-day-per-year basis for the
actual number of days during the period commencing on (and including) the
Purchase Date and ending on (but excluding) the Repurchase Date (reduced by any
amount of such Price Differential in respect of such period previously paid by
Seller to Buyer) with respect to such Transaction.

         "Pricing Rate" means the per annum percentage rate for determination of
          ------------
the Price Differential as set forth in Section 3(b) hereof or as otherwise set
forth in the Side Letter.

         "Prime Rate" means a rate set by Buyer based upon various factors
          ----------
including Buyer's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate. Any change in such rate
announced by Buyer shall take effect at the opening of business on the day
specified in the public announcement of such change.

         "Principal" shall have the meaning given to it in Annex I.
          ---------

         "Program Documents" means this Agreement, the Custody Agreement, any
          ------------------
Servicing Agreement, the Master Netting Agreement, the Guaranty, any assignment
of Hedge Instrument, the Master Contribution Agreement, the Side Letter, the
Servicer Side Letter and any other agreement entered into by Seller and/or
Guarantor, on the one hand, and Buyer or one of its Affiliates (or Custodian on
its behalf) on the other, in connection herewith or therewith.

         "Property" means any right or interest in or to property of any kind
          --------
whatsoever, whether real, personal or mixed and whether tangible or intangible.

         "Purchase Date" means the date on which Purchased Assets are to be
          -------------
transferred by Seller to Buyer.

         "Purchase Price" shall have the meaning assigned thereto in the Side
          --------------
Letter.

         "Purchased Assets" means, with respect to a Transaction, the Loans set
          ----------------
forth on the related Loan Schedule, together with the related Records, Servicing
Rights, Seller's or Guarantor's rights under any related Hedge Instruments
(which interest in Hedge Instruments shall be pro rata and subject to rights of
other parties holding security interest therein), and other Collateral, and all
instruments, chattel paper, and general intangibles comprising or relating to
all of the foregoing. The term "Purchased Assets" with respect to any
Transaction at any time also shall include Additional Purchased Assets delivered
pursuant to Section 6(a) hereof.

         "Records" means all instruments, agreements and other books, records,
          --------
reports and data generated by other media for the storage of information
maintained by Seller, Guarantor, any of their Affiliates or agents, or their
servicer or custodian with respect to a Purchased Asset.



Records shall include the Notes, any Mortgages, the Loan Files and any other
instruments necessary to document or service a Loan that is a Purchased Asset,
including, without limitation, the complete payment and modification history of
each Loan that is a Purchased Asset.

         "Reference Banks" Any leading banks selected by the Agent which are
          ---------------
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market with an established place of business in London.

         "Repurchase Date" shall have the meaning assigned thereto in Section
          ---------------
3(b) and shall also include the date determined by application of Section 19.

         "Repurchase Price" means the price at which Purchased Assets are to be
          ----------------
transferred from Buyer to Seller upon termination of a Transaction, which will
be determined in each case (including Transactions terminable upon demand) as
the sum of the Purchase Price and the Price Differential as of the date of such
determination.

         "Reserve Interest Rate" means with respect to any LIBOR determination
          ---------------------
date, the rate per annum that the Agent determines to be either (i) the
arithmetic mean (rounded to the nearest whole multiple of 1/16%) of the
one-month or overnight U.S. dollar lending rates (as applicable) which New York
City banks selected by the Agent are quoting on the relevant LIBOR determination
date to the principal London offices of leading banks in the London interbank
market or (ii) in the event that the Agent can determine no such arithmetic
mean, the lowest one-month or overnight U.S. dollar lending rate (as applicable)
which New York City banks selected by the Agent are quoting on such LIBOR
determination date to leading European banks.

         "Servicer Side Letter" means the letter agreement, dated as of May 13,
          --------------------
2002, among Seller, Guarantors, Ocwen Federal Bank, FSB and Buyer.

         "Servicing Agreement" means any agreement (other than the Custody
          -------------------
Agreement) giving rise or relating to Servicing Rights with respect to a
Purchased Asset, including any assignment or other agreement relating to such
agreement.

         "Servicing Rights" means contractual, possessory or other rights of
          ----------------
Seller or any other Person arising under a Servicing Agreement, the Custody
Agreement or otherwise, to administer or service a Purchased Asset or to possess
related Records.

         "Side Letter" means the pricing side letter, dated as of May 13, 2002,
          -----------
among Seller, Guarantors and Buyer, as the same may be amended, supplemented or
modified from time to time.

         "Subsidiary" means, with respect to any Person, any corporation,
          ----------
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by



such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.

         "Substitute Assets" has the meaning assigned thereto in Section 16(a).
          -----------------

         "Termination Date" has the meaning assigned thereto in Section 27.
          ----------------

         "Total Adjusted Liabilities" shall mean for any fiscal quarter, the sum
          --------------------------
of (i) the daily average funded indebtedness for such fiscal quarter, plus (ii)
all other consolidated liabilities, determined in accordance with GAAP, as of
the last day of such fiscal quarter.

         "Total Liabilities" shall mean the total liabilities of a Person and
          -----------------
its consolidated Subsidiaries, determined in accordance with GAAP.

         "Total Non-warehouse Debt" shall mean as of any date of determination
          ------------------------
with respect to NCFC (and its subsidiaries), the sum of (i) the aggregate of all
of its Funded Debt, less (ii) 100% of its unencumbered mortgage loan inventory
                    ----
held for sale or held for investment, less, (iii) 80% of its aggregate servicing
                                      ----
advance receivables (all determined in accordance with GAAP).

         "Transaction" has the meaning assigned thereto in Section 1.
          -----------

         "Transaction Notice" means a written request of Seller to enter into a
          -------------------
Transaction, in the form attached to the Custody Agreement which is delivered to
Buyer and Custodian.

         "Trust Receipt" means a Trust Receipt and Certification as defined in
          -------------
the Custody Agreement.

         "Underwriting Guidelines" means NCMC's underwriting guidelines in
          -------------------------
effect as of the date of this Agreement, which have been approved in writing by
Buyer, as the same may be amended from time to time in accordance with terms of
this Agreement.

         "Uniform Commercial Code" means the Uniform Commercial Code as in
          -----------------------
effect on the date hereof in the State of New York or the Uniform Commercial
Code as in effect in the applicable jurisdiction.

         "Wet Funded Loan" means a Loan for which, as of the related initial
          ---------------
Purchase Date, the documents in the related Loan File has not been delivered to
the Custodian, and thereafter, each date until the documents in the related Loan
File has been delivered to the Custodian.

         "Wet Funding Package" shall have the meaning assigned thereto in the
          -------------------
Custody Agreement.

         b. Capitalized terms used but not defined in this Agreement shall have
the meanings assigned thereto in the Custody Agreement.

         c. Interpretation.



         Headings are for convenience only and do not affect interpretation. The
following rules of this subsection (c) apply unless the context requires
otherwise. The singular includes the plural and conversely. A gender includes
all genders. Where a word or phrase is defined, its other grammatical forms have
a corresponding meaning. A reference to a subsection, Section, Annex or Exhibit
is, unless otherwise specified, a reference to a Section of, or annex or exhibit
to, this Agreement. A reference to a party to this Agreement or another
agreement or document includes the party's successors and permitted substitutes
or assigns. A reference to an agreement or document is to the agreement or
document as amended, modified, novated, supplemented or replaced, except to the
extent prohibited by any Program Document. A reference to legislation or to a
provision of legislation includes a modification or re-enactment of it, a
legislative provision substituted for it and a regulation or statutory
instrument issued under it. A reference to writing includes a facsimile
transmission and any means of reproducing words in a tangible and permanently
visible form. A reference to conduct includes, without limitation, an omission,
statement or undertaking, whether or not in writing. An Event of Default
subsists until it has been waived in writing by the Buyer or has been timely
cured. The words "hereof", "herein", "hereunder" and similar words refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
term "including" is not limiting and means "including without limitation." In
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including", the words "to" and "until"
each mean "to but excluding", and the word "through" means "to and including."
This Agreement may use several different limitations, tests or measurements to
regulate the same or similar matters. All such limitations, tests and
measurements are cumulative and shall each be performed in accordance with their
terms. Unless the context otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied. References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Seller. Except where otherwise provided in
this Agreement any determination, statement or certificate by the Buyer or an
authorized officer of the Buyer provided for in this Agreement is conclusive and
binds the parties in the absence of manifest error. A reference to an agreement
includes a security interest, guarantee, agreement or legally enforceable
arrangement whether or not in writing related to such agreement. A reference to
a document includes an agreement (as so defined) in writing or a certificate,
notice, instrument or document, or any information recorded in computer disk
form. Where the Seller or a Guarantor is required to provide any document to the
Buyer under the terms of this Agreement, the relevant document shall be provided
in writing or printed form unless the Buyer requests otherwise. At the request
of the Buyer, the document shall be provided in computer readable format or both
printed and computer readable format. This Agreement is the result of
negotiations among and has been reviewed by counsel to the Buyer, Guarantors and
the Seller, and is the product of all parties. In the interpretation of this
Agreement, no rule of construction shall apply to disadvantage one party on the
ground that such party proposed or was involved in the preparation of any
particular provision of this Agreement or this Agreement itself. Except where
otherwise expressly stated the Buyer may give or withhold, or give
conditionally, approvals and consents, may be satisfied or unsatisfied, and may
form opinions and make determinations at its absolute discretion. Any
requirement of good faith, discretion or judgment by the Buyer shall not be
construed to require Buyer to request or await receipt of information or
documentation not immediately available from or with respect to the Seller,
Guarantor, a servicer of the Purchased Assets, any other Person or the Purchased
Assets themselves.



3.       THE TRANSACTIONS
         ----------------

         a. Seller shall repurchase Purchased Assets from Buyer on each related
Repurchase Date. Each obligation to repurchase subsists without regard to any
prior or intervening liquidation or foreclosure with respect to any Purchased
Asset. Seller is obligated to obtain the Purchased Assets from Buyer or its
designee (including the Custodian) at Seller's expense on (or after) the related
Repurchase Date.

         b. Provided that the applicable conditions in Sections 9(a) and (b)
have been satisfied, each Purchased Asset that is repurchased by Seller on the
Repurchase Date occurring on the 25th day of each month (or, if such 25th day is
not a Business Day, the immediately following Business Day) following the
related Purchase Date (the day of the month so determined for each month, or any
other date designated by Seller to Buyer for such a repurchase on at least one
Business Day's prior notice to Buyer, a "Repurchase Date", which term shall also
include the date determined by application of Section 19) shall automatically
become subject to a new Transaction unless Buyer is notified by Seller at least
one (1) Business Day prior to any such Repurchase Date, provided that if the
Repurchase Date so determined is later than the Termination Date, the Repurchase
Date for such Transaction shall automatically reset to the Termination Date, and
the provisions of this sentence as it might relate to a new Transaction shall
expire on such date. For each new Transaction, unless otherwise agreed, (y) the
accrued and unpaid Price Differential shall be settled in cash on each related
Repurchase Date, and (z) the Pricing Rate shall be as set forth in the Side
Letter.

         c. If Buyer locks in the rate of LIBOR at the request of Seller and
Seller repurchases Purchased Assets on any day which is not the Repurchase Date
set forth in Section 3(b) above, Seller shall indemnify Buyer and hold Buyer
harmless from any losses, costs and/or expenses which Buyer may sustain or incur
arising from the reemployment of funds obtained by Buyer hereunder or from fees
payable to terminate the deposits from which such funds were obtained ("Breakage
Costs"), in each case for the remainder of the applicable 30 day period. Buyer
shall deliver to Seller a statement setting forth the amount and basis of
determination of any Breakage Costs in such detail as determined in good faith
by Buyer to be adequate, it being agreed that such statement and the method of
its calculation shall be adequate and shall be conclusive and binding upon
Seller, absent manifest error. This Section shall survive termination of this
Agreement and the repurchase of all Purchased Assets subject to Transactions
hereunder.

4.       ENTERING INTO TRANSACTIONS, TRANSACTION NOTICE CONFIRMATIONS
         ------------------------------------------------------------

         a. Under the terms and conditions of the Program Documents, Buyer
hereby agrees to enter into Transactions with a Purchase Price up to the Maximum
Aggregate Purchase Price. Unless otherwise agreed, Seller shall give Buyer and
Custodian notice of any proposed Purchase Date in accordance with the terms of
the Custody Agreement (the date on which such notice is so given, the "Notice
Date"). On the Notice Date, Seller or a Guarantor shall (i) request that Buyer
enter into a Transaction by furnishing to Buyer and Custodian a Transaction
Notice and Loan Schedule, (ii) deliver to Buyer a Computer Medium for the
related Purchased Assets and (iii) deliver to Custodian the Loan File or Wet
Funding Package for each Loan subject to such Transaction.



     b. In the event that the parties hereto desire to enter into a Transaction
on terms other than as set forth in this Agreement (as amended by the Side
Letter), the parties shall execute a "Confirmation" specifying such terms prior
to entering into such Transaction. Any such Confirmation and the related
Transaction Notice, together with this Agreement, shall constitute conclusive
evidence of the terms agreed between Buyer and Seller with respect to the
Transaction to which the Confirmation relates. In the event of any conflict
between this Agreement and a Confirmation, the terms of the Confirmation shall
control with respect to the related Transaction.

5.   PAYMENT AND TRANSFER
     --------------------

     Unless otherwise agreed, all transfers of funds hereunder shall be in
immediately available funds and all Purchased Assets transferred shall be
transferred to the Custodian pursuant to the Custody Agreement. Any Repurchase
Price or Price Differential received by Buyer after 2:30 p.m. noon New York City
time shall be applied on the next succeeding Business Day.

6.   MARGIN MAINTENANCE
     ------------------

     a. If at any time the aggregate Market Value of all Purchased Assets
subject to all Transactions is less than the aggregate Buyer's Margin Amount for
all such Transactions (a "Margin Deficit"), then Buyer may by notice to Seller
require Seller in such Transactions to transfer to Buyer cash or, at Buyer's
option (and provided Seller has additional Eligible Assets), additional Eligible
Assets ("Additional Purchased Assets"), so that the cash and aggregate Market
Value of the Purchased Assets, including any such Additional Purchased Assets,
will thereupon equal or exceed such aggregate Buyer's Margin Amount (such
requirement, a "Margin Call").

     b. Notice required pursuant to Section 6(a) may be given by any means
provided in Section 35 hereof. Any notice given before 10:00 a.m. New York time
on a Business Day shall be satisfied no later than 5:00 p.m. New York time on
such Business Day. Any notice given on or after 10:00 a.m. New York time on a
Business Day shall be satisfied no later than 5:00 p.m. New York time on the
Business Day following the date of such notice. The failure of Buyer, on any one
or more occasions, to exercise its rights hereunder, shall not change or alter
the terms and conditions to which this Agreement is subject or limit the right
of Buyer to do so at a later date. Seller, Guarantors and Buyer each agree that
a failure or delay by Buyer to exercise its rights hereunder shall not limit or
waive Buyer's rights under this Agreement or otherwise existing by law or in any
way create additional rights for Seller or a Guarantor.

7.   INCOME PAYMENTS
     ---------------

     Where a particular term of a Transaction extends over the date on which
Income is paid in respect of any Purchased Assets subject to that Transaction,
such Income shall be the property of Buyer. Notwithstanding the foregoing, Buyer
agrees that prior to the occurrence of an Event of Default, Seller shall be
entitled to receive an amount equal to all Income received, whether by
Guarantor, Buyer, Custodian, Interim Servicer or any servicer or any other
Person, which is not



otherwise received by Seller, in respect of the Purchased Assets; provided,
however, that any income received by or on behalf of Seller while the related
Transaction is outstanding shall be deemed held by Seller solely in trust for
Buyer pending the repurchase on the related Repurchase Date. Upon the occurrence
of an Event of Default, the Seller and each Guarantor shall cause all Income to
be delivered to the Buyer.

8.   SECURITY INTEREST
     -----------------

     Seller and Buyer intend that the Transactions hereunder be sales to Buyer
of the Purchased Assets and not loans from Buyer to Seller secured by the
Purchased Assets. However, in order to preserve Buyer's rights under this
Agreement in the event that a court or other forum recharacterizes the
Transactions hereunder as other than sales, and as security for Seller's
performance of all of its Obligations, Seller hereby grants Buyer a fully
perfected first priority security interest in the following property, whether
now existing or hereafter acquired: the Purchased Assets, the related Records,
all mortgage guaranties and insurance relating to such Purchased Assets (issued
by governmental agencies or otherwise) and any mortgage insurance certificate or
other document evidencing such mortgage guaranties or insurance relating to such
Purchased Assets and all claims and payments thereunder, any purchase agreements
or other agreements or contracts relating to or constituting any or all of the
foregoing, all "accounts" as defined in the Uniform Commercial Code relating to
or constituting any or all of the foregoing, all other insurance policies and
insurance proceeds relating to any Purchased Asset or the related Mortgaged
Property, any security account and all rights to Income and the rights to
enforce such payments arising from any of the Purchased Assets, and any and all
replacements, substitutions, distributions on or proceeds with respect to any of
the foregoing (collectively the "Collateral").

9.   CONDITIONS PRECEDENT
     --------------------

     a.   As conditions precedent to the initial Transaction, Buyer shall have
received on or before the day of such initial Transaction the following, in form
and substance satisfactory to Buyer and duly executed by each party thereto (as
applicable):

          (i)   The Program Documents duly executed and delivered by the parties
     thereto and being in full force and effect, free of any modification,
     breach or waiver;

          (ii)  Evidence that all other actions necessary or, in the opinion of
     Buyer, desirable to perfect and protect Buyer's interest in the Purchased
     Assets and other Collateral have been taken, including, without limitation,
     duly executed and filed Uniform Commercial Code financing statements on
     Form UCC-1;

          (iii) A certified copy of Seller's and Guarantors' consents or
     corporate resolutions, as applicable, approving the Program Documents and
     Transactions thereunder (either specifically or by general resolution), and
     all documents evidencing other necessary corporate action or governmental
     approvals as may be required in connection with the Program Documents;

          (iv)  An incumbency certificate of the secretaries of Seller and
     Guarantors certifying the names, true signatures and titles of Seller's and
     Guarantors' representatives



     duly authorized to request Transactions hereunder and to execute the
     Program Documents and the other documents to be delivered thereunder;

          (v)    An opinion of Seller's and Guarantors' counsel as to such
     matters as Buyer may reasonably request and in form and substance
     acceptable to Buyer;

          (vi)   A copy of the Underwriting Guidelines certified by an officer
     of NCMC;

          (vii)  The original trust certificate of NCMC, representing 100%
     ownership of Seller, issued in the name of NCMC and an original conveyance
     power in blank executed by NCMC;

          (viii) All of the conditions precedent in the Guaranty shall have been
     satisfied; and

          (ix)   Any other documents reasonably requested by Buyer.

          (x)    Buyer's legal, tax, business and environmental due diligence of
     the Seller and Guarantors each shall have been completed to the
     satisfaction of the Buyer.

     b.   The obligation of Buyer to enter into each Transaction pursuant to
this Agreement is subject to the following conditions precedent:

          (i)    Buyer or its designee shall have received on or before the day
     of a Transaction with respect to such Purchased Assets (unless otherwise
     specified in this Agreement) the following, in form and substance
     satisfactory to Buyer and (if applicable) duly executed:

          (A)    Transaction Notice, Loan Schedule and Computer Medium delivered
                 pursuant to Section 4(a);

          (B)    The related Trust Receipt; and

          (C)    Such certificates, customary opinions of counsel or other
                 documents as Buyer may reasonably request, provided that such
                 opinions of counsel shall not be required in connection with
                 each Transaction but shall only be required from time to time
                 as deemed necessary by Buyer in its good faith.

          (ii)   No Default or Event of Default shall have occurred and be
     continuing.

          (iii)  Buyer shall not have reasonably determined that a change in any
     requirement of law or in the interpretation or administration of any
     requirement of law applicable to Buyer has made it unlawful, and no
     Governmental Authority shall have asserted that it is unlawful, for Buyer
     to enter into Transactions with a Pricing Rate based on LIBOR.



          (iv)    All representations and warranties in the Program Documents
     shall be true and correct on the date of such Transaction.

          (v)    The then aggregate outstanding Purchase Price for all Purchased
     Assets, when added to the Purchase Price for the requested Transaction,
     shall not exceed the Maximum Aggregate Purchase Price.

          (vi)   No event or events shall have been reasonably determined by
     Buyer to have occurred and be continuing resulting in the effective absence
     of a whole loan or asset-backed securities market.

          (vii)  Satisfaction of any conditions precedent to the initial
     Transaction as set forth in clause (a) of this Section 9 that were not
     satisfied prior to such initial Purchase Date.

          (viii) The Purchase Price for the requested Transaction shall not be
     less than $500,000.

          (ix)   Buyer shall have determined that all actions necessary or, in
     the opinion of Buyer, desirable to maintain Buyer's perfected interest in
     the Purchased Assets and other Collateral have been taken, including,
     without limitation, duly executed and filed Uniform Commercial Code
     financing statements on Form UCC-1.

          (x)    Any other documents reasonably requested by Buyer.

          (xi)   The Buyer shall not be obligated to enter into more than two
     Transactions per Business Day.

10.  RELEASE OF PURCHASED ASSETS
     ---------------------------

     Upon timely payment in full of the Repurchase Price and all other
Obligations that relate to and are owed with respect to a Purchased Asset, if no
Default or Event of Default has occurred and is continuing, Buyer shall, and
shall direct Custodian to, release such Purchased Asset unless such release
would give rise to or perpetuate a Margin Deficit. Except as set forth in
Sections 6(a) and 16, Seller shall give at least one (1) Business Day's prior
written notice to Buyer if such repurchase shall occur on other than a
Repurchase Date set forth in Section 3(b).

     If such a Margin Deficit is applicable, Buyer shall notify Seller of the
amount thereof and Seller may thereupon satisfy the Margin Call in the manner
specified in Section 6.

11.  RELIANCE
     --------

     With respect to any Transaction, Buyer may conclusively rely upon, and
shall incur no liability to Seller or Guarantors in acting upon, any request or
other communication that Buyer reasonably believes to have been given or made by
a person authorized to enter into a Transaction on Seller's or a Guarantor's
behalf.



12.  REPRESENTATIONS AND WARRANTIES
     ------------------------------

     Each of the Seller and each Guarantor hereby represents and warrants, and
shall on and as of the Purchase Date for any Transaction and on and as of each
date thereafter through and including the related Repurchase Date be deemed to
represent and warrant, that:

     a.   Due Organization and Qualification. Each of the Seller and each
          ----------------------------------
Guarantor is duly organized, validly existing and in good standing under the
laws of the jurisdiction under whose laws it is organized. Each of the Seller
and each Guarantor is duly qualified to do business, is in good standing and has
obtained all necessary licenses, permits, charters, registrations and approvals
necessary for the conduct of its business as currently conducted and the
performance of its obligations under the Program Documents or any failure to
obtain such a license, permit, charter, registration or approval will not cause
a Material Adverse Effect or impair the enforceability of any Loan.

     b.   Power and Authority. Each of the Seller and each Guarantor has all
          -------------------
necessary power and authority to conduct its business as currently conducted, to
execute, deliver and perform its obligations under the Program Documents and to
consummate the Transactions.

     c.   Due Authorization. The execution, delivery and performance of the
          -----------------
Program Documents by each of the Seller and each Guarantor have been duly
authorized by all necessary action and do not require any additional approvals
or consents or other action by or any notice to or filing with any Person other
than any that have heretofore been obtained, given or made.

     d.   Noncontravention. None of the execution and delivery of the Program
          ----------------
Documents by Seller or either Guarantor or the consummation of the Transactions
and transactions thereunder:

               i)   conflicts with, breaches or violates any provision of any
          material agreements of Seller or a Guarantor or in any material
          respect any law, rule, regulation, order, writ, judgment, injunction,
          decree, determination or award currently in effect having
          applicability to Seller or either Guarantor or its properties;

               ii)  constitutes a material default by Seller or a Guarantor
          under any loan or repurchase agreement, mortgage, indenture or other
          agreement or instrument to which Seller or a Guarantor is a party or
          by which it or any of its properties is or may be bound or affected;
          or

               iii) results in or requires the creation of any lien upon or in
          respect of any of the assets of Seller or a Guarantor except the lien
          relating to the Program Documents.

     e.   Legal Proceeding. Except as otherwise disclosed in the financial
          ----------------
statements of NCFC, there is no action, proceeding or investigation by or before
any court, governmental or administrative agency or arbitrator affecting any of
the Purchased Assets, Seller, a Guarantor or



any of their Affiliates, pending or threatened, which has a reasonable
likelihood of having a Material Adverse Effect.

     f.   Valid and Binding Obligations. Each of the Program Documents to which
          -----------------------------
the Seller or a Guarantor is a party, when executed and delivered by such Seller
or Guarantor, will constitute the legal, valid and binding obligations of such
Seller or Guarantor, enforceable against such Seller or Guarantor, in accordance
with their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equitable principles.

     g.   Financial Statements. The financial statements of Guarantors, copies
          --------------------
of which have been furnished to Buyer, (i) are, as of the dates and for the
periods referred to therein, complete and correct in all material respects, (ii)
present fairly the financial condition and results of operations of each
Guarantor as of the dates and for the periods indicated and (iii) have been
prepared in accordance with GAAP consistently applied, except as noted therein
(subject as to interim statements to normal year-end adjustments). Since the
date of the most recent financial statements, there has been no Material Adverse
Change with respect to either Guarantor. Except as disclosed in such financial
statements, neither Guarantor is subject to any contingent liabilities or
commitments that, individually or in the aggregate, have a reasonably likelihood
of causing a Material Adverse Change with respect to either Guarantor.

     h.   Accuracy of Information. None of the documents or information prepared
          -----------------------
by or on behalf of Seller or a Guarantor and provided by Seller or a Guarantor
to Buyer relating to Seller's or a Guarantor's financial condition contain any
statement of a material fact with respect to Seller or Guarantors or the
Transactions that was untrue or misleading in any material respect when made.
Since the furnishing of such documents or information, there has been no change,
nor any development or event involving a prospective change known to Seller or
either Guarantor, that would render any of such documents or information untrue
or misleading in any material respect.

     i.   No Consents. No consent, license, approval or authorization from, or
          -----------
registration, filing or declaration with, any regulatory body, administrative
agency, or other governmental, instrumentality, nor any consent, approval,
waiver or notification of any creditor, lessor or other non-governmental person,
is required in connection with the execution, delivery and performance by Seller
or either Guarantor of this Agreement or the consummation by Seller or either
Guarantor of any other Program Document, other than any that have heretofore
been obtained, given or made.

     j.   Compliance With Law. Etc. No practice, procedure or policy employed or
          -------------------
proposed to be employed by Seller or either Guarantor in the conduct of its
businesses violates any law, regulation, judgment, regulatory consent, order or
decree applicable to it which, if enforced, would result in either a Material
Adverse Change with respect to Seller or either Guarantor or a Material Adverse
Effect.

     k.   Solvency: Fraudulent Conveyance. Each of the Seller and each Guarantor
          -------------------------------
is solvent and will not be rendered insolvent by the Transaction and, after
giving effect to such Transaction, neither Seller nor either Guarantor will be
left with an unreasonably small amount



of capital with which to engage in its business. Neither Seller nor a Guarantor
intends to incur, nor believes that it has incurred, debts beyond its ability to
pay such debts as they mature. Neither Seller nor a Guarantor is contemplating
the commencement of insolvency, bankruptcy, liquidation or consolidation
proceedings or the appointment of a receiver, liquidator, conservator, trustee
or similar official in respect of Seller or either Guarantor or any of their
assets. The amount of consideration being received by Seller upon the sale of
the Purchased Assets to Buyer constitutes reasonably equivalent value and fair
consideration for such Purchased Assets. Seller is not transferring any
Purchased Assets with any intent to hinder, delay or defraud any of its
creditors. The amount of consideration being received by NCMC upon the sale
and/or contribution of the Purchased Assets to Seller, respectively, constitutes
reasonably equivalent value and fair consideration for such Purchased Assets.
Neither Guarantor is transferring any Purchased Assets with any intent to
hinder, delay or defraud any of its creditors.

         l. Investment Company Act Compliance. Seller is not required to be
            ---------------------------------
registered as an "investment company" as defined under the Investment Company
Act nor as an entity under the control of an "investment company" as defined
under the Investment Company Act.

         m. Taxes. Each of the Seller and each Guarantor has filed all federal
            -----
and state tax returns which are required to be filed and paid all taxes,
including any assessments received by it, to the extent that such taxes have
become due (other than for taxes that are being contested in good faith or for
which it has established adequate reserves). Any taxes, fees and other
governmental charges payable by Seller or a Guarantor in connection with a
Transaction and the execution and delivery of the Program Documents have been
paid.

         n. Additional Representations. With respect to each Loan, Seller and
            --------------------------
Guarantors, jointly and severally, hereby make all of the applicable
representations and warranties set forth in Appendix A to the Custody Agreement
as of the date the Loan File or Wet Funding Package, as applicable, is delivered
to the Custodian. Further, as of each Purchase Date, the Seller and the
Guarantors shall be deemed to have represented and warranted in like manner that
neither the Seller nor either Guarantor has any knowledge that any such
representation or warranty may have ceased to be true in a material respect as
of such date, except as otherwise stated in a Transaction Notice, any such
exception to identify the applicable representation or warranty and specify in
reasonable detail the related knowledge of the Seller or either Guarantor.

         o. No Broker. Neither Seller nor a Guarantor has dealt with any broker,
            ---------
investment banker, agent, or other person, except for Buyer, who may be entitled
to any commission or compensation in connection with the sale of Purchased
Assets pursuant to this Agreement; provided, that if Seller or either Guarantor
has dealt with any broker, investment banker, agent, or other person, except for
Buyer, who may be entitled to any commission or compensation in connection with
the sale of Purchased Assets pursuant to this Agreement, such commission or
compensation shall have been paid in full by Seller or a Guarantor, as
applicable.

         p. Corporate Separateness.
            ----------------------

            (i) The capital of Seller and Guarantors is adequate for the
respective business and undertakings of Seller and Guarantors.




                  (ii) Other than as provided in this Agreement and the other
         Program Documents, Seller is not engaged in any business transactions
         with either Guarantor or any of their Affiliates other than
         transactions in the ordinary course of its business on an "arms-length"
         basis.

                  (iii) The funds and assets of the Seller are not and will not
         be, commingled with the funds of any other Person.

         The representations and warranties set forth in this Agreement shall
survive transfer of the Purchased Assets to Buyer and shall continue for so long
as the Purchased Assets are subject to this Agreement.

13.      COVENANTS OF SELLER AND GUARANTOR
         ---------------------------------

         Each of Seller and each Guarantor, as applicable, hereby covenants with
Buyer as follows:

         a. Defense of Title. Each of Seller and each Guarantor warrants and
            ----------------
will defend the right, title and interest of Buyer in and to all Collateral
against all adverse claims and demands.

         b. No Amendment or Compromise. Following an Event of Default, without
            --------------------------
the prior written consent of the Buyer, neither Seller, either Guarantor nor
those acting on Seller's or either Guarantor's behalf shall amend or modify, or
waive any term or condition of, or settle or compromise any claim in respect of,
any item of the Purchased Assets, any related rights or any of the Program
Documents, provided that any such party may amend or modify a Loan if such
amendment or modification does not affect the amount or timing of any payment of
principal or interest, extend its scheduled maturity date, modify its interest
rate, or constitute a cancellation or discharge of its outstanding principal
balance and does not materially and adversely affect the security afforded by
the real property, finishings, fixtures, or equipment securing the Loan.

         c. No Assignment. Except as permitted herein, neither Seller, NCMC nor
            -------------
any servicer shall sell, assign, transfer or otherwise dispose of, or grant any
option with respect to, or pledge, hypothecate or grant a security interest in
or lien on or otherwise encumber (except pursuant to the Program Documents), any
of the Purchased Assets or any interest therein, provided that this Section
shall not prevent any of the following: any transfer of Purchased Assets in
accordance with the Program Documents; any Hedging Instruments for the related
Purchased Assets; any servicing arrangement between the Interim Servicer and
Seller or its Affiliates; and any forward purchase commitment or other types of
take out commitment for the Purchased Assets.

         d. Servicing of Loans. Seller and each Guarantor shall cause Interim
            ------------------
Servicer to service, or cause to be serviced, all Loans that are part of the
Purchased Assets in accordance with prudent servicing practices, pending any
delivery of such servicing to Buyer pursuant to this Agreement, employing at
least the same procedures and exercising the same care that Interim Servicer
customarily employs in servicing Loans for its own account. Seller shall notify
servicers of Buyer's interest hereunder and Seller shall notify Buyer of the
name and address of all servicers of Loans and shall identify each servicer with
respect to each Purchased Asset on a



loan-by-loan basis. Buyer shall have the right to approve each servicer and the
form of all Servicing Agreements or servicing side letter agreements. Seller
shall cause each servicer to hold or cause to be held all escrow funds collected
with respect to such Loans in customary custodial accounts and shall apply the
same for the purposes for which such funds were collected. Upon Buyer's request,
Seller shall provide reasonably promptly to Buyer a letter addressed to and
agreed to by each servicer of Loans, in form and substance reasonably
satisfactory to Buyer, advising such servicer of such matters as Buyer may
reasonably request relating to the Loans. If Seller should discover that, for
any reason whatsoever, Seller or any entity responsible to Seller by contract
for the administration and/or servicing any such Loan has failed to perform
fully Seller's obligations under the Program Documents or any of the obligations
of such entities with respect to the Purchased Assets, Seller shall promptly
notify Buyer.

         e. Preservation of Collateral: Collateral Value. Each of Seller and
            --------------------------------------------
each Guarantor shall do all things necessary to preserve the Collateral so that
it remains subject to a first priority perfected security interest hereunder.
Without limiting the foregoing, Seller and each Guarantor will comply with all
rules, regulations and other laws of any Governmental Authority and cause the
Collateral to comply with all applicable rules, regulations and other laws.
Neither Seller nor a Guarantor will allow any default by Seller or either
Guarantor to occur under any Collateral or any Program Documents and Seller and
each Guarantor shall fully perform or cause to be performed when due all of its
obligations under any Collateral or the Program Documents.

         f. Maintenance of Papers, Records and Files. Seller and each Guarantor
            ----------------------------------------
shall require, and Seller or either Guarantor shall build, maintain and have
available, a complete file in accordance with lending industry custom and
practice for each Purchased Asset. Seller or either Guarantor will maintain or
cause to be maintained all such Records not in the possession of Custodian in
good and complete condition in accordance with industry practices and preserve
them against loss.

                  i)   Seller and each Guarantor shall collect and maintain or
         cause to be collected and maintained all Records relating to the
         Purchased Assets in accordance with industry custom and practice,
         including those maintained pursuant to the preceding subsection, and
         all such Records shall be in the possession of the Custodian, the
         Interim Servicer, the Seller or a Guarantor unless Buyer otherwise
         approves. Neither Seller nor a Guarantor will allow any such papers,
         records or files that are an original or an only copy to leave
         Custodian's possession, except for individual items removed in
         connection with servicing a specific Loan, in which event Seller or a
         Guarantor will obtain or cause to be obtained a receipt from a
         financially responsible person for any such paper, record or file.

                  ii)  For so long as Buyer has an interest in or lien on any
         Purchased Asset, Seller and each Guarantor will hold or cause to be
         held all related Records in trust, as the custodian and bailee, for
         Buyer. Seller or Guarantor shall notify, or cause to be notified, every
         other party holding any such Records of the interests and liens granted
         hereby.

                  iii) Upon reasonable advance notice from Custodian or Buyer,
         Seller and each Guarantor shall (x) make any and all such Records
         available to Custodian or Buyer to examine any such Records, either by
         its own officers or employees, or by agents or contractors, or both,
         and make copies of all or any portion thereof, (y) permit Buyer or its



         authorized agents to discuss the affairs, finances and accounts of
         Seller or either Guarantor with its respective chief operating officer
         and chief financial officer and to discuss the affairs, finances and
         accounts of Seller or either Guarantor with its independent certified
         public accountants.

         g.       Financial Statements: Accountants' Reports: Other Information.
                  --------------------
Seller and each Guarantor shall keep or cause to be kept in reasonable detail
books and records of account of its assets and business and shall clearly
reflect therein the transfer of Purchased Assets to Buyer. Seller and Guarantors
shall furnish or cause to be furnished to Buyer the following:

                  i)   Financial Statements. (x) As soon as available and in any
                       --------------------
         event within 90 days after the end of each fiscal year, the
         consolidated, audited balance sheets of NCFC, Guarantors and Seller as
         of the end of each fiscal year of NCFC (inclusive of NCMC and Seller),
         and the audited financial statements of income and changes in equity of
         Guarantors and Seller, and the audited statement of cash flows of NCFC
         (inclusive of NCMC and Seller), for such fiscal year and (y) as soon as
         available and in any event within 45 days after the end of each quarter
         (including the fourth quarter), the consolidated and consolidating,
         unaudited balance sheets of NCFC (inclusive of NCMC and Seller) as of
         the end of each quarter, and the unaudited financial statements of
         income and changes in equity of NCFC (inclusive of NCMC and Seller),
         and the unaudited statement of cash flows of NCFC (inclusive of NCMC
         and Seller), for the portion of the fiscal year then ended, and (z)
         within 45 days after the end of each month, monthly consolidated and
         unaudited financial statements of income and changes in equity (and, to
         the extent available, cash flow statements) and balance sheets as
         provided in clause (y), all of which have been prepared in accordance
         with GAAP and certified by such NCFC's, Guarantor's and Seller's, as
         applicable, chief financial officer in the form of a compliance
         certificate to be delivered along with the above financial statements.

                  ii)  Loan Data. Monthly reports in form and scope satisfactory
                       ---------
         to Buyer, setting forth data regarding the performance of the Purchased
         Assets for the immediately preceding month, and such other information
         as Buyer may reasonably request, including, without limitation, any
         other information regarding the Purchased Assets reasonably requested
         by Buyer, the performance of any loans serviced by or on behalf of each
         Interim Servicer and any other financial information regarding the
         Guarantors reasonably requested by Buyer.

                  iii) Monthly Servicing Diskettes. On or before the second
                       ---------------------------
         Business Day prior to each Repurchase Date, or any other time at
         Buyer's request, a Computer Medium (or any other electronic
         transmission acceptable to Buyer) in a format acceptable to Buyer
         containing such information with respect to the Purchased Assets as
         Buyer may reasonably request upon reasonable prior notice.

                  iv)  Certifications. NCMC shall execute and deliver, on behalf
                       --------------
         of the Seller, a monthly certification substantially in the form of
         Exhibit A-1 attached hereto and each Guarantor shall execute and
         deliver a quarterly certification substantially in the form of Exhibit
         A-2 attached hereto.



         h.       Notice of Material Events. Each of Seller and each Guarantor
                  -------------------------
shall promptly inform Buyer in writing of any of the following:

                  i)   any Default, Event of Default or default or breach by
         Seller or either Guarantor of any other material obligation under any
         Program Document, or the occurrence or existence of any event or
         circumstance that Seller or either Guarantor with the passage of time
         expects to have a reasonably likelihood of becoming an Event of
         Default;

                  ii)  any material change in the insurance coverage required of
         Seller or either Guarantor or any other Person pursuant to any Program
         Document, with copy of evidence of same attached;

                  iii) any material dispute, litigation, investigation,
         proceeding or suspension between Seller or a Guarantor, on the one
         hand, and any Governmental Authority or any other Person;

                  iv)  any material adverse change in accounting policies or
         financial reporting practices of Seller or a Guarantor;

                  v)   the occurrence of any material employment dispute and a
         description of the strategy for resolving it; and

                  vi)  any event, circumstance or condition that has resulted,

         or has a reasonably likelihood of resulting, in either a Material
         Adverse Change with respect to Seller or a Guarantor or a Material
         Adverse Effect.

         i.       Maintenance of Licenses. Each of Seller and each Guarantor
                  -----------------------
shall maintain, all licenses, permits or other approvals necessary for each of
Seller and each Guarantor to conduct its business and to perform its obligations
under the Program Documents, and each of Seller and each Guarantor shall conduct
its business strictly in accordance with applicable law.

         j.       No Withholdings for Taxes. Any payments made by Seller to
                  -------------------------
Buyer shall be free and clear of, and without deduction or withholding for, any
taxes; provided, however, that if Seller shall be required by law to deduct or
withhold any taxes from any sums payable to Buyer, then Seller shall (A) make
such deductions or withholdings and pay such amounts to the relevant authority
in accordance with applicable law, (B) pay to Buyer the sum that would have been
payable had such deduction or withholding not been made, and (C) at the time the
Price Differential is paid, pay to Buyer all additional amounts as specified by
Buyer to preserve the after-tax yield Buyer would have received if such tax had
not been imposed. This provision does not apply to income taxes payable by Buyer
on its taxable income.

         k.       Nature of Business. Neither Seller nor a Guarantor shall make
                  ------------------
any material change in the nature of its business as carried on at the date
hereof.

         l.       Limitation on Distributions. If a Default has occurred and is
                  ---------------------------
occurring, neither Seller nor either Guarantor shall pay any dividends or
distributions with respect to any capital stock or other equity interests in
Seller or either Guarantor, whether now or hereafter



outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of Seller or either
Guarantor.

         m.       Reserved.
                  --------

         n.       Merger of Guarantor. Neither Guarantor shall at any time,
                  -------------------
directly or indirectly, (i) liquidate or dissolve or enter into any
consolidation or merger or be subject to a Change in Control without Buyer's
prior consent; (ii) form or enter into any partnership, joint venture, syndicate
or other combination which would have a Material Adverse Effect; or (iii) make
any Material Adverse Change with respect to a Guarantor or such Guarantor's
Subsidiaries.

         o.       Insurance. Seller will, and shall cause the Interim Servicer
                  ---------
to, obtain and maintain insurance with responsible companies in such amounts and
against such risks as are customarily carried by business entities engaged in
similar businesses similarly situated, and will furnish Buyer on request full
information as to all such insurance, and provide within (15) days after receipt
of such request the certificates or other documents evidencing renewal of each
such policy.

         p.       Affiliate Transaction. Neither Seller nor a Guarantor will at
                  ---------------------
any time, directly or indirectly, sell, lease or otherwise transfer any property
or assets to, or otherwise acquire any property or assets from, or otherwise
engage in any transactions with, any of their Affiliates unless the terms
thereof are no less favorable to such Seller or Guarantor, as applicable, than
those that could be obtained at the time of such transaction in an arm's length
transaction with a Person who is not such an Affiliate.

         q.       Change of Fiscal Year. Neither Seller nor a Guarantor will at
                  ---------------------
any time, directly or indirectly, except upon ninety (90) days' prior written
notice to Buyer, change the date on which such Seller's or Guarantor's fiscal
year begins from such Seller's or Guarantor's current fiscal year beginning
date.

         r.       Delivering of Servicing Rights. With respect to the Servicing
                  ------------------------------
Rights of each Loan, Seller and Guarantors shall deliver such Servicing Rights
to the designee of Buyer, within 75 days of a Purchase Date, unless otherwise
stated in writing by Buyer; provided that on each Repurchase Date that is
subject to a new Transaction, such delivery requirement is deemed restated for
such new Transaction (and the immediately preceding delivery requirement is
deemed to be rescinded) in the absence of directions to the contrary from Buyer,
and a new 75-day period is deemed to commence as of such Repurchase Date. The
Seller's and Guarantors' transfer of the Servicing Rights under this Section
shall be in accordance with customary standards in the industry.

         s.       Underwriting Guidelines. NCMC shall not permit any material
                  -----------------------
modifications to be made to the Underwriting Guidelines without the prior
consent of the Buyer (such consent not to be unreasonably withheld).

         t.       No Other Indebtedness. Without the prior written consent of
                  ---------------------
the Buyer, the Seller shall not incur any Indebtedness or guaranty the
Indebtedness of any other Person other than the Indebtedness incurred under the
Program Documents.



         u. Facility Fee. Seller agrees to pay to Buyer on the date of execution
            ------------
of this Agreement, a facility fee in the amount of the Facility Fee Amount, such
payment to be made in United States dollars, in immediately available funds,
without deduction, set-off or counterclaim. The Buyer may, in its sole
discretion, net such commitment fee from the proceeds of any Purchase Price
payable to the Seller.

14.      REPURCHASE DATE PAYMENTS/COLLECTIONS
         ------------------------------------

         On each Repurchase Date, Seller shall remit or shall cause to be
remitted to Buyer the Repurchase Price.

15.      REPURCHASE OF PURCHASED ASSETS, CHANGE OF LAW
         ---------------------------------------------

         a. Upon discovery by Seller or a Guarantor of a breach of any of the
representations and warranties set forth in Appendix A to the Custody Agreement,
Seller or a Guarantor shall give prompt written notice thereof to Buyer. Upon
any such discovery by Buyer, Buyer will notify Seller. It is understood and
agreed that the representations and warranties set forth in Appendix A to the
Custody Agreement shall survive delivery of the respective Loan Files to the
Custodian and shall inure to the benefit of Buyer. The fact that Buyer has
conducted or has failed to conduct any partial or complete due diligence
investigation in connection with its purchase of any Purchased Asset shall not
affect Buyer's right to demand repurchase as provided under this Agreement. The
Seller shall within two (2) Business Days of the earlier of the Seller's or a
Guarantor's discovery or either Seller or a Guarantor receiving notice, with
respect to any Purchased Asset, of (i) any breach of a representation or
warranty contained in Appendix A to the Custody Agreement or (ii) any failure to
deliver any of the items required to be delivered as part of the Loan File
within the time period required for delivery pursuant to the Custody Agreement,
promptly cure such breach or delivery failure in all material respects. If
within two (2) Business Days after the earlier of Seller's or a Guarantor's
discovery of such breach or delivery failure or Seller or a Guarantor receiving
notice thereof that such breach or delivery failure has not been remedied by the
Seller, the Seller shall promptly upon receipt of written instructions from
Buyer, at Buyer's option, either (i) purchase such Purchased Asset at a purchase
price equal to the Repurchase Price with respect to such Purchased Asset by wire
transfer to the account designated by Buyer, or (ii) transfer comparable
Substitute Assets to Buyer, as provided in Section 16 hereof.

         b. If Buyer determines that the introduction of, any change in, or the
interpretation or administration of any requirement of law has made it unlawful
or commercially impracticable to engage in any Transactions with a Pricing Rate
based on LIBOR, then Seller (i) shall, upon its receipt of notice of such fact
and demand from Buyer (with a copy of such notice to Custodian), repurchase the
Purchased Assets subject to the Transaction on the next succeeding Business Day
and, at Seller's election, concurrently enter into a new Transaction with Buyer
with a Pricing Rate based on the Prime Rate plus the margin set forth in the
Side Letter as part of the Pricing Rate and (ii) may elect, by giving notice to
Buyer and Custodian, that all new Transactions shall have Pricing Rates based on
the Prime Rate plus such margin.



         c. If Buyer determines in its sole discretion that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on Buyer's capital or on the capital of any Affiliate of Buyer as a
consequence of such Change in Law on this Agreement, then from time to time
Seller will compensate Buyer or Buyer's Affiliate, as applicable, for such
reduced rate of return suffered as a consequence of such Change in Law on terms
similar to those imposed by Buyer on its other similarly affected customers.
Buyer shall provide Seller with prompt notice as to any Change in Law.
Notwithstanding any other provisions in this Agreement, in the event of any such
Change in Law Seller will have the right to terminate all Transactions then
outstanding without any prepayment penalty as of a date selected by Seller,
which date shall be prior to the then applicable Repurchase Date and which date
shall thereafter for all purposes hereof be deemed to be the Repurchase Date.

16.      SUBSTITUTION
         ------------

         Seller may, subject to agreement with and acceptance by Buyer,
substitute other assets which are substantially the same as the Purchased Assets
(the "Substitute Assets") for any Purchased Assets. Such substitution shall be
made by transfer to Buyer of such other Substitute Assets and transfer to Seller
of such Purchased Assets. After substitution, the Substitute Assets shall be
deemed to be Purchased Assets.

17.      REPURCHASE TRANSACTIONS
         -----------------------

         Buyer may, in its sole election, engage in repurchase transactions with
the Purchased Assets or otherwise pledge, hypothecate, assign, transfer or
otherwise convey the Purchased Assets with a counterparty of Buyer's choice, in
all cases subject to Buyer's obligation to reconvey the Purchased Assets (and
not substitutes therefor) on the Repurchase Date. In the event Buyer engages in
a repurchase transaction with any of the Purchased Assets or otherwise pledges
or hypothecates any of the Purchased Assets, Buyer shall have the right to
assign to Buyer's counterparty any of the applicable representations or
warranties in Appendix A to the Custody Agreement and the remedies for breach
thereof, as they relate to the Purchased Assets that are subject to such
repurchase transaction.

18.      EVENTS OF DEFAULT
         -----------------

         With respect to any Transactions covered by or related to this
Agreement, the occurrence of any of the following events shall constitute an
"Event of Default":

         a. Seller fails to transfer the Purchased Assets to Buyer on the
applicable Purchase Date (provided Buyer has tendered the related Purchase
Price);

         b. Seller either fails to repurchase the Purchased Assets on the
applicable Repurchase Date or fails to perform its obligations under Section 6;

         c. either Seller or a Guarantor shall fail to perform, observe or
comply with any other material term, covenant or agreement contained in the
Program Documents (other than Appendix A to the Custody Agreement) and such
failure is not cured within the time period expressly provided or, if no such
cure period is provided, within two (2) Business Days of the



earlier of (i) such party's receipt of written notice from Buyer or Custodian of
such breach or (ii) the date on which such party obtains notice or knowledge of
the facts giving rise to such breach;

         d. any representation or warranty made by Seller or a Guarantor (or any
of Seller's or a Guarantor's officers) in the Program Documents or in any other
document delivered in connection therewith (other than the representations or
warranties in Appendix A to the Custody Agreement) shall have been incorrect or
untrue in any material respect when made or repeated or deemed to have been made
or repeated;

         e. Seller, a Guarantor, or any of Seller's or a Guarantor's
Subsidiaries shall fail (i) to pay any of Seller's, a Guarantor's or Seller's or
a Guarantor's Subsidiaries' Indebtedness (aggregating in excess of $2,500,000
with respect to a Guarantor or a Guarantor and its Subsidiaries, taken as a
whole), or any interest or premium thereon when due (whether by scheduled
maturity, requirement prepayment, acceleration, demand or otherwise), or (ii) to
make any payment when due under Seller's, a Guarantor's or Seller's or a
Guarantor's Subsidiaries' Guarantee of another person's Indebtedness for
borrowed money, and, in either case, such failure shall entitle any related
counterparty to declare any such Indebtedness or Guarantee to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;

         f. a custodian, receiver, conservator, liquidator, trustee,
sequestrator or similar official for Seller, a Guarantor or any of Seller's or a
Guarantor's Subsidiaries, or of any of Seller's, a Guarantor's or their
respective Property (as a debtor or creditor protection procedure), is appointed
or takes possession of such property; or Seller, a Guarantor or any of Seller's
or a Guarantor's Subsidiaries generally fails to pay Seller's, a Guarantor's or
Seller's or a Guarantor's Subsidiaries' debts as they become due; or Seller, a
Guarantor or any of Seller's or a Guarantor's Subsidiaries is adjudicated
bankrupt or insolvent; or an order for relief is entered under the Federal
Bankruptcy Code, or any successor or similar applicable statute, or any
administrative insolvency scheme, against Seller, a Guarantor or any of Seller's
or a Guarantor's Subsidiaries; or any of Seller's, a Guarantor's or Seller's or
a Guarantor's Subsidiaries' Property is sequestered by court or administrative
order; or a petition is filed against Seller, a Guarantor or any of Seller's or
a Guarantor's Subsidiaries under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, moratorium, delinquency or
liquidation law of any jurisdiction, whether now or subsequently in effect;

         g. Seller, a Guarantor or any of Seller's or a Guarantor's Subsidiaries
files a voluntary petition in bankruptcy seeks relief under any provision of any
bankruptcy, reorganization, moratorium, delinquency, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction whether
now or subsequently in effect; or consents to the filing of any petition against
it under any such law; or consents to the appointment of or taking possession by
a custodian, receiver, conservator, trustee, liquidator, sequestrator or similar
official for Seller, a Guarantor or any of Seller's or a Guarantor's
Subsidiaries, or of all or any part of Seller's, a Guarantor's or Seller's or a
Guarantor's Subsidiaries' Property; or makes an assignment for the benefit of
Seller, a Guarantor or Seller's or a Guarantor's Subsidiaries' creditors;

         h. any final, nonappealable judgment or order for the payment of money
in excess of $2,500,000 is rendered against Seller, a Guarantor or any of
Seller's or a Guarantor's



Subsidiaries and remains undischarged or unsatisfied after the passage of 30
days following the date on which it is entered;

         i. any Governmental Authority or any person, agency or entity acting or
purporting to act under governmental authority shall have taken any action to
condemn, seize or appropriate, or to assume custody or control of, all or any
substantial part of the Property of Seller, a Guarantor or any of Seller's or a
Guarantor's Subsidiaries, or shall have taken any action to displace the
management of Seller, a Guarantor or any of Seller's or a Guarantor's
Subsidiaries or to curtail its authority in the conduct of the business of
Seller, a Guarantor or any of Seller's or a Guarantor's Subsidiaries, or takes
any action in the nature of enforcement to remove, limit or restrict the
approval of Seller, a Guarantor or any of Seller's or a Guarantor's Subsidiaries
as an issuer, buyer or a seller/servicer of Loans or securities backed thereby;

         j. Seller, a Guarantor or any of Seller's or a Guarantor's Subsidiaries
shall default under, or fail to perform as requested under, or shall otherwise
breach the material terms of any instrument, agreement or contract relating to
Indebtedness (aggregating in excess of $2,500,000 with respect to a Guarantor or
a Guarantor and its Subsidiaries, taken as a whole), and such default, failure
or breach shall entitle any counterparty to declare such Indebtedness to be due
and payable prior to the maturity thereof;

         k. in the reasonable good faith judgment of Buyer any Material Adverse
Change shall have occurred with respect to Seller, a Guarantor or any of
Seller's or a Guarantor's Subsidiaries taken as a whole;

         l. Seller or a Guarantor shall admit in writing its inability to, or
intention not to, perform any of such Seller's or a Guarantor's respective
material Obligations;

         m. except as expressly permitted in this Agreement, Seller or a
Guarantor dissolves, merges or consolidates with another entity, or sells,
transfers, or otherwise disposes of a material portion of such Seller's or a
Guarantor's (as applicable) business or assets unless Buyer's written consent is
given;

         n. this Agreement shall for any reason cease to create a valid, first
priority security interest or ownership interest upon transfer in any material
portion of the Purchased Assets or Collateral purported to be covered hereby;

         o. either Seller's or a Guarantor's audited annual financial statements
or the notes thereto or other opinions or conclusions stated therein shall be
qualified or limited by reference to the status of such Seller or a Guarantor as
a "going concern" or a reference of similar import;

         p. a Change in Control of Seller or a Guarantor shall have occurred
which has not been approved by Buyer;

         q. at the end of any financial quarter, the ratio of NCMC's Total
Liabilities to Adjusted Tangible Net Worth is greater than 10:1; or at the end
of any financial quarter, the ratio of NCFC's Total Liabilities to Adjusted
Tangible Net Worth is greater than 10:1; or at the end of any financial quarter,
the ratio of NCFC's Total Adjusted Liabilities to Adjusted Tangible Net Worth is
greater than 12:1;



         r. at the end of any financial quarter, the Adjusted Tangible Net Worth
of NCMC is less than the sum of (i) 85% of its Adjusted Tangible Net Worth as of
December 31, 2001, plus (ii) 90% of all capital contributions following December
                   ----
31, 2001, plus (iii) 50% of its positive net income December 31, 2001; or at the
          ----
end of any financial quarter, the Adjusted Tangible Net Worth of NCFC is less
than the sum of (i) 85% of its Adjusted Tangible Net Worth as of December 31,
2001, plus (ii) 90% of all capital contributions following December 31, 2001,
      ----
plus (iii) 50% of its positive net income December 31, 2001;
- ----

         s. at the end of any month, NCMC fails to maintain at least $30,000,000
of Liquid Assets;

         t. at the end of any financial quarter, the ratio of NCFC's Total
Non-warehouse Debt to Adjusted Tangible Net Worth is greater than 0.50:1.0;

         u. at the end of any financial quarter, the net income of NCFC
(determined in accordance with GAAP) over the four most recent financial
quarters from any date of determination is less than $1; and v. at the end of
any financial quarter, the Interest Coverage Ratio of NCFC is less than 1.25;
and

         w. any material amendment is made to the Underwriting Guidelines
which was not previously approved in writing by Buyer.

         It is understood and agreed that any default, cure or notice period
provided for in the Program Documents may be accelerated by Buyer unilaterally
upon Buyer's or Agent's reasonable determination that it is reasonable to do so
under the circumstances, with due consideration to the volatility of markets,
the seriousness of any Defaults and the perceived risk to Buyer of delay.

19.      REMEDIES
         --------

         Upon the occurrence of an Event of Default, Buyer, at its option (which
option shall be deemed to have been exercised immediately upon the occurrence of
an Event of Default pursuant to Section 18(f) or (g) hereof), shall have any or
all of the following rights and remedies, which may be exercised by Buyer:

         a. The Repurchase Date for each Transaction hereunder shall be deemed
immediately to occur.

         b. Seller's obligations hereunder to repurchase all Purchased Assets at
the Repurchase Price therefor on the Repurchase Date in such Transactions shall
thereupon become immediately due and payable; all Income paid after such
exercise or deemed exercise shall be remitted to and retained by Buyer and
applied to the aggregate Repurchase Prices and any other amounts owing by Seller
hereunder; Seller and Guarantors shall immediately deliver to Buyer or its
designee any and all Records relating to the Purchased Assets subject to such
Transaction



then in Seller's and Guarantor's possession and/or control; and all right, title
and interest in and entitlement to such Purchased Assets and Servicing Rights
thereon shall be deemed transferred to Buyer.

         Buyer may (A) sell, on or following the Business Day following the date
on which the Repurchase Price became due and payable pursuant to Section 19(b)
without notice or demand of any kind, at a public or private sale and at such
price or prices as Buyer may reasonably deem satisfactory any or all Purchased
Assets or (B) in its sole discretion elect, in lieu of selling all or a portion
of such Purchased Assets, to give Seller credit for such Purchased Assets in an
amount equal to the Market Value of the Purchased Assets against the aggregate
unpaid Repurchase Price and any other amounts owing by Seller hereunder. The
Seller shall remain liable to the Buyer for any amounts that remain owing to
Buyer following a sale or credit under the preceding sentence. The proceeds of
any disposition of Purchased Assets shall be applied first to the reasonable
costs and expenses incurred by Buyer in connection with or as a result of an
Event of Default; second to Breakage Costs, costs of cover and/or related
hedging transactions; third to the aggregate Repurchase Prices; and fourth to
all other Obligations.

         The parties recognize that it may not be possible to purchase or sell
all of the Purchased Assets on a particular Business Day, or in a transaction
with the same purchaser, or in the same manner because the market for such
Purchased Assets may not be liquid. In view of the nature of the Purchased
Assets, the parties agree that liquidation of a Transaction or the underlying
Purchased Assets does not require a public purchase or sale and that a good
faith private purchase or sale shall be deemed to have been made in a
commercially reasonable manner. Accordingly, Buyer may elect the time and manner
of liquidating any Purchased Asset and nothing contained herein shall obligate
Buyer to liquidate any Purchased Asset on the occurrence of an Event of Default
or to liquidate all Purchased Assets in the same manner or on the same Business
Day or constitute a waiver of any right or remedy of Buyer. Notwithstanding the
foregoing, the parties to this Agreement agree that the Transactions have been
entered into in consideration of and in reliance upon the fact that all
Transactions hereunder constitute a single business and contractual obligation
and that each Transaction has been entered into in consideration of the other
Transactions.

         In addition to its rights hereunder, Buyer shall have the right to
proceed against any of Seller's assets which may be in the possession of Buyer,
any of Buyer's Affiliates or its designee (including the Custodian), including
the right to liquidate such assets and to set-off the proceeds against monies
owed by Seller to Buyer pursuant to this Agreement. Buyer may set off cash, the
proceeds of the liquidation of the Purchased Assets and Additional Purchased
Assets, any other Collateral or its proceeds and all other sums or obligations
owed by Buyer to Seller against all of Seller's Obligations to Buyer, whether
under this Agreement, under a Transaction, or under any other agreement between
the parties, or otherwise, whether or not such Obligations are then due, without
prejudice to Buyer's right to recover any deficiency.

         The Buyer shall have the right to obtain physical possession of the
Records and all other files of the Seller relating to the Purchased Assets and
all documents relating to the Purchased Assets which are then or may thereafter
come into the possession of the Seller or any third party acting for the Seller
and the Seller shall deliver to the Buyer such assignments as the Buyer shall
request.



         Buyer may direct all Persons servicing the Purchased Assets to take
such action with respect to the Purchased Assets as Buyer determines
appropriate.

         Each of Seller and each Guarantor shall cause all sums received by it
with respect to the Purchased Assets to be deposited with Custodian (or such
other Person as Buyer may direct) after receipt thereof.

         Buyer shall without regard to the adequacy of the security for the
Obligations, be entitled to the appointment of a receiver by any court having
jurisdiction, without notice, to take possession of and protect, collect,
manage, liquidate, and sell the Purchased Assets and any other Collateral or any
portion thereof, collect the payments due with respect to the Purchased Assets
and any other Collateral or any portion thereof, and do anything that Buyer is
authorized hereunder to do. Seller shall pay all costs and expenses incurred by
Buyer in connection with the appointment and activities of such receiver.

         Buyer may enforce its rights and remedies hereunder without prior
judicial process or hearing, and Seller hereby expressly waives, to the extent
permitted by law, any right Seller might otherwise have to require Buyer to
enforce its rights by judicial process. Seller also waives, to the extent
permitted by law, any defense Seller might otherwise have to the Obligations,
arising from use of nonjudicial process, enforcement and sale of all or any
portion of the Purchased Assets and any other Collateral or from any other
election of remedies. Seller recognizes that nonjudicial remedies are consistent
with the usages of the trade, are responsive to commercial necessity and are the
result of a bargain at arm's length.

         In addition to all the rights and remedies specifically provided
herein, Buyer shall have all other rights and remedies provided by applicable
federal, state, foreign, and local laws, whether existing at law, in equity or
by statute.

         Upon the occurrence of an Event of Default, Buyer shall have, except as
otherwise expressly provided in this Agreement, the right to exercise any of its
rights and/or remedies without presentment, demand, protest or further notice of
any kind other than as expressly set forth herein, all of which are hereby
expressly waived by Seller.

         Seller hereby authorizes Buyer, at Seller's expense, to file such
financing statement or statements relating to the Purchased Assets and the
Collateral without Seller's signature thereon as Buyer at its option may deem
appropriate, and appoints Buyer as Seller's attorney-in-fact to execute any such
financing statement or statements in Seller's name and to perform all other acts
which Buyer deems appropriate to perfect and continue the lien and security
interest granted hereby and to protect, preserve and realize upon the Purchased
Assets and the Collateral, including, but not limited to, the right to endorse
notes, complete blanks in documents and execute assignments on behalf of Seller
as its attorney-in-fact. This power of attorney is coupled with an interest and
is irrevocable without Buyer's consent.

20.      DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE
         -----------------------------------------



         No failure on the part of Buyer to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by Buyer of any right, power
or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All rights and remedies of Buyer
provided for herein are cumulative and in addition to any and all other rights
and remedies provided by law, the Program Documents and the other instruments
and agreements contemplated hereby and thereby, and are not conditional or
contingent on any attempt by Buyer to exercise any of its rights under any other
related document. Buyer may exercise at any time after the occurrence of an
Event of Default one or more remedies, as it so desires, and may thereafter at
any time and from time to time exercise any other remedy or remedies.

21.      USE OF EMPLOYEE PLAN ASSETS
         ---------------------------

         No assets of an employee benefit plan subject to any provision of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") shall be
used by either party hereto in a Transaction.

22.      INDEMNITY
         ---------

         a. Seller agrees to pay on demand (i) all reasonable out-of-pocket
costs and expenses of Buyer in connection with the preparation, execution,
delivery, modification, administration and amendment of the Program Documents
(including, without limitation, (A) all collateral review and UCC search and
filing fees and expenses and (B) the reasonable fees and expenses of counsel for
Buyer with respect to advising Buyer as to its rights and responsibilities, or
the perfection, protection or preservation of rights or interests, under this
Agreement, with respect to negotiations with Seller or with other creditors of
Seller or any of its Subsidiaries arising out of any-Default or any events or
circumstances that may rise to a Default and with respect to presenting claims
in or otherwise participating in or monitoring any bankruptcy, insolvency or
other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all costs and expenses of Buyer in
connection with the enforcement of this Agreement (including any waivers),
whether in any action, suit or litigation, any bankruptcy, insolvency or other
similar proceeding affecting creditors' rights generally (including, without
limitation, the reasonable fees and expenses of counsel for Buyer) whether or
not the transactions contemplated hereby are consummated.

         b. Seller agrees to indemnify and hold harmless Buyer and each of its
respective Affiliates and their officers, directors, employees, agents and
advisors (each, an "Indemnified Party") from and against (and will reimburse
each Indemnified Party as the same is incurred) any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) that may be incurred by or asserted or awarded against
any Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or other proceeding (whether or not such Indemnified Party is a party
thereto) relating to, resulting from or arising out of any of the Program
Documents and all other documents related thereto, any breach of a
representation or warranty of Seller or a Guarantor or Seller's or a Guarantor's
officer in this Agreement or any other Program Document, and all actions taken
pursuant thereto) (i) the Transactions, the actual or proposed use of the
proceeds of the Transactions, this



Agreement or any of the transactions contemplated thereby, including, without
limitation, any acquisition or proposed acquisition or (ii) the actual or
alleged presence of hazardous materials on any Property or any environmental
action relating in any way to any Property, except to the extent such claim,
damage, class, liability or expense is found in a final, non-appealable judgment
by a court of competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct or is the result of a claim made
by Seller or a Guarantor against the Indemnified Party, and Seller or a
Guarantor is ultimately the successful party in any resulting litigation or
arbitration. Seller also agrees not to assert any claim against Buyer or any of
its Affiliates, or any of their respective officers, directors, employees,
attorneys and agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to the
Program Documents, the actual or proposed use of the proceeds of the
Transactions, this Agreement or any of the transactions contemplated thereby.
THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES,
WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT) OF THE INDEMNIFIED PARTIES.

         c. Without limitation on the provisions of Section 4, if any payment of
the Repurchase Price of any Transaction is made by Seller other than on the then
scheduled Repurchase Date thereto as a result of an acceleration of the
Repurchase Date pursuant to Section 19 or for any other reason, Seller shall,
except as otherwise provided in Sections 15(c) and 24, upon demand by Buyer, pay
to Buyer any Breakage Costs incurred as of a result of such payment.

         d. If Seller fails to pay when due any costs, expenses or other amounts
payable by it under this Agreement, including, without limitation, reasonable
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of Seller by Buyer, in its sole discretion.

         e. Without prejudice to the survival of any other agreement of Seller
hereunder, the covenants and obligations of Seller contained in this Section
shall survive the payment in full of the Repurchase Price and all other amounts
payable hereunder and delivery of the Purchased Assets by Buyer against full
payment therefor.

23.      WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS
         ------------------------------------------

         Seller hereby expressly waives, to the fullest extent permitted by law,
every statute of limitation on a deficiency judgment, any reduction in the
proceeds of any Purchased Assets as a result of restrictions upon Buyer or
Custodian contained in the Program Documents or any other instrument delivered
in connection therewith, and any right that it may have to direct the order in
which any of the Purchased Assets shall be disposed of in the event of any
disposition pursuant hereto.

24.      REIMBURSEMENT
         -------------

         All sums reasonably expended by Buyer in connection with the exercise
of any right or remedy provided for herein shall be and remain Seller's
obligation. Seller agrees to pay, with interest at the Default Rate, to the
extent that an Event of Default has occurred, the reasonable out-of-pocket
expenses and reasonable attorneys' fees incurred by Buyer and/or Custodian in



connection with the preparation, enforcement (including any waivers),
administration and amendments of the Program Documents, the taking of any
action, including a Guarantor action, required or permitted to be taken by Buyer
(without duplication to Buyer) and/or Custodian pursuant thereto, any "due
diligence" or loan agent reviews conducted by Buyer or on its behalf or by
refinancing or restructuring in the nature of a "workout." If Buyer determines
that, due to the introduction of, any change in, or the compliance by Buyer with
(i) any eurocurrency reserve requirement or (ii) the interpretation of any law,
regulation or any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
an increase in the cost to Buyer in engaging in the present or any future
Transactions, then Seller agrees to pay to Buyer, from time to time, upon demand
by Buyer (with a copy to Custodian) the actual cost of additional amounts as
specified by Buyer to compensate Buyer for such increased costs. Notwithstanding
any other provisions in this Agreement, in the event of any such change in the
eurocurrency reserve requirement or the interpretation of any law, regulation or
any guideline or request from any central bank or other Governmental Authority,
Seller will have the right to terminate all Transactions then outstanding as of
a date selected by Seller (without the payment by Seller of any prepayment
penalty or Breakage Costs), which date shall be prior to the applicable
Repurchase Date and which date shall thereafter for all purposes hereof, be
deemed to be the Repurchase Date. In addition, Buyer shall promptly notify
Seller if any events in clause (i) or (ii) of this Section 24 occur.

25.      FURTHER ASSURANCES
         ------------------

         Seller and Guarantors agree to do such further acts and things and to
execute and deliver to Buyer such additional assignments, acknowledgments,
agreements, powers and instruments as are reasonably required by Buyer to carry
into effect the intent and purposes of this Agreement, to perfect the interests
of Buyer in the Purchased Assets or to better assure and confirm unto Buyer its
rights, powers and remedies hereunder.

26.      ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION
         ----------------------------------------

         This Agreement supersedes and integrates all previous negotiations,
contracts, agreements and understandings between the parties relating to a sale
and repurchase of Purchased Assets and Additional Purchased Assets thereto, and
it, together with the other Program Documents, and the other documents delivered
pursuant hereto or thereto, contains the entire final agreement of the parties.
No prior negotiation, agreement, understanding or prior contract shall have any
validity.

27.      TERMINATION
         -----------

         This Agreement shall remain in effect until the earlier of (i) 364 days
following the Effective Date or (ii) at Buyer's option upon the occurrence of an
Event of Default (such date, the "Termination Date"). However, no such
termination shall affect Seller's outstanding obligations to Buyer at the
time-of such termination. Seller's obligations to indemnify Buyer pursuant to
this Agreement shall survive the termination hereof.

28.      ASSIGNMENT
         ----------



         The Program Documents are not assignable by Seller. Buyer may from time
to time assign all or a portion of its rights and obligations under this
Agreement and the Program Documents; provided, however, that Buyer shall
maintain, for review by Seller upon written request, a register of assignees and
a copy of an executed assignment and acceptance by Buyer and assignee
("Assignment and Acceptance"), specifying the percentage or portion of such
rights and obligations assigned. Upon such assignment, (a) such assignee shall
be a party hereto and to each Program Document to the extent of the percentage
or portion set forth in the Assignment and Acceptance, and shall succeed to the
applicable rights and obligations of Buyer hereunder, and (b) Buyer shall, to
the extent that such rights and obligations have been so assigned by it to
either (i) an Affiliate of Buyer which assumes the obligations of Buyer or (ii)
to another Person approved by Seller (such approval not to be unreasonably
withheld) which assumes the obligations of Buyer, be released from its
obligations hereunder accruing thereafter and under the Program Documents.
Unless otherwise stated in the Assignment and Acceptance, Seller shall continue
to take directions solely from Buyer unless otherwise notified by Buyer in
writing. Buyer may distribute to any prospective assignee any document or other
information delivered to Buyer by Seller. Notwithstanding any assignment by
Buyer pursuant to this Section 28, Buyer shall remain liable as to the
Transactions.

29.      AMENDMENTS, ETC.
         ----------------

         No amendment or waiver of any provision of this Agreement nor any
consent to any failure to comply herewith or therewith shall in any event be
effective unless the same shall be in writing and signed by Seller and Buyer,
and then such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

30.      SEVERABILITY
         ------------

         If any provision of any Program Document is declared invalid by any
court of competent jurisdiction, such invalidity shall not affect any other
provision of the Program Documents, and each Program Document shall be enforced
to the fullest extent permitted by law.

31.      BINDING EFFECT: GOVERNING LAW
         -----------------------------

         This Agreement shall be binding and inure to the benefit of the parties
hereto and their respective successors and assigns, except that Seller may not
assign or transfer any of its rights or obligations under this Agreement or any
other Program Document without the prior written consent of Buyer. THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF.

32.      CONSENT TO JURISDICTION
         -----------------------



         SELLER HEREBY WAIVES TRIAL BY JURY. SELLER HEREBY IRREVOCABLY CONSENTS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING
OUT OF OR RELATING TO THE PROGRAM DOCUMENTS IN ANY ACTION OR PROCEEDING. SELLER
HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION SELLER MAY HAVE TO, NON-EXCLUSIVE
PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT
TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS.

33.      SINGLE AGREEMENT
         ----------------

         Seller, Guarantors and Buyer acknowledge that, and have entered
hereinto and will enter into each Transaction hereunder in consideration of and
in reliance upon the fact that, all Transactions hereunder constitute a single
business and contractual relationship and have been made in consideration of
each other. Accordingly, Seller, Guarantors and Buyer each agree (i) to perform
all of its obligations in respect of each Transaction hereunder, and that a
default in the performance of any such obligations shall constitute a default by
it in respect of all Transactions hereunder, and (ii) that payments, deliveries
and other transfers made by any of them in respect of any Transaction shall be
deemed to have been made in consideration of payments, deliveries and other
transfer in respect of any other Transaction hereunder, and the obligations to
make any such payments, deliveries and other transfers may be applied against
each other and netted.

34.      INTENT
         ------

         Seller and Buyer recognize that each Transaction is a "repurchase
agreement" as that term is defined in Section 101 of Title 11 of the United
States Code, as amended ("USC") (except insofar as the Loans subject to such
Transaction or the term of such Transaction would render such definition
inapplicable), and a "securities contract" as that term is defined in Section
741 of Title 11 of the USC (except insofar as the Loans subject to such
Transaction or the term of such Transaction would render such definition
inapplicable).

         It is understood that Buyer's right to liquidate the Purchased Assets
delivered to it in connection with the Transactions hereunder or to exercise any
other remedies pursuant to Section 19 hereof is a contractual right to liquidate
such Transaction as described in Sections 555 and 559 of Title 11 of the USC.

35.      NOTICES AND OTHER COMMUNICATIONS
         --------------------------------

         Except as provided herein, any notice required or permitted by this
Agreement shall be in writing and shall be effective and deemed delivered only
when received by the party to which it is sent; provided, however, that a
facsimile transmission shall be deemed to be received when transmitted so long
as the transmitting machine has provided an electronic confirmation (without
error message) of such transmission. Any such notice shall be sent to a party at
the address or facsimile transmission number set forth below:



if to Seller:
- ------------

                  New Century Funding A
                           c/o Christiana Bank & Trust Company
                  1314 King Street
                  Wilmington, Delaware 19801
                           Attention:       Corporate Trust Administration

                  with a copy to:

                  New Century Funding Corporation
                  as administrator of New Century Funding A
                  18400 Von Karman
                  Irvine, California 92612
                  Attention:  Stergios Theologides, Esq.
                           Telephone:       (949) 863-7243
                           Facsimile:       (949) 440-7033

if to NCMC:
- ----------

                           New Century Mortgage Corporation
                           18400 Van Karman, Suite 1000
                           Irvine, California 92612
                           Attention:       Stergios Theologides, Esq.
                           Telephone:       (949) 863-7243
                           Facsimile:       (949) 440-7033

if to Buyer or Agent:
- --------------------

                           Bank of America, N.A.
                           TX1-492-66-01
                  901 Main Street, 66th Floor
                  Dallas, Texas 75202-3714
                           Attention:       Agnes McAlpine
                  Telephone:        (214) 209-3566
                  Facsimile:        (214) 209-0338
                  with a copy to:
                           Attention:       Mark G. Short, Associate
                  Telephone:        (214) 209-0670
                  Facsimile:        (214) 209-0338

                           or, for Transaction Notices and related documents:

                           Attention:       Uma Subramanian, Loan Administrator
                           Telephone:       (214) 209-1076
                           Facsimile:       (214) 209-2710



as such address or number may be changed by like notice.

36.  CONFIDENTIALITY
     ---------------

     This Agreement and its terms, provisions, supplements and amendments, and
transactions and notices hereunder, are proprietary to Buyer and Agent and shall
be held by Seller and each Guarantor (and Seller and Guarantors shall cause
Interim Servicer to hold it) in strict confidence and shall not be disclosed to
any third party without the consent of Buyer except for (i) disclosure to
Seller's or a Guarantor's direct and indirect parent companies, attorneys,
agents or accountants, provided that such attorneys or accountants likewise
agree to be bound by this covenant of confidentiality or (ii) disclosure
required by law, rule, regulation or order of a court or other regulatory body
or (iii) disclosure to any approved Hedge Counterparty to the extent necessary
to obtain any Hedge Instrument hereunder or (iv) any disclosures or filing
required under Securities and Exchange Commission or state securities' laws;
provided that neither the Seller nor any Guarantor shall file the Side Letter
with the Securities and Exchange Commission or state securities office, unless
otherwise agreed by Buyer in writing, and the Seller and Guarantor agree to use
best efforts not to file the terms of the Side Letter with any such filing;
provided, that in the case of (ii), (iii) and (iv), Seller shall take reasonable
actions to provide Buyer with prior written notice.

37.  MAXIMUM AGGREGATE PURCHASE PRICE
     --------------------------------

     The Maximum Aggregate Purchase Price under this Agreement shall initially
equal $400,000,000. The Maximum Aggregate Purchase Price shall be increased to
$500,000,000 upon the occurrence of the following: (i) the Seller shall have
requested such increase in writing to the Buyer no later than ten (10) days
prior to the effective date of such increase, (ii) the Buyer shall have approved
of such increase in its sole discretion, and (iii) the Seller shall have paid to
the Buyer an extension fee in the amount of the Facility Enlargement Fee Amount,
such payment to be made in United States dollars, in immediately available
funds, without deduction, set-off or counterclaim. The Buyer may, in its sole
discretion, net such fee from the proceeds of any Purchase Price payable to the
Seller.

38.  NO RECOURSE.
     -----------

     It is expressly understood and agreed by the parties hereto that (a) this
side letter is executed and delivered by Christiana Bank & Trust Company, not
individually or personally but solely as trustee of the Seller, in the exercise
of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Seller is made and intended not as personal representations, undertakings and
agreements by Christiana Bank & Trust Company but is made and intended for the
purpose for binding only the Seller, (c) nothing herein contained shall be
construed as creating any liability on the Christiana Bank & Trust Company,
individually or personally, to perform any covenant either expressed or implied
contained herein, all such liability, if any, being expressly waived by the
parties hereto and by any Person claiming by, through or under the parties
hereto and (d) under no circumstances shall the Christiana Bank & Trust Company
be personally liable for the payment of any indebtedness or expenses of the
Seller or be liable for the breach or failure of any



obligation, representation, warranty or covenant made or undertaken by the
Seller under this side letter or any other related documents.

                            [Signature Page Follows]



                  IN WITNESS WHEREOF, Seller, Guarantors and Buyer have caused
their names to be signed to this Master Repurchase Agreement by their respective
officers thereunto duly authorized as of the date first above written.

                                                NEW CENTURY FUNDING A, as
                                            Seller

                                            By: Christiana Bank & Trust Company,
                                            not in its individual capacity but
                                            solely as trustee


                                             By:         /s/ Debra A. Balliet
                                                --------------------------------
                                                 Name:
                                                      --------------------------
                                                 Title:  Trust Officer
                                                       -------------------------


                                                BANK OF AMERICA, N.A., as Buyer
                                             and Agent, as applicable


                                             By:        /s/ Agnes J. McAlpine
                                                --------------------------------
                                                Name:
                                                     ---------------------------
                                                Title:  Managing Director
                                                      --------------------------

Acknowledged and Agreed:
- -----------------------


NEW CENTURY MORTGAGE CORPORATION,
as Guarantor

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


NEW CENTURY FINANCIAL CORPORATION,
as Guarantor

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

EX-99.3

                                                                    Exhibit 99.3
                                                                  EXECUTION COPY


================================================================================




                AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT


                                      Among


                       CDC MORTGAGE CAPITAL INC., as Buyer


                   NEW CENTURY MORTGAGE CORPORATION, as Seller


                                       and


                        NC CAPITAL CORPORATION, as Seller

                            Dated as of May 10, 2002



================================================================================



                                TABLE OF CONTENTS



                                                                 Page
                                                                 ----
                                                              
1.   APPLICABILITY ............................................     1

2.   DEFINITIONS ..............................................     1

3.   INITIATION; TERMINATION ..................................    20

4.   MARGIN AMOUNT MAINTENANCE ................................    30

5.   INCOME PAYMENTS ..........................................    30

6.   REQUIREMENTS OF LAW ......................................    31

7.   SECURITY INTEREST ........................................    33

8.   PAYMENT, TRANSFER AND CUSTODY ............................    34

9.   HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS ..............    35

10.  SELLER'S REPRESENTATIONS .................................    35

11.  COVENANTS OF SELLER ......................................    41

12.  EVENTS OF DEFAULT ........................................    51

13.  REMEDIES .................................................    53

14.  INDEMNIFICATION AND EXPENSES .............................    56

15.  RECORDING OF COMMUNICATIONS ..............................    57

16.  SINGLE AGREEMENT .........................................    57

17.  NOTICES AND OTHER COMMUNICATIONS .........................    58

18.  ENTIRE AGREEMENT; SEVERABILITY ...........................    58

19.  NON-ASSIGNABILITY ........................................    58

20.  TERMINABILITY ............................................    58

21.  GOVERNING LAW ............................................    59

22.  SUBMISSION TO JURISDICTION; WAIVERS ......................    59


                                      -i-



                                                                
23.  NO WAIVERS, ETC. .........................................    60

24.  SERVICING ................................................    60

25.  INTENT ...................................................    61

26.  BUYER'S REPRESENTATIONS ..................................    62

27.  NETTING ..................................................    63

28.  PERIODIC DUE DILIGENCE REVIEW ............................    63

29.  BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT ..................    64

30.  MISCELLANEOUS ............................................    65

31.  CONFIDENTIALITY ..........................................    66

32.  CONFLICTS ................................................    66

33.  SET-OFF. .................................................    66

34.  MOST FAVORED STATUS. .....................................    67
- ------------------------

35.  OBLIGATIONS JOINT AND SEVERAL. ...........................    67



                                      -ii-



EXHIBITS

SCHEDULE 1         Representations and Warranties Re:  Mortgage Loans

SCHEDULE 2         Subsidiaries

SCHEDULE 3         Litigation

EXHIBIT I          Transaction Request

EXHIBIT II         Underwriting Guidelines

EXHIBIT III        Form of Opinion Letter

EXHIBIT IV         UCC Filing Jurisdictions

EXHIBIT V          Form of Account Agreement

EXHIBIT VI         Form of True Sale Certification

EXHIBIT VII-A      Form of Seller's Release Letter

EXHIBIT VII-B      Form of Warehouse Lender's Release Letter

EXHIBIT VIII       Form of Servicer Notice

EXHIBIT IX         Form of Request for Additional Transactions for Excess Margin

                                     -iii-



                AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

          This is an AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT, dated as
of May 10, 2002, among NEW CENTURY MORTGAGE CORPORATION, a California
corporation ("NCMC"), NC CAPITAL CORPORATION, a California corporation ("NCCC",
              ----                                                       ----
and together with NCMC, "Seller") and CDC MORTGAGE CAPITAL INC., a New York
                         ------
corporation ("Buyer").
              -----

          WHEREAS, the Seller and the Buyer are parties to that certain Master
Repurchase Agreement, dated as of July 19, 2001 (the "Original Repurchase
                                                      -------------------
Agreement"), between the Seller and the Buyer; and
- ---------

          WHEREAS the Seller has requested Buyer to agree to amend certain
provisions of the Original Repurchase Agreement as set forth in this Amended and
Restated Master Repurchase Agreement. The Buyer is willing to agree to such
amendments, but only on the terms and subject to the conditions set forth in
this Amended and Restated Master Repurchase Agreement.

          NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Sellers and the Buyer hereby agree as follows:

1.   APPLICABILITY

     From time to time the parties hereto may enter into transactions in which
     Seller agrees to transfer to Buyer Mortgage Loans against the transfer of
     funds by Buyer, with a simultaneous agreement by Buyer to transfer to
     Seller such Mortgage Loans at a date certain not later than 364 days after
     the date of transfer, against the transfer of funds by Seller. Each such
     transaction shall be referred to herein as a "Transaction" and shall be
                                                   -----------
     governed by this Agreement, unless otherwise agreed in writing.

2.   DEFINITIONS

     As used herein, the following terms shall have the following meanings (all
     terms defined in this Section 2 or in other provisions of this Agreement in
     the singular to have the same meanings when used in the plural and vice
                                                                        ----
     versa). Terms otherwise not defined herein shall have the meanings assigned
     -----
     thereto in the Custodial and Disbursement Agreement.

     "Account Agreement" shall mean a letter agreement among NCCC, NCMC,
      -----------------
     Servicer, Buyer and the Bank substantially in the form of Exhibit V
                                                               ---------
     attached hereto.

     "Act of Insolvency" shall mean, with respect to any Person, (i) the filing
      -----------------
     of a petition, commencing, or authorizing the commencement of any case or
     proceeding under any bankruptcy, insolvency, reorganization, liquidation,
     dissolution or similar law relating to the protection of creditors, or
     suffering any such petition or proceeding to be commenced by another which
     is consented to, not timely contested or results in entry of an order for
     relief which is not discharged within thirty (30) days; (ii) the seeking or
     consenting to the



          appointment of a receiver, trustee, custodian or similar official for
          such Person or any substantial part of the property of such Person;
          (iii) the appointment of a receiver, conservator, or manager for such
          Person by any governmental agency or authority having the jurisdiction
          to do so; (iv) the making or offering by such Person of a composition
          with its creditors or a general assignment for the benefit of
          creditors; (v) the admission by such Person of its inability to pay
          its debts or discharge its obligations as they become due or mature;
          or (vi) that any governmental authority or agency or any person,
          agency or entity acting or purporting to act under governmental
          authority shall have taken any action to condemn, seize or
          appropriate, or to assume custody or control of, all or any
          substantial part of the property of such Person, or shall have taken
          any action to displace the management of such Person or to curtail its
          authority in the conduct of the business of such Person.

          "Additional Purchased Assets" shall mean Mortgage Loans or cash
           ---------------------------
          provided by Seller to Buyer or its designee pursuant to Section 4.

          "Adjusted Leverage Ratio" shall mean on any date of determination, the
           -----------------------
          ratio of (a) Total Liabilities to (b) Adjusted Tangible Net Worth.

          "Adjusted Tangible Net Worth" shall mean on any date of determination,
           ---------------------------
          the Tangible Net Worth of Guarantor minus 25% of the amount by which
          the book value of Junior Securitization Interests included in
          calculating Tangible Net Worth exceeds Indebtedness of the type
          described in Section 11(s)(4).

          "Affiliate" shall mean with respect to any Person, any "affiliate" of
           ---------
          such Person, as such term is defined in the Bankruptcy Code.

          "Agreement" shall mean this Amended and Restated Master Repurchase
           ---------
          Agreement, as the same may be further amended, supplemented or
          otherwise modified in accordance with the terms hereof.

          "ALTA" shall mean the American Land Title Association.
           ----

          "Appraised Value" shall mean the value set forth in an appraisal made
           ---------------
          in connection with the origination of the related Mortgage Loan as the
          value of the Mortgaged Property.

          "Asset Schedule and Exception Report" shall have the meaning assigned
           -----------------------------------
          thereto in the Deutsche Custodial and Disbursement Agreement.

          "Asset Value" shall mean as of any date of determination with respect
           -----------
          to each Eligible Asset, the lesser of (a) the Purchase Percentage
          multiplied by the Market Value of such Mortgage Loan as of such date
          of determination, and (b) the outstanding principal balance of such
          Eligible Asset as of such date of determination; provided, that, the
          following additional limitations on Asset Value shall apply:

               (1)  the aggregate Asset Value of Wet-Ink Mortgage Loans may not
                    exceed the Wet-Ink Sub-Limit at any time;

                                      -2-



         (2)      the aggregate Asset Value of Second Lien Mortgage Loans may
                  not exceed the Second Lien Sub-Limit at any time;

         (3)      the aggregate Asset Value of Second Lien Mortgage Loans with a
                  CLTV in excess of 100% shall not exceed the Second Lien CLTV
                  Sub-Limit at any time;

         (4)      the aggregate Asset Value of a single Mortgage Loan shall not
                  exceed the Mortgage Loan Sub-Limit;

         (5)      the aggregate Asset Value of Jumbo Mortgage Loans may not
                  exceed the Jumbo Sub-Limit at any time;

         (6)      the aggregate Asset Value of Jumbo(500) Mortgage Loans may not
                  exceed the Jumbo(500) Sub-Limit at any time;

         (7)      the aggregate Asset Value of Jumbo(750) Mortgage Loans may not
                  exceed the Jumbo(750) Sub-Limit at any time;

         (8)      The aggregate Asset Values of C Credit Mortgage Loans and C
                  Minus Credit Mortgage Loans may not exceed the C/C- Credit
                  Sub-Limit at any time;

         (9)      [Reserved];

         (10)     The aggregate Asset Value of Non-owner Occupied Mortgage Loans
                  may not exceed $25,000,000;

         (11)     The aggregate Asset Value of High Cost Mortgage Loans may not
                  exceed $10,000,000; and

         (12)     the Asset Value shall be deemed to be zero with respect to
                  each Mortgage Loan (i) in respect of which there is a breach
                  of a representation and warranty set forth in Schedule 1
                                                                ----------
                  (assuming each representation and warranty is made as of the
                  date Asset Value is determined), (ii) in respect of which
                  there is a delinquency in the payment of principal and/or
                  interest which continues for a period in excess of twenty nine
                  (29) calendar days (without regard to any applicable grace
                  periods), (iii) which has not been repurchased by Seller by
                  the earlier to occur of (A) the Termination Date and (B) the
                  180th day after the date on which it is first purchased by
                  Buyer, (iv) which has been released from the possession of
                  Custodian under the Custodial and Disbursement Agreement to
                  Seller for a period in excess of ten (10) calendar days, (v)
                  which exceed the limitations on Asset Value set forth above or
                  (vi) which is a Wet-Ink Mortgage Loan, for which Custodian has
                  failed to receive the related Mortgage Documents by the
                  seventh (7/th/) Business Day following the applicable
                  Origination Date of such Wet-Ink Mortgage Loan.

                                      -3-



      "Assignment of Mortgage" shall mean, with respect to any Mortgage, an
       ----------------------
      assignment of the Mortgage, notice of transfer or equivalent instrument in
      recordable form, sufficient under the laws of the jurisdiction wherein the
      related Mortgaged Property is located to reflect the assignment of the
      Mortgage to Buyer.

      "Bank" shall mean U.S. Bank National Association, a national banking
       ----
      association, and its successors in interest, or such other depository
      institution as may be acceptable to Buyer in its sole discretion, and
      their respective successors in interest.

      "Bank of America Financing Facility" shall mean the Master Repurchase
       ----------------------------------
      Agreement dated as of May 10, 2002, as may be amended from time to time,
      by and between New Century Funding A and Bank of America, N.A. and all
      other documents or agreements executed in connection therewith, or
      replacement facilities with substantially similar terms (including, but
      not limited to, amounts and rates) with financial institutions approved by
      Buyer.

      "Bankruptcy Code" shall mean the United States Bankruptcy Code of 1978, as
       ---------------
      amended from time to time.

      "Basic Status Report and Exception Report" shall have the meaning assigned
       ----------------------------------------
      thereto in the US Bank Custodial Agreement.

      "Business Day" shall mean any day other than (i) a Saturday or Sunday or
       ------------
      (ii) a day on which banks in the State of New York (or state in which any
      of Custodian, Disbursement Agent, Seller or Buyer is located) is
      authorized or obligated by law or executive order to be closed.

      "Buyer" shall mean CDC Mortgage Capital Inc., a New York corporation, and
       -----
      its successors in interest and assigns.

      "C Credit Mortgage Loan" shall mean each Mortgage Loan originated in
       ----------------------
      accordance with the Underwriting Guidelines criteria for "C" credit
      mortgage loans.

      "C/C- Credit Sub-Limit" shall mean an amount equal to $60,000,000.
       ---------------------

      "C Minus Credit Mortgage Loans" shall mean each Mortgage Loan originated
       -----------------------------
      in accordance with the Underwriting Guidelines criteria for "C-" credit
      mortgage loans.

      "Capital Lease Obligations" shall mean, for any Person, all obligations of
       -------------------------
      such Person to pay rent or other amounts under a lease of (or other
      agreement conveying the right to use) Property to the extent such
      obligations are required to be classified and accounted for as a capital
      lease on a balance sheet of such Person under GAAP, and, for purposes of
      this Agreement, the amount of such obligations shall be the capitalized
      amount thereof, determined in accordance with GAAP.

      "Class" shall mean with respect to a Purchased Asset, the designation of
       -----
      such Purchased Asset as one or more of the following: (i) a Mortgage Loan,
      (ii) a Wet-Ink Mortgage Loan, (iii) a Second Lien Mortgage Loan, (iv) a
      Jumbo Mortgage Loan, (v) a Jumbo(500)

                                      -4-



      Mortgage Loan, (vi) a Jumbo(750) Mortgage Loan, (vii) a C Credit Mortgage
      Loan, (viii) a C Minus Credit Mortgage Loan, (ix) a Non-owner Occupied
      Mortgage Loan, and/or (x) a High Cost Mortgage Loan.

      "Code" shall mean the Internal Revenue Code of 1986, as amended from time
       ----
      to time.

      "Collection Account" shall mean the account established by the Bank
       ------------------
      subject to an Account Agreement, into which all Income shall be deposited.

      "Combined Loan-to-Value Ratio or CLTV" shall mean with respect to any
       ------------------------------------
      Second Lien Mortgage Loan, the sum of the original principal balance of
      such Mortgage Loan and the outstanding principal balance of any related
      first lien as of the date of origination of the Mortgage Loan, divided by
      the lesser of the Appraised Value of the Mortgage Property as of the
      Origination Date or the purchase price of the Mortgaged Property.

      "Commonly Controlled Entity" shall mean an entity, whether or not
       --------------------------
      incorporated, which is under common control with Seller within the meaning
      of Section 4001 of ERISA or is part of a group which includes Seller and
      which is treated as a single employer under Section 414 of the Code.

      "Company Securitization Transaction" shall mean an issuance of
       ----------------------------------
      Mortgage-backed Securities by NCCC, NCMC, or by SBRC, or any other
      registered broker dealer, or an Affiliate of any of them, on behalf of
      NCCC or NCMC, through a trust or other entity created by NCCC or NCMC,
      SBRC or any other registered broker-dealer which Mortgage-backed
      Securities are either secured (in whole or in part) by Mortgage Loans
      originated or acquired by NCCC or NCMC or evidence the entire beneficial
      ownership interest therein, and in connection with which one or more
      Junior Securitization Interests are issued to NCCC or NCMC or any
      Affiliate.

      "Change of Control" shall mean the occurrence, after the Effective Date,
       -----------------
      of any of the following circumstances: (a) Guarantor not owning, directly
      or indirectly, all of the issued and outstanding capital stock of NCMC; or
      (b) any Person, or two or more Persons acting in concert, other than the
      Management Shareholders, acquiring beneficial ownership (within the
      meaning of Rule 13d-3 of the Securities and Exchange Commission under the
      Securities Exchange Act of 1934, as amended), directly or indirectly, of
      securities of Guarantor (or other securities convertible into such
      securities) representing 35% or more of the combined voting power of all
      securities of Guarantor entitled to vote in the election of directors; (c)
      any Person, or two or more Persons acting in concert, other than the
      Management Shareholders, acquiring by contract or otherwise, or entering
      into a contract or arrangement which upon consummation will result in its
      or their acquisition of and, control over securities of Guarantor (or
      other securities convertible into such securities) representing 35% or
      more of the combined voting power of all securities of Guarantor entitled
      to vote in the election of directors; or (d) Robert Cole ceasing to be
      Chairman and Chief Executive Officer of Guarantor.

      "Confirmation" shall have the meaning specified in Section 3(c).
       ------------

                                      -5-



      "Countrywide Financing Facility" shall mean the Master Repurchase
       ------------------------------
      Agreement, dated as of July 28, 2000, and Annex I thereto, as may be
      amended from time to time, among between Countrywide Warehouse Lending and
      NC Residual Corporation II, and all other documents or agreements executed
      in connection therewith, or replacement facilities with substantially
      similar terms (including, but not limited to, amounts and rates) with
      financial institutions approved by Buyer.

      "Custodial and Disbursement Agreement" shall mean either the US Bank
       ------------------------------------
      Custodial Agreement or the Deutsche Custodial and Disbursement Agreement,
      as applicable.

      "Custodial Identification Certificate" shall have the meaning assigned
       ------------------------------------
      thereto in the Custodial and Disbursement Agreement.

      "Custodian" shall mean (i) U.S. Bank National Association, a national
       ---------
      banking association, and its successors in interest, as custodian under
      the US Bank Custodial Agreement; or (ii) Deutsche Bank National Trust
      Company, a national banking association, and its successors in interest,
      as custodian under the Deutsche Custodial and Disbursement Agreement, and
      any successor Custodian under the Deutsche Custodial and Disbursement
      Agreement, as applicable; provided that Buyer in its sole discretion may
      terminate U.S. Bank National Association as custodian at any time after
      August 15, 2002.

      "Daily Leverage Ratio" shall mean on any date of determination, the ratio
       --------------------
      of (a) Total Liabilities of Guarantor and its Subsidiaries on such date to
      (b) Tangible Net Worth of Guarantor and its Subsidiaries as of the last
      day of the most recently completed month.

      "Default" shall mean an Event of Default or an event that with notice or
       -------
      lapse of time or both would become an Event of Default.

      "Deutsche Custodial and Disbursement Agreement" shall mean that custodial
       ---------------------------------------------
      and disbursement agreement, dated as of May 10, 2002, by and among Buyer,
      NCCC, NCMC and Custodian, as the same shall be modified and supplemented
      and in effect from time to time.

      "Disbursement Agent" shall mean Deutsche Bank National Trust Company, a
       ------------------
      national banking association, and its successors in interest, as
      disbursement agent under the Custodial and Disbursement Agreement, and any
      successor Disbursement Agent under the Custodial and Disbursement
      Agreement.

      "Dollars" and "$" shall mean lawful money of the United States of America.
       -------       -

      "Due Diligence Review" shall mean the performance by Buyer of any or all
       --------------------
      of the reviews permitted under Section 27 with respect to any or all of
      the Mortgage Loans, as desired by Buyer from time to time.

      "Early Termination Percentage" shall mean 25 basis points (0.25%) less
       ----------------------------
      0.02 basis points (0.02%) for each calendar month that has elapsed since
      March 15, 2002.

                                      -6-



      "Effective Date" shall mean the date upon which the conditions precedent
       --------------
      set forth in Section 3(a)(1) shall have been satisfied.

      "Electronic Transmission" shall mean the delivery of information in an
       -----------------------
      electronic format acceptable to the applicable recipient thereof.

      "Eligible Asset" shall mean a Mortgage Loan, including a Wet-Ink Mortgage
       --------------
      Loan, (i) as to which the representations and warranties in Schedule 1
                                                                  ----------
      attached hereto are true and correct, (ii) which is underwritten strictly
      in accordance with the Underwriting Guidelines of Seller, and (iii) which
      is secured by a Residential Dwelling.

      "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
       -----
      amended from time to time.

      "ERISA Affiliate" shall mean any corporation or trade or business that is
       ---------------
      a member of any group of organizations (i) described in Section 414(b) or
      (c) of the Code of which Seller is a member and (ii) solely for purposes
      of potential liability under Section 302(c)(11) of ERISA and Section
      412(c)(11) of the Code and the lien created under Section 302(f) of ERISA
      and Section 412(n) of the Code, described in Section 414(m) or (o) of the
      Code of which Seller is a member.

      "Eurodollar Rate" shall mean, with respect to each day a Transaction is
       ---------------
      outstanding, the rate per annum equal to the rate appearing at page 5 of
      the Telerate Screen as one-month LIBOR at or about 9:00 a.m., New York
      time, on such date (and if such date is not a Business Day, the Eurodollar
      Rate in effect on the Business Day immediately preceding such date), and
      if such rate shall not be so quoted, the average rate per annum at which
      three mutually acceptable banks are offered Dollar deposits at or about
      9:00 a.m., New York City time, on such date by prime banks in the
      interbank eurodollar market where the eurodollar and foreign currency
      exchange operations in respect of its Transactions are then being
      conducted for delivery on such day for a period of thirty (30) days and in
      an amount comparable to the amount of the Transactions to be outstanding
      on such day. The Eurodollar Rate shall be reset by Buyer as described
      above and Buyer's determination of Eurodollar Rate shall be conclusive
      upon the parties absent manifest error on the part of Buyer

      "Event of Default" has the meaning specified in Section 12.
       ----------------

      "Excess Margin" has the meaning specified in Section 3(r).
       -------------

      "Existing Financing Facilities" shall mean the Bank of America Financing
       -----------------------------
      Facility, Countrywide Financing Facility, the Greenwich Financing
      Facility, the Morgan Stanley Financing Facility, the Salomon Financing
      Facility, the Salomon NCMC Financing Facility, the Salomon REO Financing
      Facility, the Salomon Residual Financing Facility, the US Bank Financing
      Facility, the UBS Financing Facility and the USB Financing Facility.

      "Fannie Mae" shall mean the Federal National Mortgage Association, and its
       ----------
      successors in interest.

                                      -7-



      "Foreclosed Loan" shall mean a loan the property securing which has been
       ---------------
      foreclosed upon by Seller.

      "Freddie Mac" shall mean the Federal Home Loan Mortgage Corporation, and
       -----------
      its successors in interest.

      "GAAP" shall mean generally accepted accounting principles as in effect
       ----
      from time to time in the United States.

      "Governmental Authority" shall mean any nation or government, any state or
       ----------------------
      other political subdivision thereof, any entity exercising executive,
      legislative, judicial, regulatory or administrative functions of or
      pertaining to government and any court or arbitrator having jurisdiction
      over NCCC, NCMC, Guarantor, any of their respective Subsidiaries or any of
      their properties.

      "Greenwich Financing Facility" shall mean the Residual Financing Facility
       ----------------------------
      Agreement dated as of June 23, 1999, as may be amended from time to time,
      by and between NCCC and Greenwich Capital Financial Products, Inc. and all
      other documents or agreements executed in connection therewith, or
      replacement facilities with substantially similar terms (including, but
      not limited to, amounts and rates) with financial institutions approved by
      Buyer.

      "Guarantee" shall mean, as to any Person, any obligation of such Person
       ---------
      directly or indirectly guaranteeing any Indebtedness of any other Person
      or in any manner providing for the payment of any Indebtedness of any
      other Person or otherwise protecting the holder of such Indebtedness
      against loss (whether by virtue of partnership arrangements, by agreement
      to keep-well another Person, to purchase assets, goods, securities or
      services, or to agree to take-or-pay arrangement or otherwise); provided
      that the term "Guarantee" shall not include (i) endorsements for
      collection or deposit in the ordinary course of business, or (ii)
      obligations to make servicing advances for delinquent taxes and insurance,
      or other obligations in respect of a Mortgaged Property, or other
      principal and interest advances made in the ordinary course of servicing
      the Mortgage Loans. The amount of any Guarantee of a Person shall be
      deemed to be an amount equal to the stated or determinable amount of the
      primary obligation in respect of which such Guarantee is made or, if not
      stated or determinable, the maximum reasonably anticipated liability in
      respect thereof as determined by such Person in good faith. The terms
      "Guarantee" and "Guaranteed" used as verbs shall have correlative
       ---------       ----------
      meanings.

      "Guarantor" shall mean New Century Financial Corporation, a California
       ---------
      corporation, and its successors in interest.

      "Guaranty" shall mean the Guaranty, dated as of the date hereof, made by
       --------
      Guarantor in favor of Buyer, which shall be in form and substance
      satisfactory to Buyer in all respects.

      "Income" shall mean, with respect to any Mortgage Loan at any time, all
       ------
      collections and proceeds on or in respect of the Mortgage Loans,
      including, without limitation, any principal thereof then payable and all
      interest or other distributions payable thereon less any related servicing
      fee(s) charged by Servicer.

                                      -8-



     "Indebtedness" shall mean, for any Person: (a) obligations created, issued
      ------------
     or incurred by such Person for borrowed money (whether by loan, the
     issuance and sale of debt securities or the sale of Property to another
     Person subject to an understanding or agreement, contingent or otherwise,
     to repurchase such Property from such Person); (b) obligations of such
     Person to pay the deferred purchase or acquisition price of Property or
     services, other than trade accounts payable (other than for borrowed money)
     arising, and accrued expenses incurred, in the ordinary course of business
     so long as such trade accounts payable are payable within 90 days of the
     date the respective goods are delivered or the respective services are
     rendered; (c) Indebtedness of others secured by a Lien on the Property of
     such Person, whether or not the respective Indebtedness so secured has been
     assumed by such Person; (d) obligations (contingent or otherwise) of such
     Person in respect of letters of credit or similar instruments issued or
     accepted by banks and other financial institutions for account of such
     Person; (e) obligations of such Person under repurchase agreements,
     sale/buy-back agreements or like arrangements; (f) Indebtedness of others
     Guaranteed by such Person; (g) all obligations of such Person incurred in
     connection with the acquisition or carrying of fixed assets by such Person;
     and (h) Indebtedness of general partnerships of which such Person is
     secondarily or contingently liable (other than by endorsement of
     instruments in the course of collection), whether by reason of any
     agreement to acquire such indebtedness to supply or advance sums or
     otherwise; and (i) Capital Lease Obligations of such Person.

     "Initial Funding" shall mean the date upon which the conditions precedent
      ---------------
     set forth in Section 3(a)(2) shall have been satisfied.

     "Interest Rate Protection Agreement" shall mean, with respect to any or all
      ----------------------------------
     of the Mortgage Loans, any short sale of US Treasury securities, or futures
     contract, or options related contract, or interest rate swap, cap or collar
     agreement or similar arrangement providing for protection against
     fluctuations in interest rates or the exchange of nominal interest
     obligations, either generally or under specific contingencies and
     acceptable to Buyer.

     "Investment" shall mean with respect to any Person, any direct or indirect
      ----------
     purchase or other acquisition by that Person of, or a beneficial interest
     in, stock or other securities of any other Person, or any direct or
     indirect loan, advance (other than advances to employees for moving and
     travel expenses, drawing accounts and similar expenditures in the ordinary
     course of business) or capital contribution by that Person to any other
     Person, including all Indebtedness and accounts receivable from that other
     Person which are not current assets or did not arise from sales to that
     other Person in the ordinary course of business.

     "Jumbo Mortgage Loans" shall mean each Mortgage Loan with a principal
      --------------------
     balance as of origination of more than $275,000.

     "Jumbo Sub-Limit" shall mean an amount equal to $140,000,000
      ---------------

     "Jumbo(500) Mortgage Loans" shall mean each Mortgage Loan with a principal
      -------------------------
     balance as of origination of more than $500,000 and less than or equal to
     $750,000.

                                      -9-



     "Jumbo(500) Sub-Limit" shall mean an amount equal to $80,000,000.
      --------------------

     "Jumbo(750) Mortgage Loans" shall mean shall mean each Mortgage Loan with a
      -------------------------
     principal balance as of origination of more than $750,000.

     "Jumbo(750) Sub-Limit" shall mean an amount equal to $40,000,000.
      --------------------

     "Junior Securitization Interests" shall mean a Mortgage-backed Security
      -------------------------------
     created in a Company Securitization Transaction that represents a
     subordinated right to receive principal or interest payments on the
     underlying Mortgage Loans (whether or not such subordination arises only
     under particular circumstances).

     "Late Payment Fee" has the meaning specified in Section 5(b).
      ----------------

     "Leverage Ratio" shall mean on any date of determination, the ratio of (a)
      --------------
     Total Liabilities to (b) Tangible Net Worth.

     "Lien" shall mean any mortgage, lien, pledge, charge, security interest or
      ----
     similar encumbrance.

     "Loan-to-Value Ratio" or "LTV" means with respect to any Mortgage Loan, the
      -------------------      ---
     ratio of the original outstanding principal amount of such Mortgage Loan at
     the time of origination to the lesser of (a) the Appraised Value of the
     related Mortgaged Property at origination of such Mortgage Loan and (b) if
     the related Mortgaged Property was purchased within twelve (12) months of
     the origination of such Mortgage Loan, the purchase price of the related
     Mortgaged Property.

     "Management Shareholders" shall mean Robert K. Cole, Brad A. Morrice, and
      -----------------------
     Edward F. Gotschall.

     "Margin Base" shall mean the aggregate Asset Value of all Purchased Assets
      -----------
     which are Eligible Assets.

     "Margin Deficit" has the meaning specified in Section 4.
      --------------

     "Market Value" shall mean, as of any date in respect of any Mortgage Loan,
      ------------
     the price at which such Mortgage Loan could readily be sold as determined
     in Buyer's sole discretion using its reasonable business judgment, which
     price may be determined to be zero. Buyer's determination of Market Value
     shall be conclusive upon the parties absent manifest error on the part of
     Buyer.

     "Material Adverse Effect" shall mean a material adverse effect on (a) the
      -----------------------
     Property, business, operations, financial condition or prospects of NCCC,
     NCMC or Guarantor, (b) the ability of NCCC or NCMC to perform its
     obligations under any of the Repurchase Documents to which it is a party,
     (c) the validity or enforceability of any of the Repurchase Documents, (d)
     the rights and remedies of Buyer under any of the Repurchase Documents, (e)
     the timely payment of any amounts payable under the

                                      -10-



     Repurchase Documents, (f) the Asset Value of the Purchased Assets or (g)
     the ability of Guarantor to perform its obligations under the Guaranty.

     "Maximum Amount" shall mean $400,000,000.
      --------------

     "Morgan Stanley Financing Facility" shall mean the Master Loan and Security
      ---------------------------------
     Agreement dated December 1, 2000, as may be amended from time to time,
     between NCCC and Morgan Stanley Dean Witter Mortgage Capital, Inc. and all
     other documents or agreements executed in connection therewith, or
     replacement facilities with substantially similar terms (including, but not
     limited to, amounts and rates) with financial institutions approved by
     Buyer.

     "Mortgage" shall mean the mortgage, deed of trust or other instrument
      --------
     securing a Mortgage Note, which creates a first lien or second lien on a
     fee simple Residential Dwelling securing the Mortgage Note.

     "Mortgage File" shall have the meaning assigned thereto in the Custodial
      -------------
     and Disbursement Agreement.

     "Mortgage Loan" shall mean a mortgage loan originated in accordance with
      -------------
     the Underwriting Guidelines which Custodian has been instructed to hold for
     Buyer pursuant to the Custodial and Disbursement Agreement including any
     Wet-Ink Mortgage Loan listed on a Transaction Request, and which Mortgage
     Loan includes, without limitation, (i) a Mortgage Note and related
     Mortgage, and (ii) all right, title and interest of Seller in and to the
     Mortgaged Property covered by such Mortgage.

     "Mortgage Loan Sub-Limit" shall mean $1,000,000.
      -----------------------

     "Mortgage Note" shall mean the original executed promissory note or other
      -------------
     evidence of the indebtedness of a Mortgagor with respect to a Mortgage
     Loan.

     "Mortgage-backed Security" shall mean a security (including, without
      ------------------------
     limitation, a participation certificate) that is an interest in a pool of
     Mortgage Loans or is secured by such an interest.

     "Mortgaged Property" shall mean a fee simple interest in the real property
      ------------------
     (including all improvements, buildings, fixtures, building equipment and
     personal property thereon and all additions, alterations and replacements
     made at any time with respect to the foregoing) and all other collateral
     securing repayment of the debt evidenced by a Mortgage Note.

     "Mortgagee" shall mean the record holder of a Mortgage Note secured by a
      ---------
     Mortgage.

     "Mortgagor" shall mean the obligor or obligors on a Mortgage Note,
      ---------
     including any person who has assumed or guaranteed the obligations of the
     obligor thereunder.

     "Multiemployer Plan" shall mean a multiemployer plan defined as such in
      ------------------
     Section 3(37) of ERISA to which contributions have been or are required to
     be made by Seller or any ERISA Affiliate and that is covered by Title IV of
     ERISA.

                                      -11-



     "NCCC" shall mean NC Capital Corporation, a California corporation, and its
      ----
     successors in interest.

     "NCMC" shall mean New Century Mortgage Corporation, a California
      ----
     corporation, and its successors in interest.

     "NCRC" shall mean NC Residual II Corporation, a Delaware corporation, and
      ----
     its successors in interest.

     "Net Worth" shall mean with respect to any Person, on any date of
      ---------
     determination, the net worth of such Person as of such date, determined in
     accordance with GAAP.

     "Non-owner Occupied Mortgage Loans" shall mean each Mortgage Loan with
      ---------------------------------
     respect to which the improvements on the Mortgaged Property are not
     occupied by the owner of such Mortgaged Property.

     "Non-Use Fee" has the meaning specified in Section 3(p).
      -----------

     "Origination Date" shall mean the date a Mortgage Loan is funded by any
      ----------------
     originator and the proceeds are disbursed to a borrower under such Mortgage
     Loan.

     "Payment Calculation Date" shall mean the tenth (10/th/) day of each month.
      ------------------------

     "Payment Date" shall mean two (2) Business Days after the Payment
      ------------
     Calculation Date.

     "PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
      ----
     succeeding to any or all of its functions under ERISA.

     "Periodic Advance Repurchase Payment" has the meaning specified in Section
      -----------------------------------
     5(b).

     "Person" shall mean any individual, corporation, company, voluntary
      ------
     association, partnership, joint venture, limited liability company, trust,
     unincorporated association or government (or any agency, instrumentality or
     political subdivision thereof).

     "Plan" shall mean an employee benefit or other plan established or
      ----
     maintained by any Seller or any ERISA Affiliate and covered by Title IV of
     ERISA, other than a Multiemployer Plan.

     "Post-Default Rate" shall mean, in respect of any day a Transaction is
      -----------------
     outstanding or any other amount under this Agreement or any other
     Repurchase Document that is not paid when due to Buyer at the stated
     Repurchase Date or otherwise when due (a "Post-Default Day"), a rate per
     annum on a 360 day per year basis during the period from and including the
     due date to but excluding the date on which such amount is paid in full
     equal to 4% per annum plus the Prime Rate on such Post-Default Day.
                           ----

     "Price Differential" means, with respect to any Transaction hereunder as of
      ------------------
     any date, the aggregate amount obtained by daily application of the Pricing
     Rate for such Transaction to the Purchase Price for such Transaction on a
     360 day per year basis for the actual

                                      -12-



     number of days during the period commencing on (and including) the Purchase
     Date for such Transaction and ending on (but excluding) the Repurchase Date
     (reduced by any amount of such Price Differential previously paid by Seller
     to Buyer with respect to such Transaction).

     "Pricing Rate" shall mean a rate per annum equal to the sum of (a) the
      ------------
     Eurodollar Rate plus (b) the Pricing Spread.

     "Pricing Spread" shall mean the applicable rates per annum set forth below
      --------------
     for each type of Eligible Asset for each day during the related Interest
     Period:

          (b)  Mortgage Loans (other than Wet-Ink Mortgage Loans), 0.95% (95)
               basis points; and

          (c)  Wet-Ink Mortgage Loans, 1.25% (125) basis points.

     "Prime Rate" shall mean the prime rate announced to be in effect from time
      ----------
     to time, as published as the average rate in The Wall Street Journal.
                                                  --- ---- ------ -------

     "Property" shall mean any right or interest in or to property of any kind
      --------
     whatsoever, whether real, personal or mixed and whether tangible or
     intangible.

     "Purchase Agreement" shall mean any purchase agreement by and between NCCC
      ------------------
     or NCMC and any third party, including without limitation, any Affiliate of
     NCCC or NCMC, pursuant to which NCCC or NCMC has purchased assets
     subsequently sold to Buyer hereunder.

     "Purchase Date" shall mean the date on which Purchased Assets are
      -------------
     transferred by Seller to Buyer or its designee (including Custodian).

     "Purchase Percentage" shall mean the applicable percentage set forth below
      -------------------
     for each type of Eligible Assets:

          (a)  Mortgage Loans (other than Wet-Ink Mortgage Loans), 98%; and

          (b)  Wet-Ink Mortgage Loans, 98%.

     "Purchase Price" shall mean on each Purchase Date, the price at which
      --------------
     Purchased Assets are transferred by Seller to Buyer or its designee
     (including Custodian) which shall equal the Asset Value for such Purchased
     Assets on the Purchase Date.

     "Purchased Assets" shall mean the Mortgage Loans sold by Seller to Buyer in
      ----------------
     a Transaction, and any Additional Purchased Assets.

     "Purchased Items" has the meaning specified in Section 7.
      ---------------

     "Qualified Originator" means NCMC, any of its subsidiaries set forth on
      --------------------
     Schedule 2, or any other originator of Mortgage Loans acceptable to Buyer
     in its sole discretion.

                                      -13-



     "Quarterly Average Leverage Ratio" shall mean for each three (3) month
      --------------------------------
     period ending on March 31, June 30, September 30 or December 31 of any year
     during the term of this Agreement, the ratio of (a) the average daily
     amount of Total Liabilities of Guarantor and its Subsidiaries outstanding
     during such three (3) month period to (b) the average of the Tangible Net
     Worth of Guarantor and its Subsidiaries at the end of each month during
     such three (3) month period.

     "Regulations T, U and X" shall mean Regulations T, U and X of the Board of
      ----------------------
     Governors of the Federal Reserve System (or any successor), as the same may
     be modified and supplemented and in effect from time to time.

     "REO Property" shall mean real property acquired by Seller, including a
      ------------
     Mortgaged Property acquired through foreclosure of a Mortgage Loan or by
     deed in lieu of such foreclosure.

     "REO Sub" shall mean New Century REO Corp., a California corporation.
      -------

     "Reportable Event" shall mean any of the events set forth in Section
      ----------------
     4043(b) of ERISA or a successor provision thereof, other than those events
     as to which the thirty day notice period is waived under subsections .13,
     .14, .16, .18, .19 or .20 of PBGC Reg. ss. 2615 or one or more successor
     provision thereof.

     "Repurchase Date" shall mean the date on which Seller is to repurchase the
      ---------------
     Purchased Assets from Buyer as specified in the related Confirmation,
     including any date determined by application of the provisions of Sections
     3 or 13; which date shall be specified as "open" unless otherwise requested
     by Seller and agreed by Buyer; provided that in no event shall the
     Repurchase Date be in excess of 364 days after the Purchase Date.

     "Repurchase Documents" shall mean this Agreement, the Custodial Agreement,
      --------------------
     the Custodial and Disbursement Agreement, the Guaranty and the Account
     Agreement.

     "Repurchase Obligations" shall have the meaning specified in Section 7(b).
      ----------------------

     "Repurchase Price" means the price at which Purchased Assets are to be
      ----------------
     transferred from Buyer or its designee (including Custodian) to Seller upon
     termination of a Transaction, which will be determined in each case
     (including Transactions terminable upon demand) as the sum of the Purchase
     Price and the Price Differential as of the date of such determination
     decreased by all cash, Income and Periodic Advance Repurchase Payments
     (including Late Payment Fees, if any) actually received by Buyer pursuant
     to Sections 5(a) or 5(b), respectively.

     "Requirement of Law" shall mean as to any Person, the certificate of
      ------------------
     incorporation and by-laws or other organizational or governing documents of
     such Person, and any law, treaty, rule or regulation or determination of an
     arbitrator or a court or other Governmental Authority, in each case
     applicable to or binding upon such Person or any of its property or to
     which such Person or any of its property is subject.

                                      -14-



     "Residential Dwelling" shall mean any one of the following: (i) a detached
      --------------------
     single family dwelling, (ii) a two-to-four family dwelling, (iii) a unit in
     a condominium project, (iv) a detached single family dwelling in a planned
     unit development or (v) manufactured housing units. Mortgaged Properties
     that consist of the following property types are not Residential Dwellings:
     (a) co-operative units, (b) log homes, (c) earthen homes, (d) underground
     homes, (e) mobile homes, and (f) any dwelling situated on more than ten
     acres of property.

     "Residual Finance Subsidiaries" shall mean (a) NC Residual Corporation, a
      -----------------------------
     Delaware corporation, as long as it is a wholly-owned Subsidiary of NCMC
     and does not amend its Certificate of Incorporation as in effect on March
     20, 1998, and (b) any other wholly-owned Subsidiary of NCMC or NCCC that,
     pursuant to its Articles or Certificate of Incorporation, has a purpose
     limited to the ownership of Junior Securitization Interests, the
     establishment of one or more securitization trusts, issuing securities
     backed by such Junior Securitization Interests, otherwise financing such
     Junior Securitization Interests, and lawful activities incidental to and
     necessary and convenient to the foregoing.

     "Residual Financing Agreements" shall mean collectively, the Global Master
      -----------------------------
     Repurchase Agreement dated as of March 29, 2001 by and between Salomon
     Smith Barney, Inc., as Agent for Salomon Brothers International, Inc., and
     NCCC, as amended, supplemented, restated or otherwise modified and in
     effect from time to time, (ii) the Global Master Repurchase Agreement dated
     as of March 29, 2001 by and between Salomon Smith Barney, Inc., as Agent
     for Salomon Brothers International, Inc., and NCRC, as amended,
     supplemented, restated or otherwise modified and in effect from time to
     time, and (iii) any similar agreements pursuant to which "Residual
     Financing" (as defined in the Residual Security Agreement) is hereafter
     provided to NCMC or NCCC or any Subsidiary of NCMC or NCCC.

     "Residual Security Agreement" shall mean the Amended and Restated Security
      ---------------------------
     Agreement dated as of April 30, 2000 by and among NCCC, NCRC and U.S. Bank
     National Association, as collateral agent for (i) the Lenders (as defined
     therein), (ii) U.S. Bancorp Leasing & Financial, successor in interest to
     FBS Business Finance Corp. (the "Lessor"), as Lessor under any present or
     future leases of equipment by the Lessor, as lessor, to NCCC, NCMC or
     Guarantor, as lessee, or as lender under any present or future loan by the
     Lessor, as lender, to NCCC, NCMC or Guarantor, as borrower, secured by
     equipment and (iii) the Subordinated Noteholder (as defined therein).

     "Responsible Officer" shall mean, as to any Person, the chief executive
      -------------------
     officer, the chief financial officer, the treasurer or the chief operating
     officer of such Person.

     "Risk Rating" shall mean the risk rating of a Mortgage Loan, as determined
      -----------
     using the Underwriting Guidelines.

     "Restricted Payment" shall mean, with respect to any Person, collectively,
      ------------------
     all dividends or other distributions of any nature (cash, securities,
     assets or otherwise), and all payments, by virtue of redemption or
     otherwise, on any class of equity securities (including, without
     limitation, warrants, options or rights therefor) issued by such Person,

                                      -15-



     whether such securities are now or may hereafter be authorized or
     outstanding and any distribution in respect of any of the foregoing,
     whether directly or indirectly.

     "Salomon Financing Facility" shall mean TBMA/ISMA Global Master Repurchase
      --------------------------
     Agreement, as may be amended from time to time, by and between Salomon
     Smith Barney Inc. as agent for Salomon Brothers International Ltd. and NCCC
     and Annex I thereto, dated as of March 29, 2001 and all other documents or
     agreements executed in connection therewith, or replacement facilities with
     substantially similar terms (including, but not limited to, amounts and
     rates) with financial institutions approved by Buyer.

     "Salomon NCMC Financing Facility" shall mean the Letter Agreement, dated
      -------------------------------
     December 1, 2000, as may be amended from time to time, by and among Salomon
     Brothers Realty Corp., NCCC and NCMC and all other documents or agreements
     executed in connection therewith, or replacement facilities with
     substantially similar terms (including, but not limited to, amounts and
     rates) with financial institutions approved by Buyer.

     "Salomon REO Financing Facility" shall mean the Master Loan and Security
      ------------------------------
     Agreement dated as of April 1, 2000, as may be amended from time to time,
     by and between NCMC, NCCC and SBRC, and all other documents or agreements
     executed in connection therewith, or replacement facilities with
     substantially similar terms (including, but not limited to, amounts and
     rates) with financial institutions approved by Buyer.

     "Salomon Residual Financing Facility" shall mean TBMA/ISMA Global Master
      -----------------------------------
     Repurchase Agreement, as may be amended from time to time, by and between
     Salomon Smith Barney Inc as Agent for Salomon Brothers International Ltd.
     and NC Residual II Corporation and Annex I thereto, dated as of March 29,
     2001 and all other documents or agreements executed in connection
     therewith, or replacement facilities with substantially similar terms
     (including, but not limited to, amounts and rates) with financial
     institutions approved by Buyer; provided that amounts available under the
     Salomon Residual Financing Facility may be reduced by up to $2,000,000 per
     month and $9,000,000 per quarter in accordance with its terms.

     "SBRC" shall mean Salomon Brothers Realty Corp., a Delaware corporation.
      ----

     "Second Lien Mortgage Loans" shall mean an Eligible Asset secured by a lien
      --------------------------
     on the Mortgaged Property, subject to one prior lien on such Mortgaged
     Property.

     "Second Lien Sub-Limit" shall mean an amount equal to $40,000,000.
      ---------------------

     "Second Lien CLTV Sub-Limit" shall mean with respect to Second Lien
      --------------------------
     Mortgage Loans with a Combined Loan to Value Ratio of greater than 100%,
     $20,000,000.

     "Security Agreement" shall mean with respect to any Mortgage Loan, any
      ------------------
     contract, instrument or other document related to security for repayment
     thereof (other than the related Mortgage and Mortgage Note), executed by
     the Mortgagor and/or others in connection with such Mortgage Loan,
     including without limitation, any security agreement, guaranty, title
     insurance policy, hazard insurance policy, chattel mortgage,

                                      -16-



     letter of credit or certificate of deposit or other pledged accounts, and
     any other documents and records relating to any of the foregoing.

     "Seller" shall mean NCCC and NCMC.
      ------

     "Seller Asset Schedule" shall have the meaning assigned thereto in the
      ---------------------
     Custodial and Disbursement Agreement.

     "Seller-Related Obligations" shall mean any obligations of NCCC or NCMC
      --------------------------
     hereunder and under any other arrangement between NCCC, NCMC or an
     Affiliate of NCCC or NCMC on the one hand and Buyer or an Affiliate of
     Buyer on the other hand.

     "Servicer" shall have the meaning specified in Section 24.
      --------

     "Servicer Account" shall mean any account established by Servicer in
      ----------------
     connection with the servicing of the Mortgage Loans.

     "Servicing Agreement" has the meaning specified in Section 24.
      -------------------

     "Servicing Contract" shall mean a contract or agreement purchased by NCCC
      ------------------
     or NCMC or entered into by NCCC or NCMC for its own account (and not as
     nominee or subservicer), whether now existing or hereafter purchased or
     entered into, pursuant to which NCCC or NCMC services Mortgage Loans or
     Mortgage Loan pools for Persons other than itself or the other Seller.

     "Servicing File" means with respect to each Mortgage Loan, the file
      --------------
     retained by Seller consisting of originals of all documents in the Mortgage
     File which are not delivered to a Custodian and copies of all documents in
     the Mortgage File set forth in Section 2 of the Custodial and Disbursement
     Agreement.

     "Servicing Records" has the meaning specified in Section 24.
      -----------------

     "Settlement Agent" shall mean, with respect to any Transaction, the entity,
      ----------------
     which may be a title company, escrow company or attorney in accordance with
     local law and practice in the jurisdiction where the related Wet-Ink
     Mortgage Loan is being originated, which funds such Mortgage Loan with
     amounts wired pursuant to the terms of an Existing Financing Facility.

     "Sub-Limit" shall mean any of the Web-Ink Sub-Limit, the Second Lien
      ---------
     Sub-Limit, the Second Lien CLTV Sub-Limit, the Mortgage Loan Sub-Limit, the
     Jumbo Sub-Limit, the Jumbo(500) Sub-Limit, the Jumbo(750) Sub-Limit at any
     time, and the C/C- Credit Sub-Limit.

     "Subordinated Debt" shall mean any Indebtedness of NCCC or NCMC, now
      -----------------
     existing or hereafter created, incurred or arising, which is subordinated
     in right of payment to the payment of all obligations hereunder in a manner
     and to an extent that Buyer has approved in writing prior to the creation
     of such Indebtedness.

                                      -17-



     "Subsidiary" shall mean, with respect to any Person, any corporation,
      ----------
     partnership, limited liability company or other entity of which at least a
     majority of the securities or other ownership interests having by the terms
     thereof ordinary voting power to elect a majority of the board of directors
     or other persons performing similar functions of such corporation,
     partnership, limited liability company or other entity (irrespective of
     whether or not at the time securities or other ownership interests of any
     other class or classes of such corporation, partnership or other entity
     shall have or might have voting power by reason of the happening of any
     contingency) is at the time directly or indirectly owned or controlled by
     such Person or one or more Subsidiaries of such Person or by such Person
     and one or more Subsidiaries of such Person.

     "Tangible Net Worth" shall mean on any date of determination, the
      ------------------
     consolidated Net Worth of Guarantor, NCCC or NCMC, as applicable, and its
     respective Subsidiaries, minus the consolidated book value of all assets of
     Guarantor, NCCC or NCMC, as applicable, and its respective Subsidiaries (to
     the extent reflected as an asset in the balance sheet of Guarantor, NCCC or
     NCMC, as applicable, or any such Subsidiary at such date) which are treated
     as intangibles under GAAP, including, without limitation, such items as
     deferred financing expenses, net leasehold improvements, good will,
     trademarks, trade names, service marks, copyrights, patents, licenses and
     unamortized debt discount and expense; provided, that Junior Securitization
     Interests shall not be treated as intangibles for purposes of this
     definition.

     "Term Purchased Asset" shall mean any Purchased Asset for which Buyer and
      --------------------
     Seller shall have agreed that the Repurchase Date is not "open".

     "Termination Date" shall mean the date which is 364 days from March 14,
      ----------------
     2002 which shall be March 14, 2003 or such earlier date on which this
     Agreement shall terminate in accordance with the provisions hereof or by
     operation of law, as may be extended pursuant to Section 3(n).

     "Termination Fee" has the meaning specified in Section 3(p).
      ---------------

     "Test Period" shall mean each consecutive three-month period commencing
      -----------
     with the three-month period from the Effective Date to the date that is
     three months after the Effective Date, provided that with respect to the
     first Test Period, for purposes of determining if a Non-Use Fee is payable,
     the first Test Period shall begin on August 1, 2001 and end on the date
     that is 3 months after the Effective Date.

     "Total Liabilities" shall mean on any date of determination, the amount, on
      -----------------
     a consolidated basis, of the liabilities of Guarantor, NCCC or NCMC, as
     applicable, and its respective Subsidiaries, determined in accordance with
     GAAP, minus Subordinated Debt.

     "Transaction" has the meaning specified in Section 1.
      -----------

     "Transaction Request" means a request from Seller to Buyer, in the form
      -------------------
     attached as Exhibit I hereto, to enter into a Transaction.

                                      -18-



     "True Sale Certification" shall mean a true sale certification in the form
      -----------------------
     of Exhibit VI attached hereto.
        ----------

     "Trust Receipt" shall mean a trust receipt issued by Custodian to Buyer
      -------------
     confirming Custodian's possession of certain Mortgage Files which are held
     by Custodian for the benefit of Buyer or the registered holder of such
     trust receipt.

     "UBS Financing Facility" shall mean the Committed Note Purchase Agreement
      ----------------------
     dated as of May 10, 2002, as may be amended from time to time, by and
     between New Century Funding I and UBS Real Estate Securities Inc. (formerly
     known as Paine Webber Real Estate Securities Inc.) and all other documents
     or agreements executed in connection therewith, or replacement facilities
     with substantially similar terms (including, but not limited to, amounts
     and rates) with financial institutions approved by Buyer; provided that the
     UBS Financing Facility may be terminated or amounts available to Seller
     thereunder may be reduced so long as it is a result of the repayment of all
     amounts due thereunder other than as a result of an acceleration or a
     default.

     "Underwriting Guidelines" shall mean the underwriting guidelines delivered
      -----------------------
     by Seller to Buyer on or prior to the Effective Date and as may be modified
     or supplemented from time to time thereafter as approved by Buyer in its
     sole discretion attached hereto as Exhibit II.

     "Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial Code
      -----------------------      ---
     as in effect on the date hereof in the State of New York; provided that if
     by reason of mandatory provisions of law, the perfection or the effect of
     perfection or non-perfection of the security interest in any Purchased
     Items is governed by the Uniform Commercial Code as in effect in a
     jurisdiction other than New York, "Uniform Commercial Code" shall mean the
     Uniform Commercial Code as in effect in such other jurisdiction for
     purposes of the provisions hereof relating to such perfection or effect of
     perfection or non-perfection.

     "US Bank Custodial Agreement" shall mean that custodial agreement, dated as
      ---------------------------
     of July 19, 2001 by and among Buyer, NCCC, NCMC and Custodian, as the same
     shall be modified and supplemented and in effect from time to time.

     "US Bank Financing Facility" shall mean the Subordinated Loan Agreement by
      --------------------------
     and among NCMC and US Bank National Association, dated April 28, 2000, as
     may be amended from time to time, and all other documents or agreements
     executed in connection therewith, or replacement facilities with
     substantially similar terms (including, but not limited to, amounts and
     rates) with financial institutions approved by Buyer.

     "USB Financing Facility" shall mean the Fifth Amended and Restated Credit
      ----------------------
     Agreement dated as of May 23, 2001, as may be amended from time to time, by
     and among NCCC, NCMC and U.S. Bank National Association as agent for the
     lenders thereunder and all other documents or agreements executed in
     connection therewith, or replacement facilities with substantially similar
     terms (including, but not limited to, amounts and

                                      -19-



     rates) with financial institutions approved by Buyer; provided that on or
     prior to July 31, 2001 Bank United may cease being a lender thereunder and
     the commitment may be reduced by the amount of Bank United's commitment
     amount.

     "USB Settlement Account" shall mean the following account of U.S. Bank
      ----------------------
     National Association as agent for the lenders under the USB Financing
     Facility, U.S. Bank National Association, Minneapolis, Minnesota, ABA #
     0910-0002-2 for credit to New Century Mortgage Corporation, Collateral
     Account #1731-0097-1378.

     "Wet-Ink Mortgage Loan" shall mean an Eligible Asset which is sold to Buyer
      ---------------------
     within 6 Business Days of, the origination thereof by Seller, which
     origination is in accordance with the Underwriting Guidelines and is funded
     in part or in whole with cash advanced directly to the USB Settlement
     Account or an escrow agent, Settlement Agent, or Warehouse Lender approved
     by Buyer in its sole discretion.

     "Wet-Ink Sub-Limit" shall mean an amount equal to (i) with respect to the
      -----------------
     first five (5) Business Days of each calendar month, $200,000,000, (ii)
     with respect to the last three (3) Business Days of each calendar month,
     $200,000,000 and (iii) at all other times, $160,000,000.

     "Worth Purchase Agreement" shall mean the mortgage loan purchase agreement,
      ------------------------
     dated as of July 1, 2001 between Worth Funding Incorporated and NCMC, as
     the same shall be modified and supplemented and in effect from time to
     time, pursuant to which NCMC buys certain of the Eligible Assets from Worth
     Funding Incorporated.

3.   INITIATION; TERMINATION

     (a)  Conditions Precedent to the Effective Date.
          ------------------------------------------

          (1)  The Effective Date hereof is subject to the satisfaction,
               immediately prior to or concurrently therewith, of the conditions
               precedent that Buyer shall have received from Seller any fees and
               expenses payable hereunder (including, without limitation, the
               fee required pursuant to Section 3(q)), and all of the following
               documents, each of which shall be satisfactory in form and
               substance to Buyer and its counsel:

                    (A)  The following Repurchase Documents delivered to Buyer:

                              (1) Amended and Restated Master Repurchase
                                  --------------------------------------
                    Agreement. This Amended and Restated Master Repurchase
                    Agreement duly completed and executed by the parties
                    thereto. In addition, Seller shall have taken such other
                    action as Buyer shall have requested in order to perfect the
                    security interests created pursuant to this Agreement;

                              (2) Deutsche Custodial and Disbursement Agreement.
                                  ---------------------------------------------
                    The Deutsche Custodial and Disbursement Agreement, duly
                    executed and delivered by NCMC, NCCC, Buyer and Deutsche
                    Bank

                                      -20-



                    National Trust Company. In addition, Seller shall have taken
                    such other action as Buyer shall have requested in order to
                    transfer the Purchased Assets pursuant to this Agreement;

                         (3)  UCC Financing Statements. Amendments to the UCC
                              ------------------------
                    Financing Statements naming each of NCCC and NCMC as Debtor
                    and Buyer as Secured Party and describing the Purchased
                    Items;

                         (4)  Opinions of Counsel. An opinion or opinions of
                              -------------------
                    outside counsel to each of NCCC, NCMC and Guarantor,
                    substantially in the form of Exhibit III;
                                                 -----------

                         (5)  Organizational Documents. A good standing
                              ------------------------
                    certificate and certified copies of the charter and by-laws
                    (or equivalent documents) of each of NCCC, NCMC and
                    Guarantor and of all corporate or other authority for NCCC,
                    NCMC or Guarantor, as applicable, with respect to the
                    execution, delivery and performance of the Repurchase
                    Documents to which it is a party and each other document to
                    be delivered by NCCC, NCMC or Guarantor from time to time in
                    connection herewith (and Buyer may conclusively rely on such
                    certificate until it receives notice in writing from NCCC,
                    NCMC or Guarantor, as applicable, to the contrary);

                         (6)  Underwriting Guidelines. A copy of Seller's
                              -----------------------
                    current Underwriting Guidelines, and any material changes to
                    the Underwriting Guidelines made since the Underwriting
                    Guidelines were last delivered to Buyer;

                         (7)  Servicing Agreement(s). Any Servicing Agreement,
                              ----------------------
                    certified as a true, correct and complete copy of the
                    original;

                         (8)  Consents and Waivers. Any and all irrevocable
                              --------------------
                    consents and waivers required under the Existing Financing
                    Facilities;

                         (9)  UCC Amendments and Releases. Any and all
                              ---------------------------
                    amendments or terminations of UCC financing statements
                    required by Buyer; and

                         (10) Other Documents. Such other documents as Buyer may
                              ---------------
                    reasonably request, in form and substance reasonably
                    acceptable to Buyer.

     (b)  Conditions Precedent to all Transactions. Buyer's obligation to enter
          ----------------------------------------
          into each Transaction (including the initial Transaction) is subject
          to the satisfaction of the following further conditions precedent,
          both immediately prior to entering into

                                      -21-



          such Transaction and also after giving effect to the consummation
          thereof and the intended use of the proceeds of the sale:

          (1)  Seller shall have delivered a Transaction Request via Electronic
               Transmission in accordance with the procedures set forth in
               Section 3(c);

          (2)  no Default or Event of Default shall have occurred and be
               continuing under the Repurchase Documents;

          (3)  after giving effect to the requested Transaction, the aggregate
               outstanding Purchase Price of the Transactions outstanding shall
               not exceed the Maximum Amount;

          (4)  both immediately prior to the requested Transaction and also
               after giving effect thereto and to the intended use thereof, the
               representations and warranties made by Seller in Section 10,
               shall be true, correct and complete on and as of such Purchase
               Date in all material respects with the same force and effect as
               if made on and as of such date (or, if any such representation or
               warranty is expressly stated to have been made as of a specific
               date, as of such specific date);

          (5)  after giving effect to the requested Transaction, the aggregate
               outstanding Purchase Price of the Transactions outstanding shall
               not exceed the Asset Value of all the Purchased Assets subject to
               outstanding Transactions;

          (6)  subject to Buyer's right to perform one or more Due Diligence
               Reviews pursuant to Section 28, Buyer shall have completed its
               due diligence review of the Mortgage File for each Purchased
               Asset, and such other documents, records, agreements,
               instruments, mortgaged properties or information relating to such
               Purchased Asset as Buyer in its sole discretion deems appropriate
               to review and such review shall be satisfactory to Buyer in its
               sole discretion;

          (7)  Buyer shall have received from Seller certified copies of any
               Servicing Agreement relating to the Eligible Assets and Buyer
               shall have reviewed and approved each such Servicing Agreement in
               its sole discretion;

          (8)  Buyer shall have received all fees and expenses of counsel to
               Buyer as contemplated by Section 14(b) which amount, at Buyer's
               option, may be withheld from the sale proceeds of any Transaction
               hereunder;

          (9)  Buyer shall have approved, in its sole discretion, all exceptions
               to the Underwriting Guidelines;

          (10) none of the following shall have occurred and/or be continuing:

                    (A) an event or events shall have occurred in the good faith
               determination of Buyer resulting in the effective absence of a
               "repo

                                      -22-



               market" or comparable "lending market" for financing debt
               obligations secured by mortgage loans or securities or an event
               or events shall have occurred resulting in Buyer not being able
               to finance Purchased Assets through the "repo market" or "lending
               market" with traditional counterparties at rates which would have
               been reasonable prior to the occurrence of such event or events;
               or

                    (B) an event or events shall have occurred resulting in the
               effective absence of a "securities market" for securities backed
               by mortgage loans or an event or events shall have occurred
               resulting in Buyer not being able to sell securities backed by
               mortgage loans at prices which would have been reasonable prior
               to such event or events; or

                    (C) there shall have occurred a material adverse change in
               the financial condition of Buyer which affects (or can reasonably
               be expected to affect) materially and adversely the ability of
               Buyer to fund its obligations under this Agreement; or

          (11) with respect to each Eligible Asset, Buyer shall have received
               from Custodian on each Purchase Date an Asset Schedule and
               Exception Report or Trust Receipt and Basic Status Report, as
               applicable, dated the Purchase Date, duly completed and with
               exceptions acceptable to Buyer in its sole discretion in respect
               of Eligible Assets to be purchased hereunder on such Business
               Day;

          (12) Buyer shall have received from Seller a Warehouse Lender's
               Release Letter substantially in the form of Exhibit VII-B hereto
                                                           -------------
               (or such other form acceptable to Buyer) or a Seller's Release
               Letter substantially in the form of Exhibit VII-A hereto (or such
                                                   -------------
               other form acceptable to Buyer) covering each Eligible Asset to
               be sold to Buyer;

          (13) The aggregate requested Purchase Price of Eligible Assets that
               are not Wet-Ink Mortgage Loans that Seller has requested Buyer
               purchase pursuant to the Transaction Request is equal to or in
               excess of $10,000,000;

          (14) Buyer shall not have determined that the introduction of, or a
               change in, any Requirement of Law or in the interpretation or
               administration of any Requirement of Law applicable to Buyer has
               made it unlawful, and no Governmental Authority shall have
               asserted that it is unlawful, for Buyer to enter into
               Transactions;

          (15) With respect to Mortgage Loans for which U.S. Bank National
               Association is or is to be Custodian, after August 15, 2002,
               Buyer shall have approved such Transaction in its sole
               discretion; and

          (16) The Repurchase Date for such Transaction is not later than the
               Termination Date.

                                      -23-



     Each Transaction Request delivered by Seller hereunder shall constitute a
     certification by each of NCCC and NCMC that all the conditions set forth in
     this Section 3(b) have been satisfied (both as of the date of such notice
     or request and as of the date of such purchase).

     Each of NCCC and NCMC hereby request that Buyer, on each Business Day,
     convert each Eligible Asset which is a Wet-Ink Mortgage Loan for which the
     Mortgage File has been received by the Custodian in accordance with the
     Custodial Agreement to a dry Mortgage Loan and this request shall
     constitute a certification by each of NCCC and NCMC that all the conditions
     set forth in this Section 3(b) have been satisfied (both as of the date
     hereof and as of the date of such conversion).

     (c)

          (1)  With respect to all Mortgage Loans for which Deutsche Bank
               National Trust Company is or is to be the Custodian, Seller shall
               request a Transaction by delivering to Custodian, Disbursement
               Agent and Buyer via Electronic Transmission a request in the form
               of Exhibit I attached hereto (a "Transaction Request") in
                  ---------                     -------------------
               accordance with the timeframe set forth in Section 3(a) of the
               Custodial and Disbursement Agreement. Such Transaction Request
               shall describe the Purchased Assets in a Seller Asset Schedule
               and set forth (i) the Purchase Date, (ii) the Purchase Price,
               (iii) the Repurchase Date, (iv) the Pricing Rate applicable to
               the Transaction, (v) the applicable Purchase Percentages and (vi)
               additional terms or conditions not inconsistent with this
               Agreement. Each such Transaction Request in respect of Eligible
               Assets that are not Wet-Ink Mortgage Loans shall be for an
               aggregate Purchase Price equal to or in excess of $10,000,000.

          (2)  With respect to all Mortgage Loans for which U.S. Bank National
               Association is or is to be the Custodian, Seller shall request a
               Transaction by delivering to Custodian and Buyer via Electronic
               Transmission a request in the form of Exhibit I attached hereto
                                                     ---------
               (a "Transaction Request") no later than (i) 9:00 a.m. New York
                   -------------------
               time on the requested Purchase Date with respect to the initial
               purchase of each Eligible Asset that is not a Wet-Ink Mortgage
               Loan and with respect to each Wet-Ink Mortgage Loan anticipated
               to be purchased on such Purchase Date (with a final Seller Asset
               Schedule to be delivered no later than 11:30 a.m. New York time
               on the related Purchase Date) and (ii) 4:00 p.m. New York time on
               the Business Day prior to the date a Wet-Ink Mortgage Loan
               converts with respect to each Wet-Ink Mortgage Loan for which
               Custodian has received the related Mortgage File and there are no
               Fatal Exceptions with respect thereto and such Wet-Ink Mortgage
               Loan is converting to a dry Mortgage Loan on the Purchase Date.
               Such Transaction Request shall describe the Purchased Assets in a
               Seller Asset Schedule and set forth (i) the Purchase Date, (ii)
               the Purchase Price, (iii) the Repurchase Date, (iv) the Pricing
               Rate applicable to the Transaction, (v) the applicable Purchase

                                      -24-



               Percentages and (vi) additional terms or conditions not
               inconsistent with this Agreement. Each such Transaction Request
               in respect of Eligible Assets that are not Wet-Ink Mortgage Loans
               shall be for an aggregate Purchase Price equal to or in excess of
               $10,000,000.

          On each Purchase Date, Buyer shall forward to Seller a confirmation (a
     "Confirmation") by Electronic Transmission setting forth with respect to
      ------------
     each Transaction funded on such date, (1) the mortgage loan number, (2) the
     Purchase Price for such Purchased Assets, (3) the Market Value of the
     related Mortgage Loans as of the date of such Confirmation, (4) the
     outstanding principal amount of the related Mortgage Loans, (5) the
     Repurchase Date, (6) the Pricing Rate and (7) the Class designations of
     such Purchased Assets. Buyer shall forward to Seller a revised Confirmation
     by Electronic Transmission notifying Seller as to any changes made by Buyer
     in the Pricing Spread, Purchase Percentage or Reduction Amount pursuant to
     the terms hereof.

          On each date that all the documents set forth in Section 2(a)(i) of
     the Custodial and Disbursement Agreement are received by the Custodian with
     respect to any Wet-Ink Mortgage Loan, and Custodian delivers to Buyer a
     Trust Receipt attaching an Asset Schedule and Exception Report or Basic
     Status Report and Exception Report, as applicable, with respect to such
     Eligible Assets, Buyer shall forward to Seller a new Confirmation by
     Electronic Transmission setting forth the following information, updated to
     reflect the revised Pricing Rate, and, if applicable, Market Value as a
     result of the conversion of such Mortgage Loan, (1) the mortgage loan
     number, (2) the Purchase Price for such Purchased Assets, (3) the Market
     Value of the related Mortgage Loans, (4) the outstanding principal amount
     of the related Mortgage Loans, (5) the Repurchase Date, (6) the Pricing
     Rate and (7) the Class designations of such Purchased Assets.

          In the event Seller disagrees with any terms of the Confirmation,
     Seller shall notify Buyer in writing of such disagreement within one (1)
     Business Day after receipt of such Confirmation unless a corrected
     Confirmation is sent by Buyer. An objection sent by Seller must state
     specifically that it is an objection, must specify the provision(s) being
     objected to by Seller, must set forth such provision(s) in the manner that
     Seller believes they should be stated, and must be received by Buyer no
     more than one (1) Business Day after the Confirmation was received by
     Seller.

     (d)  Any Confirmation by Buyer shall be deemed to have been received by
          Seller on the date actually received by Seller.

     (e)  Except as set forth in Section 3(c), each Confirmation, together with
          this Agreement, shall constitute conclusive evidence of the terms
          agreed between Buyer and Seller with respect to the Transaction to
          which the Confirmation relates, and Seller's acceptance of the related
          proceeds shall constitute Seller's agreement to the terms of such
          Confirmation. It is the intention of the parties that each
          Confirmation shall not be separate from this Agreement but shall be
          made a part of this Agreement.

                                      -25-



     (f)  On the Repurchase Date, termination of a Transaction will be effected
          by transfer to Seller or its designee of the Purchased Assets (and any
          Income in respect thereof received by Buyer not previously credited or
          transferred to, or applied to the obligations of, Seller pursuant to
          Section 5) which amount shall be netted against the simultaneous
          receipt of the Repurchase Price by Buyer. To the extent a net amount
          is owed to one party, the other party shall pay such amount to such
          party. Seller is obligated to obtain the Mortgage Files from Buyer or
          its designee (including Custodian) at Seller's expense on the
          Repurchase Date.

     (g)  Subject to the terms and conditions of this Agreement, during the term
          of this Agreement Seller may sell to Buyer, repurchase from Buyer and
          resell to Buyer Eligible Assets hereunder.

     (h)  In no event shall a Transaction be entered into when any Default or
          Event of Default has occurred and is continuing or when the Repurchase
          Date for such Transaction would be later than the Termination Date.

     (i)  With respect to all Mortgage Loans for which Deutsche Bank National
          Trust Company is or is to be the Custodian, with respect to each
          Eligible Asset that is not a Wet-Ink Mortgage Loan, Seller shall
          deliver to Custodian the Mortgage File pertaining to each Eligible
          Asset to be purchased by Buyer no later than the time set forth in the
          Custodial and Disbursement Agreement. With respect to all Mortgage
          Loans for which U.S. Bank National Association is or is to be the
          Custodian, with respect to each Eligible Asset that is not a Wet-Ink
          Mortgage Loan, no later than 12:00 noon, New York time, two (2)
          Business Days prior to the requested Purchase Date (or such lesser
          time as Custodian and Seller may agree), Seller shall deliver to
          Custodian the Mortgage File, as applicable, pertaining to each
          Eligible Asset to be purchased by Buyer.

     (j)

          (1)  With respect to all Mortgage Loans for which Deutsche Bank
               National Trust Company is or is to be the Custodian, with respect
               to each Eligible Asset that is not a Wet-Ink Mortgage Loan,
               pursuant to the Custodial and Disbursement Agreement, Custodian
               shall deliver to Buyer and Seller an Asset Schedule and Exception
               Report with respect to the Eligible Assets which Seller has
               requested Buyer purchase on such Purchase Date, and no later than
               5 p.m., New York City time, on each Purchase Date, Custodian
               shall deliver to Buyer a Trust Receipt in respect of all such
               Eligible Assets purchased by Buyer on such Purchase Date. Subject
               to the provisions of this Section 3 and Section 11 of the
               Custodial and Disbursement Agreement, the Purchase Price for each
               Eligible Asset that is not a Wet-Ink Mortgage Loan will be made
               available to Seller by Disbursement Agent transferring, the
               aggregate amount of such Purchase Price in accordance with the
               Custodial and Disbursement Agreement.

                                      -26-



          (2)  With respect to all Mortgage Loans for which U.S. Bank National
               Association is or is to be the Custodian, with respect to each
               Eligible Asset that is not a Wet-Ink Mortgage Loan, pursuant to
               the Custodial Agreement, Custodian shall deliver to Buyer and
               Seller, by no later than 11:30 a.m., New York time on a Purchase
               Date, a Trust Receipt in respect of all such Eligible Assets
               purchased by Buyer on such Purchase Date. Subject to the
               provisions of this Section 3, the Purchase Price for each
               Eligible Asset which is not a Wet-Ink Mortgage Loan will then be
               made available to Seller by Buyer transferring via wire transfer,
               in the aggregate amount of such Purchase Price in funds
               immediately available pursuant to wire instructions set forth in
               the Transaction Request (subject to the purchase limits set forth
               herein). Pursuant to the Custodial Agreement, Custodian shall
               deliver to Buyer a Basic Status Report and Exception Report no
               later than 11:00 a.m. New York time on each Purchase Date.

     (k)

          (1)  With respect to all Mortgage Loans for which Deutsche Bank
               National Trust Company is or is to be the Custodian, subject to
               the provisions of this Section 3 and Section 11 of the Custodial
               and Disbursement Agreement, the Purchase Price for each Eligible
               Asset which is a Wet-Ink Mortgage Loan will then be made
               available to Seller by Disbursement Agent transferring the
               aggregate amount of such Purchase Price in accordance with the
               Custodial and Disbursement Agreement. Seller shall deliver the
               Mortgage File related thereto to Custodian, for receipt by
               Custodian no later than seven (7) Business Days following the
               Origination Date of such Wet-Ink Mortgage Loan.

          (2)  With respect to all Mortgage Loans for which U.S. Bank National
               Association is or is to be the Custodian, with respect to each
               Eligible Asset that is a Wet-Ink Mortgage Loan, pursuant to the
               Custodial Agreement, Custodian shall deliver to Buyer and Seller,
               by no later than 11:30 a.m., New York time on a Purchase Date, a
               Trust Receipt in respect of all such Wet-Ink Mortgage Loans
               purchased by Buyer on such Purchase Date. Subject to the
               provisions of this Section 3, the Purchase Price for each
               Eligible Asset which is a Wet-Ink Mortgage Loan will then be made
               available to Seller by Buyer transferring, via wire transfer, to
               the USB Settlement Account, in the aggregate amount of such
               Purchase Price in funds immediately available to the USB Account.
               Seller shall deliver the Mortgage File related thereto to
               Custodian, for receipt by Custodian no later than seven (7)
               Business Days following the Origination Date of such Wet-Ink
               Mortgage Loan.

     (l)  Seller may repurchase any individual Purchased Asset without penalty
          or premium, but subject to the last sentence of this Section 3(l), on
          any date. The Repurchase Price payable for the repurchase of any such
          Purchased Asset shall be reduced as provided in Section 5(d). If
          Seller intends to make such a repurchase,

                                      -27-



          Seller shall give one (1) Business Day's prior written notice thereof
          to Buyer, designating the Purchased Assets to be repurchased. If such
          notice is given, the amount specified in such notice shall be due and
          payable on the date specified therein, and, on receipt, such amount
          shall be applied to the Repurchase Price for the designated Purchased
          Assets. The amount of the original Purchase Price of the Purchased
          Assets thus repurchased shall be available for subsequent Transactions
          subject to the terms of this Agreement. If any Term Purchased Asset is
          repurchased on any date other than the Repurchase Date for such Term
          Purchased Asset, Seller shall pay to Buyer any amount determined by
          Buyer in its sole discretion, exercised in good faith, as necessary to
          compensate Buyer for any additional losses, costs or expenses which it
          may reasonably incur as a result of such repurchase, including,
          without limitation, any loss, cost or expense incurred by reason of
          the liquidation or reemployment of deposits or other funds acquired by
          Buyer to fund or maintain such Transaction.

     (m)  [Reserved]

     (n)  At the request of Seller made at least 90 days, but in no event
          earlier than 360 days, prior to the then current Termination Date,
          Buyer may in its sole discretion extend the Termination Date for a
          period of 364 additional days or such other period to be determined by
          Buyer in its sole discretion by giving written notice of such
          extension to Seller no later than sixty (60) days after Buyer's
          receipt of Seller's request. Any failure by Buyer to deliver such
          notice of extension shall be deemed to be Buyer's determination not to
          extend the then current Termination Date.

     (o)  [Reserved]

          In the event Seller fails to maintain the average aggregate principal
          balance of Transactions outstanding hereunder for any Test Period
          equal to at least $200,000,000, Seller agrees to pay to Buyer on the
          fifth (5/th/) Business Day of the next succeeding calendar month a
          non-use fee (the "Non-Use Fee") equal to 25 basis points (0.25%) per
                            -----------
          annum of the amount equal to the Maximum Amount less the average
          aggregate principal balance of Transactions outstanding hereunder over
          such Test Period; provided that the Seller shall not be required to
          pay such Non-Use Fee if, during the applicable Test Period, the
          Buyer's determination of Market Value resulted in Purchase Prices with
          respect to a requested Transaction during such Test Period equal to
          less than 99% of the outstanding principal balance of the Eligible
          Assets Seller requested Buyer purchase during such Test Period. No
          Non-Use Fee shall be payable by Seller if Buyer does not purchase any
          Eligible Assets during such Test Period due to the occurrence of any
          event set forth in Section 3(b)(10). In addition, in the event Seller
          terminates this Agreement in accordance with Section 20, Seller shall
          pay to Buyer on the fifth (5/th/) Business Day of the next succeeding
          calendar month a termination fee (the "Termination Fee") equal to a
                                                 ---------------
          percentage per annum equal to the Early Termination Percentage,
          calculated based on the actual number of days remaining and assuming a
          360 day year, of the Maximum Amount for the period

                                      -28-



          commencing on the date of such termination and ending on the original
          Termination Date, as may have been extended pursuant to Section 3(n);
          provided, however, that if Buyer assigns its obligation to purchase
          Eligible Assets from Seller under this Agreement, no Termination Fee
          will be payable by Seller in the event Seller terminates this
          Agreement in accordance with Section 20. All such payments pursuant to
          this clause (p) shall be made in Dollars, in immediately available
          funds, without deduction, set-off or counterclaim, to Buyer at the
          account set forth in Section 8(a) hereof.

     (p)  Seller agrees to pay to Buyer on or prior to the Effective Date a
          facility fee equal to 12.5 basis points (0.125%) per annum of the
          Maximum Amount, such payment to be made in Dollars, in immediately
          available funds, without deduction, set-off or counterclaim, to Buyer
          at the account set forth in Section 8(a) hereof.

     (q)  With respect to Mortgage Loans held by Deutsche Bank National Trust
          Company, on any day on which the Margin Base for such Mortgage Loans
          exceeds the aggregate outstanding Purchase Price of all Transactions
          with respect to such Mortgage Loans, so long as no Default or Event of
          Default has occurred and is continuing:

          (1)  Seller may prepare a Request for Additional Transactions for
               Excess Margin in the form of Exhibit IX attached hereto ("Request
                                            ----------                   -------
               for Additional Transactions for Excess Margin"), (A) specifying
               ---------------------------------------------
               (i) the increase in Purchase Price for all outstanding
               Transactions and the requested Purchase Date, (ii) the Excess
               Margin with respect to all outstanding Transactions before giving
               effect to the requested Transaction, (iii) the remaining Excess
               Margin after giving effect to the requested Transaction, and (iv)
               the aggregate outstanding Purchase Price of the Transactions
               after giving effect to the requested Transaction, and (B)
               including a certification that, upon the consummation of the
               additional Transactions, the Margin Base will be equal to or
               greater than the aggregate outstanding Purchase Price of all
               Transactions, and the excess of the Margin Base over the
               aggregate outstanding Purchase Price, after giving effect to the
               Transaction, shall be the "Excess Margin".
                                          -------------

          (2)  Seller shall transmit via Electronic Transmission the Request for
               Additional Transactions for Excess Margin to Disbursement Agent
               and Buyer prior to 12:00 noon, New York City time, on the
               requested Purchase Date. Upon confirming that the Request for
               Additional Transactions for Excess Margin correctly reflects the
               information set forth in Section 3(r)(1) and that, after giving
               effect to the requested Transaction, the amount of the Margin
               Base would be equal to or greater than the aggregate outstanding
               Purchase Prices of all Transactions, Buyer shall cause
               Disbursement Agent to remit the additional Purchase Price in the
               amount set forth in such Request for Additional Transactions for
               Excess Margin and send a revised Confirmation with respect to
               such Purchased Assets. In the event that Buyer's assessment of
               the Margin Base would

                                      -29-



               alter the information set forth in any Request for Additional
               Transactions for Excess Margin, Buyer shall promptly notify
               Seller in writing of such assessment.

          (3)  Buyer shall not be obligated to cause Disbursement Agent to remit
               the additional Purchase Price requested pursuant to a Request for
               Additional Transactions for Excess Margin which (i) Buyer
               reasonably determines is based on erroneous information or would
               result in a Transaction other than in accordance with the terms
               of this Agreement, or (ii) does not reflect Buyer's current
               determination of Market Value as provided in the definition
               thereof.

4.   MARGIN AMOUNT MAINTENANCE

     (a)  If at any time the Margin Base is less than the aggregate Purchase
          Price for all outstanding Transactions (a "Margin Deficit"), then
                                                     --------------
          Buyer may by notice to Seller (as such notice is more particularly set
          forth below, a "Margin Deficit Notice"), require Seller to transfer to
                          ---------------------
          Buyer or its designee (including Custodian) cash or Eligible Assets
          ("Additional Purchased Assets") so that the aggregate Asset Value of
            ---------------------------
          the Purchased Assets, including any such Additional Purchased Assets,
          will thereupon equal or exceed the aggregate Purchase Prices for such
          Purchased Assets. If Buyer delivers a Margin Deficit Notice to Seller
          on or prior to 6 p.m. (New York time) on any Business Day, then Seller
          shall transfer Additional Purchased Assets to Buyer no later than 5
          p.m. (New York time) the following Business Day. In the event Buyer
          delivers a Margin Deficit Notice to Seller after 6 p.m. (New York
          time) on any Business Day, then such Margin Deficit Notice shall be
          deemed to have been delivered on the following Business Day and Seller
          shall be required to transfer Additional Purchased Assets no later
          than 5 p.m. (New York time) on the subsequent Business Day. All cash
          transferred to Buyer pursuant to this Section 4(a) shall be deposited
          in the account set forth in Section 8(a) hereof and shall be deemed to
          reduce the aggregate Purchase Price with respect to all outstanding
          Transactions.

     (b)  Buyer's election, in its sole and absolute discretion, not to deliver
          a Margin Deficit Notice at any time there is a Margin Deficit shall
          not in any way limit or impair its right to deliver a Margin Deficit
          Notice at any time a Margin Deficit exists.

5.   INCOME PAYMENTS

     (a)  Where a particular Transaction's term extends over an Income payment
          date on the Purchased Assets subject to that Transaction such Income
          shall be the property of Buyer. Buyer agrees that until a Default or
          an Event of Default has occurred and Buyer otherwise directs as
          contemplated in each Servicer Notice, each Servicer that is not Seller
          shall be permitted to continue to remit Income in accordance with the
          respective Servicing Agreement. In the event that Seller is the
          Servicer of any Mortgage Loans, Buyer agrees that until a Default or
          an Event

                                      -30-



          of Default has occurred, Seller shall be permitted to continue to
          remit or retain Income with respect to such Mortgage Loans in
          accordance with its current existing business practice. Upon notice of
          a Default or an Event of Default to Seller hereunder or to Servicer
          pursuant to a Servicer Notice, Seller shall, and pursuant to the
          Servicer Notice, Servicer shall be required to, deposit promptly all
          Income in a deposit account (the title of which shall indicate that
          the funds therein are being held in trust for Buyer) (the "Collection
                                                                     ----------
          Account") with the Bank and which is subject to the Account Agreement.
          -------
          All funds in the Collection Account may be withdrawn by Buyer and
          applied as determined by Buyer. Seller may not give any instruction
          with respect to the Collection Account after a Default or an Event of
          Default.

     (b)  Notwithstanding that Buyer and Seller intend that the Transactions
          hereunder be sales to Buyer of the Purchased Assets, Seller shall pay
          to Buyer the accreted value of the Price Differential (less any amount
          of such Price Differential previously paid by Seller to Buyer) of each
          Transaction through but not including the Payment Calculation Date
          (each such payment, a "Periodic Advance Repurchase Payment") on each
                                 -----------------------------------
          Payment Date. Buyer shall deliver to Seller, via Electronic
          Transmission, notice of the required Periodic Advance Repurchase
          Payment on or prior to the second Business Day preceding each Payment
          Date. If Seller fails to make all or part of the Periodic Advance
          Repurchase Payment by 5:00 p.m., New York City time, on the Payment
          Date, Seller shall be obligated to pay to Buyer (in addition to, and
          together with, the Periodic Advance Repurchase Payment) interest on
          the unpaid amount of the Periodic Advance Repurchase Payment at a rate
          per annum equal to the Post-Default Rate (the "Late Payment Fee")
                                                         ----------------
          until the overdue Periodic Advance Repurchase Payment is received in
          full by Buyer.

     (c)  Seller shall hold or cause to be held for the benefit of, and in trust
          for, Buyer all income, including without limitation all Income
          received by or on behalf of Seller with respect to such Purchased
          Assets. All such Income shall be held in trust for Buyer, shall
          constitute the property of Buyer and shall not be commingled with
          other property of Seller, any affiliate of Seller or the applicable
          Servicer except as expressly permitted above in this Section 5. Funds
          deposited in the Collection Account during any month shall be held
          therein, in trust for Buyer.

     (d)  Buyer shall offset against the Repurchase Price of each such
          Transaction all Income and Periodic Advance Repurchase Payments
          actually received by Buyer for such Transaction pursuant to Sections
          5(a) and 5(b) as of the applicable Repurchase Date, respectively,
          excluding any Late Payment Fees paid pursuant to Section 5(b); it
          being understood that the Late Payment Fees are properties of Buyer
          that are not subject to offset against the Repurchase Price.

6.   REQUIREMENTS OF LAW

     (a)  If any Requirement of Law (other than with respect to any amendment
          made to Buyer's certificate of incorporation and by-laws or other
          organizational or

                                      -31-



          governing documents) or any change in the interpretation or
          application thereof or compliance by Buyer with any request or
          directive (whether or not having the force of law) from any central
          bank or other Governmental Authority made subsequent to the date
          hereof:

          (1)  shall subject Buyer to any tax of any kind whatsoever with
               respect to this Agreement or any Transaction (excluding net
               income taxes) or change the basis of taxation of payments to
               Buyer in respect thereof;

          (2)  shall impose, modify or hold applicable any reserve, special
               deposit, compulsory loan or similar requirement against assets
               held by, deposits or other liabilities in or for the account of,
               advances, or other extensions of credit by, or any other
               acquisition of funds by, any office of Buyer which is not
               otherwise included in the determination of the Eurodollar Rate
               hereunder;

          (3)  shall impose on Buyer any other condition;

          and the result of any of the foregoing is to increase the cost to
     Buyer, by an amount which Buyer deems to be material, of entering,
     continuing or maintaining any Transaction or to reduce any amount due or
     owing hereunder in respect thereof, then, in any such case, Seller shall
     promptly pay Buyer such additional amount or amounts as calculated by Buyer
     in good faith as will compensate Buyer for such increased cost or reduced
     amount receivable.

     (b)  If Buyer shall have determined that the adoption of or any change in
          any Requirement of Law (other than with respect to any amendment made
          to Buyer's certificate of incorporation and by-laws or other
          organizational or governing documents) regarding capital adequacy or
          in the interpretation or application thereof or compliance by Buyer or
          any corporation controlling Buyer with any request or directive
          regarding capital adequacy (whether or not having the force of law)
          from any Governmental Authority made subsequent to the date hereof
          shall have the effect of reducing the rate of return on Buyer's or
          such corporation's capital as a consequence of its obligations
          hereunder to a level below that which Buyer or such corporation could
          have achieved but for such adoption, change or compliance (taking into
          consideration Buyer's or such corporation's policies with respect to
          capital adequacy) by an amount deemed by Buyer to be material, then
          from time to time, Seller shall promptly pay to Buyer such additional
          amount or amounts as will compensate Buyer for such reduction.

     (c)  Any payments made by Seller to Buyer shall be free and clear of, and
          without deduction or withholding for, any taxes; provided, however,
          that if Seller shall be required by law to deduct or withhold any
          taxes from any sums payable to Buyer, then Seller shall (A) make such
          deductions or withholdings and pay such amounts to the relevant
          authority in accordance with applicable law, (B) pay to Buyer the sum
          that would have been payable had such deduction or withholding not
          been made, and (C) at the time the Price Differential is paid, pay to
          Buyer all additional

                                      -32-



          amounts as specified by Buyer to preserve the after-tax yield Buyer
          would have been received had such tax not been imposed.

     (d)  If Buyer becomes entitled to claim any additional amounts pursuant to
          this Section, (i) it shall promptly notify Seller of the event by
          reason of which it has become so entitled and (ii) at the sole option
          of Buyer, (x) Buyer may terminate this Agreement and Seller shall not
          be required to pay any Termination Fee or (y) this Agreement shall
          continue in full force and effect, but, Seller shall not be required
          to pay any Non-Use Fee with respect to each Test Period during which
          Buyer is entitled to such additional amounts solely under this
          Section. A certificate as to any additional amounts payable pursuant
          to this Section submitted by Buyer to Seller shall be conclusive in
          the absence of manifest error.

7.   SECURITY INTEREST

     (a)  Each of the following items or types of property, whether now owned or
          hereafter acquired, now existing or hereafter created and wherever
          located, is hereinafter referred to as the "Purchased Items": all
                                                      ---------------
          Mortgage Loans, all rights under each Purchase Agreement (but not the
          obligations thereunder), all rights of NCMC under the Worth Purchase
          Agreement with respect to Mortgage Loans originated by Worth Funding
          Incorporated, all Mortgage Files, including without limitation all
          promissory notes, all Servicing Records relating to the Mortgage Loans
          (as defined in Section 24(c)), all Servicing Agreements relating to
          the Mortgage Loans and any other collateral pledged or otherwise
          relating to such Mortgage Loans, together with all files, documents,
          instruments, surveys, certificates, correspondence, appraisals,
          computer programs, computer storage media, accounting records and
          other books and records relating thereto, all mortgage guaranties and
          insurance (issued by governmental agencies or otherwise) and any
          mortgage insurance certificate or other document evidencing such
          mortgage guaranties or insurance relating to any Mortgage Loan, all
          servicing fees to which such Seller is entitled and servicing and
          other rights relating to the Mortgage Loans, all Servicer Accounts
          established pursuant to any Servicing Agreement and all amounts on
          deposit therein, from time to time, all Purchase Agreements or other
          agreements or contracts relating to, constituting, or otherwise
          governing, any or all of the foregoing to the extent they relate to
          the Purchased Assets including the right to receive principal and
          interest payments with respect to the Purchased Assets and the right
          to enforce such payments, the Collection Account and all monies from
          time to time on deposit in the Collection Account, all "general
          intangibles", "accounts", "chattel paper", "deposit accounts" and
          "investment property" as defined in the Uniform Commercial Code as in
          effect from time to time relating to or constituting any and all of
          the foregoing, and any and all replacements, substitutions,
          distributions on or proceeds of any and all of the foregoing.

     (b)  Buyer and Seller intend that the Transactions hereunder be sales to
          Buyer of the Purchased Assets and not loans from Buyer to Seller
          secured by the Purchased Assets. However, in order to preserve Buyer's
          rights under this Agreement in the

                                      -33-



          event that a court or other forum recharacterizes the Transactions
          hereunder as loans and as security for the performance by Seller of
          all of Seller's obligations to Buyer hereunder and the Transactions
          entered into hereunder ("Repurchase Obligations") and the
                                   ----------------------
          Seller-Related Obligations, each of NCCC and NCMC hereby assigns,
          pledges and grants a security interest in all of its right, title and
          interest in, to and under the Purchased Items and Purchased Assets to
          Buyer to secure the Repurchase Obligations and Seller-Related
          Obligations, including without limitation the repayment of all amounts
          owing to Buyer hereunder. The assignment, pledge and grant of security
          interest contained herein shall be, and each of NCCC and NCMC hereby
          represents and warrants to Buyer that it is, a first priority
          perfected security interest. Each of NCCC and NCMC agrees to mark its
          computer records and tapes to evidence the interests granted to Buyer
          hereunder. All Purchased Items shall secure the payment of all
          obligations of Seller now or hereafter existing under this Agreement,
          including, without limitation, Seller's obligation to repurchase
          Purchased Assets, or if such obligation is so recharacterized as a
          loan, to repay such loan, for the Repurchase Price and to pay any and
          all other amounts owing to Buyer hereunder.

     (c)  Pursuant to the Custodial and Disbursement Agreement, Custodian shall
          hold the Mortgage Files as exclusive bailee and agent for Buyer
          pursuant to the terms of the Custodial and Disbursement Agreement and
          shall deliver to Buyer Trust Receipts each to the effect that
          Custodian has reviewed such Mortgage Files in the manner and to the
          extent required by the Custodial and Disbursement Agreement and
          identifying any deficiencies in such Mortgage Files as so reviewed.

8.   PAYMENT, TRANSFER AND CUSTODY

     (a)  Unless otherwise mutually agreed in writing, all transfers of funds to
          be made by Seller hereunder shall be made in Dollars, in immediately
          available funds, without deduction, set-off or counterclaim, to Buyer
          at the following account maintained by Buyer; Account No. GLA 111569
          SER, for the account of CDC Mortgage Capital, Inc., Bank of New York,
          ABA No. 021000018, Attn: Eric Seyffer not later than 3 p.m., New York
          City time, on the date on which such payment shall become due (and
          each such payment made after such time shall be deemed to have been
          made on the next succeeding Business Day). Notwithstanding the
          preceding sentence, on each Repurchase Date, Seller shall remit
          payment of the Repurchase Price to the Settlement Account in
          accordance with Section 11 of the Custodial Agreement. Seller
          acknowledges that it has no rights of withdrawal from the foregoing
          account.

     (b)  On the Purchase Date for each Transaction, ownership of the Purchased
          Assets shall be transferred to Buyer or its designee (including
          Custodian) against the simultaneous transfer of the Purchase Price to
          or on behalf of Seller not later than 6 p.m., New York City time,
          simultaneously with the delivery to Custodian of the Purchased Assets
          relating to each Transaction in accordance with the terms hereof and
          of the Custodial and Disbursement Agreement. Each of NCCC and NCMC

                                      -34-



          hereby sells, transfers, conveys and assigns to Buyer or its designee
          (including Custodian) without recourse, but subject to the terms of
          this Agreement, all the right, title and interest of NCCC and NCMC, as
          applicable, in and to the Purchased Assets together with all right,
          title and interest in and to the proceeds of any related Purchased
          Items.

     (c)  In connection with such sale, transfer, conveyance and assignment, on
          or prior to each Purchase Date, Seller shall deliver or cause to be
          delivered and released to Buyer or its designee (including Custodian)
          (i) the Custodial Identification Certificate and (ii) the documents
          identified in the Custodial and Disbursement Agreement.

     (d)  Any Mortgage Files not delivered to Buyer or its designee (including
          Custodian) are and shall be held in trust by Seller or its designee
          for the benefit of Buyer as the owner thereof. Seller or its designee
          shall maintain a copy of the Mortgage File and the originals of the
          Mortgage File not delivered to Buyer or its designee (including
          Custodian). The possession of the Mortgage File by Seller or its
          designee is at the will of Buyer for the sole purpose of servicing the
          related Purchased Asset, and such retention and possession by Seller
          or its designee is in a custodial capacity only. Each Mortgage File
          retained or held by Seller or its designee shall be segregated on
          Seller's books and records from the other assets of Seller or its
          designee and the books and records of Seller or its designee shall be
          marked appropriately to reflect clearly the sale of the related
          Purchased Asset to Buyer. Seller or its designee shall release its
          custody of the Mortgage File only in accordance with written
          instructions from Buyer, unless such release is required as incidental
          to the servicing of the Purchased Assets or is in connection with a
          repurchase of any Purchased Asset by Seller.

9.   HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

     Title to all Purchased Assets and Purchased Items shall pass to Buyer and
     Buyer shall have free and unrestricted use of all Purchased Assets and
     Purchased Items. Nothing in this Agreement shall preclude Buyer from
     engaging in repurchase transactions with the Purchased Assets and Purchased
     Items or otherwise pledging, repledging, transferring, hypothecating, or
     rehypothecating the Purchased Assets and Purchased Items, all on terms that
     Buyer may determine in its sole discretion. Nothing contained in this
     Agreement shall obligate Buyer to segregate any Purchased Assets and
     Purchased Items delivered to Buyer by Seller.

10.  SELLER'S REPRESENTATIONS

     Each of NCCC and NCMC represents and warrants to Buyer that as of the
     Purchase Date for the purchase of any Purchased Assets by Buyer from Seller
     and as of the date of this Agreement and any Transaction hereunder and at
     all times while the Repurchase Documents and any Transaction hereunder is
     in full force and effect:

                                      -35-



     (a)  Acting as Principal. Seller will engage in such Transactions as
          -------------------
          principal (or, if agreed in writing in advance of any Transaction by
          the other party hereto, as agent for a disclosed principal).

     (b)  Solvency. Neither the Repurchase Documents nor any Transaction
          --------
          thereunder are entered into in contemplation of insolvency or with
          intent to hinder, delay or defraud any of Seller's creditors. The
          transfer of the Mortgage Loans subject hereto and the obligation to
          repurchase such Mortgage Loans is not undertaken with the intent to
          hinder, delay or defraud any of Seller's creditors. Seller is not
          insolvent within the meaning of 11 U.S.C. Section 101(32) or any
          successor provision thereof and the transfer and sale of the Mortgage
          Loans pursuant hereto and the obligation to repurchase such Mortgage
          Loan (i) will not cause Seller to become insolvent, (ii) will not
          result in Seller having unreasonably small capital, and (iii) will not
          result in debts that would be beyond Seller's ability to pay as the
          same mature. Seller received reasonably equivalent value in exchange
          for the transfer and sale of the Purchased Assets and Purchased Items
          subject hereto.

     (c)  No Broker. Seller has not dealt with any broker, investment banker,
          ---------
          agent, or other person, except for Buyer, who may be entitled to any
          commission or compensation in connection with the sale of Purchased
          Assets pursuant to this Agreement.

     (d)  Ability to Perform. Seller does not believe, nor does it have any
          ------------------
          reason or cause to believe, that it cannot perform each and every
          covenant contained in the Repurchase Documents applicable to it to
          which it is a party.

     (e)  No Defaults. No Default or Event of Default has occurred and is
          -----------
          continuing hereunder.

     (f)  Legal Name; Existence. NCMC's exact legal name is New Century Mortgage
          ---------------------
          Corporation. NCCC's exact legal name is NC Capital Corporation. Each
          of NCCC and NCMC (a) is a corporation duly organized, validly existing
          and in good standing under the laws of California, (b) has all
          requisite corporate or other power, and has all governmental licenses,
          authorizations, consents and approvals necessary to own its assets and
          carry on its business as now being or as proposed to be conducted,
          except where the lack of such licenses, authorizations, consents and
          approvals would not be reasonably likely to have a Material Adverse
          Effect; and (c) is qualified to do business and is in good standing in
          all other jurisdictions in which the nature of the business conducted
          by it makes such qualification necessary, except where failure so to
          qualify could not be reasonably likely (either individually or in the
          aggregate) to have a Material Adverse Effect.

     (g)  Financial Condition. Seller has heretofore furnished to Buyer a copy
          -------------------
          of (a) its consolidated balance sheet for the fiscal year ended
          December 31, 2000, and the related consolidated statements of income
          and retained earnings and of cash flows for Seller and its
          consolidated Subsidiaries for such fiscal year, each audited by and
          with the unqualified opinion thereon of KPMG LLP and (b) its
          consolidated

                                      -36-



          balance sheet for the quarterly fiscal period of Seller as of March
          31, 2001 and its consolidated balance sheet as of May 31, 2001 and the
          related consolidated statements of income and retained earnings and of
          cash flows for Seller and its consolidated Subsidiaries for such
          periods, setting forth in each case in comparative form the figures
          for the previous year. All such financial statements are complete and
          correct and fairly present, in all material respects, the consolidated
          financial position of Seller and its Subsidiaries and the consolidated
          results of their operations as at such dates and for such fiscal
          periods, all in accordance with GAAP applied on a consistent basis.
          Since May 31, 2001, there has been no material adverse change in the
          consolidated business, operations or financial condition of Seller and
          its consolidated Subsidiaries taken as a whole from that set forth in
          said financial statements.

     (h)  Litigation. There are no actions, suits, arbitrations, investigations
          ----------
          (including, without limitation, any of the foregoing which are pending
          or threatened) or other legal or arbitrable proceedings affecting
          Seller or any of its Subsidiaries or affecting any of the Property of
          any of them before any Governmental Authority which (i) questions or
          challenges the validity or enforceability of the Repurchase Documents
          or any action to be taken in connection with the transactions
          contemplated hereby, (ii) makes a claim or claims in an aggregate
          amount greater than $500,000 except as set forth on Schedule 3, or
          (iii) individually or in the aggregate, if adversely determined, could
          reasonably be likely to have a Material Adverse Effect.

     (i)  No Breach. Neither (a) the execution and delivery of the Repurchase
          ---------
          Documents nor (b) the consummation of the transactions therein
          contemplated to be entered into by Seller in compliance with the terms
          and provisions thereof will conflict with or result in a breach of the
          organizational documents of NCCC, NCMC or Guarantor, or any applicable
          law, rule or regulation, or any order, writ, injunction or decree of
          any Governmental Authority, or any Servicing Agreement or other
          material agreement or instrument to which NCCC, NCMC, Guarantor or any
          of their respective Subsidiaries is a party or by which any of them or
          any of their Property is bound or to which any of them is subject, or
          constitute a default under any such material agreement or instrument
          or result in the creation or imposition of any Lien (except for the
          Liens created pursuant to the Repurchase Documents) upon any Property
          of NCCC, NCMC or Guarantor, or any of their respective Subsidiaries
          pursuant to the terms of any such agreement or instrument, other than
          a breach or default for which a consent or waiver has been obtained
          pursuant to Section 3(a)(1)(F).

     (j)  Action. Each of NCCC, NCMC and Guarantor has all necessary corporate
          ------
          or other power, authority and legal right to execute, deliver and
          perform its obligations under each of the Repurchase Documents to
          which it is a party, as applicable; the execution, delivery and
          performance by NCCC, NCMC or Guarantor of each of the Repurchase
          Documents to which it is a party have been duly authorized by all
          necessary corporate or other action on its part; and each Repurchase
          Document to which it is a party has been duly and validly executed

                                      -37-



          and delivered by NCCC, NCMC or Guarantor, as applicable, and
          constitutes a legal, valid and binding obligation of NCCC, NCMC or
          Guarantor, as applicable, enforceable against NCCC, NCMC or Guarantor,
          as applicable, in accordance with its terms.

     (k)  Approvals. No authorizations, approvals or consents of, and no filings
          ---------
          or registrations with, any Governmental Authority or any securities
          exchange are necessary for the execution, delivery or performance by
          NCCC, NCMC or Guarantor, as applicable, of the Repurchase Documents to
          which it is a party or for the legality, validity or enforceability
          thereof, except for filings and recordings in respect of the Liens
          created pursuant to the Repurchase Documents.

     (l)  Margin Regulations. Neither any Transaction hereunder, nor the use of
          ------------------
          the proceeds thereof, will violate or be inconsistent with the
          provisions of Regulation T, U or X.

     (m)  Taxes. Each of NCCC, NCMC, Guarantor and their respective Subsidiaries
          -----
          have filed all Federal income tax returns and all other material tax
          returns that are required to be filed by them and have paid all taxes
          due pursuant to such returns or pursuant to any assessment received by
          it or any of its Subsidiaries, except for any such taxes as are being
          appropriately contested in good faith by appropriate proceedings
          diligently conducted and with respect to which adequate reserves have
          been provided. The charges, accruals and reserves on the books of
          NCCC, NCMC, Guarantor and their respective Subsidiaries in respect of
          taxes and other governmental charges are, in the opinion of NCCC, NCMC
          or Guarantor, as applicable, adequate.

     (n)  Investment Company Act. None of NCCC, NCMC, Guarantor nor any of their
          ----------------------
          respective Subsidiaries is an "investment company", or a company
          "controlled" by an "investment company," within the meaning of the
          Investment Company Act of 1940, as amended.

     (o)  Purchased Assets.
          ----------------

          (1)  Neither NCCC nor NCMC has assigned, pledged, or otherwise
               conveyed or encumbered any Mortgage Loan to any other Person
               (except as between any of NCCC, Worth Funding Incorporated and
               NCMC), and immediately prior to the sale of such Mortgage Loan to
               Buyer, NCCC and/or NCMC was the sole owner of such Mortgage Loan
               and had good and marketable title thereto, free and clear of all
               Liens, in each case except for Liens to be released
               simultaneously with the sale to Buyer hereunder. No Mortgage Loan
               sold to Buyer hereunder was acquired (by purchase or otherwise)
               by NCCC or NCMC from an Affiliate of NCCC or NCMC (except as
               between any of NCCC, Worth Funding Incorporated and NCMC), as
               applicable unless a True Sale Certification has been delivered to
               Buyer.

                                      -38-



          (2)  The provisions of this Agreement are effective to either
               constitute a sale of Purchased Items to Buyer or to create in
               favor of Buyer a valid and fully perfected security interest in
               all right, title and interest of NCCC and NCMC in, to and under
               the Purchased Items.

          (3)  Upon receipt by Custodian of each Mortgage Note, endorsed in
               blank by a duly authorized officer of NCCC or NCMC, as
               applicable, either a purchase shall have been completed by Buyer
               of each Mortgage Note or Buyer shall have a valid and fully
               perfected first priority security interest in the applicable
               Mortgage Note and in such Seller's interest in the related
               Mortgaged Property.

          (4)  Upon the filing of financing statements on Form UCC-1 naming
               Buyer as "Secured Party", and NCCC and NCMC as "Debtor" and
               describing the Purchased Items, in the jurisdictions and
               recording offices listed on Exhibit IV attached hereto, the
                                           ----------
               security interests granted hereunder in the Purchased Items will
               constitute fully perfected first priority security interests
               under the Uniform Commercial Code in all right, title and
               interest of NCCC and NCMC in, to and under such Purchased Items,
               which can be perfected by filing under the Uniform Commercial
               Code.

          (5)  Upon execution and delivery of the Account Agreement, Buyer shall
               either be the owner of, or have a valid and fully perfected first
               priority security interest in, the investment property and all
               deposit accounts comprising Purchased Items.

          (6)  With respect to each Purchased Asset, each of the representations
               and warranties on Schedule 1 is true and correct.

     (p)  Chief Executive Office/Jurisdiction of Organization. On the Effective
          ---------------------------------------------------
          Date, and during the four months immediately preceding the Effective
          Date, each of NCCC and NCMC's chief executive office, is, and has been
          located at 18400 Von Karman, Suite 1000, Irvine, California 92612. On
          the Effective Date, each of NCCC and NCMC's jurisdiction of
          organization is California.

     (q)  Location of Books and Records. The location where each of NCCC and
          ------------------------------
          NCMC keeps its books and records, including all computer tapes and
          records related to the Purchased Items is its chief executive office.

     (r)  Reserved.
          --------

     (s)  Servicing Agreements. Seller has delivered to Buyer all Servicing
          --------------------
          Agreements with respect to the Purchased Mortgage Loans and no default
          or event of default exists thereunder.

     (t)  Existing Financing Facilities. All credit facilities, repurchase
          -----------------------------
          facilities or substantially similar facilities of Seller which are
          presently in effect are listed under the definition of "Existing
          Financing Facilities." Seller has delivered to

                                      -39-



          Buyer copies of all Existing Financing Facilities and no defaults or
          events of default exist thereunder.

     (u)  True and Complete Disclosure. (a) The information, reports, financial
          ----------------------------
          statements, exhibits and schedules furnished in writing by or on
          behalf of NCCC, NCMC or Guarantor to Buyer in connection with the
          negotiation, preparation or delivery of this Agreement and the other
          Repurchase Documents or included herein or therein or delivered
          pursuant hereto or thereto (other than with respect to the Mortgage
          Loans), when taken as a whole, do not contain any untrue statement of
          material fact or omit to state any material fact necessary to make the
          statements herein or therein, in light of the circumstances under
          which they were made, not misleading. All written information
          furnished after the date hereof by or on behalf of each of NCCC, NCMC
          and Guarantor to Buyer in connection with this Agreement and the other
          Repurchase Documents and the transactions contemplated hereby (other
          than with respect to the Mortgage Loans) and thereby will be true,
          complete and accurate in every material respect, or (in the case of
          projections) based on reasonable estimates, on the date as of which
          such information is stated or certified. There is no fact known to a
          Responsible Officer of either NCCC or NCMC, after due inquiry, that
          could reasonably be expected to have a Material Adverse Effect that
          has not been disclosed herein, in the other Repurchase Documents or in
          a report, financial statement, exhibit, schedule, disclosure letter or
          other writing furnished to Buyer for use in connection with the
          transactions contemplated hereby or thereby.

     (v)  ERISA. NCCC, NCMC, Guarantor and any of their respective ERISA
          -----
          Affiliates are not and will not be in the future, required to
          contribute to any Plan (including Multiemployer Plans) subject to the
          applicable provisions of ERISA.

     (w)  Worth Purchase Agreement. Each Eligible Asset sold by Seller to Buyer,
          ------------------------
          which was originated by Worth Funding Incorporated, was purchased by
          Seller pursuant to the Worth Purchase Agreement.

     (x)  Compliance with Anti-Money Laundering Laws. Seller has complied with
          ------------------------------------------
          all applicable anti-money laundering laws and regulations, including
          without limitation the USA Patriot Act of 2001 (collectively, the
          "Anti-Money Laundering Laws"); Seller has established an adequate
           --------------------------
          anti-money laundering compliance program as required by the Anti-Money
          Laundering Laws, has conducted the requisite due diligence in
          connection with the origination of each Mortgage Loan for purposes of
          the Anti-Money Laundering Laws, including with respect to the
          legitimacy of the applicable Mortgagor and the origin of the assets
          used by the said Mortgagor to purchase the property in question, and
          maintains, and will maintain, sufficient information to identify the
          applicable Mortgagor for purposes of the Anti-Money Laundering Laws.

                                      -40-



11.  COVENANTS OF SELLER

     On and as of the date of this Agreement and each Purchase Date and until
     this Agreement is no longer in force with respect to any Transaction, each
     of NCCC and NCMC covenants that it will:

     (a)  Financial Statements. Seller shall deliver to Buyer:
          --------------------

          (1)  as soon as available and in any event within thirty (30) calendar
               days after the end of each calendar month, the unaudited
               consolidated balance sheets of Guarantor, Seller and their
               consolidated Subsidiaries as at the end of such period and the
               related unaudited consolidated statements of income and retained
               earnings and of cash flows for Guarantor, Seller and their
               consolidated Subsidiaries for such period and the portion of the
               fiscal year through the end of such period, accompanied by a
               certificate of a Responsible Officer of Guarantor and Seller, as
               applicable, which certificate shall state that said consolidated
               financial statements fairly present in all material respects the
               consolidated financial condition and results of operations of
               Guarantor or Seller and its consolidated Subsidiaries, as
               applicable, in accordance with GAAP, consistently applied, as at
               the end of, and for, such period (subject to normal year-end
               adjustments);

          (2)  as soon as available and in any event within ninety (90) days
               after the end of each fiscal year of Guarantor or Seller, the
               consolidated balance sheets of Guarantor and Seller and their
               respective consolidated Subsidiaries as at the end of such fiscal
               year and the related consolidated statements of income and
               retained earnings and of cash flows for Guarantor and Seller and
               their respective consolidated Subsidiaries for such year, setting
               forth in each case in comparative form the figures for the
               previous year, accompanied by an opinion thereon of independent
               certified public accountants of recognized national standing,
               which opinion shall not be qualified as to scope of audit or
               going concern and shall state that said consolidated financial
               statements fairly present the consolidated financial condition
               and results of operations of Guarantor and Seller and their
               respective consolidated Subsidiaries as at the end of, and for,
               such fiscal year in accordance with GAAP, and a certificate of
               such accountants stating that, in making the examination
               necessary for their opinion, they obtained no knowledge, except
               as specifically stated, of any Default or Event of Default;

          (3)  prior to the end of each fiscal year, final annual budgets,
               forecasts and pro-forma cash flow projections developed by
               Guarantor, NCMC and NCCC for their next succeeding fiscal year;

          (4)  as soon as available and in any event within thirty (30) days
               after the end of each fiscal quarter of Seller, management
               reports containing such

                                      -41-



               information with respect to each Junior Securitization Interest
               owned by any of NCCC, NCMC or their respective Affiliates, and
               the related Company Securitization Transaction, as Buyer may
               request, including, without limitation, information concerning
               reserve account balances, cash receipts, prepayment and credit
               loss experience, REO Property inventory status and loss
               projections, and relevant gain on sale assumptions;

          (5)  from time to time such other information regarding the financial
               condition, operations, or business of Seller as Buyer may
               reasonably request; and

          (6)  as soon as available and in any event within thirty (30) calendar
               days after the end of each calendar month, the balance sheet and
               statement of profits and losses as at the end of such period for
               Worth Funding Incorporated.

     Seller will furnish to Buyer, at the time Seller furnishes each set of
     financial statements pursuant to paragraphs (a) and (b) above, a
     certificate of a Responsible Officer of Seller to the effect that, to the
     best of such Responsible Officer's knowledge, Seller during such fiscal
     period or year has observed or performed in all material respects all of
     its covenants and other agreements, and satisfied every condition,
     contained in this Agreement and the other Repurchase Documents to be
     observed, performed or satisfied by it, and that such Responsible Officer
     has obtained no knowledge of any Default or Event of Default except as
     specified in such certificate (and, if any Default or Event of Default has
     occurred and is continuing, describing the same in reasonable detail and
     describing the action Seller has taken or proposes to take with respect
     thereto).

     (b)  Litigation. Seller will promptly, and in any event within ten (10)
          ----------
          days after service of process on any of the following, give to Buyer
          notice of all litigation, actions, suits, arbitrations, investigations
          (including, without limitation, any of the foregoing which are
          threatened or pending) or other legal or arbitrable proceedings
          affecting Seller or any of its Subsidiaries or affecting any of the
          Property of any of them before any Governmental Authority that (i)
          questions or challenges the validity or enforceability of any of the
          Repurchase Documents or any action to be taken in connection with the
          transactions contemplated hereby, (ii) makes a claim or claims in an
          aggregate amount greater than $500,000, or (iii) which, individually
          or in the aggregate, if adversely determined, could be reasonably
          likely to have a Material Adverse Effect.

     (c)  Existence, etc.  Each of NCCC and NCMC will:
          --------------

          (1)  preserve and maintain its legal existence and all of its material
               rights, privileges, licenses and franchises necessary for the
               operation of its business (provided that nothing in this Section
               11(c)(1) shall prohibit any transaction expressly permitted under
               Section 11(d));

          (2)  comply with the requirements of all applicable laws, rules,
               regulations and orders of Governmental Authorities (including,
               without limitation, all environmental laws) if failure to comply
               with such requirements could be

                                      -42-



               reasonably likely (either individually or in the aggregate) to
               have a Material Adverse Effect;

          (3)  keep adequate records and books of account, in which complete
               entries will be made in accordance with GAAP consistently
               applied;

          (4)  not move its chief executive office from the address referred to
               in Section 10(p) or change its jurisdiction of organization
               unless it shall have provided Buyer thirty (30) days' prior
               written notice of such change;

          (5)  pay and discharge all taxes, assessments and governmental charges
               or levies imposed on it or on its income or profits or on any of
               its Property prior to the date on which penalties attach thereto,
               except for any such tax, assessment, charge or levy the payment
               of which is being contested in good faith and by proper
               proceedings and against which adequate reserves are being
               maintained; and

          (6)  permit representatives of Buyer, upon reasonable notice (unless a
               Default shall have occurred and is continuing, in which case, no
               prior notice shall be required), during normal business hours, to
               examine, copy and make extracts from its books and records, to
               inspect any of its Properties, and to discuss its business and
               affairs with its officers, all to the extent reasonably requested
               by Buyer.

     (d)  Restriction on Fundamental Changes. Guarantor, NCCC and NCMC will not,
          ----------------------------------
          and will not permit any of their Subsidiaries to, engage in any
          business activities or operations substantially different from or
          unrelated to those in which Guarantor, NCCC and NCMC were engaged on
          the Effective Date, enter into any transaction of merger or
          consolidation, or liquidate, wind up or dissolve itself (or suffer any
          liquidation or dissolution), or convey, sell, lease, transfer or
          otherwise dispose of, in one transaction or a series of transactions,
          any of its assets, whether now owned or hereafter acquired, or acquire
          by purchase or otherwise all or substantially all the business or
          Property of, or stock or other evidence of beneficial ownership of,
          any Person, except:

          (1)  Guarantor, NCCC or NCMC may sell or otherwise dispose of property
               in the ordinary course of business, provided such sales do not
               include all or substantially all of the assets of Guarantor, NCCC
               or NCMC;

          (2)  Guarantor and its Subsidiaries other than Seller may engage in
               any business involving the origination, acquisition, servicing or
               sale of consumer Indebtedness; and

          (3)  the Seller may transfer assets with a book value not to exceed
               $6,000,000 at any time to REO Sub, provided that Buyer's interest
               has been released in such assets in accordance herewith.

                                      -43-



     (e)  Margin Deficit. If at any time there exists a Margin Deficit, Seller
          --------------
          shall cure same in accordance with Section 4.

     (f)  Notices. Seller shall give notice to Buyer:
          -------

          (1)  promptly upon receipt of notice or knowledge of the occurrence of
               any Default or Event of Default;

          (2)  with respect to any Purchased Asset, promptly upon receipt of any
               principal prepayment (in full or partial) of such Purchased
               Asset;

          (3)  with respect to any Purchased Asset hereunder, promptly upon
               receipt of notice or knowledge that the underlying Mortgaged
               Property has been damaged by waste, fire, earthquake or earth
               movement, flood, tornado or other casualty, or otherwise damaged
               so as to affect adversely the Asset Value of such Purchased Asset
               (provided that Seller may satisfy its obligations under this
               clause (3) by causing Servicer to notify Buyer of any such
               damage);

          (4)  promptly upon receipt of notice or knowledge of (i) any material
               default related to any Purchased Item, (ii) any Lien or security
               interest on, or claim asserted against, any Purchased Item or
               (iii) any event or change in circumstances which could reasonably
               be expected to have a Material Adverse Effect;

          (5)  promptly upon any material change in the market value of any or
               all of Seller's assets which could reasonably be expected to have
               a Material Adverse Effect;

          (6)  no later than five Business Days after the end of each such
               month, of all amounts borrowed under the Existing Financing
               Facilities during such month, in the form of a daily tabulation
               of all such amounts borrowed;

          (7)  upon any material amendment to the Existing Financing Facilities,
               any decrease in the gross amount available to be borrowed
               thereunder, or any change in custodian or custodial arrangements
               relating thereto; and

          (8)  promptly upon the occurrence of any default or event of default
               under the Existing Financing Facilities.

     Each notice pursuant to this Section shall be accompanied by a statement of
     a Responsible Officer of Seller setting forth details of the occurrence
     referred to therein and stating what action Seller has taken or proposes to
     take with respect thereto.

     (g)  Reports. Seller shall provide Buyer with a quarterly report, which
          -------
          report shall include, among other items, a summary of such Seller's
          delinquency and loss experience with respect to Mortgage Loans
          serviced by Seller, any Servicer or any designee of either, operating
          statements and the occupancy status of such

                                      -44-



          Mortgaged Property and other property level information, plus any such
          additional reports as Buyer may reasonably request with respect to
          Seller or any Servicer's servicing portfolio or pending originations
          of Mortgage Loans.

     (h)  Underwriting Guidelines. All Eligible Assets will conform with, and
          -----------------------
          will be assigned a Risk Rating in accordance with, the Underwriting
          Guidelines. Seller shall not make any material change in the
          Underwriting Guidelines without the prior written consent of Buyer and
          shall review the Underwriting Guidelines periodically to confirm that
          they are being complied with in all material respects and are adequate
          to meet Seller's business objectives. In the event Seller makes any
          material amendment or modification to the Underwriting Guidelines,
          Seller shall promptly deliver to Buyer a complete copy of the amended
          or modified Underwriting Guidelines. Seller shall deliver to Buyer a
          complete copy of the then-current Underwriting Guidelines (i) on the
          1/st/ day of each Test Period and (ii) promptly upon Buyer's request.

     (i)  Affiliate Transactions. Guarantor, NCCC and NCMC will not, and will
          ----------------------
          not permit any of their Subsidiaries to, enter into any transaction
          with an Affiliate of Guarantor, NCCC or NCMC, except: (a) transactions
          in the ordinary course of business on terms no less favorable to
          Guarantor, NCCC or NCMC than those that would be obtained in an
          arm's-length transaction; (b) Indebtedness described in Sections
          11(s)(5) and 11(s)(10); (c) guaranties of Indebtedness described in
          Section 11(k); (d) transfers of assets by NCMC to NCCC and REO Sub as
          described in Sections 11(k)(3) and 11(k)(4); and (e) transfers by NCCC
          and NCCC of Junior Securitization Interests to Residual Finance
          Subsidiaries. In no event shall Seller transfer to Buyer hereunder any
          Mortgage Loan acquired by Seller from an Affiliate of Seller (other
          than each other Seller or Worth Funding Incorporated) unless a True
          Sale Certification has been delivered to Buyer prior to such sale.

     (j)  Liens. Guarantor, NCCC and NCMC will not, and will not permit any of
          -----
          their Subsidiaries to, directly or indirectly, create, incur, assume
          or permit to exist any Lien with respect to any property now owned or
          hereafter acquired by Guarantor, NCCC or NCMC, or any income or
          profits therefrom, except:

          (1)  [Reserved];

          (2)  Liens in connection with deposits or pledges to secure payment of
               workers' compensation, unemployment insurance, old age pensions
               or other social security obligations, in the ordinary course of
               business of Guarantor, NCCC or NCMC;

          (3)  Liens for taxes, fees, assessments and governmental charges not
               delinquent or which are being contested in good faith by
               appropriate proceedings and for which appropriate reserves have
               been established in accordance with GAAP;

                                      -45-



          (4)  encumbrances consisting of zoning regulations, easements, rights
               of way, survey exceptions and other similar restrictions on the
               use of real property and minor irregularities in title thereto
               which do not materially impair their use in the operation of its
               business;

          (5)  Liens on equipment arising under any capitalized lease obligation
               or other purchase money Liens on equipment acquired after the
               Effective Date to secure Indebtedness permitted pursuant to
               Section 11(s)(3);

          (6)  Liens incurred in connection with gestation repurchase agreements
               or similar arrangements, including, without limitation, (i)
               arrangements under which Guarantor or its Subsidiaries are
               required to repurchase Mortgage-backed Securities or Mortgage
               Loans from any lender or other counterparty reasonably
               satisfactory to Buyer, or (ii) credit facilities structured as
               loan and security agreements; provided, that such gestation
               repurchase agreements or similar arrangements are entered into in
               the ordinary course of business in contemplation of the
               subsequent non-recourse sale of such Mortgage-backed Securities
               or Mortgage Loans, including without limitation, liens granted
               under the Existing Financing Facilities;

          (7)  Liens on Junior Securitization Interests which secure
               Indebtedness permitted by Section 11(s)(4);

          (8)  Liens arising under Interest Rate Protection Agreements;

          (9)  a pledge of the stock of REO Sub to SBRC pursuant to the Salomon
               REO Financing Facility; and

          (10) a pledge of the stock of NC Residual II Corporation to Financial
               Securities Assurance Corporation.

     (k)  Guarantees. Guarantor, NCCC and NCMC will not, and will not permit any
          ----------
          of their Subsidiaries to, directly or indirectly, create or become or
          be liable with respect to any Guarantee, other than:

          (1)  the Guarantee pursuant to the USB Financing Facility;

          (2)  Guarantees by Guarantor of Indebtedness of NCMC OR NCCC secured
               by liens described in Section 11(j)(5), in an amount not to
               exceed $7,500,000;

          (3)  Guarantees by Guarantor of NCMC's or NCCC's obligations relating
               to (i) Indebtednes7s permitted by Sections 11(s)(4) and 11(s)(7)
               or (ii) the Strategic Alliance Agreement (as defined below)
               described in Section 11(t)(10);

                                      -46-



          (4)  Guarantees by NCMC of the obligations of NCCC or Residual Finance
               Subsidiaries in respect of Indebtedness permitted by Sections
               11(s)(4) and 11(s)(7); and

          (5)  the Guaranty.

     (l)  Limitation on Distributions. After the occurrence and during the
          ---------------------------
          continuation of any Default, neither NCCC nor NCMC shall make any
          payment on account of, or set apart assets for, a sinking or other
          analogous fund for the purchase, redemption, defeasance, retirement or
          other acquisition of any equity or partnership interest of NCCC or
          NCMC, as applicable, whether now or hereafter outstanding, or make any
          other distribution in respect thereof, either directly or indirectly,
          whether in cash or property or in obligations of NCCC or NCMC, as
          applicable.

     (m)  Net Worth. Guarantor will at all times during each fiscal year
          ---------
          maintain Tangible Net Worth of not less than (a) the greater of (i)
          $130,000,000 or (ii) eighty-five percent (85%) of the Tangible Net
          Worth at the end of its most recently completed fiscal year (or, in
          the case of the Tangible Net Worth at the end of any fiscal year, its
          prior fiscal year) plus (b) ninety percent (90%) of capital
          contributions made during such fiscal year plus (c) fifty percent
          (50%) of positive year-to-date net income. NCMC will at all times
          during each fiscal year maintain Tangible Net Worth of not less than
          (a) the greater of (i) $85,000,000 or (ii) eighty-five percent (85%)
          of the Tangible Net Worth at the end of its most recently completed
          fiscal year (or, in the case of the Tangible Net Worth at the end of
          any fiscal year, its prior fiscal year) plus (b) ninety percent (90%)
          of capital contributions made during such fiscal year plus (c) fifty
          percent (50%) of positive year-to-date net income. NCCC will at all
          times during each fiscal year maintain Tangible Net Worth of not less
          than $1.00.

     (n)  Minimum Liquidity. Seller will not permit the sum of (a) Cash of the
          -----------------
          Guarantor plus (b) the lesser of the Borrowing Base (as defined
          therein) of the USB Financing Facility and the Commitment Amounts (as
          defined therein) of the USB Financing Facility minus, in either case,
          the outstanding principal balance of all Loans thereunder (as defined
          therein), plus (c) the lesser of eighty percent (80%) of the
          receivables related to the sale or transfer of NCMC's or NCCC's
          interest in any Servicing Contract, or $5,000,000, to (i) be less than
          $10,000,000 as of the end of any month or (ii) remain less than
          $10,000,000 for more than ten (10) calendar days after giving effect
          to any mandatory prepayment of principal (or the equivalent) under any
          Residual Financing Agreement.

     (o)  Leverage Ratio. Guarantor will not permit (i) the Quarterly Average
          --------------
          Leverage Ratio for any period of measurement to be greater than 10.0
          to 1.0, (ii) the Daily Leverage Ratio on any date to be greater than
          15.0 to 1.0, or (iii) the Adjusted Leverage Ratio as of the last day
          of each fiscal quarter to be greater than 12.0 to 1.0. NCMC will not
          permit the Leverage Ratio of NCMC to be greater than 8.0 to 1.0 as of
          the last day of each fiscal quarter of NCMC.

                                      -47-



     (p)  Servicer; Servicing Tape. Seller shall provide to Buyer and to
          ------------------------
          Disbursement Agent via Electronic Transmission, a remittance report on
          a monthly basis by no later than the 12/th/ day of each month (the

          "Reporting Date") containing servicing information, including without
           --------------
          limitation those fields reasonably requested by Buyer from time to
          time, on a loan-by-loan basis and in the aggregate, with respect to
          the Purchased Assets serviced hereunder by Seller or any Servicer for
          the month (or any portion thereof) prior to the Reporting Date (such
          remittance report, an "Asset Tape"). Seller shall not cause the
                                 ----------
          Mortgage Loans to be serviced by any servicer other than a servicer
          expressly approved in writing by Buyer, which approval shall be deemed
          granted by Buyer with respect to Seller with the execution of this
          Agreement.

     (q)  Required Filings. Seller shall promptly provide Buyer with copies of
          ----------------
          all documents which NCCC, NCMC or any Subsidiary of NCCC or NCMC is
          required to file with the Office of the Comptroller of Currency in
          accordance with its regulations.

     (r)  Remittance of Prepayments. Seller shall remit or cause to be remitted
          -------------------------
          to Buyer, with sufficient detail via Electronic Transmission to enable
          Buyer to appropriately identify the Mortgage Loan to which any amount
          remitted applies, all full or partial principal prepayments on any
          Purchased Asset that Seller has received on a weekly basis, to be paid
          on Thursday of the next succeeding week (or the next Business Day).

     (s)  Indebtedness. Guarantor, NCCC and NCMC will not, and will not permit
          ------------
          any of their Subsidiaries to, directly or indirectly, create, incur,
          assume, guarantee, or otherwise become or remain directly or
          indirectly liable with respect to, any Indebtedness, except:

          (1)  The obligations of Seller hereunder and Guarantor under the
               Guaranty;

          (2)  current liabilities not more than ninety (90) days overdue,
               unless contested in good faith by appropriate proceedings and any
               reserves required by GAAP have been established, incurred by
               Guarantor, NCMC or NCCC in the ordinary course of business
               otherwise than for money borrowed;

          (3)  Indebtedness incurred to finance the purchase of equipment and
               secured solely by Liens on such equipment, in an aggregate amount
               not to exceed $10,000,000;

          (4)  Indebtedness incurred to finance all Junior Securitization
               Interests which Indebtedness is secured only by Junior
               Securitization Interests, provided, that such Indebtedness does
               not exceed 50% of the aggregate value of all Junior
               Securitization Interests determined in accordance with GAAP;

          (5)  intercompany Indebtedness of Guarantor to NCCC or NCMC in an
               aggregate amount not to exceed $1,000,000;

                                      -48-



          (6)  intercompany Indebtedness of NCCC or NCMC to Guarantor incurred
               in the ordinary course of business;

          (7)  obligations under gestation repurchase agreements or similar
               arrangements of the type described in Section 11(j)(6);

          (8)  Subordinated Debt;

          (9)  Indebtedness incurred by NCCC or NCMC in connection with the
               Salomon REO Financing Facility in an aggregate amount not to
               exceed $3,000,000; and

          (10) intercompany Indebtedness between NCMC and NCCC incurred in the
               ordinary course of business.

     (t)  Investments. Guarantor, NCMC and NCCC will not, and will not permit
          -----------
          any of their Subsidiaries to, directly or indirectly, make or own any
          Investment, except Investments in:

          (1)  marketable direct obligations issued or unconditionally
               guaranteed by the United States Government or issued by any
               agency thereof and backed by the full faith and credit of the
               United States, in each case maturing within one year from the
               date of acquisition thereof;

          (2)  marketable direct obligations issued by any state of the United
               States of America or any political subdivision of any such state
               or any public instrumentality thereof maturing within one year
               from the date of acquisition thereof and, at the time of
               acquisition, having the highest rating obtainable from either
               Standard & Poor's Ratings Group, a division of McGraw Hill, Inc.,
               or Moody's Investors Service, Inc.;

          (3)  commercial paper maturing no more than one year from the date of
               creation thereof and, at the time of acquisition, having the
               highest rating obtainable from either Standard & Poor's Ratings
               Group, a division of McGraw Hill, Inc., or Moody's Investors
               Service, Inc.;

          (4)  in the case of Guarantor, other consumer debt obligations
               originated or acquired by Guarantor in the ordinary course of
               Guarantor's business, in the case of NCMC, Mortgage Loans
               originated or acquired by NCMC in the ordinary course of NCMC's
               business, and in the case of NCCC, Mortgage Loans acquired from
               NCMC in the ordinary course of NCCC's business;

          (5)  certificates of deposits or bankers acceptances issued by Buyer
               or any other commercial bank organized under the laws of the
               United States or any State thereof and having a combined capital
               and surplus of at least $500,000,000, or by United States offices
               of foreign banks having the

                                      -49-



               highest rating obtainable from a nationally recognized rating
               agency, in each case maturing within one year from the date of
               acquisition thereof;

          (6)  Investments in mutual funds that invest substantially all of
               their assets in Investments of the types described in subsections
               (1), (2), (3) and (5) of this Section 11(t);

          (7)  the capital stock of any Subsidiary (subject to the limitations
               set forth in Sections 11(d) and 11(u);

          (8)  in the case of NCMC and NCCC, loans to Guarantor in an aggregate
               amount not to exceed $1,000,000;

          (9)  direct equity investments made by either NCMC or NCCC, to the
               extent no Event of Default or Default has occurred and is
               continuing, or would occur as a result thereof, in or loans to
               Persons in the mortgage origination business, in an aggregate
               amount not to exceed $2,500,000;

          (10) Investments made or to be made by NCMC, in an amount not to
               exceed $1,250,000 in the aggregate, and a guaranty made by
               Guarantor, pursuant to a Strategic Alliance Agreement (the
               "Strategic Alliance Agreement") by and among NCMC, Qualified
                ----------------------------
               Financial Services, Inc., a Colorado corporation, Qualified
               Financial Services, Inc., a California corporation, Simon Mundy,
               an individual, and David V.V. Thais, an individual;

          (11) Investments arising under Interest Rate Protection Agreements;

          (12) in the case of Guarantor, loans to NCMC and NCCC; and

          (13) intercompany Indebtedness between NCMC and NCCC incurred in the
               ordinary course of business.

     (u)  Subsidiaries. (a) Guarantor will not create or acquire any
          ------------
          Subsidiaries other than (i) NCCC and NCMC, (ii) the Subsidiaries
          listed on Schedule 2 hereto, (iii) Residual Finance Subsidiaries, and
          (iv) Subsidiaries engaged solely in any business involving the
          origination, acquisition, servicing and sale of consumer obligations,
          and (b) Seller will not create or acquire any Subsidiaries other than
          (i) the Subsidiaries listed on Schedule 2 hereto, (ii) Residual
          Finance Subsidiaries, and (iii) Subsidiaries acquired as a result of
          Investments permitted pursuant to Section 11(t)(10).

     (v)  Restricted Payments. Guarantor, NCCC and NCMC will not make any
          -------------------
          Restricted Payments, other than (a) dividends paid by Guarantor on its
          Series 1998A Convertible Preferred Stock and its Series 1999A
          Convertible Preferred Stock in an aggregate amount not to exceed
          $3,000,000 per annum, (b) dividends paid by Guarantor on its Common
          Stock not to exceed $0.20 per share in any calendar year, and (c)
          dividends paid by NCMC to Guarantor to enable Guarantor to pay
          dividends as provided in clauses (a) and (b) above; provided, that in
          each case

                                      -50-



                  both before and after giving effect to such dividends,
                  Guarantor, NCCC and NCMC are in compliance with the covenants
                  set forth in Section 11 of this Agreement and no Event of
                  Default or Default has occurred and is continuing."

         (w)      Custodial and Disbursement Agreement and Account Agreement.
                  ----------------------------------------------------------
                  Seller shall maintain each of the Custodial and Disbursement
                  Agreement and Account Agreement in full force and effect and
                  shall not amend or modify either of the Custodial and
                  Disbursement Agreement or the Account Agreement or waive
                  compliance with any provisions thereunder without the prior
                  written consent of Buyer.

         (x)      Inconsistent Agreements. Guarantor, NCMC and NCCC will not,
                  -----------------------
                  and will not permit any of their Subsidiaries to, directly or
                  indirectly, enter into any agreement containing any provision
                  which would be violated or breached by any Transaction
                  hereunder or by the performance by either of Guarantor, NCCC
                  or NCMC of their respective obligations under any Repurchase
                  Document to which it is a party.

         (y)      Compliance Report. Seller shall provide Buyer no later than
                  -----------------
                  the 30th day of each month, in a letter format acceptable to
                  Buyer in its sole discretion, a compliance report
                  demonstrating therein the calculations Seller utilized to
                  determine its compliance with the financial covenants set
                  forth in clauses (m), (n) and (o) of this Section 11 as of the
                  end of the immediately preceding month.

         (z)      Sub-Limits. Seller shall not sell to Buyer any Eligible Assets
                  ----------
                  if, after giving effect to such Transaction, the aggregate
                  principal balance of such Purchased Assets are in excess of
                  any applicable Sub-Limit.

         (aa)     Escrow Imbalances. Seller will, no later than five (5)
                  -----------------
                  Business Days after learning (from any source) of any material
                  imbalance in any escrow account, fully and completely correct
                  and eliminate such imbalance including, without limitation,
                  depositing its own funds into such account to eliminate any
                  overdrawal or deficit.

         (bb)     Independence of Covenants. All covenants hereunder shall be
                  -------------------------
                  given independent effect so that if a particular action or
                  condition is not permitted by any of such covenants, the fact
                  that it would be permitted by an exception to, or be otherwise
                  within the limitations of, another covenant shall not avoid
                  the occurrence of an Event of Default or Default if such
                  action is taken or condition exists.

12.      EVENTS OF DEFAULT

         If any of the following events (each, an "Event of Default") occur,
                                                   ----------------
         Seller and Buyer shall have the rights set forth in Section 13, as
         applicable:

         (a)      Seller shall default in the payment of any Repurchase Price
                  due or any amount under Section 5 when due (whether at stated
                  maturity, upon acceleration or at mandatory or optional
                  prepayment); or

                                      -51-



         (b)      Seller shall default in the payment of any other amount
                  payable by it hereunder or under any other Repurchase Document
                  after notification by Buyer of such default, and such default
                  shall have continued unremedied for one (1) Business Day; or

         (c)      any representation, warranty or certification made or deemed
                  made herein or in any other Repurchase Document by Seller or
                  any certificate furnished to Buyer pursuant to the provisions
                  hereof or thereof or any information with respect to the
                  Mortgage Loans furnished in writing by on behalf of Seller
                  shall prove to have been false or misleading in any material
                  respect as of the time made or furnished (other than the
                  representations and warranties set forth in Schedule 1, which
                                                              ----------
                  shall be considered solely for the purpose of determining the
                  Asset Value of the Purchased Assets, unless (i) Seller shall
                  have made any such representations and warranties with actual
                  knowledge that they were materially false or misleading at the
                  time made; or (ii) any such representations and warranties
                  have been determined in good faith by Buyer in its sole
                  discretion to be materially false or misleading on a regular
                  basis); or

         (d)      Seller shall fail to comply with the requirements of 11(c),
                  Section 11(d), Section 11(e), Section 11(f), Section 11(h)
                  (with respect to the Eligible Assets as a whole and not with
                  respect to any single Eligible Asset) or Sections 11(i)
                  through 11(w); and such default shall continue unremedied for
                  a period of 5 Business Days from the earlier of (i) a
                  responsible officer of Seller having knowledge of such default
                  and (ii) Buyer giving notice to Seller of such default; or
                  except as otherwise set forth in Sections 12(a), 12(b), 12(c)
                  and 12(d), Seller shall fail to observe or perform any other
                  covenant or agreement contained in this Agreement or any other
                  Repurchase Document and such failure to observe or perform
                  shall continue unremedied for a period of 10 Business Days
                  from the earlier of (i) a responsible officer of Seller having
                  knowledge of such default and (ii) Buyer giving notice to
                  Seller of such default; or

         (e)      a final judgment or judgments for the payment of money in
                  excess of $500,000 in the aggregate shall be rendered against
                  NCCC, NCMC or any of their Affiliates by one or more courts,
                  administrative tribunals or other bodies having jurisdiction
                  and the same shall not be satisfied, discharged (or provision
                  shall not be made for such discharge) or bonded, or a stay of
                  execution thereof shall not be procured, within 30 days from
                  the date of entry thereof; or

         (f)      an Act of Insolvency shall have occurred with respect to NCCC,
                  NCMC or any of their Affiliates; or

         (g)      the Custodial and Disbursement Agreement, the Account
                  Agreement or any Repurchase Document shall for whatever reason
                  be terminated or cease to be in full force and effect, or the
                  enforceability thereof shall be contested by NCCC or NCMC; or

         (h)      NCCC or NCMC shall grant, or suffer to exist, any Lien on any
                  Purchased Item (except any Lien in favor of Buyer); or either
                  the Purchased Items shall not have

                                      -52-



                  been sold to Buyer, or the Liens contemplated hereby shall
                  cease or fail to be first priority perfected Liens on any
                  Purchased Items (but not the related Mortgaged Properties) in
                  favor of Buyer or shall be Liens in favor of any Person other
                  than Buyer; or

         (i)      NCCC, NCMC or any of their Affiliates shall be in default
                  under (i) any Indebtedness in an amount equal to $250,000 or
                  more of NCCC or NCMC or of such Affiliate which default (1)
                  involves the failure to pay a matured obligation, or (2)
                  permits the acceleration of the maturity of obligations by any
                  other party to or beneficiary with respect to such
                  Indebtedness, (ii) any other contract to which NCCC or NCMC or
                  such Affiliate is a party which default (1) involves the
                  failure to pay a matured obligation in excess of $250,000, or
                  (2) permits the acceleration of the maturity of obligations in
                  excess of $250,000 by any other party to or beneficiary of
                  such contract, or (iii) any Seller-Related Obligation; or

         (j)      any material adverse change in the Property, business or
                  financial condition of NCCC or NCMC or any of their Affiliates
                  shall occur, in each case as determined by Buyer in its sole
                  good faith discretion, or any other condition shall exist
                  which, in Buyer's sole good faith discretion, constitutes a
                  material impairment of Seller's ability to perform its
                  obligations under this Agreement or any other Repurchase
                  Document; or

         (k)      the Initial Funding does not occur on or prior to August 1,
                  2001; or

         (l)      upon (i) any material adverse change in the terms of or (ii)
                  material reduction in amounts available to NCCC, NCMC or their
                  Affiliates under any of the Existing Financing Facilities; or

         (m)      upon any event of default or event which, with the passage of
                  time or expiration of any grace periods, would constitute an
                  event of default under any of the Existing Financing
                  Facilities; or

         (n)      a Change of Control shall have occurred.

13.      REMEDIES

         (a)      If an Event of Default occurs, the following rights and
                  remedies are available to Buyer; provided, that an Event of
                  Default shall be deemed to be continuing unless expressly
                  waived by Buyer in writing.

                  (1)      At the option of Buyer, exercised by written notice
                           to Seller (which option shall be deemed to have been
                           exercised, even if no notice is given, immediately
                           upon the occurrence of an Act of Insolvency of
                           Seller), the Repurchase Date for each Transaction
                           hereunder, if it has not already occurred, shall be
                           deemed immediately to occur. Buyer shall (except upon
                           the occurrence of an Act of Insolvency of Seller)
                           give notice to Seller of the exercise of such option
                           as promptly as practicable.

                                      -53-



                  (2)      If Buyer exercises or is deemed to have exercised the
                           option referred to in subsection (a)(1) of this
                           Section 13,

                                 (A) (i) Seller's obligations in such
                           Transactions to repurchase all Purchased Assets, at
                           the Repurchase Price therefor on the Repurchase Date,
                           and to pay all other amounts owed by Seller
                           hereunder, shall thereupon become immediately due and
                           payable, (ii) all Income paid after such exercise or
                           deemed exercise shall be retained by Buyer and
                           applied to the aggregate unpaid Repurchase Prices and
                           any other amounts owed by Seller hereunder, and (iii)
                           Seller shall immediately deliver to Buyer any
                           Purchased Assets subject to such Transactions then in
                           NCCC's or NCMC's possession or control;

                                 (B) to the extent permitted by applicable law,
                           the Repurchase Price with respect to each such
                           Transaction shall be increased by the aggregate
                           amount obtained by daily application of, on a 360 day
                           per year basis for the actual number of days during
                           the period from and including the date of the
                           exercise or deemed exercise of such option to but
                           excluding the date of payment of the Repurchase
                           Price, (x) the Post-Default Rate to (y) the
                           Repurchase Price for such Transaction as of the
                           Repurchase Date (decreased as of any day by (i) any
                           amounts actually in the possession of Buyer pursuant
                           to clause (C) of this subsection, (ii) any proceeds
                           from the sale of Purchased Assets applied to the
                           Repurchase Price pursuant to subsection (a)(4) of
                           this Section 13, and (iii) any amounts applied to the
                           Repurchase Price pursuant to subsection (a)(4) of
                           this Section 13); and

                                 (C) all Income actually received by Buyer
                           pursuant to Section 5 (excluding any Late Payment
                           Fees paid pursuant to Section 5(b)) shall be applied
                           to the aggregate unpaid Repurchase Price owed by
                           Seller.

                  (3)      Upon the occurrence of one or more Events of Default,
                           Buyer shall have the right to obtain physical
                           possession of the Servicing Records (subject to the
                           provisions of the Custodial and Disbursement
                           Agreement) and all other files of Seller relating to
                           the Purchased Assets and all documents relating to
                           the Purchased Assets which are then or may thereafter
                           come in to the possession of Seller or any third
                           party acting for Seller and Seller shall deliver to
                           Buyer such assignments as Buyer shall request and
                           Buyer shall have the right to appoint any Person to
                           act as Servicer for the Purchased Assets. Buyer shall
                           be entitled to specific performance of all agreements
                           of Seller contained in the Repurchase Documents.

                  (4)      At any time on the Business Day following notice to
                           Seller (which notice may be the notice given under
                           subsection (a)(1) of this Section 13), in the event
                           Seller has not repurchased all Purchased Assets,
                           Buyer may (A) immediately sell, without demand or
                           further notice of any kind, at a public or private
                           sale and at such price or prices as Buyer may deem
                           satisfactory any or all Purchased Assets subject to
                           such Transactions hereunder and

                                      -54-



                           apply the proceeds thereof to the aggregate unpaid
                           Repurchase Price and any other amounts owing by
                           Seller hereunder or (B) in its sole discretion elect,
                           in lieu of selling all or a portion of such Purchased
                           Assets, to give Seller credit for such Purchased
                           Assets in an amount equal to the Market Value of the
                           Purchased Assets against the aggregate unpaid
                           Repurchase Price and any other amounts owing by
                           Seller hereunder. The proceeds of any disposition of
                           Purchased Assets shall be applied first to the costs
                           and expenses incurred by Buyer in connection with
                           Seller's default; second to costs of related covering
                           and/or related hedging transactions; third to the
                           Repurchase Price; and fourth to any other outstanding
                           obligation of Seller to Buyer or its Affiliates.

                  (5)      Seller agrees that Buyer may obtain an injunction or
                           an order of specific performance to compel Seller to
                           fulfill its obligations as set forth in Section 24,
                           if Seller fails or refuses to perform its obligations
                           as set forth therein.

                  (6)      Seller shall be liable to Buyer, payable as and when
                           incurred by Buyer, for (A) the amount of all actual
                           out-of-pocket expenses, including legal or other
                           expenses incurred by Buyer in connection with or as a
                           consequence of an Event of Default, and (B) all costs
                           incurred in connection with hedging or covering
                           transactions.

                  (7)      Buyer shall have, in addition to its rights
                           hereunder, any rights otherwise available to it under
                           any other agreement or applicable law.

         (b)      Buyer may exercise one or more of the remedies available to
                  Buyer immediately upon the occurrence of an Event of Default
                  and, except to the extent provided in subsections (a)(1) and
                  (4) of this Section 13, at any time thereafter without notice
                  to Seller. All rights and remedies arising under this
                  Agreement as amended from time to time hereunder are
                  cumulative and not exclusive of any other rights or remedies
                  which Buyer may have.

         (c)      Buyer may enforce its rights and remedies hereunder without
                  prior judicial process or hearing, and Seller hereby expressly
                  waives any defenses Seller might otherwise have to require
                  Buyer to enforce its rights by judicial process. Seller also
                  waives any defense (other than a defense of payment or
                  performance) Seller might otherwise have arising from the use
                  of nonjudicial process, enforcement and sale of all or any
                  portion of the Purchased Items, or from any other election of
                  remedies. Seller recognizes that nonjudicial remedies are
                  consistent with the usages of the trade, are responsive to
                  commercial necessity and are the result of a bargain at
                  arm's-length.

         (d)      To the extent permitted by applicable law, Seller shall be
                  liable to Buyer for interest on any amounts owing by Seller
                  hereunder, from the date Seller becomes liable for such
                  amounts hereunder until such amounts are (i) paid in full by
                  Seller or (ii) satisfied in full by the exercise of Buyer's
                  rights hereunder. Interest on any

                                      -55-



         sum payable by Seller to Buyer under this paragraph 13(d) shall be at a
         rate equal to the Post-Default Rate.

14.  INDEMNIFICATION AND EXPENSES

     (a)  NCCC and NCMC, jointly and severally, agree to hold Buyer and its
         Affiliates and their present and former respective officers, directors,
         employees, agents, advisors and other representatives (each an
         "Indemnified Party") harmless from and indemnify any Indemnified Party
          -----------------
         against all liabilities, losses, damages, judgments, costs and expenses
         of any kind which may be imposed on, incurred by or asserted against
         such Indemnified Party (including counsel's fees and disbursements)
         (collectively, "Costs"), relating to or arising out of this Agreement,
                         -----
         any other Repurchase Document or any transaction contemplated hereby or
         thereby, or any amendment, supplement or modification of, or any waiver
         or consent under or in respect of, this Agreement, any other Repurchase
         Document or any transaction contemplated hereby or thereby, that, in
         each case, results from anything other than the Indemnified Party's
         gross negligence or willful misconduct. Without limiting the generality
         of the foregoing, each of NCCC and NCMC, jointly and severally, agrees
         to hold any Indemnified Party harmless from and indemnify such
         Indemnified Party against all Costs with respect to all Mortgage Loans
         relating to or arising out of any violation or alleged violation of any
         environmental law, rule or regulation or any consumer credit laws,
         including without limitation the federal Truth in Lending Act and/or
         the federal Real Estate Settlement Procedures Act, that, in each case,
         results from anything other than the Indemnified Party's gross
         negligence or willful misconduct. In any suit, proceeding or action
         brought by an Indemnified Party in connection with any Mortgage Loan
         for any sum owing thereunder, or to enforce any provisions of any
         Mortgage Loan, each of NCCC and NCMC, jointly and severally, will save,
         indemnify and hold such Indemnified Party harmless from and against all
         expense, loss or damage suffered by reason of any defense, set-off,
         counterclaim, recoupment or reduction or liability whatsoever of the
         account debtor or obligor thereunder, arising out of a breach by NCCC
         or NCMC of any obligation thereunder or arising out of any other
         agreement, indebtedness or liability at any time owing to or in favor
         of such account debtor or obligor or its successors from NCCC or NCMC.
         Each of NCCC and NCMC, jointly and severally, also agrees to reimburse
         an Indemnified Party as and when billed by such Indemnified Party for
         all the Indemnified Party's costs and expenses incurred in connection
         with the enforcement or the preservation of Buyer's rights under this
         Agreement, any other Repurchase Document or any transaction
         contemplated hereby or thereby, including without limitation the fees
         and disbursements of its counsel.

     (b) Subject to the second succeeding sentence, Seller agrees to pay as and
         when billed by Buyer all of the out-of-pocket costs and expenses
         (including legal fees) incurred by Buyer in connection with the
         development, preparation and execution of, any other Repurchase
         Document or any other documents prepared in connection herewith (the
         "Initial Costs"). Seller agrees to pay as and when billed
          -------------

                                      -56-



           by Buyer all of the out-of-pocket costs and expenses (including legal
           fees) incurred by Buyer in connection with any amendment, supplement
           or modification to, this Agreement or any other Repurchase Document
           or any other documents prepared in connection therewith. Seller
           agrees to pay as and when billed by Buyer all of the out-of-pocket
           costs and expenses incurred in connection with the consummation and
           administration of the transactions contemplated hereby and thereby
           including without limitation all fees, disbursements and expenses of
           counsel to Buyer which amount shall be deducted from the Purchase
           Price paid for the first Transaction hereunder; provided that such
           expenses, together with the Initial Costs, shall not exceed $65,000
           without the prior written consent of Seller which consent shall not
           be unreasonably withheld. Subject to the limitations set forth in
           Section 27, Seller agrees to pay Buyer all the out-of-pocket due
           diligence, inspection, testing and review costs and expenses incurred
           by Buyer with respect to Mortgage Loans submitted by Seller for
           purchase under this Agreement, including, but not limited to, those
           out of pocket costs and expenses incurred by Buyer pursuant to
           Sections 24 and 27.

15.   RECORDING OF COMMUNICATIONS

      Buyer and Seller shall have the right (but not the obligation) from time
      to time to make or cause to be made tape recordings of communications
      between its employees and those of the other party with respect to
      Transactions upon notice to the other party of such recording. Buyer and
      Seller consent to the admissibility of such tape recordings in any court,
      arbitration, or other proceedings. The parties agree that a duly
      authenticated transcript of such a tape recording shall be deemed to be a
      writing conclusively evidencing the parties' agreement.

16.   SINGLE AGREEMENT

      Buyer and Seller acknowledge that, and have entered hereinto and will
      enter into each Transaction hereunder in consideration of and in reliance
      upon the fact that, all Transactions hereunder constitute a single
      business and contractual relationship and that each has been entered into
      in consideration of the other Transactions. Accordingly, each of Buyer and
      Seller agrees (i) to perform all of its obligations in respect of each
      Transaction hereunder, and that a default in the performance of any such
      obligations shall constitute a default by it in respect of all
      Transactions hereunder, (ii) that each of them shall be entitled to set
      off claims and apply property held by them in respect of any Transaction
      against obligations owing to them in respect of any other Transaction
      hereunder; (iii) that payments, deliveries, and other transfers made by
      either of them in respect of any Transaction shall be deemed to have been
      made in consideration of payments, deliveries, and other transfers in
      respect of any other Transactions hereunder, and the obligations to make
      any such payments, deliveries, and other transfers may be applied against
      each other and netted and (iv) to promptly provide notice to the other
      after any such set off or application.

                                      -57-



17.      NOTICES AND OTHER COMMUNICATIONS

         Except as otherwise expressly permitted by this Agreement, all notices,
         requests and other communications provided for herein and under the
         Custodial and Disbursement Agreement (including without limitation any
         modifications of, or waivers, requests or consents under, this
         Agreement) shall be given or made in writing (including without
         limitation by email, telex or telecopy) delivered to the intended
         recipient at the "Address for Notices" specified below its name on the
         signature pages hereof or thereof); or, as to any party, at such other
         address as shall be designated by such party in a written notice to
         each other party. Except as otherwise provided in this Agreement and
         except for notices given under Section 3 (which shall be effective only
         on receipt), all such communications shall be deemed to have been duly
         given when transmitted by telecopy or personally delivered or, in the
         case of a mailed notice, upon receipt.

18.      ENTIRE AGREEMENT; SEVERABILITY

         This Agreement together with the other Repurchase Documents constitute
         the entire understanding between Buyer and Seller with respect to the
         subject matter it covers and shall supersede any existing agreements
         between the parties containing general terms and conditions for
         repurchase transactions involving Purchased Assets. By acceptance of
         this Agreement, Buyer and Seller acknowledge that they have not made,
         and are not relying upon, any statements, representations, promises or
         undertakings not contained in this Agreement. Each provision and
         agreement herein shall be treated as separate and independent from any
         other provision or agreement herein and shall be enforceable
         notwithstanding the unenforceability of any such other provision or
         agreement.

19.      NON-ASSIGNABILITY

         The rights and obligations of the parties under this Agreement and
         under any Transaction shall not be assigned by NCCC or NCMC without the
         prior written consent of Buyer, and any attempted assignment without
         such consent shall be null and void. Subject to the foregoing, this
         Agreement and any Transactions shall be binding upon and shall inure to
         the benefit of the parties and their respective successors and assigns.
         Nothing in this Agreement express or implied, shall give to any person,
         other than the parties to this Agreement and their successors
         hereunder, any benefit of any legal or equitable right, power, remedy
         or claim under this Agreement.

20.      TERMINABILITY

         Except as set forth below, this Agreement may be terminated (a) by
         Seller upon giving written notice to Buyer and (b) by Buyer upon the
         occurrence of any event set forth in Section 3(b)(10) except that this
         Agreement shall, notwithstanding such notice, remain applicable to any
         Transaction then outstanding; provided that the Repurchase Date for any
         such Transaction outstanding shall be the earlier to occur of the
         original Repurchase Date pursuant to the applicable Confirmation and
         (ii) 20 days from the date of such notice of termination. Each
         representation and warranty made or deemed to be made by entering into
         a Transaction, herein or pursuant hereto shall survive the making of
         such

                                      -58-



         representation and warranty, and Buyer shall not be deemed to have
         waived any Default that may arise because any such representation or
         warranty shall have proved to be false or misleading, notwithstanding
         that Buyer may have had notice or knowledge or reason to believe that
         such representation or warranty was false or misleading at the time the
         Transaction was made. Notwithstanding any such termination or the
         occurrence of an Event of Default, all of the representations and
         warranties and covenants hereunder shall continue and survive. The
         obligations of Seller under Section 14 shall survive the termination of
         this Agreement.

21.      GOVERNING LAW

         THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
         LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW
         PRINCIPLES.

22.      Submission To Jurisdiction; Waivers

         EACH OF BUYER, NCCC AND NCMC HEREBY IRREVOCABLY AND UNCONDITIONALLY:

         (A)            SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION
         OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER REPURCHASE
         DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
         RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
         COURTS OF THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN, THE
         FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
         DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

         (B)            CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
         BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY
         OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
         ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
         PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
         PLEAD OR CLAIM THE SAME;

         (C)            AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
         PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
         CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
         PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH
         OTHER ADDRESS OF WHICH BUYER SHALL HAVE BEEN NOTIFIED;

         (D)            AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
         EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER

                                      -59-



         PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER
         JURISDICTION; AND

         (E)            WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
         LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
         ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER REPURCHASE
         DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

23.      NO WAIVERS, ETC.

         No failure on the part of Buyer or Seller to exercise and no delay in
         exercising, and no course of dealing with respect to, any right, power
         or privilege under any Repurchase Document shall operate as a waiver
         thereof, nor shall any single or partial exercise of any right, power
         or privilege under any Repurchase Document preclude any other or
         further exercise thereof or the exercise of any other right, power or
         privilege. The remedies provided herein are cumulative and not
         exclusive of any remedies provided by law. An Event of Default shall be
         deemed to be continuing unless expressly waived by Buyer in writing.

24.      SERVICING

         (a)      Each of NCCC and NCMC covenants to maintain or cause the
                  servicing of the Mortgage Loans to be maintained in conformity
                  with accepted and prudent servicing practices in the industry
                  for the same type of mortgage loans as the Mortgage Loans and
                  in a manner at least equal in quality to the servicing Seller
                  provides for mortgage loans which it owns. In the event that
                  the preceding language is interpreted as constituting one or
                  more servicing contracts, each such servicing contract shall
                  terminate automatically upon the earliest of (i) an Event of
                  Default, (ii) the date on which this Agreement terminates or
                  (iii) the transfer of servicing approved by Buyer.

         (b)      If the Mortgage Loans are serviced by Seller, Seller agrees
                  that Buyer is the owner of all servicing records, including
                  but not limited to any and all servicing agreements, files,
                  documents, records, data bases, computer tapes, copies of
                  computer tapes, proof of insurance coverage, insurance
                  policies, appraisals, other closing documentation, payment
                  history records, and any other records relating to or
                  evidencing the servicing of the Mortgage Loans (the "Servicing
                                                                       ---------
                  Records"). Seller covenants to safeguard such Servicing
                  -------
                  Records and to deliver them promptly to Buyer or its designee
                  (including Custodian) at Buyer's request.

         (c)      If the Mortgage Loans are serviced by a person other than
                  Seller (such third party the "Servicer"), Seller (i) shall, in
                                                --------
                  accordance with Section (3)(b)(7), provide a copy of the
                  servicing agreement to Buyer, which shall be in form and
                  substance acceptable to Buyer (the "Servicing Agreement"), and
                                                      -------------------
                  shall provide a Servicer Notice to the Buyer substantially in
                  the form of Exhibit VIII hereto, fully executed by Seller and
                              ------------
                  the Servicer; and (ii) hereby irrevocably assigns to Buyer

                                      -60-



                  and Buyer's successors and assigns all right, title and
                  interest of Seller in, to and under, and the benefits of, any
                  Servicing Agreement with respect to the Mortgage Loans. Seller
                  agrees that no Person shall assume the servicing obligations
                  with respect to the Mortgage Loans as successor to the
                  Servicer unless such successor is approved in writing by Buyer
                  prior to such assumption of servicing obligations.

         (d)      If the servicer of the Mortgage Loans is Seller, upon the
                  occurrence of an Event of Default, Buyer shall have the right
                  to terminate the Seller as servicer of the Mortgage Loans and
                  transfer servicing to its designee, at no cost or expense to
                  Buyer, at any time thereafter. If the servicer of the Mortgage
                  Loans is not Seller, Buyer shall have the right, as
                  contemplated in the applicable Servicer Notice, upon the
                  occurrence of an Event of Default, to terminate any applicable
                  Servicing Agreement and transfer servicing to its designee, at
                  no cost or expense to Buyer, it being agreed that Seller will
                  pay any and all fees required to terminate such Servicing
                  Agreement and to effectuate the transfer of servicing to the
                  designee of Buyer.

         (e)      After the Purchase Date, until the repurchase of any Mortgage
                  Loan, Seller will have no right to modify or alter the terms
                  of such Mortgage Loan and Seller will have no obligation or
                  right to repossess such Mortgage Loan or substitute another
                  Mortgage Loan, in each case except as provided in the
                  Custodial and Disbursement Agreement.

         (f)      In the event Seller or its Affiliate is servicing the Mortgage
                  Loans, Seller shall permit Buyer to inspect Seller's or its
                  Affiliate's servicing facilities, as the case may be, for the
                  purpose of satisfying Buyer that Seller or its Affiliate, as
                  the case may be, has the ability to service the Mortgage Loans
                  as provided in this Agreement.

25.      INTENT

         (a)      The parties recognize that each Transaction is a "repurchase
                                                                    ----------
                  agreement" as that term is defined in Section 101 of Title 11
                  ---------
                  of the United States Code, as amended (except insofar as the
                  type of Purchased Assets subject to such Transaction or the
                  term of such Transaction would render such definition
                  inapplicable), and a "securities contract" as that term is
                                        -------------------
                  defined in Section 741 of Title 11 of the United States Code,
                  as amended (except insofar as the type of Purchased Assets
                  subject to such Transaction would render such definition
                  inapplicable).

         (b)      It is understood that either party's right to liquidate
                  Purchased Assets delivered to it in connection with
                  Transactions hereunder or to exercise any other remedies
                  pursuant to Section 16 hereof is a contractual right to
                  liquidate such Transaction as described in Sections 555 and
                  559 of Title 11 of the United States Code, as amended.

         (c)      The parties agree and acknowledge that if a party hereto is an
                  "insured depository institution," as such term is defined in
                   ------------------------------
                  the Federal Deposit Insurance Act, as

                                      -61-



                  amended ("FDIA"), then each Transaction hereunder is a
                            ----
                  "qualified financial contract," as that term is defined in
                   ----------------------------
                  FDIA and any rules, orders or policy statements thereunder
                  (except insofar as the type of Purchased Assets subject to
                  such Transaction would render such definition inapplicable).

         (d)      It is understood that this Agreement constitutes a "netting
                                                                      -------
                  contract" as defined in and subject to Title IV of the Federal
                  --------
                  Deposit Insurance Corporation Improvement Act of 1991
                  ("FDICIA") and each payment entitlement and payment obligation
                    ------
                  under any Transaction hereunder shall constitute a "covered
                                                                      -------
                  contractual payment entitlement" or "covered contractual
                  -------------------------------      -------------------
                  payment obligation", respectively, as defined in and subject
                  ------------------
                  to FDICIA (except insofar as one or both of the parties is not
                  a "financial institution" as that term is defined in FDICIA or
                     ---------------------
                  regulations promulgated thereunder).

26.      BUYER'S REPRESENTATIONS

                  Buyer represents and warrants to Seller that as of the
Effective Date and as of the Repurchase Date for the repurchase of any Purchased
Assets by Seller from Buyer hereunder:

         (a)      Action. Buyer has all necessary corporate or other power,
                  ------
                  authority and legal right to execute, deliver and perform its
                  obligations under each of the Repurchase Documents to which it
                  is a party; the execution, delivery and performance by Buyer
                  of each of the Repurchase Documents to which it is a party
                  have been duly authorized by all necessary corporate or other
                  action on its part; and each Repurchase Document to which it
                  is a party has been duly and validly executed and delivered by
                  Buyer, and constitutes a legal, valid and binding obligation
                  of Buyer, enforceable against Buyer, in accordance with its
                  terms.

         (b)      Approvals. No authorizations, approvals or consents of, and no
                  ---------
                  filings or registrations with, any Governmental Authority or
                  any securities exchange are necessary for the execution,
                  delivery or performance by Buyer, of the Repurchase Documents
                  to which it is a party or for the legality, validity or
                  enforceability thereof, except for filings and recordings in
                  respect of the Liens created pursuant to the Repurchase
                  Documents.

         (c)      No Breach. Neither (a) the execution and delivery of the
                  ---------
                  Repurchase Documents nor (b) the consummation of the
                  transactions therein contemplated to be entered into by Buyer
                  in compliance with the terms and provisions thereof will
                  conflict with or result in a breach of the organizational
                  documents of Buyer, or any applicable law, rule or regulation,
                  or any order, writ, injunction or decree of any Governmental
                  Authority or other material agreement or instrument to which
                  Buyer or any of its Subsidiaries is a party or by which Buyer
                  or any of its Property is bound or to which Buyer is subject,
                  or constitute a default under any such material agreement or
                  instrument or result in the creation or imposition of any Lien
                  upon any Property of Buyer, or any of its respective
                  Subsidiaries pursuant to the terms of any such agreement or
                  instrument.

                                      -62-



     (d)  Purchased Assets. Immediately prior to the repurchase of any Purchased
          ----------------
          Assets by Seller, Buyer was the sole owner of such Purchased Assets
          and had good and marketable title thereto, free and clear of all
          Liens, in each case except for Liens to be released simultaneously
          with the repurchase by Seller hereunder.

27.  NETTING

     If Buyer and Seller are "financial institutions" as now or hereinafter
     defined in Section 4402 of Title 12 of the United States Code ("Section
     4402") and any rules or regulations promulgated thereunder,

     (a)  All amounts to be paid or advanced by one party to or on behalf of the
          other under this Agreement or any Transaction hereunder shall be
          deemed to be "payment obligations" and all amounts to be received by
          or on behalf of one party from the other under this Agreement or any
          Transaction hereunder shall be deemed to be "payment entitlements"
          within the meaning of Section 4402, and this Agreement shall be deemed
          to be a "netting contract" as defined in Section 4402.

     (b)  The payment obligations and the payment entitlements of the parties
          hereto pursuant to this Agreement and any Transaction hereunder shall
          be netted as follows. In the event that either party (the "Defaulting
                                                                     ----------
          Party") shall fail to honor any payment obligation under this
          -----
          Agreement or any Transaction hereunder, the other party (the
          "Nondefaulting Party") shall be entitled to reduce the amount of any
           -------------------
          payment to be made by the Nondefaulting Party to the Defaulting Party
          by the amount of the payment obligation that the Defaulting Party
          failed to honor.

28.  PERIODIC DUE DILIGENCE REVIEW

     Seller acknowledges that Buyer has the right to perform continuing due
     diligence reviews with respect to the Mortgage Loans, for purposes of
     verifying compliance with the representations, warranties and
     specifications made hereunder, or otherwise, and Seller agrees that upon
     reasonable (but no less than one (1) Business Day's) prior notice unless an
     Event of Default shall have occurred, in which case no notice is required,
     to Seller, Buyer or its authorized representatives will be permitted during
     normal business hours to examine, inspect, and make copies and extracts of,
     the Mortgage Files and any and all documents, records, agreements,
     instruments or information relating to such Mortgage Loans in the
     possession or under the control of Seller and/or Custodian. Seller also
     shall make available to Buyer a knowledgeable financial or accounting
     officer for the purpose of answering questions respecting the Mortgage
     Files and the Mortgage Loans. Without limiting the generality of the
     foregoing, Seller acknowledges that Buyer may purchase Mortgage Loans from
     Seller based solely upon the information provided by Seller to Buyer in the
     Seller Asset Schedule and the representations, warranties and covenants
     contained herein, and that Buyer, at its option, has the right at any time
     to conduct a partial or complete due diligence review on some or all of the
     Mortgage Loans purchased in a Transaction, including without limitation
     ordering new credit reports and new appraisals on the related Mortgaged
     Properties and otherwise re-generating the information used to originate
     such Mortgage Loan. Buyer may underwrite such

                                      -63-



     Mortgage Loans itself or engage a mutually agreed upon third party
     underwriter to perform such underwriting. Seller agrees to cooperate with
     Buyer and any third party underwriter in connection with such underwriting,
     including, but not limited to, providing Buyer and any third party
     underwriter with access to any and all documents, records, agreements,
     instruments or information relating to such Mortgage Loans in the
     possession, or under the control, of Seller. Buyer shall pay all
     out-of-pocket costs and expenses incurred by Buyer in connection with
     Buyer's activities pursuant to this Section 28 ("Due Diligence Costs");
                                                      -------------------
     provided that, in the event that a Default or an Event of Default shall
     have occurred, Seller shall reimburse Buyer for all Due Diligence Costs for
     any and all reasonable out-of-pocket costs and expenses incurred by Buyer
     in connection with Buyer's activities pursuant to this Section 28.

29.  BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT

     (a)  Each of NCCC and NCMC hereby irrevocably constitutes and appoints
          Buyer and any officer or agent thereof, with full power of
          substitution, as its true and lawful attorney-in-fact with full
          irrevocable power and authority in the place and stead of Seller and
          in the name of Seller or in its own name, from time to time in Buyer's
          discretion, for the purpose of carrying out the terms of this
          Agreement, to take any and all appropriate action and to execute any
          and all documents and instruments which may be reasonably necessary or
          desirable to accomplish the purposes of this Agreement, and, without
          limiting the generality of the foregoing, Seller hereby gives Buyer
          the power and right, on behalf of Seller, without assent by, but with
          notice to, Seller, to do the following:

          (1)  in the name of Seller, or in its own name, or otherwise, to take
               possession of and endorse and collect any checks, drafts, notes,
               acceptances or other instruments for the payment of moneys due
               under any mortgage insurance with respect to a Purchased Item or
               with respect to any other Purchased Items and to file any claim
               or to take any other action or proceeding in any court of law or
               equity or otherwise deemed appropriate by Buyer for the purpose
               of collecting any and all such moneys due under any such mortgage
               insurance with respect to a Purchased Item or with respect to any
               other Purchased Items whenever payable;

          (2)  to pay or discharge taxes and Liens levied or placed on or
               threatened against the Purchased Items;

          (3)  (A) to direct any party liable for any payment under any
               Purchased Items to make payment of any and all moneys due or to
               become due thereunder directly to Buyer or as Buyer shall direct;
               (B) to ask or demand for, collect, receive payment of and receipt
               for, any and all moneys, claims and other amounts due or to
               become due at any time in respect of or arising out of any
               Purchased Items; (C) to sign and endorse any invoices,
               assignments, verifications, notices and other documents in
               connection with any Purchased Items; (D) to commence and
               prosecute any suits, actions or proceedings at law or in equity
               in any court of competent jurisdiction to

                                      -64-



               collect the Purchased Items or any proceeds thereof and to
               enforce any other right in respect of any Purchased Items; (E) to
               defend any suit, action or proceeding brought against Seller with
               respect to any Purchased Items; (F) to settle, compromise or
               adjust any suit, action or proceeding described in clause (E)
               above and, in connection therewith, to give such discharges or
               releases as Buyer may deem appropriate; and (G) generally, to
               sell, transfer, pledge and make any agreement with respect to or
               otherwise deal with any Purchased Items as fully and completely
               as though Buyer were the absolute owner thereof for all purposes,
               and to do, at Buyer's option and Seller's expense, at any time,
               and from time to time, all acts and things which Buyer deems
               necessary to protect, preserve or realize upon the Purchased
               Items and Buyer's Liens thereon and to effect the intent of this
               Agreement, all as fully and effectively as such Seller might do;

          (4)  after a Default or an Event of Default, to direct the actions of
               Custodian with respect to the Purchased Items under the Custodial
               and Disbursement Agreement; and

          (5)  to execute, from time to time, in connection with any sale
               provided for in Section 13, any endorsements, assignments or
               other instruments of conveyance or transfer with respect to the
               Purchased Items.

     Each of NCCC and NCMC hereby ratifies all that said attorneys shall
     lawfully do or cause to be done by virtue hereof. This power of attorney is
     a power coupled with an interest and shall be irrevocable. Until the
     occurrence of a Default or Event of Default, Buyer shall not direct a
     Servicer in its servicing of the Purchased Assets or commence any servicing
     actions with respect to the Mortgage Loans pursuant to this Section 28(a).
     Neither Buyer nor any of its officers, directors, employers or agents shall
     be responsible to Seller for any failure to act hereunder prior to a
     Default or Event of Default.

     (b)  The powers conferred on Buyer hereunder are solely to protect Buyer's
          interests in the Purchased Items and Purchased Assets and shall not
          impose any duty upon it to exercise any such powers. Buyer shall be
          accountable only for amounts that it actually receives as a result of
          the exercise of such powers, and neither it nor any of its officers,
          directors, employees or agents shall be responsible to Seller for any
          act or failure to act hereunder, except for its or their own gross
          negligence or willful misconduct.

30.  MISCELLANEOUS

     (a)  If there is any conflict between the terms of this Agreement or any
          Transaction entered into hereunder and the Custodial and Disbursement
          Agreement, this Agreement shall prevail.

                                      -65-



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

     (c)  The captions and headings appearing herein are for included solely for
          convenience of reference and are not intended to affect the
          interpretation of any provision of this Agreement.

     (d)  Each of NCCC and NCMC hereby acknowledges that:

          (1)  it has been advised by counsel in the negotiation, execution and
               delivery of this Agreement and the other Repurchase Documents;

          (2)  Buyer has no fiduciary relationship to Seller; and

          (3)  no joint venture exists between Buyer and Seller.

31.  CONFIDENTIALITY

     Seller hereby acknowledges and agrees that all information regarding the
     terms set forth in any of the Repurchase Documents or the Transactions
     contemplated thereby (the "Confidential Terms") shall be kept confidential
                                ------------------
     and shall not be divulged to any party without the prior written consent of
     such other party except to the extent that (i) it is necessary to do so in
     working with legal counsel, auditors, taxing authorities or other
     governmental agencies or regulatory bodies or in order to comply with any
     applicable federal or state laws, (ii) any of the Confidential Terms are in
     the public domain other than due to a breach of this covenant, or (iii) in
     the event of a Default or an Event of Default Buyer determines such
     information to be necessary or desirable to disclose in connection with the
     marketing and sales of the Purchased Assets or otherwise to enforce or
     exercise Buyer's rights hereunder. The provisions set forth in this Section
     30 shall survive the termination of this Agreement for a period of one year
     following such termination.

32.  CONFLICTS

     In the event of any conflict between the terms of this Agreement, any other
     Repurchase Document and any Confirmation, the documents shall control in
     the following order of priority: first, the terms of the Confirmation shall
                                      -----
     prevail, then the terms of this Agreement shall prevail, and then the terms
     of the other Repurchase Documents shall prevail.

33.  SET-OFF.

     In addition to any rights and remedies of Buyer provided by this Agreement
     and by law, Buyer shall have the right, without prior notice to Seller, any
     such notice being expressly waived by Seller to the extent permitted by
     applicable law, upon any amount becoming due and payable by Seller to Buyer
     hereunder or otherwise (whether at the stated maturity, by acceleration or
     otherwise) to set-off and appropriate and apply against such

                                      -66-



     amount any and all monies and other property of Seller, any and all
     deposits (general or special, time or demand, provisional or final), in any
     currency, and any and all other credits, indebtedness or claims, in any
     currency, in each case whether direct or indirect, absolute or contingent,
     matured or unmatured, and in each case at any time held or owing by Buyer
     or any Affiliate thereof to or for the credit or the account of Seller.
     Buyer agrees promptly to notify Seller after any such set-off and
     application made by Buyer; provided that the failure to give such notice
     shall not affect the validity of such set-off and application.

34.  MOST FAVORED STATUS.
     -------------------

     The Sellers and the Buyer each agree that should either Seller enter into a
     repurchase agreement or credit facility with any Person other than the
     Buyer or an Affiliate of the

     Buyer which by its terms is more favorable to such other Person in respect
     of any of its provisions described in the following sentence (a "More
                                                                      ----
     Favorable Credit Agreement"), the terms of this Agreement shall be deemed
     --------------------------
     automatically amended to include each additional more favorable provision
     contained in such More Favorable Credit Agreement; provided, that in the
                                                        --------
     event that such More Favorable Credit Agreement is terminated, upon notice
     by the Sellers to the Buyer of such termination, the original terms of this
     Agreement shall be deemed to be automatically reinstated. The provisions to
     which this paragraph pertains are: (i) representations and warranties of
     either Seller with respect to itself (but not with respect to the Mortgage
     Loans), (ii) covenants of either Seller regarding the conduct of its
     business in general and its financial condition, and (iii) events defined
     as "events of default," or giving rise to substantially the same remedies
     as Events of Default hereunder. The Buyer and the Sellers further agree to
     execute and deliver an amendment to this Agreement evidencing such
     provisions, provided that the execution of such amendment shall not be a
     precondition to the effectiveness of such amendment, but shall merely be
     for the convenience of the parties hereto. Promptly upon either Seller
     entering into a repurchase agreement, loan agreement or other credit
     facility with any Person other than the Buyer, the Sellers shall deliver to
     the Buyer a true, correct and complete copy of such repurchase agreement,
     loan agreement or other financing documentation.

35.  OBLIGATIONS JOINT AND SEVERAL.

     Each of NCCC and NCMC hereby acknowledges and agrees that it shall be
     jointly and severally liable to Buyer for all representations, warranties,
     covenants, obligations and indemnities of Seller hereunder.

                            [SIGNATURE PAGE FOLLOWS]

                                      -67-



          IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date set forth above.


                                     BUYER:
                                     -----


                                     CDC MORTGAGE CAPITAL INC.


                                     By: /s/ Adil Nathani
                                        ----------------------------------------
                                        Name:  Adil Nathani
                                        Title: Managing Director


                                     By: /s/ Carmine Creco
                                        ----------------------------------------
                                        Name:  Carmine Creco
                                        Title: Vice President


Address for Notices:                  with a copy to:
- -------------------
9 West 57/th/ Street                  9 West 57/th/ Street
New York, NY 10019                    New York, NY 10019
Attn: Ray Sullivan                    Attn:  Al Zakes, Esq., General Counsel
Telecopier No.: (212) 891-3347        Telecopier No.: (212) 891-1922
Telephone No.: (212) 891-5815         Telephone No.: (212) 891-6137
Email: r.sullivan@cdcixis-cmna.com    Email: albert.zakes@cdcixis- cmna.com

                                    Exh.IX-1



                                     SELLER:
                                     ------

                                     NEW CENTURY MORTGAGE CORPORATION


                                     By: /s/ Kevin Cloyd
                                         ---------------------------------------
                                         Name:
                                         Title: Senior Vice President


                                     Address for Notices:
                                     -------------------
                                         18400 Von Karman, Suite 1000
                                         Irvine, California 92612
                                         Attn: Sean Carter, Esq.
                                         Telecopier No.: (949) 440-7033
                                         Telephone No: (949) 862-7749
                                         Email: scarter@ncen.com

                                     NC CAPITAL CORPORATION


                                     By: /s/ Kevin Cloyd
                                         ---------------------------------------
                                         Name:
                                         Title: President


                                     Address for Notices:
                                     -------------------
                                         18400 Von Karman, Suite 1000
                                         Irvine, California 92612
                                         Attn: Sean Carter, Esq.
                                         Telecopier No.: (949) 440-7033
                                         Telephone No: (949) 862-7749
                                         Email: scarter@ncen.com

                                    Exh.IX-2



          The undersigned guarantor hereby consents and agrees to the foregoing
Amended and Restated Master Repurchase Agreement, dated as of May __, 2002:

                                     NEW CENTURY FINANCIAL CORPORATION

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

                                    Exh.IX-3

EX-99.4

                                                                    Exhibit 99.4
                                                                  Execution Copy

                       ___________________________________


                             LOAN PURCHASE AGREEMENT

                                      among

                        NEW CENTURY MORTGAGE CORPORATION

                                   as Seller,

                       NEW CENTURY FINANCIAL CORPORATION,


                                       and

                              NEW CENTURY FUNDING I

                                  as Purchaser

                       ____________________________________


                                   Dated as of

                                  May 10, 2002



                                TABLE OF CONTENTS



                                                                                                                Page
                                                                                                                ----
                                                                                                             
ARTICLE I DEFINITIONS ................................................................................           1
  SECTION 1.01   Definitions .........................................................................           1

ARTICLE II SALE AND CONTRIBUTION OF MORTGAGE LOANS ...................................................           2

  SECTION 2.01   Acquisition; Capital Contribution ...................................................           2
  SECTION 2.02   Delivery of Mortgage Files ..........................................................           3
  SECTION 2.03   Intention of the Parties; Grant of Security Interest ................................           3

ARTICLE III REPRESENTATIONS AND WARRANTIES ...........................................................           3

  SECTION 3.01   Representations and Warranties ......................................................           3
  SECTION 3.02   Purchase of Mortgage Loans by the New Century Parties ...............................           9

ARTICLE IV COVENANTS .................................................................................           9

  SECTION 4.01   Covenants of New Century Parties ....................................................           9
  SECTION 4.02   Purchaser Covenants .................................................................          16
  SECTION 4.03   Pledge of Mortgage Loans ............................................................          18

ARTICLE V CONDITIONS PRECEDENT .......................................................................          18

  SECTION 5.01   Conditions to the Purchaser Obligations .............................................          18

ARTICLE VI TERMINATION ...............................................................................          19

  SECTION 6.01   Termination .........................................................................          19
  SECTION 6.02   Effect of Termination ...............................................................          19

ARTICLE VII MISCELLANEOUS PROVISIONS .................................................................          19

  SECTION 7.01   Amendment ...........................................................................          19
  SECTION 7.02   GOVERNING LAW; JURISDICTION .........................................................          19
  SECTION 7.03   Notices .............................................................................          20
  SECTION 7.04   Severability of Provisions ..........................................................          21
  SECTION 7.05   Assignment ..........................................................................          21
  SECTION 7.06   Further Assurances ..................................................................          21
  SECTION 7.07   No Waiver; Cumulative Remedies ......................................................          21
  SECTION 7.08   Counterparts ........................................................................          21
  SECTION 7.09   Binding Effect:  Third-Party Beneficiaries ..........................................          21
  SECTION 7.10   Merger and Integration ..............................................................          22
  SECTION 7.11   Headings ............................................................................          22
  SECTION 7.12   Schedules and Exhibits ..............................................................          22
  SECTION 7.13   No Bankruptcy Petition Against the Purchaser ........................................          22
  SECTION 7.14   No Recourse .........................................................................          22


                                       i



                               SCHEDULES & ANNEXES

Schedule 1    Representations and Warranties
ANNEX A       Form of Contribution Agreement
Schedule 2    New Century Parties' Former Names and Current or Former Trade
              Names, Fictitious Names, Assumed Names and or "Doing Business As"
              Names
Schedule 3    Form of Financial Statement Footnote
Schedule 4    List of Guaranties in Effect
Schedule 5    List of Qualified Originators

                                       ii



                  THIS LOAN PURCHASE AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Loan Purchase Agreement"), dated as
                                            -----------------------
of May 10, 2002, is made among New Century Mortgage Corporation, a California
corporation, New Century Financial Corporation, a Delaware corporation ("New
                                                                         ---
Century Financial" and, together with the Seller, jointly and severally, the
- -----------------
"New Century Parties"), and New Century Funding I, a Delaware business trust
 -------------------
(the "Purchaser").
      ---------

                                   WITNESSETH:

                  WHEREAS, pursuant to the terms of this Loan Purchase
Agreement, the Seller desires from time to time to sell the Eligible Mortgage
Loans to the Purchaser upon the terms and conditions hereinafter set forth;

                  WHEREAS, the Purchaser, UBS Warburg Real Estate Securities
Inc., and certain other entities are parties to the Committed Note Purchase and
Security Agreement, dated as of the date hereof (as amended, supplemented or
otherwise modified and in effect from time to time, the "Note Purchase
                                                         -------------
Agreement"), pursuant to which certain parties thereto (the "Note Purchasers"),
- ---------                                                    ---------------
severally, have agreed, subject to the terms and conditions of the Note Purchase
Agreement, to purchase the Notes issued thereunder by the Purchaser (the
"Notes"), which will be secured by Eligible Mortgage Loans (as defined therein)
 -----
owned by the Purchaser and will be held from time to time by the entities that
are parties to the Note Purchase Agreement as Noteholders (each a "Noteholder")
                                                                   ----------
and UBS Warburg Real Estate Securities Inc. is acting thereunder as agent for
the Note Purchasers and the Noteholders (in that capacity, the "Agent").
                                                                -----

                  WHEREAS, pursuant to the terms of the Note Purchase Agreement,
the Purchaser will from time to time pledge Eligible Mortgage Loans to secure
the Notes; and

                  WHEREAS, each of the New Century Parties and the Purchaser
agree that all representations, warranties, covenants and agreements made by it
herein will be for the benefit of each other and will be assigned by the
Purchaser to the Agent for the benefit of the Agent, the Note Purchasers and the
Noteholders;

                  NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01  Definitions. For all purposes of this Loan
                                -----------
Purchase Agreement, except as otherwise expressly provided herein or unless the
context otherwise requires, capitalized terms not otherwise defined herein shall
have the meanings assigned to such terms in the definitions contained in Section
1.01 of the Note Purchase Agreement which is incorporated by reference herein.



                                   ARTICLE II

                     SALE AND CONTRIBUTION OF MORTGAGE LOANS

                  SECTION 2.01  Acquisition; Capital Contribution. (a) On the
                                ---------------------------------
Effective Date and on any Note Purchase Date thereafter until and including the
Termination Date, the Seller will sell and does hereby sell, and the Purchaser
will purchase and does hereby purchase, the Eligible Mortgage Loans owned by the
Seller, whether now existing or hereafter arising, without recourse (except as
provided in Sections 3.02 and 4.01(a) hereof). After each such sale, ownership
in the Eligible Mortgage Loans will be vested in the Purchaser. In connection
with such sale, to the extent that the fair market value of the Eligible
Mortgage Loans sold hereby by the Seller exceeds the cash consideration received
by the Seller in connection therewith, then the Seller will be deemed to have
made a capital contribution to the Purchaser in the amount of such excess.

                  (b)   In connection with such sale and contribution, the
Seller agrees to record and file, at the Seller's expense, financing statements
(and thereafter will file continuation statements with respect to such financing
statements) with respect to the Mortgage Loans contributed and to be transferred
by the Seller to the Purchaser pursuant to this Loan Purchase Agreement, meeting
the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect and to maintain the perfection of, the
transfer, conveyance and contribution of the Mortgage Loans from the Seller to
the Purchaser and the pledge of the Collateral from the Purchaser to the Agent,
pursuant to the Note Purchase Agreement, (which financing statements must be
submitted for recording on or prior to the initial Note Purchase Date);
provided, however, that the Mortgage Files (including each original executed
Mortgage) will not be physically delivered to the Agent but instead will be held
by the Custodian.

                  (c)   If in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce a Mortgage on the ground that it is not a
real party in interest or holder entitled to enforce the Mortgage, the Purchaser
shall, at the expense of the Seller, take such steps as the Servicer deems
necessary to enforce the Mortgage, including bringing suit in the Purchaser's
name.

                  (d)   Pursuant to Section 2.01(a) hereof, the Seller from time
to time may convey additional Eligible Mortgage Loans to the Purchaser by
delivering a supplemented Mortgage Loan Schedule and, in the case of each
Wet-Ink Mortgage Loan, a detailed list, to the Purchaser on the related Note
Purchase Date containing for each Eligible Mortgage Loan transferred on such
Note Purchase Date the information set forth in the definition of the Mortgage
Loan Schedule (or, in the case of a Wet-Ink Mortgage Loan, the information
required by the Note Purchase Agreement). Upon delivery of any such supplement
to the Mortgage Loan Schedule, the Mortgage Loan Schedule shall be deemed
amended to incorporate therein the information contained in such supplement.

                  (e)   Except for the obligations of the New Century Parties
hereunder with respect to any breach of a representation, warranty or covenant
made herein and except as

                                       2



otherwise specified in Section 3.02(d), the sale and conveyance of the Eligible
Mortgage Loans will be without recourse to the New Century Parties.

                  SECTION 2.02  Delivery of Mortgage Files. Pursuant to Section
                                --------------------------
2 of the Custodial Agreement, in connection with each assignment and conveyance,
the Seller shall on behalf of and at the direction of the Purchaser deliver to,
and deposit with the Custodian at the times contemplated by the Custodial
Agreement, the Mortgage Files and a related Mortgage Loan Schedule, as
applicable with respect to each of the Mortgage Loans to be sold to the
Purchaser and pledged by the Purchaser to the Agent on such Note Purchase Date.

                  SECTION 2.03  Intention of the Parties; Grant of Security
                                -------------------------------------------
Interest. It is the intention of the parties hereto that each transfer of the
- --------
Eligible Mortgage Loans to be made pursuant to the terms hereof shall constitute
an absolute assignment and a sale or capital contribution of such Eligible
Mortgage Loan by the Seller to the Purchaser and not a loan. In the event,
however, that a court of competent jurisdiction were to hold that any such
transfer constitutes a loan and not a sale or capital contribution, it is the
intention of the parties hereto that this Loan Purchase Agreement is deemed to
be a security agreement and that the Seller shall be deemed to have granted to
the Purchaser as of the date hereof a first priority perfected security interest
in all of the Seller's respective right, title and interest in, to and under
each Mortgage Loan and all related Mortgage Documents whether now or hereafter
acquired and wherever located, and all income and proceeds thereof.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

                  SECTION 3.01  Representations and Warranties. (a) Each of the
                                ------------------------------
New Century Parties hereby makes the following representations and warranties to
the Purchaser, and understands that the benefit of these representations and
warranties will be assigned by the Purchaser to the Agent for the benefit of the
Agent, the Note Purchasers and the Noteholders. Such representations and
warranties are made as of the Effective Date and as of any Note Purchase Date
with respect to Mortgage Loans transferred to the Purchaser on such date and
shall survive each assignment, transfer and conveyance by the Seller of the
Mortgage Loans to the Purchaser and its successors and assigns:

                       (i)   Existence. Each of the New Century Parties (a) is a
                             ---------
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, (b) has all requisite corporate or
other power, and has all governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as now being or
as proposed to be conducted, except where the lack of such licenses,
authorizations, consents and approvals would not be reasonably likely to have a
Material Adverse Effect; and (c) is qualified to do business and is in good
standing in all other jurisdictions in which the nature of the business
conducted by it makes such qualification necessary, except where failure so to
qualify would not be reasonably likely (either individually or in the aggregate)
to have a Material Adverse Effect.

                                       3



                  (ii)   Financial Condition. Each of the New Century Parties
                         -------------------
has heretofore furnished to the Agent a copy of (a) its consolidated balance
sheet and the consolidated balance sheets of its consolidated Subsidiaries for
the fiscal year of such New Century Party ended December 31, 2001, and the
related consolidated statements of income and retained earnings and of cash
flows for such New Century Party and its consolidated Subsidiaries for such
fiscal year, setting forth in each case in comparative form the figures for the
previous year, with the opinion thereon of KPMG LLP. All such financial
statements are complete and fairly presented, in all material respects, the
consolidated financial condition of such New Century Party and its Subsidiaries
and the consolidated results of their operations as at such dates and for such
fiscal periods, all in accordance with GAAP applied on a consistent basis. Since
December 31, 2001, there has been no material adverse change in the consolidated
business, operations or financial condition of such New Century Party and its
consolidated Subsidiaries taken as a whole from that set forth in said financial
statements.

                  (iii)  Litigation. There are no actions, suits, arbitrations,
                         ----------
investigations (including, without limitation, to the best of such New Century
Party's knowledge, any of the foregoing which are pending or threatened) or
other legal or arbitrable proceedings affecting a New Century Party or any of
its Subsidiaries or affecting any of the Property of any of them before any
Governmental Authority (each a "Dispute") that questions or challenges the
                                -------
validity or enforceability of any of the Transaction Documents or any action to
be taken in connection with the transactions contemplated thereby, (in the event
any New Century Party is a publicly-held company) requires filing with the
Securities and Exchange Commission in accordance with the 1934 Act or any rules
thereunder or that (i) has arisen other than in the ordinary course of business
of such New Century Party, (ii) is reasonably likely to be determined adversely
to such New Century Party and (iii) if so determined, would be reasonably
likely, either individually or together with any other Dispute covered by
clauses (i) and (ii) of this sentence, to have a Material Adverse Effect on the
ability of such New Century Party to perform any of its obligations under any of
this Loan Purchase Agreement or any of the other Transaction Documents. None of
the New Century Parties is (i) in violation of any applicable law which
violation materially adversely affects or would reasonably be expected to
materially adversely affect the business, operations, Properties, assets or
condition (financial or otherwise) of the New Century Parties, or (ii) subject
to or in default with respect to any final judgment, writ, injunction, decree,
rule or regulation of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which would have a material adverse effect on the business,
operations, Properties, assets or condition (financial or otherwise) of the New
Century Parties;

                  (iv)   No Breach. Neither (a) the execution and delivery of
                         ---------
the Transaction Documents nor (b) the consummation of the transactions therein
contemplated in compliance with the terms and provisions thereof will (i)
conflict with or result in a breach of the charter or by-laws of any New Century
Party, or any applicable law, rule or regulation, or any order, writ, injunction
or decree of any Governmental Authority, or any Servicing Agreement or other
material agreement or instrument to which any New Century Party or any of its
Subsidiaries is a party or by which any of them or any of their Property is
bound or to which any of them is subject, (ii) constitute a default under any
such material agreement or instrument or result in the creation or imposition of
any Lien upon any Property of a New Century Party or any of its Subsidiaries
pursuant to the terms of any such agreement or instrument or (iii) constitute an

                                       4



event of default or an event which, solely with the passage of time and
which is not amenable to cure, would constitute an event of default under the
Other Financing Documents.

                  (v)    Action. Each of the New Century Parties has all
                         ------
necessary corporate or other power, authority and legal right to execute,
deliver and perform its obligations under each of the Transaction Documents; the
execution, delivery and performance by such New Century Party of each of the
Transaction Documents have been duly authorized by all necessary corporate or
other action on its part; and each Transaction Document has been duly and
validly executed and delivered by such New Century Party and constitutes a
legal, valid and binding obligation of such New Century Party, enforceable
against such New Century Party in accordance with its terms, subject as to
enforceability to applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).

                  (vi)   Approvals. No authorizations, approvals or consents of,
                         ---------
and no filings or registrations with, any Governmental Authority or any
securities exchange are necessary for the execution, delivery or performance by
each of the New Century Parties of the Transaction Documents or for the
legality, validity or enforceability thereof, except for filings and recordings
in respect of the Liens created pursuant to this Loan Purchase Agreement and the
Note Purchase Agreement.

                  (vii)  Taxes. Each of the New Century Parties and their
                         -----
respective Subsidiaries have filed all Federal income tax returns and all other
material tax returns that are required to be filed by them and have paid all
taxes due pursuant to such returns or pursuant to any assessment received by any
of them, except for any such taxes as are being appropriately contested in good
faith by appropriate proceedings diligently conducted and with respect to which
adequate reserves have been established in conformity with GAAP. The charges,
accruals and reserves on the books of each of the New Century Parties and their
respective Subsidiaries in respect of taxes and other governmental charges are,
in the opinion of such New Century Party, adequate.

                  (viii) Investment Company Act. None of the New Century Parties
                         ----------------------
nor any of their respective Subsidiaries is an "investment company", or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.

                  (ix)   Jurisdiction of Organization.  On the Effective Date,
                         ----------------------------
the jurisdiction of organization of the Seller is California and the
jurisdiction of organization of New Century Financial is Delaware.

                  (x)    Location of Books and Records. The location where each
                         -----------------------------
of the New Century Parties keeps its books and records, including all computer
tapes and records relating to the Eligible Mortgage Loans is its chief executive
office located at 18400 Von Karman, Suite 1000, Irvine, California 92612;

                                       5



                  (xi)   True and Complete Disclosure. The information,
                         ----------------------------
reports, financial statements, exhibits and schedules furnished in writing by or
at the direction of the New Century Parties to the Purchaser in connection with
the negotiation, preparation or delivery of this Loan Purchase Agreement and the
other Transaction Documents or included herein or therein or delivered pursuant
hereto or thereto, when taken as a whole, do not contain any untrue statement of
material fact or omit to state any material fact necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not materially misleading. All written information furnished after
the date hereof by or at the request of a New Century Party or otherwise
pursuant to this Loan Purchase Agreement to the Agent in connection with this
Loan Purchase Agreement and the other Transaction Documents and the transactions
contemplated hereby and thereby will be true, complete and accurate in all
material respects, or (in the case of projections) based on reasonable
estimates, on the date as of which such information is stated or certified.
There is no fact known to a Responsible Officer of any of the New Century
Parties, after due inquiry, that would reasonably be expected to have a Material
Adverse Effect that has not been disclosed herein, in the other Transaction
Documents or in a report, financial statement, exhibit, schedule, disclosure
letter or other writing furnished to the Agent for use in connection with the
transactions contemplated hereby or thereby;

                  (xii)  Tangible Net Worth. As of December 31, 2001, the
                         ------------------
aggregate Tangible Net Worth of New Century Financial is not less than
$200,000,000. As used in this Agreement, the "Tangible Net Worth" of New Century
                                              ------------------
Financial is the positive excess, if any of (i) all amounts which would be
included under capital on the balance sheet of New Century Financial at such
date under GAAP, but disregarding (a) assets booked as "organizational expenses"
or as "goodwill", (b) notes due from Affiliates, (c) capitalized mortgaging
servicing rights, valued at the sole discretion of the Agent, using its
reasonable business judgment, taking into account the level of interest rates,
the characteristics of the mortgage loans and general market conditions, and (d)
other intangible assets, over (ii) liabilities;

                  (xiii) ERISA. Each Plan to which any of the New Century
                         -----
Parties or their respective Subsidiaries make direct contributions, and, to the
knowledge of each of the New Century Parties, each other Plan and each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law. No Reportable
Event has occurred under any Plan to which any of the New Century Parties or
their respective Subsidiaries make direct contributions, nor, to the knowledge
of each of the New Century Parties, under each other Plan and each Multiemployer
Plan maintained by any of the New Century Parties or any of their respective
Subsidiaries which is likely to result in the termination of such Plan for
purposes of Title IV of ERISA;

                  (xiv)  Valid Sale and Contribution. This Loan Purchase
                         ---------------------------
Agreement constitutes a valid sale, contribution, assignment, transfer or other
conveyance to the Purchaser of all right, title, and interest of the New Century
Parties in, to and under the Eligible Mortgage Loans enforceable against all
creditors of and purchasers from the New Century Parties, and the Eligible
Mortgage Loans will be held by the Purchaser free and clear of any Lien of any
Person claiming through or under the New Century Parties, except for Liens
permitted under, or to be created by this Loan Purchase Agreement or the Note
Purchase Agreement;

                                       6



                  (xv)     Valid Business Reasons. Each of the New Century
                           ----------------------
Parties has valid business reasons for selling its interests in the Eligible
Mortgage Loans rather than obtaining a loan with the Eligible Mortgage Loans as
collateral;

                  (xvi)    Insolvency. None of the New Century Parties is
                           ----------
insolvent. No New Century Party will be rendered insolvent by the transactions
contemplated by this Loan Purchase Agreement and each New Century Party has an
adequate amount of capital to conduct its respective business in the ordinary
course and to carry out its respective obligations hereunder and under each
Transaction Document to which it is a party;

                  (xvii)   Accounting and Tax Treatment. Each of the New Century
                           ----------------------------
Parties will endeavor to treat the sale and contribution of the Eligible
Mortgage Loans to the Purchaser pursuant to Article II as a contribution of the
Eligible Mortgage Loans to the capital of the Purchaser for all tax purposes,
and as a sale for financial reporting and accounting purposes, although such
sales may be characterized as a sale to a consolidated entity;

                  (xviii)  Legal Name. The legal name of each New Century Party
                           ----------
is as set forth in the signature line of this Loan Purchase Agreement. All names
of each New Century Party since its incorporation and all trade names,
fictitious names, assumed names or "doing business as" names that each New
Century Party has used are as set forth in Schedule 2 to this Loan Purchase
Agreement; and

                  (xix)    Consideration. Seller has received fair
                           -------------
consideration, with a value reasonably equivalent to, or in excess of, the value
of the assets being transferred in exchange for Seller's interest in the
Eligible Mortgage Loans conveyed on such date.

             (b)  The Purchaser hereby makes the following representations and
warranties for the benefit of the New Century Parties, the Agent, the Note
Purchasers and the Noteholders. Such representations and warranties are made as
of the Effective Date and each Note Purchase Date and shall survive each sale,
assignment, transfer and conveyance by the Seller of the Mortgage Loans to the
Purchaser and its successors and assigns.

                  (i)      Existence. The Purchaser (a) is a business trust duly
                           ---------
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite corporate or other
power, and has all governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being or as
proposed to be conducted, except where the lack of such licenses,
authorizations, consents and approvals would not be reasonably likely to have a
Material Adverse Effect; and (c) is qualified to do business and is in good
standing in all other jurisdictions in which the nature of the business
conducted by it makes such qualification necessary, except where failure so to
qualify would not be reasonably likely (either individually or in the aggregate)
to have a Material Adverse Effect.

                  (ii)     Legal Name. The legal name of the Purchaser is as set
                           ----------
forth in the signature line of this Loan Purchase Agreement and the Purchaser
has not changed its name since its organization and since its organization the
Purchaser did not use, nor does the Purchaser now use, any trade names,
fictitious names, assumed name or "doing business as" names;

                                       7



                  (iii)  Power and Authority. The Purchaser has the power and
                         -------------------
authority to execute and deliver this Loan Purchase Agreement and each other
Transaction Document to which it is a party, and to carry out their respective
terms; the Purchaser has duly authorized the receipt from the Seller, and the
pledge to the Agent in the Note Purchase Agreement, of all of its right, title
and interest in the Eligible Mortgage Loans and other Collateral by all
necessary action; and the execution, delivery, and performance of this Loan
Purchase Agreement, and each other Transaction Document to which it is a party,
have been duly authorized by the Purchaser by all necessary action;

                  (iv)   Due Execution and Delivery. This Loan Purchase
                         --------------------------
Agreement and each other Transaction Document to which it is a party have been
duly executed and delivered on behalf of the Purchaser;

                  (v)    Binding Obligations. This Loan Purchase Agreement, and
                         -------------------
the other Transaction Documents to which the Purchaser is a party, when duly
executed and delivered, will constitute legal, valid, and binding obligations of
the Purchaser enforceable against the Purchaser in accordance with their
respective terms subject as to enforceability to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally and to general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law);

                  (vi)   No Violation. The consummation of the transactions
                         ------------
contemplated by and the fulfillment of the terms of this Loan Purchase Agreement
will not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default under, the
organizational documents of the Purchaser, or any material term of any
indenture, agreement, mortgage, deed of trust, or other instrument to which the
Purchaser is a party or by which it is bound, or result in the creation or
imposition of any Lien upon any of its Properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust, or other instrument, or
violate any law or any order, injunction, writ, rule, or regulation applicable
to the Purchaser of any court or of any federal or state regulatory body,
administrative agency, or other Governmental Authority having jurisdiction over
the Purchaser or any of its Properties which would have a material adverse
effect on the Mortgage Loans;

                  (vii)  No Proceedings. There are no proceedings or
                         --------------
investigations pending, or, to the knowledge of the Purchaser, threatened,
before any court, regulatory body, administrative agency, or other tribunal or
Governmental Authority (A) asserting the invalidity of this Loan Purchase
Agreement, (B) seeking to prevent the consummation of any of the transactions
contemplated by this Loan Purchase Agreement, or (C) seeking any determination
or ruling that might (in the reasonable judgment of the Purchaser) materially
and adversely affect the performance by the Purchaser of its obligations under,
or the validity or enforceability of, this Loan Purchase Agreement or each other
Transaction Document for which it is a party;

                  (viii) No Consent Required. The Purchaser is not required to
                         -------------------
obtain the consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any Governmental Authority,
bureau or agency in connection with the execution, delivery or performance of
this Loan Purchase Agreement and the Transaction Documents to which it is a
party, except for such as have been obtained, effected or made, except

                                       8



for filings and recordings in respect of the Liens created pursuant to the Note
Purchase Agreement;

                  (ix)   Jurisdiction of Organization. On the Effective Date,
                         ----------------------------
the Purchaser's jurisdiction of organization is Delaware.

                  (x)    Absence of Event. No event has occurred which adversely
                         ----------------
affects the Purchaser's operations or its ability to perform its obligations
under the Transaction Documents to which it is a party; and

                  (xi)   Subsidiaries.  The Purchaser has no subsidiaries.
                         ------------

             SECTION 3.02   Purchase of Mortgage Loans by the New Century
                            ---------------------------------------------
Parties. (a) Upon discovery of a breach of any of the representations or
- -------
warranties set forth in Schedule 1 hereto that materially adversely affects any
Mortgage Loan or the related Mortgage File, as the case may be, or if the New
Century Parties fail to cause delivery of evidence of filing or copies of any
UCC financing statement in accordance with the terms of this Loan Purchase
Agreement (any such event, a "Warranty Event"), the New Century Parties, jointly
                              --------------
and severally, shall repurchase such Mortgage Loan by remitting to the Purchaser
the Repurchase Amount with respect to such Mortgage Loan as provided in Section
3.02(b).

             (b)  In consideration of its repurchase of a Mortgage Loan, the
relevant New Century Party shall remit the Repurchase Amount to the Agent for
application in accordance with the Note Purchase Agreement.

             (c)  Except as may be set forth in this Loan Purchase Agreement, it
is understood and agreed that the obligations of the New Century Parties with
respect to a breach as provided in this Section 3.02 constitute the sole remedy
against the New Century Parties for such breach available to the Purchaser. The
representations and warranties set forth in Section 3.01 shall survive the sale
and contribution of the Mortgage Loans to the Purchaser and the pledge of the
Collateral to the Agent.

             (d)  Except as provided in this Section 3.02 and in Section
4.01(a), upon the New Century Parties' transfer of their respective interests in
the Mortgage Loans to the Purchaser, none of the New Century Parties will bear
any further risk with respect to the ultimate collectibility of the Mortgage
Loans or the adequacy of the collateral securing the Mortgage Loans.

                                   ARTICLE IV

                                    COVENANTS

             SECTION 4.01   Covenants of New Century Parties. Each New Century
                            --------------------------------
Party hereby covenants and agrees with the Purchaser, the Agent, the Note
Purchasers and the Noteholders with respect to itself as follows:

             (a)  Agreement to Support Purchaser. Each New Century Party,
                  ------------------------------
jointly and severally, agrees that it will pay to the Agent (for application in
accordance with the terms of the

                                       9



Note Purchase Agreement), any unpaid amounts which may become due and owing
under the Note Purchase Agreement or any Note, but remain unpaid on the third
Business Day after the relevant amount became due, (i) on the day on which such
New Century Party is given notice of the circumstances, if the notice is given
at or before 10:00 a.m., New York City time, on a Business Day, or (ii) on the
Business Day following the day such notice is given, if it is given after that
time on a Business Day or on a day that is not a Business Day. The aggregate
amount of this recourse for the New Century Parties shall not exceed the sum of
(a) 10% of the greater of (i) the total principal amount of Notes then
outstanding under the Note Purchase Agreement and (ii) the Commitment Amount and
(b) any unpaid Facility Fee.

               (b)   Financial Statements.  The New Century Parties shall
                     --------------------
 deliver to the Agent:

                     (i)    as soon as available and in any event within
forty-five (45) calendar days after the end of each month, the unaudited
consolidated balance sheets of the New Century Parties as at the end of such
period and the related unaudited consolidated statements of income and retained
earnings and of cash flows for the New Century Parties and their consolidated
Subsidiaries for such month and the portion of the fiscal year through the end
of such month, setting forth, in each case, in comparative form the figures for
the previous year or month, accompanied by a certificate of a Responsible
Officer of the New Century Parties, which certificate shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of the New Century Parties and their
consolidated Subsidiaries in accordance with GAAP, consistently applied, as at
the end of, and for, such month (subject to normal year-end audit adjustments);

                     (ii)   as soon as available and in any event within 90 days
after the end of each fiscal year of the New Century Parties, the consolidated
balance sheets of the New Century Parties and their consolidated Subsidiaries as
at the end of such fiscal year and the related consolidated statements of income
and retained earnings and of cash flows for the New Century Parties and their
consolidated Subsidiaries for such year, setting forth in each case in
comparative form the figures for the previous year, and, accompanied by an
opinion thereon of independent certified public accountants of recognized
national standing, which opinion shall not be qualified as to scope of audit or
going concern and shall state that said consolidated financial statements fairly
present the consolidated financial condition and results of operations of the
New Century Parties and their consolidated Subsidiaries as at the end of, and
for, such fiscal year in accordance with GAAP and a certificate of such
accountants stating that, in making the examination necessary for their opinion,
they obtained no knowledge, except as specifically stated, of any Default or
Event of Default;

                     (iii)  from time to time such other information regarding
the financial condition, operations, or business of the New Century Parties as
the Agent may reasonably request;

                     (iv)   as soon as reasonably possible, and in any event
within thirty (30) days after a Responsible Officer of a New Century Party
knows, or with respect to any Plan or Multiemployer Plan to which a New Century
Party or any of its Subsidiaries makes direct contributions, has reason to
believe, that any of the events or conditions specified below with respect to
any Plan or Multiemployer Plan has occurred or exists, a statement signed by a
senior

                                       10



financial officer of such New Century Party setting forth details
respecting such event or condition and the action, if any, that such New Century
Party or its ERISA Affiliate proposes to take with respect thereto (and a copy
of any report or notice required to be filed with or given to PBGC by such New
Century Party or an ERISA Affiliate with respect to such event or condition):

               (a)   any reportable event, as defined in Section 4043(c) of
ERISA and the regulations issued thereunder, with respect to a Plan, as to which
PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA
that it be notified within thirty (30) days of the occurrence of such event
(provided that a failure to meet the minimum funding standard of Section 412 of
the Code or Section 302 of ERISA, including without limitation the failure to
make on or before its due date a required installment under Section 412(m) of
the Code or Section 302(e) of ERISA, shall be a reportable event regardless of
the issuance of any waivers in accordance with Section 412(d) of the Code); and
any request for a waiver under Section 412(d) of the Code for any Plan;

               (b)   the distribution under Section 4041(c) of ERISA of a notice
of intent to terminate any Plan or any action taken by any New Century Party or
an ERISA Affiliate to terminate any Plan;

               (c)   the institution by PBGC of proceedings under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan, or the receipt by either any New Century Party or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action has been taken by PBGC
with respect to such Multiemployer Plan;

               (d)   the complete or partial withdrawal from a Multiemployer
Plan by any of the New Century Parties or any ERISA Affiliate that results in
liability under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default) or the receipt
by any New Century Party or any ERISA Affiliate of notice from a Multiemployer
Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245
of ERISA or that it intends to terminate or has terminated under Section 4041A
of ERISA;

               (e)   the institution of a proceeding by a fiduciary of any
Multiemployer Plan against any New Century Party or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed within 30 days;
and

               (f)   the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss
of tax-exempt status of the trust of which such Plan is a part if any New
Century Party or an ERISA Affiliate fails to provide timely security to such
Plan in accordance with the provisions of said Sections.

                     (v)    Within 30 days of the end of such calendar quarter,
a compliance certificate of a senior financial officer of New Century Financial
certifying compliance as of the end of the prior quarter with (a) all covenants
applicable to the New Century Parties under this Agreement and (b) all covenants
applicable to the New Century Parties and any Affiliates thereof bound thereby
under all Other Financing Documents.

                                       11



               (c)   Litigation. Each New Century Party will promptly, and in
                     ----------
any event within 10 days after service of process on any of the following, give
to the Agent notice of all litigation, actions, suits, arbitrations,
investigations (including, without limitation, any of the foregoing which are
pending or threatened) or other legal or arbitrable proceedings affecting such
New Century Party or affecting any of its Property before any Governmental
Authority that (i) questions or challenges the validity or enforceability of any
of the Transaction Documents or any action to be taken in connection with the
transactions contemplated hereby or thereby, (ii) makes a claim or claims which,
individually or in the aggregate, if adversely determined, would be reasonably
likely to have a Material Adverse Effect, or (iii) requires filing with the
Securities and Exchange Commission in accordance with the 1934 Act and any rules
thereunder.

               (d)   Existence, etc.  Each New Century Party will:
                     --------------

                     (i)    preserve and maintain its legal existence and all of
its material rights, privileges, licenses and franchises;

                     (ii)   comply with the requirements of all applicable laws,
rules, regulations and orders of Governmental Authorities (including, without
limitation, all environmental laws) if failure to comply with such requirements
would be reasonably likely (either individually or in the aggregate) to have a
Material Adverse Effect;

                     (iii)  keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP consistently applied;

                     (iv)   not change its jurisdiction of organization from the
jurisdiction referred to in Section 3.01(a)(ix) unless it shall have provided
the Agent thirty (30) days' prior written notice of such change;

                     (v)    pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or profits or on
any of its Property prior to the date on which penalties attach thereto, except
for any such tax, assessment, charge or levy the payment of which is being
contested in good faith and by proper proceedings and against which adequate
reserves are being maintained in conformity with GAAP; provided that this shall
not include the payment of any Mortgagor or Mortgaged Property taxes,
assessments, governmental charges or levies subject to the servicing standards
set forth in the Servicing Agreement; and

                     (vi)   upon reasonable notice, permit representatives of
the Agent (and any Note Purchaser or Noteholder holding (or holding commitments
to purchase) not less than the lower of (A) the outstanding principal amount of
the Notes and (B) $5,000,000 principal amount of Notes and not affiliated with
any competitor of such New Century Party that wishes to accompany the Agent's
representatives), during normal business hours, to examine, copy and make
extracts from its books and records, to inspect any of its Properties, and to
discuss its business and affairs with its officers, all to the extent reasonably
requested by the Agent. For purposes of this provision, a Person will not be
deemed to be an affiliate of another unless it controls the second person and a
natural person will not be treated as an affiliate.

               (e)   Underwriting Guidelines. In the event any New Century Party
                     -----------------------
makes a material amendment or modification to the Underwriting Guidelines, such
New Century Party

                                       12



shall promptly deliver to the Agent a complete copy of such amended or
modified Underwriting Guidelines. The New Century Parties and the Purchaser
acknowledge that until the Agent has approved the amendments or modifications,
which approval shall not be unreasonably withheld, the Note Purchasers shall
have no obligation to make any further Note Purchases.

                     (f)    Transactions with Affiliates. Each New Century Party
                            ----------------------------
will not enter into any transaction, including without limitation any purchase,
sale, lease or exchange of Property or the rendering of any service, with any
Affiliate unless such transaction is (a) otherwise permitted under this Loan
Purchase Agreement, the Note Documents or the Trust Agreement, (b) in the
ordinary course of such New Century Party's business and (c) upon fair and
reasonable terms no less favorable to such New Century Party than it would
obtain in a comparable arm's length transaction with a Person which is not an
Affiliate, or make a payment that is not otherwise permitted by this paragraph
(f) to any Affiliate.

                     (g)    Ownership of Mortgage Loans. The New Century Parties
                            ---------------------------
will defend the Purchaser's ownership of the Mortgage Loans against, and will
take such other action as is necessary to remove, any Lien, security interest or
claim on or to the Mortgage Loans, other than the security interests created or
permitted hereunder and under the Note Purchase Agreement, and the New Century
Parties will defend the right, title and interest of the Purchaser in and to any
of the Mortgage Loans against the claims and demands of all Persons whomsoever.

                     (h)    Limitation on Guarantees. The New Century Parties
                            ------------------------
shall not create, incur, assume or suffer to exist any Guarantees by any of them
of obligations of others, in excess of $100,000 in the aggregate, except as
otherwise listed on Schedule 4 hereto.

                     (i)    Maintenance of Tangible Net Worth. As of the end of
                            ---------------------------------
each calendar quarter following December 31, 2001, the aggregate Tangible Net
Worth of New Century Financial shall be at least the greater of (x) $200,000,000
or (y) the sum of (i) 85% of the actual Tangible Net Worth number as of the most
recent calendar year end plus (ii) 70% of net earnings after declared dividends
plus (iii) 90% of net new capital received (whether in the form of equity or
subordinated debt which the Agent determines has substantial equity features),
for each such quarter on a cumulative basis.

                     (j)    Maintenance of Ratio of Total Indebtedness to Book
                            --------------------------------------------------
Equity. New Century Financial (i) shall not permit the consolidated ratio of
- ------
aggregate Total Indebtedness to its aggregate book equity as determined under
GAAP to be greater than 10: 1 as measured as of the last day of each calendar
quarter and (ii) shall provide to the Agent on the last day of each fiscal
quarter a tabulation of all borrowings pursuant to the Other Financing
Documents. At no time following the Effective Date shall New Century Financial
have unencumbered cash or cash equivalents, including short-term investments, of
less than $30,000,000.

                     (k)    Maintenance of Profitability. The New Century
                            ----------------------------
Parties shall not permit, for any period of the shorter of (x) two rolling
quarters or (y) any shorter period of time set forth in any Other Financing
Document with respect to a profitability test (each such period, a "Test
                                                                    ----
Period"), Net Income for such Test Period, before income taxes for such Test
- ------
Period and distributions made during such Test Period, to be less than $1.00.

                                       13



               (l)   Required Filings. The New Century Parties shall promptly
                     ----------------
provide the Agent with copies of all documents which any of the New Century
Parties or any Affiliate of any New Century Party is required to file with the
Securities and Exchange Commission or any Governmental Authority which may be
substituted therefor in accordance with the 1934 Act or any rules thereunder;
provided that the New Century Parties shall not be required to provide the Agent
with filings of a standard nature relating to the issuance of securities under a
REMIC or similar pass-through trust.

               (m)   No Adverse Selection. The New Century Parties have not
                     --------------------
selected the Mortgage Loans in a manner so as to adversely affect the
Purchaser's interests.

               (n)   Preservation of Security Interest. The New Century Parties
                     ---------------------------------
shall execute and file such financing statements and cause to be executed and
filed such continuation statements, all in such manner and in such places as may
be required by law fully to preserve, maintain, and protect the respective
right, title and interest of the Purchaser and the Agent, the Note Purchasers
and the Noteholders in the Mortgage Loans. The New Century Parties shall deliver
(or cause to be delivered) to the Custodian file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.

               (o)   Obligations with Respect to Mortgage Loans. Each of the New
                     ------------------------------------------
Century Parties will duly fulfill all obligations on its respective part to be
fulfilled under or in connection with each Mortgage Loan, and will do nothing to
impair the rights of the Purchaser or the Agent in any of the Mortgage Loans.

               (p)   Compliance with Law. Each New Century Party will comply, in
                     -------------------
all material respects, with all laws, acts, rules, requisitions, orders, decrees
and directions of any Governmental Authority applicable to its business and to
the Mortgage Loans or any part thereof; provided, however, that such New Century
Party may contest any law, act, regulation, order, decree or direction in any
reasonable manner which shall not materially and adversely affect the rights or
interests of the Purchaser or the Agent (for the Agent, the Note Purchasers and
the Noteholders) in the Mortgage Loans.

               (q)   Conveyance of Mortgage Loans; Security Interests. Except
                     ------------------------------------------------
for the transfers and conveyances under or permitted in this Loan Purchase
Agreement or any other Transaction Document, none of the New Century Parties
will sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien, on any Mortgage Loan, or any interest
therein and each of the New Century Parties shall defend the right, title, and
interest of the Purchaser, the Agent (for the benefit of the Agent, the Note
Purchasers and the Noteholders), and their respective successors and assigns in,
to, and under the Mortgage Loans, against all claims of third parties claiming,
through or under the New Century Parties; provided, however, that nothing in
this Section 4.01(q) shall prevent or be deemed to prohibit the New Century
Parties from suffering to exist upon any of the Mortgage Loans any Liens for
municipal or other local taxes if such taxes shall not at the time be due and
payable or if the New Century Parties shall concurrently be contesting the
validity thereof in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves with respect thereto and such contests pose
no risk of forfeiture.

                                       14



               (r)   Notification of Breach. Each of the New Century Parties
                     ----------------------
will advise the Purchaser, the Agent and the Custodian promptly, in reasonable
detail, upon discovery of the occurrence of any breach by (i) any New Century
Party of any of its representations, warranties or covenants contained herein,
or (ii) by any New Century Party or any Affiliate thereof of any of its
representations, warranties or covenants contained in any Other Financing
Document.

               (s)   Further Assurances. Each of the New Century Parties will
                     ------------------
make, execute or endorse, acknowledge and file or deliver to the Purchaser, the
Agent and the Custodian from time to time such schedules, confirmatory
assignments, conveyances, transfers, endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to the Mortgage Loans and other rights covered by this Loan
Purchase Agreement, as the Purchaser, the Agent or the Custodian may request and
reasonably require.

               (t)   Indemnification. The New Century Parties, jointly and
                     ---------------
severally, hereby agree to indemnify, defend and hold the Purchaser, the Agent,
the Note Purchasers, the Noteholders, the Servicer, the Custodian and their
respective Affiliates and each of their respective officers, directors,
employees, agents, trustees and advisors (each, an "Indemnified Party") harmless
                                                    -----------------
from and against any and all loss, liability, damage, judgment, claim,
deficiency, or expense (including interest, penalties, reasonable attorneys'
fees and amounts paid in settlement) payable to a Person that is not a party to
any of the Transaction Documents, or payable by a party to a Transaction
Document to another party to a Transaction Document, if any of them may become
subject thereto, insofar as such loss, liability, damage, judgment, claim,
deficiency, or expense arises out of or is based upon a breach by any New
Century Party of its representations contained in Section 3.01 or its covenants
contained in Section 4.01, or any information set forth in this Loan Purchase
Agreement or in any schedule delivered by any New Century Party hereunder or
thereunder, being untrue in any material respect at any time or relating to or
arising out of this Loan Purchase Agreement or any other Transaction Document
that results from anything other than any Indemnified Party's gross negligence
or willful misconduct. The New Century Parties may offer to assume the defense
of any action brought against any Indemnified Party, provided that the counsel
proposed to handle the defense be satisfactory to such Indemnified Party in its
sole discretion. If the Indemnified Party agrees to such an arrangement, then
the New Century Parties shall not be liable for any separate counsel for such
Indemnified Party. In no event will an Indemnified Party be liable for a
settlement effected without its prior consent. The obligations of the New
Century Parties under this Section 4.01(t) shall be considered to have been
relied upon by the Purchaser, the Agent, the Note Purchasers, the Noteholders,
the Servicer, and the Custodian and shall survive the execution, delivery, and
performance of this Loan Purchase Agreement regardless of any investigation made
by the Purchaser, the Agent, any Note Purchaser, any Noteholder, the Custodian
or on their behalf of any of them. THE INDEMNIFICATION OBLIGATIONS OF THE NEW
CENTURY PARTIES PURSUANT TO THE PRECEDING PROVISIONS OF THIS PARAGRAPH SHALL
APPLY REGARDLESS OF ANY NEGLIGENCE OR OTHER FAULT ON THE PART OF THE PURCHASER,
THE AGENT, ANY NOTE PURCHASER, ANY NOTEHOLDER, THE SERVICER, THE CUSTODIAN OR
ANY OF THEIR RESPECTIVE OFFICERS, EMPLOYEES, TRUSTEES OR AGENTS EXCEPT AS
EXPRESSLY STATED IN THIS PARAGRAPH.

                                       15



          The New Century Parties, jointly and severally, also agree to
reimburse an Indemnified Party as and when billed by such Indemnified Party for
all such Indemnified Party's costs and expenses incurred in connection with the
enforcement or the preservation of such Indemnified Party's rights (including
third-party beneficiary rights of the Agent, the Note Purchasers and the
Noteholders) under this Loan Purchase Agreement, including without limitation
the reasonable fees and disbursements of one counsel for the Note Purchasers and
the Noteholders as a group.

          (u)  Notice of Liens. Each New Century Party shall notify the
               ---------------
Purchaser, the Agent, the Servicer and the Custodian, promptly after becoming
aware of any Lien on any Mortgage Loan other than the Liens created hereunder
and under the Note Purchase Agreement (including any other Lien that is
permitted under the Note Purchase Agreement).

          (v)  Taxes. The New Century Parties shall promptly pay all applicable
               -----
taxes required to be paid in connection with the assignment of the Mortgage
Loans and acknowledges that the Purchaser shall have no responsibility with
respect thereto.

          (w)  Taxes and Other Liabilities. The New Century Parties shall
               ---------------------------
promptly pay and discharge all material taxes, assessments, fees, claims and
other governmental charges when due and payable by any New Century Party except
(i) such as may be paid thereafter without penalty or (ii) such as may be
contested in good faith by appropriate proceedings and for which an adequate
reserve has been established and is maintained in accordance with GAAP. The New
Century Parties shall promptly notify the Agent of any material challenge,
contest or proceeding pending by or against the New Century Parties or any
Affiliate of the New Century Parties before any taxing authority.

          (x)  No Agency. None of the New Century Parties will act as an agent
               ---------
of the Purchaser in any capacity except to the limited extent provided in the
Transaction Documents, but instead will present itself to the public as a
corporation separate from the Purchaser.

          (y)  Financial Statements. The financial statements and books and
               --------------------
records of each Seller shall reflect the separate existence of the Purchaser and
shall also include a footnote substantially to the effect set forth in Schedule
3.

          SECTION 4.02  Purchaser Covenants. The Purchaser hereby covenants and
                        -------------------
agrees with the New Century Parties and the Agent, the Note Purchasers and the
Noteholders as follows:

          (a)  Mortgagor's Quiet Enjoyment. The Purchaser hereby acknowledges
               ---------------------------
and agrees that its rights in the Mortgaged Property are expressly subject to
the rights of the related Mortgagors in such Mortgaged Property pursuant to the
applicable Mortgage Loans. The Purchaser covenants and agrees that, so long as a
Mortgagor shall not be in default of any of the provisions of the applicable
Mortgaged Loan, neither the Purchaser nor any assignee of the Purchaser will
disturb the Mortgagor's quiet and peaceful possession of the related Mortgaged
Property and the Mortgagor's use thereof for its intended purpose.

          (b)  Operation of the Purchaser. The Purchaser shall be operated in
               --------------------------
the following manner, with a view toward assuring that it would not be
substantively consolidated

                                       16



with or in the trust estate of another Person (that is, such that the
separate legal existence of the Purchaser and such Person would be disregarded)
and in that regard, the Purchaser shall:

               (i)    be a limited purpose business trust whose primary
activities are restricted as provided in the Trust Agreement as in effect on the
date of this Loan Purchase Agreement;

               (ii)   not engage in any action that would cause the separate
legal identity of the Purchaser not to be respected, including, without
limitation, (a) holding itself out as being liable for the debts of any other
party or (b) acting other than through its duly authorized agents;

               (iii)  not be involved in the day-to-day management of any New
Century Party;

               (iv)   not incur, assume or guarantee any indebtedness except
for such indebtedness as may be incurred by the Purchaser in connection with the
issuance of the Notes;

               (v)    not commingle its funds, assets and records relating
thereto with those of any New Century Party or any other entity;

               (vi)   entitle the separate creditors of the Purchaser to be
satisfied out of the Purchaser's assets and not permit its assets to be made
available to any other Person except as expressly contemplated in the Trust
Agreement;

               (vii)  act solely in its own name in the conduct of its business,
including business correspondence and other communications, and shall conduct
its business so as not to mislead others as to the identity of the entity with
which they are concerned;

               (viii) maintain records and books of account and shall not
commingle its records and books of account with the records and books of account
of any other Person;

               (ix)   not engage in any business or activity other than in
accordance with or relating to the Trust Agreement and its continuation as a
Delaware business trust;

               (x)    not form, or cause to be formed, any subsidiaries;

               (xi)   comply with all restrictions and covenants in, and shall
not fail to comply with the formalities established in, the Trust Agreement;

               (xii)  maintain its assets separately from the assets of the New
Century Parties (including through the maintenance of a separate bank account);

               (xiii) manage its day-to-day business without the involvement of
the New Century Parties (except as may be otherwise provided in the
Administration Agreement);

               (xiv)  maintain a separate office (in care of the Owner Trustee)
from that of the New Century Parties;

                                       17



               (xv)  not act as an agent of the New Century Parties, except to
the limited extent provided in the Transaction Documents; and

               (xvi) maintain at all times an Administrator to perform the
duties contemplated in the Administration Agreement.

          (c)  Merger or Consolidation. The Purchaser will keep in full effect
               -----------------------
its existence, rights status as a Delaware business trust and, if applicable,
will obtain and preserve its qualification to do business in each jurisdiction
which permits such qualification and in which it is necessary to protect the
validity and enforceability of this Loan Purchase Agreement, any other
Transaction Document to which it is a party or any of the Mortgage Loans and to
perform its duties under this Loan Purchase Agreement and each other Transaction
Document to which it is a party.

          SECTION 4.03  Pledge of Mortgage Loans. The New Century Parties
                        ------------------------
understand that the Purchaser intends to pledge and assign the benefits of this
Agreement, along with the Mortgage Loans to the Agent, for the benefit of the
Agent, the Note Purchasers and the Noteholders pursuant to the Note Purchase
Agreement. Each of the New Century Parties agree that such assignee of the
Purchaser may exercise the rights of the Purchaser hereunder and shall be
entitled to all of the benefits of the Purchaser hereunder to the extent
provided for in such pledge and assignment.

                                   ARTICLE V

                              CONDITIONS PRECEDENT

          SECTION 5.01  Conditions to the Purchaser Obligations. The obligations
                        ---------------------------------------
of the Purchaser to accept the transfer of the Mortgage Loans on each Note
Purchase Date shall be subject to the satisfaction of the following conditions:

          (a)  All representations and warranties of the New Century Parties
contained in this Loan Purchase Agreement and in the Transaction Documents shall
be true and correct on the Execution Date and on each Note Purchase Date with
the same effect as though such representations and warranties had been made on
such date;

          (b)  All information concerning the Mortgage Loans provided to the
Purchaser shall be true and correct as of the related Note Purchase Date in all
material respects;

          (c)  The New Century Parties shall have delivered to the Purchaser a
Mortgage Loan Schedule with respect to the Mortgage Loans as of the related Note
Purchase Date and shall have substantially performed all other obligations
required to be performed by the provisions of this Loan Purchase Agreement;

          (d)  The New Century Parties shall have recorded and filed, at their
expense, any financing statement with respect to the Mortgage Loans and the
other Mortgage Loans to be transferred from time to time to the Purchaser
pursuant to this Loan Purchase Agreement meeting the requirements of applicable
state law in such manner in such jurisdictions as are necessary to perfect the
transfer of the Mortgage Loans and the other Mortgage Loans from the

                                       18



Sellers to the Purchaser, and shall deliver a file-stamped copy of such
financing statements or other evidence of such filings to the Purchaser and the
Agent;

          (e)  All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Loan Purchase Agreement
shall be satisfactory in form and substance to the Purchaser, and the Purchaser
shall have received from the New Century Parties copies of all documents
(including, without limitation, records of corporate proceedings) relevant to
the transactions herein contemplated as the Purchaser may reasonably have
requested; and

          (f)  All respective conditions necessary to vest in the Purchaser good
title, free and clear of all Liens (other than Liens permitted in the proviso
contained in Section 4.01(q) hereof), to its respective Mortgage Loans shall
have been satisfied.

                                   ARTICLE VI

                                   TERMINATION

          SECTION 6.01  Termination. The respective obligations and
                        -----------
responsibilities of the New Century Parties and the Purchaser created by this
Loan Purchase Agreement shall terminate upon the latest of (i) the maturity or
other liquidation of the last Mortgage Loan and the disposition of any amounts
received upon disposition of any defaulted Mortgage Loans; and (ii) the
termination of the Note Purchase Agreement in accordance with the terms thereof;
provided, however, that the indemnifications contained in Section 4.01(t) herein
shall survive the termination of this Loan Purchase Agreement.

          SECTION 6.02  Effect of Termination. No termination or rejection or
                        ----------------------
failure to assume the executory obligations of this Loan Purchase Agreement in
the bankruptcy of any of the New Century Parties or the Purchaser shall be
deemed to impair or affect the obligations pertaining to any executed sale or
executed obligations, including, without limitation, pre-termination breaches of
representations and warranties by any New Century Party or the Purchaser.
Without limiting the foregoing, prior to termination, the failure of the New
Century Parties to pay a Repurchase Amount shall not render such transfer or
obligation executory, nor shall the continued duties of the parties pursuant to
Article 4 or Section 7.06 of this Loan Purchase Agreement render an executed
sale executory.

                                  ARTICLE VII

                            MISCELLANEOUS PROVISIONS

          SECTION 7.01  Amendment. This Loan Purchase Agreement may be amended
                        ---------
from time to time by the parties hereto only with the prior written consent of
the Agent and, to the extent specified in the Note Purchase Agreement, the
Noteholders and the Note Purchasers.

          SECTION 7.02  GOVERNING LAW; JURISDICTION. (a) THIS LOAN PURCHASE
                        ---------------------------
AGREEMENT AND ANY AMENDMENT HEREOF PURSUANT TO SECTION 7.01 SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES) APPLICABLE TO AGREEMENTS

                                       19



MADE AND TO BE PERFORMED THEREIN AND THE OBLIGATIONS, RIGHTS, AND REMEDIES
OF THE PARTIES UNDER THIS LOAN PURCHASE AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

          (b)  EACH OF THE NEW CENTURY PARTIES AND THE PURCHASER HEREBY
IRREVOCABLY AND UNCONDITIONALLY:

          (1)  TO THE EXTENT PERMITTED BY LAW, SUBMITS FOR ITSELF AND ITS
PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS LOAN PURCHASE
AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE PERSONAL JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

          (2)  CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

          (3)  AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH IN OR PURSUANT TO THIS LOAN PURCHASE AGREEMENT FOR NOTICES; AND

          (4)  AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION.

          SECTION 7.03  Notices. All demands, notices, and communications under
                        -------
or in connection with this Loan Purchase Agreement shall be in writing and shall
be deemed to have been duly given, made and received (i) when delivered against
receipt of registered or certified mail or upon actual receipt of registered or
certified mail, postage prepaid, return receipt requested; (ii) when delivered
by courier with appropriate evidence of receipt; or (iii) upon transmission via
facsimile with appropriate evidence of receipt (a) in the case of New Century
Financial and Seller, at the following address: 18400 Von Karman, Suite 1000,
Irvine, California 92612, Attention: Stergios Theologides, Esq., Fax No.: (949)
840-7033, and (b) in the case of the Purchaser, c/o the Administrator, New
Century Mortgage Corporation, Attention: Stergios Theologides, Esq., Fax No.
(949) 840-7033 and a copy to Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-0001, facsimile number: (302)
636-4041 or (302) 636-4141; Attention: Corporate Trust Administration, in the
case of the Agent, 1285 Avenue of the Americas, New York, New York 10019,
Attention: Robert

                                       20



Carpenter and George Mangiaracina, Fax No.: (212) 713-9597. Any party may alter
the address to which communications are to be sent by giving notice of such
change of address in conformity with the provisions of this Section 7.03 for
giving notice and by otherwise complying with any applicable terms of this Loan
Purchase Agreement.

          SECTION 7.04  Severability of Provisions. If any one or more of the
                        --------------------------
covenants, agreements, provisions, or terms of this Loan Purchase Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, or terms of this Loan Purchase Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Loan Purchase Agreement.

          SECTION 7.05  Assignment. Notwithstanding anything to the contrary
                        ----------
contained in this Loan Purchase Agreement, this Loan Purchase Agreement and the
respective rights and duties of the New Century Parties and the Purchaser
hereunder may not be assigned or otherwise transferred by the New Century
Parties or the Purchaser (as applicable), without the prior written consent of
the other parties to this Loan Purchase Agreement, the Agent and such of the
Note Purchasers and Noteholders as are required under the Note Purchase
Agreement. Whether or not expressly stated, all representations, warranties,
covenants and agreements of the New Century Parties and the Purchaser in this
Loan Purchase Agreement, or in any document delivered by any of them in
connection with this Loan Purchase Agreement, shall be for the benefit of, and
shall be exercisable by, the Agent.

          SECTION 7.06  Further Assurances. Each of the New Century Parties and
                        ------------------
the Purchaser agrees to do such further acts and things and to execute and
deliver to the Agent such additional assignments, agreements, powers and
instruments as are required by the Agent in its sole discretion or pursuant to
the direction of the Majority Investors to carry into effect the purposes of
this Loan Purchase Agreement or to better assure and confirm unto the Agent, the
Note Purchasers and the Noteholders their rights, powers and remedies hereunder.

          SECTION 7.07  No Waiver; Cumulative Remedies. No failure to exercise
                        ------------------------------
and no delay in exercising, on the part of the Purchaser or the New Century
Parties or the Agent or any Note Purchaser or Noteholder, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise hereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privilege provided by law.

          SECTION 7.08  Counterparts. This Loan Purchase Agreement may be
                        ------------
executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which shall
constitute one and the same instrument.

          SECTION 7.09  Binding Effect: Third-Party Beneficiaries. This Loan
                        -----------------------------------------
Purchase Agreement will inure to the benefit of and be binding upon the parties
hereto. The Agent, the Note Purchasers and the Noteholders are intended third
party beneficiaries of this Loan Purchase Agreement.

                                       21



          SECTION 7.10  Merger and Integration. Except as specifically stated
                        ----------------------
otherwise herein, this Loan Purchase Agreement sets forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, relating thereto are superseded by this
Loan Purchase Agreement. This Loan Purchase Agreement may not be modified,
amended, waived or supplemented except as provided herein.

          SECTION 7.11  Headings. The headings herein are for purposes of
                        --------
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.

          SECTION 7.12  Schedules and Exhibits. The schedules and exhibits
                        ----------------------
attached hereto and referred to herein shall constitute a part of this Loan
Purchase Agreement and are incorporated into this Loan Purchase Agreement for
all purposes.

          SECTION 7.13  No Bankruptcy Petition Against the Purchaser. Each of
                        --------------------------------------------
the New Century Parties agrees that, prior to the date that is one year and one
day after the payment in full of the Notes and all amounts payable under the
Note Purchase Agreement, it will not institute against the Purchaser, or join
any other Person in instituting against the Purchaser, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under the laws of the United States or any state of the United
States. This Section 7.13 shall survive the termination of this Loan Purchase
Agreement.

          SECTION 7.14  No Recourse. It is expressly understood and agreed by
                        -----------
the parties hereto that (a) this Loan Purchase Agreement is executed and
delivered by Wilmington Trust Company, not individually or personally but solely
as trustee of the Purchaser, in the exercise of the powers and authority
conferred and vested in it, (b) each of the representations, undertakings and
agreements herein made on the part of the Purchaser is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose of binding only the Purchaser,
(c) nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by an Person claiming by, through or
under the parties hereto and (d) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any indebtedness or expenses of
the Purchaser or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Purchaser under
this Loan Purchase Agreement or any other related documents.

                            [Signature Page Follows]

                                       22



          IN WITNESS WHEREOF, the parties hereto have caused this Loan Purchase
Agreement to be duly executed by their respective officers as of the day and
year first above written.


                             NEW CENTURY MORTGAGE CORPORATION


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


                             NEW CENTURY FINANCIAL CORPORATION


                             By:   /s/ Patrick Flanagan
                                 ---------------------------------------------
                                 Name: _______________________________________
                                 Title: Executive Vice President
                                        --------------------------------------


                              NEW CENTURY FUNDING I


                              By: Wilmington Trust Company, not in its
                                  individual capacity but solely as Owner
                                  Trustee under the Trust Agreement


                                  By:   /s/ Anita E. Daliago
                                        --------------------------------------
                                   Name:______________________________________

                                   Title: Executive Vice President
                                        --------------------------------------

                                      3-1

EX-99.5

                                                                    Exhibit 99.5

                                                                  Execution Copy

================================================================================

                 COMMITTED NOTE PURCHASE AND SECURITY AGREEMENT

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

                            Dated as of May 10, 2002

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


                              NEW CENTURY FUNDING I
                                 as Note Issuer

    Each Person Party Hereto As A Purchaser or A Noteholder from Time to Time


                                       and

                     UBS WARBURG REAL ESTATE SECURITIES INC.
                 as Agent for the Purchasers and the Noteholders

================================================================================



                                TABLE OF CONTENTS



                                                                             Page
                                                                          
 Recitals .................................................................    1

Section 1. Definitions and Accounting Matters .............................    1

   1.01      Certain Defined Terms ........................................    1
             ---------------------
   1.02      Accounting Terms and Determinations ..........................   15
             ----------------------------------

Section 2. Note Purchases .................................................   15

   2.01      Note Purchases ...............................................   15
             --------------

Section 3. Notes ..........................................................   16

   3.01      General ......................................................   16
             -------
   3.02      Execution, Authentication, Delivery and Dating ...............   17
             ----------------------------------------------
   3.03      Registration, Registration of Transfer and Exchange ..........   17
             ---------------------------------------------------
   3.04      Mutilated, Destroyed, Lost or Stolen Note ....................   17
             -----------------------------------------
   3.05      Persons Deemed Owner .........................................   18
             --------------------
   3.06      Cancellation .................................................   18
             ------------
   3.07      Limitations on Transfer of the Notes .........................   18
             ------------------------------------
   3.08      Holding of Notes .............................................   20
             ----------------
   3.09      Procedure for Note Purchases .................................   20
             ----------------------------
   3.10      Limitation on Note Purchases; Illegality .....................   23
             ----------------------------------------
   3.11      Repayment of Notes; Interest .................................   23
             ----------------------------
   3.12      Mandatory Prepayments or Pledge; Voluntary Prepayments .......   24
             ------------------------------------------------------
   3.13      Extension of Termination Date ................................   25
             -----------------------------
   3.14      Takeout Commitments ..........................................   26
             -------------------
   3.15      Additional Termination .......................................   26
             ----------------------

Section 4. Payments; Computations; Etc. ...................................   26

   4.01      Payments .....................................................   26
             --------
   4.02      Computations .................................................   26
             ------------
   4.03      Requirements of Law ..........................................   27
             -------------------
   4.04      Facility Fee .................................................   28
             ------------

Section 5. Collateral Security ............................................   29

   5.01      Collateral; Security Interest ................................   29
             -----------------------------
   5.02      Further Documentation ........................................   30
             ---------------------
   5.03      Changes in Locations, Name, etc ..............................   30
             -------------------------------
   5.04      Agent's Appointment by Note Issuer as Attorney-in-Fact .......   30
             ------------------------------------------------------
   5.05      Performance by Agent of Note Issuer's Obligations ............   32
             -------------------------------------------------
   5.06      Proceeds .....................................................   32
             --------
   5.07      Limitation on Duties Regarding Preservation of Collateral ....   32
             ---------------------------------------------------------
   5.08      Powers Coupled with an Interest ..............................   33
             -------------------------------


                                       i



                                                                     
   5.09      Release of Security Interest ............................  33
             ----------------------------

Section 6. Conditions Precedent ......................................  33

   6.01      Initial Note Purchase ...................................  33
             ---------------------
   6.02      Initial and Subsequent Note Purchases ...................  34
             -------------------------------------

Section 7. Representations and Warranties ............................  36

   7.01      Existence ...............................................  36
             ---------
   7.02      Financial Condition .....................................  37
             -------------------
   7.03      Litigation ..............................................  37
             ----------
   7.04      No Breach ...............................................  37
             ---------
   7.05      Action ..................................................  38
             ------
   7.06      Approvals ...............................................  38
             ---------
   7.07      Margin Regulations ......................................  38
             ------------------
   7.08      Taxes ...................................................  38
             -----
   7.09      Investment Company Act ..................................  38
             ----------------------
   7.10      Collateral; Collateral Security .........................  38
             -------------------------------
   7.11      Jurisdiction of Organization ............................  39
             ----------------------------
   7.12      Location of Books and Records ...........................  39
             -----------------------------
   7.13      True and Complete Disclosure ............................  39
             ----------------------------
   7.14      Tangible Net Worth ......................................  39
             ------------------
   7.15      ERISA ...................................................  40
             -----

Section 8. Covenants of the Note Issuer ..............................  40

   8.01      Litigation ..............................................  40
             ----------
   8.02      Existence, etc ..........................................  40
             --------------
   8.03      Prohibition of Fundamental Changes ......................  41
             ----------------------------------
   8.04      Borrowing Base Deficiency ...............................  41
             -------------------------
   8.05      Notices .................................................  41
             -------
   8.06      Reports .................................................  42
             -------
   8.07      Transactions with Affiliates ............................  42
             ----------------------------
   8.08      Limitation on Liens .....................................  42
             -------------------
   8.09      Limitation on Guarantees and Other Indebtedness .........  43
             -----------------------------------------------
   8.10      Limitation on Distributions .............................  43
             ---------------------------
   8.11      Maintenance of Tangible Net Worth .......................  43
             ---------------------------------
   8.12      Servicer; Servicing Tape ................................  43
             ------------------------
   8.13      Maintenance of Liquidity ................................  43
             ------------------------
   8.14      Required Filings ........................................  43
             ----------------
   8.15      No Adverse Selection ....................................  43
             --------------------
   8.16      Remittance of Prepayments ...............................  43
             -------------------------
   8.17      Wet Funding Schedules ...................................  44
             ---------------------
   8.18      Servicing Agreements ....................................  44
             --------------------



                                      -ii-



                                                                                                       
Section 9. Events of Default ...................................................................          44

Section 10. Remedies Upon Default ..............................................................          47

   10.01     Acceleration of Principal .........................................................          47
             -------------------------
   10.02     Possession of Files Relating to the Collateral ....................................          47
             ----------------------------------------------
   10.03     Action Regarding Collateral .......................................................          47
             ---------------------------
   10.04     Deficiency ........................................................................          48
             ----------
   10.05     Private Sale ......................................................................          49
             ------------
   10.06     Default Rate of Interest ..........................................................          49
             ------------------------
   10.07     Application of Proceeds ...........................................................          49
             -----------------------
   10.08     Payments on Collateral to the Note Issuer .........................................          50
             -----------------------------------------
   10.09     Cross-Collateralization; Right of Set-Off .........................................          50
             -----------------------------------------
   10.10     Interest Rate Protection Agreements ...............................................          50
             -------------------------------------
Section 11. No Duty of Agent ...................................................................          51

Section 12. The Agent ..........................................................................          51

   12.01     Appointment of Agent ..............................................................          51
             --------------------
   12.02     Delegation ........................................................................          51
             ----------
   12.03     Exculpatory Provisions ............................................................          51
             ----------------------
   12.04     Reliance ..........................................................................          52
             -----------
   12.05     Notice of Default .................................................................          52
             --------------------
   12.06     Non-Reliance on the Agents ........................................................          52
             -----------------------------
   12.07     Indemnification by Purchasers .....................................................          53
             -----------------------------
   12.08     The Agent in its Individual Capacity ..............................................          53
             ------------------------------------
   12.09     Successor Agent ...................................................................          54
             ---------------
   12.10     Arrangements Requiring Consent of Purchasers and Noteholders;
             --------------------------------------------------------------
             Agent's Discretion ................................................................          54
             ------------------
   12.11     Nonconsenting Purchasers and Noteholders ..........................................          54
             ----------------------------------------
   12.12     Refund of Payments ................................................................          54
             ------------------
   12.13     Relationship ......................................................................          55
             ------------
   12.14     Purchaser Funding to the Agent ....................................................          55
             ------------------------------
   12.15     Sharing............................................................................          55
             -------
   12.16     Remittance of Payments by the Agent ...............................................          56
             -----------------------------------

Section 13. Miscellaneous.......................................................................          56

   13.01     Waiver ............................................................................          56
             ------
   13.02     Notices ...........................................................................          57
             -------
   13.03     Indemnification and Expenses ......................................................          57
             ----------------------------
   13.04     Amendments ........................................................................          58
             ----------
   13.05     Successors and Assigns ............................................................          59
             ----------------------
   13.06     Survival ..........................................................................          59
             --------
   13.07     Captions ..........................................................................          59
             --------
   13.08     Counterparts ......................................................................          59
             ------------
   13.09     Note Purchase Agreement Constitutes Security Agreement; Governing Law .............          59
             ---------------------------------------------------------------------



                                     -iii-



                                                                      
   13.10     Submission To Jurisdiction; Waivers .....................   59
             -----------------------------------
   13.11     Acknowledgments .........................................   60
             ---------------
   13.12     Hypothecation or Pledge of Mortgage Loans ...............   60
             -----------------------------------------
   13.13     Servicing and Administration ............................   60
             ----------------------------
   13.14     Periodic Due Diligence Review ...........................   61
             -----------------------------
   13.15     No Recourse .............................................   61
             -----------
   13.16     Termination .............................................   62
             -----------



SCHEDULES
- ---------
         SCHEDULE 1      Representations and Warranties re:  Mortgage Loans
         SCHEDULE 2      Filing Jurisdictions and Offices
         SCHEDULE 3      Litigation Schedule

EXHIBITS
- --------
         EXHIBIT A       Form of Note
         EXHIBIT B       Form of Custodial Agreement
         EXHIBIT C       Forms of Opinion of Counsel
         EXHIBIT D       Form of Request for Note Purchase
         EXHIBIT E-1     Form of Note Issuer's Release Letter
         EXHIBIT E-2     Form of Warehouse Lender's Release Letter
         EXHIBIT F       Underwriting Guidelines
         EXHIBIT G       Form of Servicer Notice
         EXHIBIT I       [Reserved]
         EXHIBIT H       [Reserved]
         EXHIBIT J       [Reserved]
         EXHIBIT K       Form of Transfer Certificate
         EXHIBIT L       Note Issuer's Designated Agents

                                      -iv-



                 COMMITTED NOTE PURCHASE AND SECURITY AGREEMENT

          COMMITTED NOTE PURCHASE AND SECURITY AGREEMENT, dated as of May 10,
2002, between NEW CENTURY FUNDING I, a Delaware business trust (the "Note
                                                                     ----
Issuer"), UBS WARBURG REAL ESTATE SECURITIES INC., a Delaware corporation ("UBS
- ------                                                                      ---
Warburg"), as purchaser of Notes issued hereunder from time to time (UBS
- -------
Warburg, in that capacity, and each other entity that from time to time may be a
Purchaser as provided herein, each a "Purchaser"), each Person that from time to
                                      ---------
time holds any of the Notes issued hereunder (each a "Noteholder") and UBS
                                                      ----------
WARBURG REAL ESTATE SECURITIES INC., a Delaware corporation, as agent for the
Purchasers and the Noteholders (in that capacity, the "Agent"), whereby the
                                                       -----
parties hereto agree as follows:

          Section 1. Definitions and Accounting Matters.
                     ----------------------------------

          1.01  Certain Defined Terms. As used herein, the following terms shall
                ---------------------
have the following meanings (all terms defined in this Section 1.01 or in other
provisions of this Note Purchase Agreement in the singular to have the same
meanings when used in the plural and vice versa):
                                     ----------

          "Actual Note Issuance Proceeds" shall have the meaning provided in
           -----------------------------
Section 3.09(d) hereof.

          "Administration Agreement" shall mean the Administration Agreement
           ------------------------
dated as of May 10, 2002, between the Note Issuer and New Century Mortgage
Corporation, as Administrator.

          "Administrator" shall mean New Century Mortgage, in its capacity as
           -------------
administrator of the Note Issuer pursuant to the Administration Agreement, or
any successor in such capacity.

          "Affiliate" shall mean with respect to any Person, any "affiliate" of
           ---------
such Person, as such term is defined in the Bankruptcy Code, other than a
natural person.

          "Agent's Account" shall mean the Agent's account, Account No. 930 1
           ---------------
035581, for the account of UBS Warburg Conduit Funding, JPMorgan Chase Bank, ABA
No. 02100001), or such other account as may be identified as the Agent's Account
by notice from the Agent to the Note Issuer and the Purchasers.

          "Applicable Margin" shall mean the sum of the weighted average of the
           -----------------
applicable rates per annum set forth below for each type of Eligible Mortgage
Loan for each day during the related Interest Period that Notes shall be secured
by such Eligible Mortgage Loans:

                  (i)   Eligible Mortgage Loans (other than Wet-Ink Mortgage
                  Loans), One Hundred (100) basis points; and

                  (ii)  Wet-Ink Mortgage Loans, One Hundred and Fifteen (115)
                  basis points;

                                       L-1



          "Bankruptcy Code" shall mean the United States Bankruptcy Code of
           ---------------
1978, as amended from time to time.

          "Below 520 FICO Sub-Limit" shall mean, at any time, an amount equal to
           ------------------------
the lesser of (x) 10% of the outstanding principal balance of all Notes at that
time and (y) $25,000,000.

          "Borrowing Base" shall mean the aggregate Collateral Value of all
           --------------
Eligible Mortgage Loans.

          "Borrowing Base Deficiency" shall have the meaning provided in Section
           -------------------------
3.12 hereof.

          "Breakage Fee" shall mean as to any prepayment not occurring on a
           ------------
Paydown Date (except for any prepayment expressly excepted hereunder from the
Breakage Fee), an amount equal to the sum of (a) the interest that would
otherwise accrue on an "actual/360" basis, on the principal balance of the Notes
prepaid, over a period of three Business Days (or, if non-Business Days
intervene, for up to five days), at a rate equal to the Eurodollar Rate plus the
Applicable Margin, plus (b) all reasonable losses, expenses and liabilities that
arise from such prepayment, including without limitation, any loss and expense
on liabilities incurred by reason of liquidating or reemployment of deposits or
other funds required by the Noteholders to fund the Notes (but excluding
anticipated profits).

          "Business Day" shall mean any day other than (i) a Saturday or Sunday
           -------------
or (ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of
New York or the Custodian is authorized or obligated by law or executive order
to be closed.

          "Capital Lease Obligations" shall mean, for any Person, all
           -------------------------
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this Note
Purchase Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP.

          "Cash Equivalents" shall mean (a) securities with maturities of 180
           ----------------
days or less from the date of acquisition issued or fully guaranteed or insured
by the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of 180 days or less from
the date of acquisition and overnight bank deposits of any commercial bank
having capital and surplus in excess of $5,000,000, (c) repurchase obligations
of any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than thirty days with respect to
securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least "A-1" or
the equivalent thereof by Standard & Poor's Ratings Services ("S&P") or "P-1" or
                                                               ---
the equivalent thereof by Moody's Investors Service, Inc. ("Moody's") and in
                                                            -------
either case maturing within 180 days after the day of acquisition, (e)
securities with maturities of 180 days or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or

                                       -2-



territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least "A" by S&P or "A" by Moody's,
(f) securities with maturities of 180 days or less from the date of acquisition
backed by standby letters of credit issued by any commercial bank satisfying the
requirements of clause (b) of this definition, or (g) shares of money market,
mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.

          "Code" shall mean the Internal Revenue Code of 1986, as amended from
           ----
time to time.

          "Collateral" shall have the meaning provided in Section 5.01(b)
           ----------
hereof.

          "Collateral Value" shall mean, with respect to each Eligible Mortgage
           ----------------
Loan, the lesser of (a) 98% of the Market Value of such Mortgage Loan, and (b)
100% of the outstanding principal balance of such Mortgage Loan, provided,
further that, the following additional limitations on Collateral Value shall
apply:

          (i) the aggregate Collateral Value of Wet-Ink Mortgage Loans may not
          exceed the Wet-Ink Sub-Limit at any time;

          (ii) the aggregate Collateral Value of Late Certification Wet-Ink
          Mortgage Loans may not exceed the Late Certification Sub-Limit at any
          time;

          (iii) the aggregate Collateral Value of Second Mortgage Loans may not
          exceed the Second Mortgage Sub-Limit at any time;

          (iv) the aggregate Collateral Value of Mortgage Loans having FICO
          scores between 519 and 500 (inclusive) shall not exceed the Below 520
          FICO Sub-Limit;

           (v) the Collateral Value shall be deemed to be zero with respect to
          each Mortgage Loan:

             (1) in respect of which there is a breach of a representation and
          warranty set forth on Schedule 1 to the Loan Purchase Agreement
                                ----------
          (assuming each representation and warranty is made as of the date
          Collateral Value is determined);

             (2) in respect of which there is a delinquency in the payment of
          principal and/or interest which continues for a period of more than
          fifty-nine (59) days (without regard to any applicable grace periods);

             (3) which has been released from the possession of the Custodian
          under the Custodial Agreement to the Note Issuer for a period in
          excess of (5) Business Days;

             (4) which remains pledged to the Agent hereunder later than one
          hundred eighty (180) days after the date on which it is first included
          in the Collateral;

                                       -3-



            (5) which is a Wet-Ink Mortgage Loan and exceeds the Wet-Ink
          Sub-Limit;

            (6) which is a Second Mortgage Loan and exceeds the Second Mortgage
          Sub-Limit;

            (7) which is a Wet-Ink Mortgage Loan, for which the Custodian has
          not completed its certification process by 3:00 p.m. (New York time)
          on the fifth (5th) Business Day following the applicable Note Purchase
          Date (unless and until such Wet-Ink Mortgage Loan later becomes a
          Dried-Ink Mortgage Loan), except that, if such Wet-Ink Mortgage Loan
          is a Late Certification Wet-Ink Mortgage Loan, then it shall be
          included for purposes of determining the aggregate Collateral Value to
          the extent that the exclusion would not cause the Late Certification
          Sub-Limit to be exceeded;

            (8) which has been originated in accordance with the Note Issuer's
          Underwriting Guidelines if (x) such Underwriting Guidelines as in
          effect as of the date hereof have been amended or modified and (y) the
          Majority Investors object to such amendments or modifications;

            (9) which has a FICO score of between 519 through 500 (inclusive)
          and exceeds the Below 520 FICO Sub-Limit; or

          (vi) notwithstanding the limitations set forth in (i) through (v)
          above, the Purchasers, the Noteholders and the Note Issuer may by
          mutual agreement exceed the limitations set forth in (i) through (v).

          "Collections" shall mean, collectively, all collections and proceeds
           -----------
on or in respect of the Mortgage Loans, excluding collections required to be
paid to the Servicer or a Mortgagor on the Mortgage Loans.

          "Commitment Amount" shall mean $400,000,000, subject to reduction from
           -----------------
time to time as provided herein.

          "Commitment Percentage" shall initially mean 100% with respect to UBS
           ---------------------
Warburg, as the sole Purchaser, but, if it at any time after the date of this
Note Purchase Agreement UBS Warburg transfers all or any part of its commitment
hereunder to purchase Notes with the consent of the Note Issuer, "Commitment
Percentage" at any time thereafter shall mean, with respect to each Purchaser,
the percentage of all Purchasers' commitments hereunder to purchase Notes that
such Purchaser at the time retains after taking into account all prior transfers
of all or part of such commitment of such Purchaser.

          "Custodial Agreement" shall mean the Custodial Agreement, dated as of
           -------------------
the date hereof, among the Seller, the Note Issuer, the Custodian, the
Disbursement Agent and the Agent, substantially in the form of Exhibit B hereto,
                                                               ---------
as the same shall be modified and supplemented and in effect from time to time.

          "Custodian" shall mean Deutsche Bank National Trust Company, as
           ---------
custodian under the Custodial Agreement, and its successors and permitted
assigns thereunder.

                                       -4-



          "Default" shall mean an Event of Default or an event that with notice
           -------
or lapse of time or both would become an Event of Default.

          "Designated Agent" shall mean, with respect to the Note Issuer, any of
           ----------------
the individuals identified in Exhibit L of the Administrator and those
individuals identified in Exhibit L and any Responsible Officer of the Owner
Trustee.

          "Dollars" and "$" shall mean lawful money of the United States of
           -------       -
America.

          "Dried-Ink Mortgage Loan" shall mean an Eligible Mortgage Loan which
           -----------------------
was previously a Wet-Ink Mortgage Loan, but as to which the related Mortgage
Documents have since been received and certified by the Custodian in accordance
with the terms hereof and the Custodial Agreement.

          "Due Diligence Review" shall mean the performance by the Agent of any
           --------------------
or all of the reviews permitted under Section 13.14 hereof with respect to any
or all of the Mortgage Loans.

          "Effective Date" shall mean the date upon which the conditions
           --------------
precedent set forth in Section 6.01 shall have been satisfied.

          "Electronic Agent" shall mean MERSCORP, Inc., or its successor or
           ----------------
assigns.

          "Electronic Agent Agreement" shall mean that certain agreement (if
           --------------------------
any) between the Electronic Agent, the Agent and the Note Issuer.

          "Eligible Mortgage Loan" shall mean a Mortgage Loan, including a
           ----------------------
Wet-Ink Mortgage Loan, which is secured by a first or second mortgage lien on a
one-to-four family residential property originated and serviced in accordance
with the Underwriting Guidelines, as to which the representations and warranties
in Section 7.10 and Part I of Schedule 1 to the Loan Purchase Agreement are
correct; provided that in no event shall a land installment contract or similar
lending arrangement be an Eligible Mortgage Loan.

          "ERISA" shall mean the Employee Retirement Income Security Act of
           -----
1974, as amended from time to time.

          "ERISA Affiliate" shall mean any corporation or trade or business that
           ---------------
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which the Note Issuer is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which the Note
Issuer is a member.

          "Estimated Note Issuance Proceeds" shall have the meaning provided in
           --------------------------------
Section 3.09(d) hereof.

          "Eurodollar Rate" shall mean, with respect to each Interest Period a
           ---------------
Note is outstanding, the rate per annum equal to the rate appearing at page 5 of
the Telerate Screen as

                                       -5-



one-month LIBOR on the first day of such Interest Period and if such rate shall
not be so quoted, the rate per annum at which the Reference Bank is offered
Dollar deposits at or about 9:00 A.M., New York City time, on such date by prime
banks in the London interbank eurodollar market for delivery on such day for a
period of thirty (30) days and in an amount comparable to the amount of the
Notes to be outstanding on such day. The Eurodollar Rate shall be reset by the
Agent as described above and the Agent's determination of Eurodollar Rate shall
be conclusive upon the parties absent manifest error on the part of the Agent.

                  "Event of Default" shall have the meaning provided in Section
                   ----------------
9 hereof.

                  "Exception Report" shall have the meaning as set forth in the
                   ----------------
Custodial Agreement.

                  "Existing Financing Documents" shall mean (a) the Subordinated
                   ----------------------------
Loan Agreement dated as of April 28, 2000, as may be amended from time to time ,
among New Century Mortgage and U.S. Bank National Association and all other
documents or agreements executed in connection therewith, (b) the Fifth Amended
and Restated Credit Agreement dated as of May 23, 2001, as may be amended from
time to time, among New Century Mortgage, NC Capital Corporation and U.S. Bank
National Association and all other documents or agreements executed in
connection therewith, (c) the Master Repurchase Agreement dated as of July 19,
2001, as may be amended from time to time, among New Century Mortgage, NC
Capital Corporation and CDC Mortgage Capital Inc. and all other documents or
agreements executed in connection therewith, and (d) the letter agreement dated
January 1, 2002, as may be amended from time to time, among New Century
Mortgage, NC Capital Corporation and Solomon Brothers Realty Corp. and all other
documents or agreements executed in connection therewith. The Agent acknowledges
that New Century Funding A, an affiliate of the Note Issuer, expects to enter
into a credit facility with Bank of America on or about May 13, 2002.

                  "Fatal Exception" shall have the meaning assigned thereto in
                   ---------------
the Custodial Agreement.

                  "Fatal Exception Report" shall mean the schedule of Mortgage
                   ----------------------
Loans and exception report prepared by the Custodian pursuant to the Custodial
Agreement including each Mortgage Loan with a Fatal Exception.

                  "Federal Funds Rate" shall mean, for any day, the weighted
                   ------------------
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the Agent from
three federal funds brokers of recognized standing selected by it in good faith.

                  "First Mortgage Loan" shall mean a Mortgage Loan which
                   -------------------
constitutes a first priority mortgage lien with respect to the related Mortgaged
Property.

                  "Future Financing Document" shall mean any mortgage loan
                   -------------------------
warehouse financing agreement, regardless of form (e.g., loan agreement, note
purchase agreement, repurchase

                                      -6-



agreement) for performing or non-performing loans entered into by any of the New
Century Parties or any Affiliate thereof.

                  "GAAP" shall mean generally accepted accounting principles as
                   ----
in effect from time to time in the United States.

                  "Governmental Authority" shall mean, in relation to any
                   ----------------------
Person, any nation or government, any state or other political subdivision
thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any court or
arbitrator having jurisdiction over such Person, any of its Subsidiaries or any
of its Properties.

                  "Guarantee" shall mean, as to any Person, any obligation of
                   ---------
such Person directly or indirectly guaranteeing any Indebtedness of any other
Person or in any manner providing for the payment of any Indebtedness of any
other Person or otherwise protecting the holder of such Indebtedness against
loss (whether by virtue of partnership arrangements, by agreement to keep-well,
to purchase assets, goods, securities or services, or to take-or-pay or
otherwise); provided that the term "Guarantee" shall not include (i)
endorsements for collection or deposit in the ordinary course of business, or
(ii) obligations to make any servicing advances, escrow advances or other
obligations in respect of a Mortgaged Property. The amount of any Guarantee of a
Person shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by such Person in good faith. The terms
"Guarantee" and "Guaranteed" used as verbs shall have correlative meanings.
 ---------       ----------

                  "Indebtedness" shall mean, for any Person: (a) obligations
                   ------------
created, issued or incurred by such Person for borrowed money (whether by loan,
the issuance and sale of debt securities or the sale of Property to another
Person subject to an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of such Person to
pay the deferred purchase or acquisition price of Property or services, other
than trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as such trade
accounts payable are payable within 90 days after the date the respective goods
are delivered or the respective services are rendered; (c) Indebtedness of
others secured by a Lien on the Property of such Person, whether or not the
respective Indebtedness so secured has been assumed by such Person; (d)
obligations (contingent or otherwise) of such Person in respect of letters of
credit or similar instruments issued or accepted by banks and other financial
institutions for account of such Person; (e) Capital Lease Obligations of such
Person; (f) obligations of such Person under repurchase agreements,
sale/buy-back agreements or like arrangements; (g) Indebtedness of others
Guaranteed by such Person; (h) all obligations of such Person incurred in
connection with the acquisition or carrying of fixed assets by such Person; and
(i) Indebtedness of general partnerships of which such Person is secondarily or
contingently liable (other than by endorsement of instruments in the course of
collection), whether by reason of any agreement to acquire such indebtedness or
to supply or advance sums or otherwise.

                                      -7-



                  "Interest Period" shall mean, with respect to any Note, (i)
                   ---------------
initially, the period commencing on the Note Purchase Date on which such Note is
purchased hereunder from the Note Issuer and ending on the earlier of the
related Maturity Date or the last day of the month in which that period
commences, and (ii) thereafter, each period commencing on and including the
first day of a month and ending on the earlier of the related Maturity Date or
the last day of that month.

                  "Interest Rate Protection Agreement" shall mean, with respect
                   ----------------------------------
to any or all of the Mortgage Loans, any short sale of US Treasury Security, or
futures contract, or mortgage related security, or Eurodollar futures contract,
or options related contract, or interest rate swap, cap or collar agreement or
similar arrangements entered into solely to provide for protection against
fluctuations in interest rates or the exchange of nominal interest obligations,
either generally or under specific contingencies, acceptable to the Majority
Investors.

                  "Investment Company Act" shall mean the Investment Company Act
                   ----------------------
of 1940, as amended.

                  "Late Certification Sub-Limit" shall mean, at any time, an
                   ----------------------------
amount equal to $5,000,000.

                  "Late Certification Wet-Ink Mortgage Loan" shall mean a
                   ----------------------------------------
Wet-Ink Mortgage Loan for which the Custodian has not completed its
certification process by 3:00 p.m. (New York time) on the fifth (5th) Business
Day following the applicable Note Purchase Date, but for which the Custodian
completes its certification process not later than 3:00 p.m. (New York time) on
the seventh (7th) Business Day following the applicable Note Purchase Date.

                  "Lien" shall mean any mortgage, lien, pledge, charge, security
                   ----
interest or similar encumbrance.

                  "Loan Purchase Agreement" shall mean the Loan Purchase
                   -----------------------
Agreement, dated as of the date hereof, between the Seller, New Century
Financial and the Note Issuer.

                  "MAC Notice" shall have the meaning set forth in Section 13.16
                   ----------
hereof.

                  "Majority Investors" shall mean Majority Purchasers and
                   ------------------
 Majority Noteholders.

                  "Majority Noteholders" shall mean Noteholders of Notes whose
                   --------------------
principal amount outstanding is at least equal to 51% of the outstanding
principal amount of all the Notes (not including any Notes known by the Agent to
be held by the Note Issuer or any of its Affiliates).

                  "Majority Purchasers" shall mean Purchasers with Commitment
                   -------------------
Percentages at least equal to 51% in the aggregate (not including any Notes
known by the Agent to be held by the Note Issuer or any of its Affiliates).

                  "Market Value" shall mean, as of any date in respect of an
                   ------------
Eligible Mortgage Loan, the price at which such Eligible Mortgage Loan could
readily be sold as determined in the Agent's sole discretion using its
reasonable business judgment, taking into account the level of interest rates,
the financial condition of the Note Issuer, the characteristics of the
Collateral and

                                      -8-



general market conditions, which price may be determined to be zero. The Agent
shall furnish the Note Issuer and the Seller, upon request, with a listing of
its key assumptions regarding the determination of Market Value, including, at a
minimum, the discount rate, prepayment speed and cumulative loss assumption.

                  "Material Adverse Effect" shall mean a material adverse effect
                   -----------------------
on (a) the Property, business, operations, financial condition or prospects of
the Note Issuer, (b) the ability of the Note Issuer to perform its obligations
under any of the Note Documents to which it is a party, (c) the validity or
enforceability of any of the Note Documents, (d) the rights and remedies of the
Agent, any of the Purchasers or any of the Noteholders under any of the Note
Documents, (e) the timely payment of the principal of or interest on the Notes
or other amounts payable in connection therewith, (f) the Agent's security
interest in the Collateral or (g) the Collateral as a whole.

                  "Maturity Date" shall mean such date as is described in the
                   -------------
related Request for Note Purchase, or such earlier date on which this Note
Purchase Agreement shall terminate in accordance with the provisions hereof or
by operation of law (without prejudice to the provisions of this Note Purchase
Agreement under which a Note's maturity, and the Note Issuer's related
obligations to pay the principal thereof and interest thereon, may be
accelerated).

                  "MERS" shall mean Mortgage Electronic Registration Systems,
                   ----
Inc. or its successors or assigns.

                  "MERS Procedures Manual" shall mean the MERS Procedures
                   ----------------------
Manual, as it may be amended from time to time.

                  "MERS(R) System" shall mean the Electronic Agent's mortgage
                   --------------
electronic registry system, as more particularly described in the MERS
Procedures Manual.

                  "Mortgage" shall mean the mortgage, deed of trust or other
                   --------
instrument securing a Mortgage Note, which creates a first lien on the real
property securing the Mortgage Note.

                  "Mortgage Documents" shall mean, with respect to a Mortgage
                   ------------------
Loan, the documents comprising the Mortgage File for such Mortgage Loan.

                  "Mortgage File" shall have the meaning assigned thereto in the
                   -------------
Custodial Agreement.

                  "Mortgage Interest Rate" shall mean the annual rate of
                   ----------------------
interest borne on the Mortgage Note.

                  "Mortgage Loan" shall mean a first or second lien,
                   -------------
residential, one to four family mortgage loan originated in accordance with the
Underwriting Guidelines, which the Custodian has been instructed to hold for the
Agent pursuant to the Custodial Agreement, and which Mortgage Loan includes,
without limitation, (i) a Mortgage Note and related Mortgage and (ii) all of the
Note Issuer's right, title and interest in and to the Mortgaged Property covered
by such Mortgage.

                                      -9-



                  "Mortgage Loan Schedule" shall have the meaning assigned
                  -----------------------
thereto in the Custodial Agreement.

                  "Mortgage Loan Schedule and Exception Report" shall mean the
                  --------------------------------------------
mortgage loan schedule and exception report prepared by the Custodian pursuant
to the Custodial Agreement.

                  "Mortgage Loan Tape" shall mean a computer-readable file
                  -------------------
containing information with respect to each Mortgage Loan, to be delivered by
the Note Issuer to the Agent pursuant to Section 3.09(a) hereof which tape
fields are identified on Annex I to the Custodial Agreement.

                  "Mortgage Note" shall mean the original executed promissory
                  --------------
note or other evidence of the indebtedness of a mortgagor/Note Issuer with
respect to a Mortgage Loan.

                  "Mortgaged Property" shall mean the real property (including
                  -------------------
all buildings and fixtures thereon and all additions, alterations and
replacements made at any time with respect to the foregoing) and all other
collateral securing repayment of the debt evidenced by a Mortgage Note.

                  "Mortgagor" shall mean the obligor on a Mortgage Note.
                  ----------

                  "Multiemployer Plan" shall mean a multiemployer plan defined
                  -------------------
as such in Section 3(37) of ERISA to which contributions have been or are
required to be made by the Note Issuer or any ERISA Affiliate and that is
covered by Title IV of ERISA.

                  "Net Income" shall mean, for any period, and with respect to a
                  -----------
Person, the net income of the Person for such period as determined in accordance
with GAAP.

                  "1934 Act" shall mean the Securities and Exchange Act of 1934,
                  ---------
 as amended.

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

                  "New Century Mortgage" shall mean New Century Mortgage
                  ---------------------
Corporation, a California corporation.

                  "New Century Parties" shall mean, collectively, New Century
Financial and New Century Mortgage.

                  "Note" shall have the meaning provided in Section 2.01(a)
                  -----
hereof.

                  "Note Documents" shall mean, collectively, this Note Purchase
                  ---------------
Agreement, the Loan Purchase Agreement, the Notes, the Custodial Agreement and
the Servicing Agreement.

                  "Note Issuer" shall have the meaning provided in the heading
                  ------------
hereof.

                  "Note Purchase" shall have the meaning provided in Section
                  --------------
2.01(a) hereof.

                                      -10-



          "Note Purchase Agreement" shall mean this Committed Note Purchase and
           -----------------------
Security Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.

          "Note Purchase Date" shall mean the date on which a Note Purchase is
           ------------------
made hereunder as contemplated in Section 2.

          "Note Purchase Period" shall have the meaning set forth in Section
           --------------------
2.01(a) of this Note Purchase Agreement.

          "Note Register" shall have the meaning set forth in Section 3.03 of
           -------------
this Note Purchase Agreement.

          "Noteholder" shall mean, in relation to any Note, the Person holding
           ----------
the Note, which initially shall be UBS Warburg.

          "Other Financing Documents" shall mean, collectively, the Existing
           -------------------------
Financing Documents and the Future Financing Documents.

          "Overestimate Amount" shall have the meaning as set forth in Section
           -------------------
3.09(d)(iv) of this Note Purchase Agreement.

          "Owner Trustee" shall mean Wilmington Trust Company or any successor
           -------------
not in its individual capacity but solely in its capacity as Owner Trustee under
the Trust Agreement.

          "Paydown Date" shall mean any Business Day (which may or may not be a
           ------------
Payment Date) and as to which the Note Issuer shall have informed the Agent (x)
at least five Business Days prior to such proposed Paydown Date of the Note
Issuer's expectation that a prepayment of the Notes will be made on such Paydown
Date, and the approximate amount thereof and (y) at least two Business Days
prior to such proposed Paydown Date of the Note Issuer's declaration that a
prepayment will be made on such Paydown Date, and the amount thereof (which
amount may not exceed the related approximate amount stated in the notice
described in clause (x)).

          "Payment Date" shall mean the fifth Business Day of any month
           ------------
commencing with June, 2002.

          "PBGC" shall mean the Pension Benefit Guaranty Corporation or any
           ----
entity succeeding to any or all of its functions under ERISA.

          "Person" shall mean any individual, corporation, company, voluntary
           ------
association, partnership, joint venture, limited liability company, trust,
unincorporated association or government (or any agency, instrumentality or
political subdivision thereof).

          "Plan" shall mean an employee benefit or other plan established or
           ----
maintained by the Note Issuer or any ERISA Affiliate and covered by Title IV of
ERISA, other than a Multiemployer Plan.

                                      -11-



          "Post-Default Rate" shall mean, in respect of the principal
           -----------------
amount of each Note outstanding or any other amount under this Note Purchase
Agreement, any Note or any other Note Document that is not paid when due to the
Agent or any Noteholder (whether at stated maturity, by acceleration, by
prepayment or otherwise), a rate per annum during the period from and including
the due date to but excluding the date on which such amount is paid in full
equal to four percent (4%) per annum plus the applicable Eurodollar Rate for
                                     ----
each day such Post-default Rate shall apply.

          "Property" shall mean any right or interest in or to property of any
           --------
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.

          "Prospective Owner" shall have the meaning as set forth in Section
           -----------------
3.07 hereof.

          "Purchaser" shall have the meaning provided in the heading hereof.
           ---------

          "Qualified Institutional Buyer" or "QIB" shall have the meaning as set
           -----------------------------      ---
forth in Rule 144A of the Securities Act, as amended from time to time.

          "Qualified Purchaser" shall mean a "qualified purchaser" as defined in
           -------------------
Section 2(a)(51) of the Investment Company Act.

          "Record Date" shall mean the Business Day immediately preceding the
           -----------
related Payment Date.

          "Reference Bank" shall mean the principal office in London, England,
           --------------
of UBS.

          "Registration Statement" shall have the meaning as set forth in
           ----------------------
Section 2(a)(8) of the Securities Act.

          "Regulations T, U and X" shall mean Regulations T, U and X of the
           ----------------------
Board of Governors of the Federal Reserve System (or any successor), as the same
may be modified and supplemented and in effect from time to time.

          "Reportable Event" shall mean a reportable event as defined in Title
           ----------------
IV of ERISA, except actions of general applicability issued by the Secretary of
Labor under Section 110 of ERISA.

          "Request for Note Purchase" shall have the meaning provided in Section
           -------------------------
3.09(a) hereof.

          "Requirement of Law" shall mean as to any Person, the certificate of
           ------------------
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

          "Responsible Officer" shall mean, as to any Person other than the
           -------------------
Owner Trustee, the chief executive officer or the chief financial officer of
such Person, and as to the Note Issuer,

                                      -12-



shall also mean any of the Designated Agents. With respect to the Owner Trustee,
"Responsible Officer" shall have the meaning ascribed to such term in the Trust
Agreement.

          "Second Mortgage Loan" shall mean a Mortgage Loan which constitutes a
           --------------------
second priority mortgage lien with respect to the related Mortgaged Property.

          "Second Mortgage Sub-Limit" shall mean, at any time, an amount equal
           -------------------------
to the greater of (x) 2.50% of the outstanding principal balance of all Notes at
that time and (y) $5,000,000.

          "Secured Obligations" shall have the meaning provided in Section
           -------------------
5.01(c) hereof.

          "Seller" shall mean New Century Mortgage.
           ------

          "Servicer" shall mean either (a) Ocwen Federal Bank FSB, a
           --------
 federally-chartered savings bank, in its capacity as Servicer under the
Servicing Agreement or (b) any other entity having demonstrated competence in
servicing loans similar to the Mortgage Loans and which is reasonably acceptable
to the Agent.

          "Servicing Agreement" shall mean (a) the Servicing Agreement dated as
           -------------------
of May 10, 2002, by and among the Agent, the Note Issuer, New Century Mortgage
and the Servicer, as such as amended from time to time and (b) each other
agreement which is designated as being a "Servicing Agreement" for purposes of
this facility by the parties hereof.

          "Servicing Rights" shall mean any and all of the following: (a) any
           ----------------
and all rights to service the Mortgage Loans; (b) any payments to or monies
received by the Servicer for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments with respect to the Mortgage Loans; (d) all
agreements or documents creating, defining or evidencing any such servicing
rights to the extent they relate to the Mortgage Loans and all rights of the
Note Issuer thereunder; (e) escrow payments or other similar payments with
respect to the Mortgage Loans and any amounts actually collected by the Note
Issuer (through the Servicer or otherwise) with respect thereto subject to any
superior right to such funds held by the Mortgagor; and (f) all accounts and
other rights to payment related to any of the Mortgage Loans.

          "Single Employer Plan" shall mean as to any Person any Plan of such
           --------------------
Person which is not a Multiemployer Plan.

          "Spread Fee Rate" shall mean (i) at any time after the occurrence of
           ---------------
and during the continuation of a Default or an Event of Default, a rate per
annum equal to 6% and (ii) at any other time, a rate per annum equal to 1.50%.

          "Subsidiary" shall mean, with respect to any Person, any corporation,
           ----------
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by

                                      -13-



such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.

          "Takeout Commitment" shall mean a written agreement between the Note
           ------------------
Issuer, as the seller, and the Seller, as the purchaser, governing the terms of
the resale of one or more Mortgage Loans from the Note Issuer to the Seller,
together with a copy of any related agreement between the Seller and any other
person that has entered into an agreement to purchase such Mortgage Loans from
the Seller.

          "Tangible Net Worth" shall mean, as of a particular date,
           ------------------

          (a)  all amounts which would be included under capital on a balance
sheet of the Note Issuer at such date, determined in accordance with GAAP, less
                                                                           ----
          (b)  (i) amounts owing to the Note Issuer from Affiliates and (ii)
intangible assets determined in accordance with GAAP.

          "Tax Service Contract": A paid-in-full, life-of-loan tax service
           --------------------
contract with Fidelity National Tax Service or another tax service provider
acceptable to the Majority Investors in their sole discretion (exercised in good
faith) with respect to a Mortgage Loan.

          "Termination Date" shall mean May 14, 2004; or such earlier date on
           ----------------
which this Note Purchase Agreement shall terminate in accordance with the
provisions hereof, including Section 13.16 hereof; provided, however, that
subsequent commitments may be provided by the Investors to the Note Issuer by
written agreement.

          "Total Indebtedness" shall mean, for any period, the aggregate
           ------------------
Indebtedness of the Note Issuer during such period less the amount of any
nonspecific balance sheet reserves maintained in accordance with GAAP.

          "Transaction Documents" shall mean the Note Purchase Agreement, the
           ---------------------
Notes, the Custodial Agreement, the Loan Purchase Agreement, the Trust Agreement
and the Servicing Agreement.

          "Trust Agreement" shall mean the Trust Agreement dated as of May 10,
           ---------------
2002, between the Seller, the Depositor, and Wilmington Trust Company, as Owner
Trustee.

          "Trust Receipt" shall have the meaning assigned in the Custodial
           -------------
Agreement.

          "Underwriting Guidelines" shall mean the underwriting guidelines
           -----------------------
attached as Exhibit E hereto, as may be amended from time to time.
            ---------

          "Unearned Portion of the Facility Fee" shall have the meaning provided
           ------------------------------------
in Section 13.16.

          "Uniform Commercial Code" shall mean the Uniform Commercial Code as in
           -----------------------
effect on the date hereof in the State of New York; provided that if by reason
of mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security

                                      -14-



interest in any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than New York, "Uniform Commercial Code" shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection.

          "Wet Funding Schedule" shall have the meaning provided in Section
           --------------------
3.09(d)(ii).

          "Wet-Ink Wire Funding Account" shall mean the account so designated
           ----------------------------
and established in the name of the Note Issuer and indicating the security
interest of the Agent, for the benefit of the Agent and the Noteholders, subject
to the dominion and control of the Agent, at the Disbursement Agent pursuant to
the terms of the Custodial Agreement.

          "Wet-Ink Mortgage Loan" shall mean an Eligible Mortgage Loan which is
           ---------------------
pledged to the Agent, for the benefit of the Agent and the Noteholders,
simultaneously with the origination thereof by the Note Issuer pursuant to
Section 3.09(d) and is funded in part or in whole with proceeds of the purchase
of Notes remitted directly to the Wet-Ink Wire Funding Account.

          "Wet-Ink Sub-Limit" shall mean an amount equal to $160,000,000.
           -----------------

          "Wet Funding Schedule" shall have the meaning provided in Section
           --------------------
3.09(d)(ii).

          "Wire" shall mean a wire transfer made from the Wet-Ink Wire Funding
           ----
Account pursuant to Section 27 of the Custodial Agreement.

          "Wiring Schedule" shall mean the schedule so defined in Section 27(c)
           ---------------
of the Custodial Agreement.

          1.02  Accounting Terms and Determinations. Except as otherwise
                -----------------------------------
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Agent hereunder shall be
prepared, in accordance with GAAP.

          Section 2. Note Purchases.
                     --------------

          2.01  Note Purchases.
                --------------

          (a) Subject to fulfillment of the conditions precedent set forth in
Sections 6.01 and 6.02 hereof, and provided that no Default or Event of Default
shall have occurred and be continuing hereunder, each Purchaser severally
agrees, from and including the Effective Date to and including the day before
the Termination Date (the "Note Purchase Period"), to provide financing to the
                           --------------------
Note Issuer which is secured as provided herein by Eligible Mortgage Loans and
the other Collateral in an aggregate principal amount at any one time
outstanding not to exceed such Purchaser's Commitment Percentage of the lesser
of (i) the Commitment Amount at such time and (ii) the Borrowing Base at such
time, unless otherwise agreed upon by such Purchaser and the Note Issuer. All
such financing provided by a Purchaser shall initially be evidenced by a single
note in the form set forth in Exhibit A (each a "Note") to be delivered to it as
                              ---------          ----
provided in Section 6.01, in the case of UBS Warburg as the sole initial
Purchaser hereunder, or in

                                      -15-



connection with its first becoming a Purchaser hereunder, in any other case, but
the foregoing is without prejudice to the rights of any Noteholder to subdivide
a Note as contemplated in Section 3.01(b). References in this Note Purchase
Agreement and any other Note Document to a "Note Purchase" by a Purchaser on any
day mean its extension on that day of an amount of financing to the Note Issuer
pursuant to the financing commitment stated in this Section 3.01(a). Similarly,
references to the purchase price of any Note or Notes to be purchased on any day
by a Purchaser, and to the principal amount of the Note or Notes, are to the
principal amount of such financing, regardless of whether the Note Issuer's
related obligations hereunder have yet been recorded on the relevant Note
certificate as contemplated in Section 3.01(b) or in the Note Register as
contemplated in Section 3.03. The obligations of the Purchasers to make Note
Purchases hereunder are several and not joint, and none of the Purchasers shall
have any liability to the Note Issuer or any other Person for the failure by any
other Purchaser to perform its obligations hereunder.

          (b) Subject to the terms and conditions of this Note Purchase
Agreement, during the Note Purchase Period the Note Issuer may request Note
Purchases, repay the principal amounts of the Notes in whole or in part as
provided herein and again request Note Purchases hereunder; provided that,
                                                            --------
notwithstanding the foregoing, none of the Purchasers shall have any obligation
to purchase Notes from the Note Issuer in excess of such Purchaser's Commitment
Percentage of the then current Commitment Amount and, in the event the
obligation of the Purchasers to purchase Notes from the Note Issuer is
terminated as permitted hereunder, the Purchasers shall have no further
obligation to make further purchases of Notes hereunder. Each time there is a
determination of the Eurodollar Rate by the Agent on any day, the following
shall be required as if that day were a Note Purchase Date: (x) the conditions
precedent in Section 6.02 hereto shall be satisfied and (y) the condition that
no Default or Event of Default shall have occurred and be continuing hereunder
shall be satisfied.

          (c) In no event shall any Purchaser be required to purchase any Note
when any Default or Event of Default has occurred and is continuing.

          Section 3. Notes.
                     -----

          3.01  General.
                -------

          (a) The Note Issuer's obligations in respect of notes to be purchased
hereunder (each a "Note") shall be represented by promissory notes of the Note
                   ----
Issuer substantially in the form of Exhibit A hereto and shall be initially
                                    ---------
evidenced by a Note, dated the date hereof, payable to UBS Warburg, as the sole
initial Purchaser, in a principal amount equal to the Commitment Amount as
originally in effect and otherwise duly completed. UBS Warburg and each other
Person, if any, who becomes a Noteholder hereunder may transfer all or any
portion of its interests in and rights under the Notes to other Persons in
accordance with Sections 3.07 and 13.05. Each Note issued hereunder shall be
secured by all the Collateral, and shall have the same standing with respect to
priority of payment. Each Noteholder shall have the right to have any Note
subdivided, by exchange for Notes of lesser denominations or otherwise.

          (b) The Purchase Date, amount and interest rate applicable to each
Note purchased hereunder, and each payment made on account of the principal
thereof, shall be

                                      -16-



recorded by the Agent and each Noteholder on its books and, prior to any
transfer of such Note, endorsed by the Noteholder on the schedule attached to
such Note or any continuation thereof; provided that the failure of the Agent or
                                       --------
any Noteholder to make any such recordation or endorsement shall not affect the
obligations of the Note Issuer to make a payment when due of any amount owing
hereunder or under any Note.

          3.02  Execution, Authentication, Delivery and Dating. Each Note shall
                ----------------------------------------------
be executed on behalf of the Note Issuer by any Designated Agent of the Note
Issuer. The signature of such Designated Agent on a Note may be manual or by
facsimile.

          3.03  Registration, Registration of Transfer and Exchange. Agent shall
                ---------------------------------------------------
keep a register (the "Note Register") in which, subject to such reasonable
                      -------------
regulations as it may prescribe, the Agent shall provide for the registration of
the Notes and the registration of transfers of the Notes.

          If a Note is issued upon any registration of transfer or exchange of
Notes, it shall be the valid obligation of the Note Issuer, evidencing the same
debt, and entitled to the same benefits under this Note Purchase Agreement, as
the Note surrendered upon such registration of transfer or exchange.

          A Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in the form of the Assignment included at Exhibit A attached hereto,
duly executed by the Noteholder thereof or its attorney duly authorized in
writing.

          No service charge shall be made for any registration of transfer or
exchange of Notes, but the Agent may require payment of a sum sufficient to
cover any tax or other governmental charge as may be imposed in connection with
any registration of transfer or exchange of Notes.

          The Agent shall, at the request of the Note Issuer, give the Note
Issuer notice of each change in the information regarding any Noteholder or Note
which is recorded in the Note Register upon the making of the relevant change,
with a copy of the relevant page of the Note Register certified by the Agent to
be a true and correct copy.

          3.04  Mutilated, Destroyed, Lost or Stolen Note. If (1) a mutilated
                -----------------------------------------
Note is surrendered to the Note Issuer or the Note Issuer receives evidence to
its satisfaction of the destruction, loss or theft of any Note, and (2) there is
delivered to the Note Issuer such security or indemnity as may be reasonably
required by the Note Issuer to save it harmless, then, in the absence of notice
to the Note Issuer that the Note has been acquired by a bona fide purchaser, the
Note Issuer shall execute, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a new Note of the same tenor and aggregate
initial principal amount bearing a number not contemporaneously outstanding. If,
after the delivery of such new Note, a bona fide purchaser of the original Note
in lieu of which such new Note was issued presents for payment such original
Note, the Note Issuer, shall be entitled to recover such new Note from the
Person to whom it was delivered or any Person taking therefrom, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss,

                                      -17-



damage, cost or expenses incurred by the Note Issuer in connection therewith. If
any such mutilated, destroyed, lost or stolen Note shall have become or shall be
about to become due and payable, or shall have become subject to redemption in
full, instead of issuing a new Note, the Note Issuer may pay the Note without
surrender thereof, except that any mutilated Note shall be surrendered.

          Upon the issuance of any new Note under this Section 3.04, the Note
Issuer may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Note Issuer)
connected therewith.

          Every new Note issued pursuant to this Section 3.04 in lieu of any
mutilated destroyed, lost or stolen Note shall constitute an original
contractual obligation of the Note Issuer, whether or not the mutilated
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Note Purchase Agreement equally
and proportionately with any other Note duly issued hereunder.

          The provisions of this Section 3.04 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Note.

          3.05  Persons Deemed Owner. Prior to due presentment for registration
                --------------------
of transfer of a Note, any agent on behalf of the Note Issuer may treat the
Person in whose name the Note is registered as the owner of the Note (a) on the
applicable Record Date for the purpose of receiving payments of the principal of
and interest on the Note due on the related Payment Date and (b) on any other
date for all other purposes whatsoever, including receiving payments of
principal and interest on the Note that are not paid as and when due, and the
Note Issuer or any agent of the Note Issuer shall not be affected by notice to
the contrary.

          3.06  Cancellation. If a Note is surrendered for payment, registration
                ------------
of transfer or exchange, or redemption it shall be delivered to the
Administrator for the Note Issuer and shall be promptly canceled by it. Any Note
previously delivered hereunder which the Note Issuer may have acquired in any
manner whatsoever shall be promptly canceled by the Note Issuer, through the
Administrator. No Note shall be authenticated in lieu of or in exchange for a
Note cancelled as provided in this Section 3.06, except as expressly permitted
by this Note Purchase Agreement. Any cancelled Notes held by the Note Issuer,
through the Administrator or the Owner Trustee or otherwise, shall be held by
for a period of three (3) years following the cancellation date.

          3.07  Limitations on Transfer of the Notes(a). (a) Any transfer of a
                ---------------------------------------
Note shall be made in accordance with the Securities Act and the Investment
Company Act. Each prospective Purchaser (other than UBS Warburg) and any
subsequent transferee of any Note (each, a "Prospective Owner") shall represent
                                            -----------------
and warrant in writing, to the Note Issuer and the Agent and the relevant
transferor and any of their respective successors that:

          (i) Such Person is duly authorized to purchase such Note and its
          purchase of investments having the characteristics of the Note is
          authorized under, and not

                                      -17-



          directly or indirectly in contravention of, any law, charter, trust
          instrument or other operative document, investment guidelines or list
          of permissible or impermissible investments that is applicable to the
          investor.

          (ii) Such Person understands that the holder of a Note, by virtue of
          its acceptance thereof, assents to the terms, provisions and
          conditions of this Note Purchase Agreement and the other Note
          Documents.

          (b) Each Prospective Owner of any Note (other than UBS Warburg) shall
represent and warrant in writing, to the Note Issuer and the Agent and the
relevant transferor and any of their respective successors that:

          (i) Such Person is a Qualified Purchaser and either (A) a QIB and is
          aware that the transferor of the Note may be relying on the exemption
          from the registration requirements of the Securities Act provided by
          Rule 144A and is acquiring the Note for its own account or for the
          account of one or more qualified institutional buyers, for whom it is
          authorized to act, or (B) an institutional investor that is an
          "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7)
          of Regulation D under the Securities Act.

          (ii) It understands that the Note has not been registered under the
          Securities Act, and the Note has not been registered under the
          Investment Company Act, and that, if in the future it decides to
          offer, resell, pledge or otherwise transfer the Note, the Note may be
          offered, resold, pledged or otherwise transferred only (A) pursuant to
          a Registration Statement which has been declared effective under the
          Securities Act, (B) to a Qualified Purchaser, and (C) for so long as
          the Note is eligible for resale pursuant to Rule 144A under the
          Securities Act, to a person whom the seller reasonably believes is a
          QIB, which is purchasing the Note for its own account or for the
          account of a qualified institutional buyer, to whom notice is given
          that the transfer is being made in reliance on Rule 144A, or (D) to an
          institutional "accredited investor" within the meaning of subparagraph
          (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act, which is
          acquiring the Note for its own account or for the account of such an
          institutional "accredited investor," for investment purposes and not
          with a view to, or for offer or sale in connection with, any
          distribution in violation of the Securities Act, in each case in
          compliance with the requirements of this Note Purchase Agreement.

          In the event that a transfer of a Note is to be made in reliance upon
an exemption from the Securities Act, Investment Company Act or state securities
laws, in order to assure compliance with the Securities Act, the Investment
Company Act and such laws, the prospective transferor and transferee shall
certify to the Note Issuer in writing the facts surrounding the transfer in
substantially the form set forth in Exhibit K hereto or, if the relevant
                                    ---------
transfer is not being made in reliance on Rule 144A, the transferor and
transferee shall make such certifications to the Note Issuer and deliver to it
such opinions of counsel regarding the availability of an exemption from the
registration requirements of the Securities Act, as the Note Issuer may
reasonably require.

                                      -19-



          The Note Issuer shall provide to the Noteholders and any prospective
transferee designated by any Noteholder, information regarding the Notes and the
Mortgage Loans and such other information as shall be necessary to satisfy the
condition to eligibility set forth in Rule 144A(d)(4) and Section 3(c)(7) of the
Investment Company Act for transfer of any of the Notes without registration
under the Securities Act or the Investment Company Act pursuant to the
registration exemption provided thereunder.

          The certificates representing the Notes shall contain a legend
substantially similar to the applicable legend provided in Exhibit A stating
                                                           ---------
that transfer of the Notes is subject to certain restrictions and referring
prospective purchasers of the Notes to this Section 3.07 with respect to such
restrictions.

          3.08  Holding of Notes. With respect to each Note executed as provided
                ----------------
in Section 3.02 (or in substitution for any such Note), the Note Issuer shall
cause a Responsible Officer of the Administrator to deliver the Note to its
Purchaser, through the Agent.

          3.09  Procedure for Note Purchases. (a) The Note Issuer may request
                ----------------------------
a Note Purchase hereunder, on any Business Day during the Note Purchase Period,
by delivering to the Agent, with a copy to the Custodian, a written preliminary
request for such Note Purchase, substantially in the form of Exhibit ------- D
attached hereto (a "Request for Note Purchase"), which request must be -
- ------------------------- received by the Agent prior to (i) 4:30 p.m., New York
City time, one (1) Business Day prior to the requested Note Purchase Date for
any Eligible Mortgage Loans which are not Wet-Ink Mortgage Loans, and (ii) 6:00
p.m., New York City time, one (1) Business Day prior to the Note Purchase Date
for any Eligible Mortgage Loans which are Wet-Ink Mortgage Loans. Each Request
for Note Purchase shall (i) specify the requested Note Purchase Date, (ii)
include a Mortgage Loan Tape in electronic form containing detailed information
with respect to the Eligible Mortgage Loans (other than the Wet-Ink Mortgage
Loans) that the Note Issuer proposes to pledge to the Agent and to be included
in the Borrowing Base in connection with such Note Purchase, and (iii) attach a
certificate signed by a Designated Agent of the Note Issuer as required by
Section 6.02(b) hereof. With respect to Wet-Ink Mortgage Loans, the Note Issuer
shall provide the Agent with a detailed listing of the Wet-Ink Mortgage Loans
the Note Issuer proposes to pledge by 4:30 p.m. New York City time on the
related Note Purchase Date. The Agent shall promptly deliver to each Purchaser a
copy of each Request for Note Purchase delivered to the Agent as provided above,
together with a copy of all attachments thereto, and a copy of each listing of
Wet-Ink Mortgage Loans delivered to the Agent as provided above.

          (b) Upon the Note Issuer's Request for Note Purchase pursuant to
Section 3.09(a) and in compliance with Sections 3.09(c), 3.09(d), 3.09(e) and
3.09(f), the Purchasers severally shall, assuming all applicable conditions
precedent set forth in Sections 6.01 and 6.02 have been met and provided no
Default or Event of Default shall have occurred and be continuing, make the
related purchases of Notes they are committed to make under Section 2.01(a) in
respect of each Eligible Mortgage Loan identified in the materials attached to
such Request for Note Purchase which is not a Wet-Ink Mortgage Loan or a
Dried-Ink Mortgage Loan, and the Note Issuer shall sell such Notes to the
Purchasers, by 4:30 p.m. New York City time on the requested Note Purchase Date.
Each Purchaser (other than a Person who at the time is also the Agent) shall pay
the purchase price for the Notes to be purchased by it hereunder on each Note
Purchase Date by wire transfer to the Agent, to the Agent's Account, not later
than 4:30 p.m. New York

                                      -20-



City time on the Note Purchase Date, of an amount in Dollars, in immediately
available funds, equal to such Purchaser's Commitment Percentage of the
aggregate principal amount of the Notes to be purchased on such Note Purchase
Date. The Agent shall make the purchase price of all Notes included in each Note
Purchase, to the extent actually received by the Agent from the Purchasers,
available to the Note Issuer as provided in Section 3.09(e), in the same funds
as the Agent receives. The Agent shall have no obligation itself to pay for any
Notes except as provided in the preceding sentence. The Note Issuer shall cause
each Note Purchase to be evidenced by an entry in the Note Register (with
evidence that it has done so to be provided to the Purchasers, through the
Agent, as contemplated in Section 6.02(m), and each Purchaser that is already a
Noteholder at the time of a Note Purchase shall endorse on the schedule to its
Note or any continuation thereof the principal amount of the Notes purchased by
it on the relevant Note Purchase Date, as contemplated in Section 3.01(b).

     (c) In the case of any Eligible Mortgage Loan which is not a Wet-Ink
Mortgage Loan, the Note Issuer shall release to the Custodian, no later than
12:00 p.m., New York City time, two (2) Business Days (or such lesser time as
the Custodian and the Note Issuer may agree) prior to the requested Note
Purchase Date, the Mortgage File pertaining to each Eligible Mortgage Loan to be
pledged to the Agent and included in the Borrowing Base on such requested Note
Purchase Date, in accordance with the terms and conditions hereof and of the
Custodial Agreement.

     (d) With respect to each Mortgage Loan which is a Wet-Ink Mortgage Loan,
pledged to the Agent and included in the Borrowing Base on a requested Note
Purchase Date:

     (i) Not later than 4:30 p.m. at least one Business Day prior to the related
     Note Purchase Date, the Note Issuer shall deliver to the Agent a report
     detailing the approximate outstanding principal balance of Wet-Ink Mortgage
     Loans to be pledged to the Agent on such Note Purchase Date and the
     approximate principal amount of the related Notes (the "Estimated Note
                                                             --------------
     Issuance Proceeds"), and the Agent, as promptly thereafter as practicable,
     -----------------
     shall make a copy of such report available to each Purchaser.

     (ii) An amount (determined as provided in Section 2.01) up to the expected
     original principal amount of each Wet-Ink Mortgage Loan, shall be remitted,
     in whole or in part, as requested by the Note Issuer, by the Agent, on
     behalf of, and with funds provided by, the Purchasers (but not otherwise),
     by means of wire transfer to the Wet-Ink Wire Funding Account, provided
     that, on or prior to the related Note Purchase Date, the Note Issuer shall
     provide to the Agent a schedule (the "Wet-Funding Schedule") setting forth
                                           --------------------
     the mortgage loan identification number, the Mortgagor name, the
     outstanding principal balance of Wet-Ink Mortgage Loans, the amount to be
     remitted to the Wet-Ink Wire Funding Account for each Wet-Ink Mortgage Loan
     to be pledged to the Agent on such Note Purchase Date and the aggregate of
     all such amounts, to be remitted to the Wet-Ink Wire Funding Account on
     such Note Purchase Date (the "Actual Note Issuance Proceeds"). On the Note
                                   -----------------------------
     Purchase Date (and on the terms and subject to the conditions set forth in
     this Note Purchase Agreement), the Agent, on behalf of, and with funds
     provided by, the Purchasers, shall remit by wire transfer the

                                      -21-



     Actual Note Issuance Proceeds directly to the Wet-Ink Wire Funding Account
     to be disbursed in accordance with the Custodial Agreement. Each Purchaser
     (other than a Person who at the time is also the Agent) shall, not later
     than 2:30 p.m. New York City time, on each Note Purchase Date, pay the
     portion of the purchase price of the Notes to be purchased by it hereunder
     which corresponds to Wet-Ink Mortgage Loans by wire transfer of an amount
     in Dollars equal to such Purchaser's Commitment Percentage of the related
     Actual Note Issuance Proceeds, to enable the Agent to make the remittances
     contemplated in this paragraph. The Agent shall, as promptly as practicable
     after receipt, furnish to each Purchaser a copy of each schedule referred
     to above in this paragraph which is received by the Agent.

     (iii) The Note Issuer shall deliver the Mortgage Documents related thereto
     to the Custodian for receipt by the Custodian no later than five (5)
     Business Days following the Note Purchase Date.

     (iv)  Upon receipt of the final Wiring Schedule with respect to a Note
     Purchase Date, the Agent shall determine the amount, if any, by which the
     Estimated Note Issuance Proceeds requested by the Note Issuer exceeds the
     Actual Note Issuance Proceeds (such amount, the "Overestimate Amount") and
                                                      -------------------
     shall give each Purchaser notice thereof.

     (v)   No later than the close of business on the Business Day following
     each Note Purchase Date, the Note Issuer shall forward to the Agent a
     schedule with respect to each Wet-Ink Mortgage Loan funded on such Note
     Purchase Date setting forth the related Mortgage Loan number, the Mortgagor
     name, the amount of each such Wet-Ink Mortgage Loan, and a list of each
     Wire actually issued in respect of such Wet-Ink Loan, setting forth the
     amount, the payee, and the wire reference number, as appropriate. At the
     request of a Purchaser, the Agent shall, as promptly as practicable after
     the request, furnish to such Purchaser a copy of each such schedule and
     list referred by the Agent.

     (vi)  The Note Issuer shall not request the purchase of Notes, and the
     Purchasers shall not be required to make purchases of Notes more often than
     six times on any Business Day.

     (vii) No Wire shall be issued or remitted to a payee which is the Note
     Issuer, the Seller or any Affiliate of the Seller.

     (e) Pursuant to the Custodial Agreement, the Custodian shall deliver to the
Agent (which shall provide a copy to each Purchaser) and the Note Issuer, no
later than 1:00 p.m., New York City time, on the Business Day prior to each Note
Purchase Date, a Trust Receipt in respect of all Mortgage Loans (other than
Wet-Ink Mortgage Loans) pledged to the Agent on such Note Purchase Date, and a
Mortgage Loan Schedule and Exception Report. Additionally, pursuant to the
Custodial Agreement, the Custodian shall deliver to the Agent (which shall
provide a copy to each Purchaser) and the Note Issuer, no later than noon, New
York City time, on each Note Purchase Date, a Trust Receipt in respect of all
Wet-Ink Mortgage Loans pledged to the Agent

                                      -22-



on such Note Purchase Date, and a Mortgage Loan Schedule with respect to
each such Wet-Ink Mortgage Loan and the Custodian shall provide the Agent (which
shall provide a copy to each Purchaser) with a listing of all Wet-Ink Mortgage
Loans pledged to the Agent by 4:30 p.m. New York City time on the related Note
Purchase Date. Subject to Section 6 hereof, the purchase price of each Note
Purchase required under Section 2.01 will (to the extent paid by the Purchasers
to the Agent), with respect to each Mortgage Loan which is not a Wet-Ink
Mortgage Loan, then be made available (or deemed made available) to the Note
Issuer by the Agent by means of transfer, via wire transfer, of the funds made
available to the Agent for the Note Purchase by the Purchasers, to the following
account of the Note Issuer (or such other account as it may identify by notice
given to the Agent not later than the third Business Day before the relevant
Note Purchase Date): ____________, for the A/C of the Note Issuer, in trust,
ABA# ___________, Attn: ___________, [we need NC wire instructions] in funds
immediately available to the Note Issuer; the Purchasers will use their
respective best efforts to honor, on the requested Note Purchase Date, Requests
for Note Purchase which are received after the times specified in paragraph (a)
above, or for which Mortgage Loan Schedules are received after the times
specified above in this paragraph (d).

     3.10 Limitation on Note Purchases; Illegality. Anything herein to the
          ----------------------------------------
contrary notwithstanding, if, on or prior to the determination of any Eurodollar
Rate:

     (a) the Agent determines, which determination shall be conclusive, that
quotations of interest rates for the relevant deposits referred to in the
definition of "Eurodollar Rate" in Section 1.01 hereof are not being provided in
the relevant amounts or for the relevant maturities for purposes of determining
rates of interest for the Notes as provided herein; or

     (b) the Agent determines, which determination shall be conclusive (and
based on such information as Majority Investors shall have given to the Agent),
that the relevant rate of interest referred to in the definition of "Eurodollar
Rate" in Section 1.01 hereof upon the basis of which the rate of interest for
the Notes is to be determined is not adequate to cover the cost to the Majority
Investors of making or maintaining Loans; or

     (c) it becomes unlawful for any Purchaser to honor its obligation to
purchase Notes hereunder or for any Noteholder to maintain its investment in
Notes issued hereunder, in each case, using a Eurodollar Rate;

then the Agent shall give the Note Issuer prompt notice thereof and at the Note
Issuer's option, upon notice to the Agent, the Purchasers and the Noteholders,
the Note Issuer may either immediately prepay all the Notes outstanding and
terminate this Note Purchase Agreement or pay interest on the Notes at a rate
per annum equal to the Federal Funds Rate plus 2.00%.

     3.11 Repayment of Notes; Interest.
          ----------------------------

     (a) The Note Issuer hereby promises to pay to the Noteholders in full on
the earlier to occur of the (x) applicable Maturity Date and (y) the Termination
Date, the then aggregate outstanding principal amount of the Notes.

     (b) The Note Issuer hereby promises to pay to the Noteholders interest on
the unpaid principal amount of each Note for the period from and including the
Note Purchase Date

                                      -23-



on which such Note was sold hereunder by the Note Issuer to but excluding
the date such Note shall be paid in full, at a rate per annum equal to the
Eurodollar Rate plus the Applicable Margin. Notwithstanding the foregoing, the
Note Issuer hereby promises to pay to the Noteholders interest at the applicable
Post-Default Rate on any principal of any Note and on any other amount payable
by the Note Issuer hereunder or under any Note that shall not be paid in full
when due (whether at stated maturity, by acceleration or by mandatory prepayment
or otherwise) for the period from and including the due date thereof to but
excluding the date the same is paid in full. Accrued interest on the principal
amount of each Note shall be due and payable (i) monthly, on the Payment Date,
(ii) on the Business Day following each Maturity Date or other day on which any
prepayment of principal is received by the Agent, but only if the accrued
interest on the amount of principal paid on such Maturity Date or prepaid on
such other day exceeds $2,000,000 and if the Agent so demands (if such amount is
$2,000,000 or less or if the Agent does not so demand, such amount to be paid on
the next following Payment Date) and (iii) on the Termination Date. Interest
payable at the Post-Default Rate shall accrue daily and shall be due and payable
upon such accrual.

          (c) In addition to any other amounts payable hereunder, the Note
Issuer shall pay a fee to the Agent (for the account of the Purchasers in
accordance with their respective Commitment Percentages) on each Payment Date
equal to the imputed interest on each Overestimate Amount. Such imputed accrued
interest shall accrue at the Spread Fee Rate for the period of time from and
including the requested Note Purchase Date specified in the Request for Note
Purchase until the earliest to occur of (i) two days after the Note Issuer has
delivered notice to the Agent that any portion of the related Overestimate
Amount will not actually be funded to the Note Issuer, provided that such notice
is delivered within one day after the initially requested Note Purchase Date,
(ii) as to such portion of the related Overestimate Amount the date such portion
of the related Overestimate Amount is funded to the Note Issuer through a Note
Purchase and (iii) the next Payment Date. Notwithstanding the foregoing, no
Spread Fee Rate shall be applied to any Overestimate Amount if (x) the related
Request for Note Purchase was timely delivered (whether or not the related
Wet-Funding Schedule was timely delivered) and (y) the Overestimate Amount does
not exceed the lessor of (a) 20% of the amount of the related Request for Note
Purchase or (b) $10,000,000.

          3.12 Mandatory Prepayments or Pledge; Voluntary Prepayments. (a) If at
               ------------------------------------------------------
any time the aggregate outstanding principal amount of Notes exceeds the
Borrowing Base (a "Borrowing Base Deficiency"), as determined by the Agent in
                   -------------------------
its sole discretion exercised in good faith and notified to the Note Issuer on
any Business Day, the following shall apply:

               (i) If the Borrowing Base Deficiency does not involve
     circumstances of the kind referred to in clause (ii) or clause (iii) of
     this Section 3.12, the Note Issuer shall no later than 5:00 p.m. New York
     City time on the Business Day on which such notice has been received (if
     received prior to 10:00 a.m. New York City time on such Business Day,
     otherwise no later than 10:00 a.m. New York City time on the next following
     Business Day), either prepay the principal amount of the Notes in part or
     in whole or pledge additional Eligible Mortgage Loans (which Collateral
     shall be in all respects acceptable to the Agent in its sole discretion) to
     the Agent, such that after giving effect to such prepayment or pledge the
     aggregate outstanding principal amount of the Notes does not exceed the
     Borrowing Base.

                                      -24-



                           (ii)  If any portion of the proceeds of a Note
         Purchase are made available to the Note Issuer in connection with the
         inclusion in the Borrowing Base of a proposed Wet-Ink Mortgage Loan
         which is not actually made on the Note Purchase Date, the Note Issuer
         shall not later than one Business Day after that Note Purchase Date
         prepay that portion of the principal amount of the Notes which
         corresponds to such proposed Wet-Ink Mortgage Loan. The interest
         accrued on the amount of the prepayment from and including the relevant
         Note Purchase Date and to but excluding the date of the prepayment (or,
         if the prepayment is made on the Note Purchase Date, one day's interest
         thereon) shall be included in the interest payable hereunder on the
         next following Payment Date.

                           (iii) If any portion of the Borrowing Base Deficiency
         relates to a sale of a Mortgage Loan by the Note Issuer to the Seller
         pursuant to the Loan Purchase Agreement, the Note Issuer shall on the
         day of the resale prepay a portion of the outstanding principal amount
         of the Notes equal to the related Repurchase Amount.

                  (b) The Note Issuer may prepay the principal amount of Notes
on any Paydown Date. Notice from the Note Issuer of any proposed prepayment may
not be revoked without the prior signed written consent of the Agent, which
consent may be withheld in the Agent's sole discretion, but the Notes shall in
no event be prepaid more often than the four times in any calendar month
pursuant to this paragraph (b). In connection with any voluntary prepayment of
all or any portion of the Notes not made in accordance with the notice
requirements set forth in the definition of Paydown Date, and any prepayment of
the Notes made pursuant to Section 10.01, the Note Issuer shall be required to
pay a Breakage Fee to the Noteholders in addition to any other amounts due
hereunder. The Note Issuer may not prepay the principal amount of the Notes
hereunder other than as specifically provided herein.

                  (c) In connection with any sales of Mortgage Loans pursuant to
Takeout Commitments, or otherwise, the Note Issuer shall cause there to be
remitted to the Agent, on the date of such sale, the entire principal portion of
the purchase price paid by the purchasers under such Takeout Commitments. In
addition, in connection with any sale of Mortgage Loans pursuant to such Takeout
Commitments, or otherwise, the Note Issuer shall cause to be remitted to the
Servicer for deposit in the collection account administered by the Servicer a
portion of such sales proceeds equal to accrued interest on the amount prepaid,
calculated at the Effective Facility Rate, (i) not later than the next following
Payment Date or (ii) at the time of such sale, if (x) such amount exceeds
$2,000,000 and (y) if the Agent so requests. As used herein, "Effective Facility
                                                              ------------------
Rate" means a rate sufficient to cover related Note interest, any imputed
- ----
interest (i.e., Spread Fee Rate) and any fees due to the Agent, the Purchasers,
          ---
or the Noteholders on the next following Payment Date, to the extent that such
amount will not otherwise be funded by interest collections on the Mortgage
Loans otherwise deposited to the collection account.

          3.13 Extension of Termination Date. At the request of the Note Issuer
               -----------------------------
made at least ninety (90) days, but in no event earlier than one hundred and
fifty (150) days, prior to the then current Termination Date, the Purchasers and
Noteholders may in their sole discretion extend the Termination Date for a
period to be requested by the Note Issuer and approved by the Purchasers and the
Noteholders in their sole discretion by giving written notice of such extension,
through the Agent, to the Note Issuer no later than ninety (90) days prior to
the then

                                      -25-



current Termination Date. Any failure by the Agent to deliver such notice of
extension within ninety (90) days prior to the then current Termination Date
shall be deemed to be the Purchasers' and Noteholders' determination not to
extend the then current Termination Date.

     3.14 Takeout Commitments. The Note Issuer shall deliver to the Agent (for
          -------------------
itself and for the Purchasers and Noteholders) copies of any Takeout Commitment
related to any Mortgage Loan.

     3.15 Additional Termination. If any of the events specified in Section
          ----------------------
6.02(j) hereof have occurred, the Purchasers shall give the Agent prompt notice
thereof and the Agent shall give a copy of the notice to Note Issuer confirming
the Agent's determination that the relevant event has occurred, and the
principal amount of the Notes then outstanding shall be due and payable,
together with all interest thereon and fees and expenses accruing under this
Note Purchase Agreement and the Purchasers' obligations to make purchases under
this Note Purchase Agreement shall terminate.

     Section 4. Payments; Computations; Etc.
                ----------------------------

     4.01 Payments. Except to the extent otherwise provided herein, all payments
          --------
of principal, interest and other amounts to be made by the Note Issuer under
this Note Purchase Agreement and the Notes shall be made in Dollars, in
immediately available funds, without deduction, set-off or counterclaim, to the
Agent for distribution by it to the Persons entitled to payment in accordance
with their interests in or commitments hereunder to Purchase the Notes and their
related rights hereunder and under the Notes. In the case of amounts payable in
respect of each Note, all such payments shall be made by the Agent with funds
received by it hereunder from the Note Issuer to the Person in whose name the
Note is registered at the close of business on the relevant Record Date by
either (i) check mailed to such Person's address as it appears in the Note
Register on such Record Date, or (ii) by wire transfer of like funds as received
by the Agent, to the account of such Person identified by it by notice to the
Agent. All payments due hereunder and under the Notes from the Note Issuer to
the Agent for such distribution shall be so paid by the Note Issuer to the
Agent's Account by wire transfer of immediately available funds not later than
1:00 p.m., New York City time, on the date on which such payment shall become
due (and each such payment made after such time on such due date shall be deemed
to have been made on the next succeeding Business Day). The Note Issuer hereby
acknowledges that it has no rights of withdrawal from the Agent's Account. To
facilitate the distribution of payments contemplated in this paragraph, the Note
Issuer shall, on each Record Date, deliver to the Agent a copy of the Note
Register certified to be a true and correct copy thereof, and the Agent shall be
entitled to rely thereon and shall have no responsibility for so doing.

     (a) Except to the extent otherwise expressly provided herein, if the due
date of any payment due under this Note Purchase Agreement or any Note would
otherwise fall on a day that is not a Business Day, such date shall be extended
to the next succeeding Business Day, and interest shall be payable for any
principal so extended for the period of such extension.

     4.02 Computations. Interest on the principal amount of the Notes shall be
          ------------
computed on the basis of a 360-day year for the actual days elapsed (including
the first day but excluding the last day) occurring in the period for which
payable.

                                      -26-



     4.03 Requirements of Law.
          -------------------

     (a) If any Requirement of Law applicable to a Purchaser or a Noteholder
(other than with respect to any amendment made to the Purchaser's or
Noteholder's certificate of incorporation and by-laws or other organizational or
governing documents) or any change in the judicial interpretation or application
thereof or compliance by a Purchaser or Noteholder with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:


     (i)   shall subject the Purchaser or Noteholder to any tax of any kind
     whatsoever with respect to this Note Purchase Agreement or any Note held by
     it (excluding net income or franchise taxes) or change the basis of
     taxation of payments to the Purchaser or Noteholder in respect thereof;

     (ii)  shall impose, modify or hold applicable any reserve, special deposit,
     compulsory loan or similar requirement against assets held by, deposits or
     other liabilities in or for the account of, advances, loans or other
     extensions of credit by, or any other acquisition of funds by, any office
     of the Purchaser or Noteholder which is not otherwise included in the
     determination of the Eurodollar Rate hereunder; or

     (iii) shall impose on the Purchaser or Noteholder any other condition;

and the result of any of the foregoing is to increase the cost to the Purchaser
or Noteholder, by an amount which the Purchaser or Noteholder deems to be
material, of purchasing any Notes or maintaining its commitment hereunder to do
so, or continuing or maintaining its investment in any of the Notes or to reduce
any amount due or owing hereunder in respect thereof, then, in any such case,
the Note Issuer shall promptly pay the Agent, for the account of the relevant
Purchaser or Noteholder, upon the Note Issuer's receipt of the certificate
described in Section 4.03(c) hereof, such additional amount or amounts as will
compensate the Purchaser or Noteholder for such increased cost or reduced amount
receivable.

     (b) If a Purchaser or Noteholder shall have determined that the adoption of
or any change in any Requirement of Law applicable to the Purchaser or
Noteholder or any corporation controlling the Purchaser or Noteholder (other
than with respect to any amendment made to the certificate of incorporation and
by-laws or other organizational or governing documents of the Purchaser or
Noteholder or scontrolling corporation) regarding capital adequacy or in the
interpretation or application thereof or compliance by the Purchaser or
Noteholder or controlling corporation with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on the capital of the relevant Purchaser, Noteholder or
controlling corporation as a consequence of its obligations hereunder or its
holding of any Notes to a level below that which the Purchaser, Noteholder or
controlling corporation would have achieved but for such adoption, change or
compliance (taking into consideration the Purchaser's, Noteholder's or
controlling corporation's policies with respect to capital adequacy) by an
amount deemed by such Purchaser or Noteholder to be material, then from time to
time, after receipt of the notice and certificate relating to the circumstances
provided for in Section 4.03(c), the Note

                                      -27-



Issuer shall promptly pay to the Purchaser or Noteholder such additional
amount or amounts as will compensate the Purchaser, Noteholder or controlling
corporation for such reduction.


     (c) If any Purchaser or Noteholder becomes entitled to claim any additional
amounts pursuant to this Section, it shall promptly notify the Note Issuer and
the Agent of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this Section
submitted by a Purchaser or Noteholder to the Note Issuer shall be conclusive in
the absence of manifest error.

     (d) If the Note Issuer is required to pay to a Purchaser or Noteholder
additional amounts pursuant to this Section 4.03, then at the Note Issuer's
option, upon notice to such Purchaser or Noteholder, with a copy to the Agent,
and upon payment of all such additional amounts due and owing to such Purchaser
or Noteholder, the Note Issuer may in accordance with Section 3.11, immediately
prepay in full the principal amount of all Notes held by such Noteholder and
terminate the commitment of such Purchaser to purchase Notes hereunder. Any such
termination shall automatically reduce pro tanto the Commitment Amount and
result in an appropriate adjustment to the Commitment Percentages of the
remaining Purchasers, if any.

     4.04 Facility Fee. (a) The Note Issuer agrees to pay to the Agent (for the
          ------------
account of the Purchasers in proportion to their respective Commitment
Percentages) (a) on or prior to the Effective Date a facility fee for the first
year equal to 20 basis points per annum of the Commitment Amount, i.e., $800,000
                                                                  ----
and (b) on or prior to May 14, 2003, a facility fee for the second year equal to
25 basis points per annum of the Commitment Amount, i.e., $1,000,000 (such
                                                    ----
amounts, together the "Facility Fee"), except as otherwise provided in paragraph
                       ------------
(b) below, such payment to be made in Dollars, in immediately available funds,
without deduction, set-off or counterclaim, to the Agent's Account set forth in
or pursuant to Section 4.01 hereof. In the event of any extension of the
Termination Date, the Note Issuer shall pay to the Agent (for the account of the
Purchasers in proportion to their respective Commitment Percentages) a Facility
Fee determined by the Purchasers, in their sole discretion, on the date or dates
specified by the Agent by notice to the Note Issuer.

     (b) In the event of any termination of this Note Purchase Agreement (i)
pursuant to Section 13.16 hereof, (ii) resulting from a failure by the
Purchasers to honor a properly-submitted Request For Note Purchase or (iii)
resulting from the occurrence of the events described in Section 6.02(j) hereof,
the Agent shall pay the Note Issuer the Unearned Portion of the Facility Fee as
set forth in Section 13.16 hereof.

                                      -28-



     Section 5. Collateral Security.
                -------------------

     5.01 Collateral; Security Interest.
          -----------------------------

     (a) The Note Issuer shall cause the Custodial Agreement to provide that the
Custodian (i) shall hold the Mortgage Documents pursuant to the Custodial
Agreement, as bailee and agent for the Agent, the Purchasers and the
Noteholders, and (ii) shall deliver to the Agent Trust Receipts (as defined in
the Custodial Agreement) each to the effect that it has reviewed such Mortgage
Documents in the manner and to the extent required by the Custodial Agreement
and identifying any deficiencies in such Mortgage Documents as so reviewed.

     (b) All of the Note Issuer's right, title and interest in, to and under
each of the following items of property, whether now owned or hereafter
acquired, now existing or hereafter created and wherever located, is hereinafter
referred to as the "Collateral":
                    ----------

     (i)    all Mortgage Loans and all Servicing Rights thereto;

     (ii)   all Mortgage Documents and Mortgage Files, including without
     limitation all promissory notes, all servicing records, Tax Service
     Contracts, servicing agreements and any other collateral pledged or
     otherwise relating to such Mortgage Loans, together with all files,
     documents, instruments, surveys, certificates, correspondence, appraisals,
     data contained on computer programs, data contained on computer storage
     media, accounting records and other books and records relating thereto;

     (iii)  all mortgage guaranties and insurance (issued by governmental
     agencies or otherwise) and any mortgage insurance certificate or other
     document evidencing such mortgage guaranties or insurance relating to any
     Mortgage Loan and all claims and payments thereunder;

     (iv)   all other insurance policies and insurance proceeds relating to any
     Mortgage Loan or the related Mortgaged Property;

     (v)    all Interest Rate Protection Agreements, relating to or constituting
     any and all of the foregoing;

     (vi)   all accounts created under the Servicing Agreement and all monies
     from time to time on deposit in such accounts; (vii) all contract rights
     and all "general intangibles", "accounts" and "chattel paper" as defined in
     the Uniform Commercial Code relating to or constituting any and all of the
     foregoing;

     (viii) the Wet-Ink Wire Funding Account, and in any other account
     maintained by the Note Issuer with the Custodian or the Disbursement Agent,
     in connection with the Custodial Agreement or the Mortgage Loans and all
     amounts on deposit in each such account from time to time;

                                      -29-



     (ix) the Loan Purchase Agreement, the Servicing Agreement and any
     agreements covering or relating to any or all of the foregoing;

     (x)  all other assets of the Note Issuer; and

     (xi) any and all replacements, substitutions, distributions on or proceeds
     of any and all of the foregoing.

     (c) The Note Issuer hereby assigns, pledges and grants a security interest
in all of its right, title and interest in, to and under the Collateral to the
Agent, for the benefit of the Agent, the Purchasers and the Noteholders to
secure the payment of principal of and interest on the Notes and all other
amounts owing to the Agent, the Purchasers and the Noteholders hereunder, under
the Notes and under the other Note Documents and all other amounts owing by the
Note Issuer to any of the Agent, the Purchasers or the Noteholders
(collectively, the "Secured Obligations"). The Note Issuer agrees to mark its
                    -------------------
computer records and tapes to evidence the interests granted to the Agent, for
the benefit of the Agent, the Purchasers and the Noteholders hereunder.

     5.02 Further Documentation. At any time and from time to time, upon the
          ---------------------
written request of the Agent (which it may make in its sole discretion and shall
make at the request of the Majority Investors), and at the sole expense of the
Note Issuer, the Note Issuer will promptly and duly execute and deliver, or will
promptly cause to be executed and delivered, such further instruments and
documents and take such further action as the Agent (or such Majority Investors)
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Note Purchase Agreement and of the rights and powers herein
granted, including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code in effect in any
jurisdiction with respect to the Liens created hereby. The Note Issuer also
hereby authorizes the Agent to file any such financing or continuation statement
without the signature of the Note Issuer to the extent permitted by applicable
law. A carbon, photographic or other reproduction of this Note Purchase
Agreement shall be sufficient as a financing statement for filing in any
jurisdiction.

     5.03 Changes in Locations, Name, etc. The Note Issuer shall not (i) change
          --------------------------------
the location of its chief executive office/chief place of business from that
specified in Section 7.11 or (ii) change its name, identity or form of
organization or place of organization unless, in each case, it shall have given
the Agent, the Purchasers and the Noteholders at least thirty (30) days' prior
written notice thereof and shall have delivered to the Agent all Uniform
Commercial Code financing statements and amendments thereto as the Agent shall
request (in its sole discretion or at the request of the Majority Investors),
with a copy to each Purchaser and Noteholder and taken all other actions deemed
necessary by the Agent to continue the perfected status of the security interest
of the Agent, for the benefit of the Agent, the Purchasers and the Noteholders,
in the Collateral with the same or better priority.

     5.04 Agent's Appointment by Note Issuer as Attorney-in-Fact.
          -------------------------------------------------------

     (a) The Note Issuer hereby irrevocably constitutes and appoints the Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact

                                      -30-



with full irrevocable power and authority in the place and stead of the Note
Issuer and in the name of the Note Issuer or in its own name, from time to time
in the Agent's discretion, for the purpose of carrying out the terms of this
Note Purchase Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Note Purchase Agreement, and, without limiting
the generality of the foregoing, the Note Issuer hereby gives the Agent the
power and right, on behalf of the Note Issuer, without assent by, but with
notice to, the Note Issuer, to do the following:

          (i)   in the name of the Note Issuer or its own name, or otherwise, to
          take possession of and endorse and collect any checks, drafts, notes,
          acceptances or other instruments for the payment of moneys due under
          any mortgage insurance or payable on or on account of any other
          Collateral and to file any claim or to take any other action or
          proceeding in any court of law or equity or otherwise deemed
          appropriate by the Agent for the purpose of collecting any and all
          such moneys due under any such mortgage insurance or with respect to
          any other Collateral whenever payable;

          (ii)  to pay or discharge taxes and Liens levied or placed on or
          threatened against the Collateral; and

          (iii) (A) to direct any party liable for any payment under any
          Collateral to make payment of any and all moneys due or to become due
          thereunder directly to the Agent or as the Agent shall direct; (B) to
          ask or demand for, collect, receive payment of and receipt for, any
          and all moneys, claims and other amounts due or to become due at any
          time in respect of or arising out of any Collateral; (C) to sign and
          endorse any invoices, assignments, verifications, notices and other
          documents in connection with any of the Collateral; (D) to commence
          and prosecute any suits, actions or proceedings at law or in equity in
          any court of competent jurisdiction to collect the Collateral or any
          portion thereof and to enforce any other right in respect of any
          Collateral; (E) to defend any suit, action or proceeding brought
          against the Note Issuer with respect to any Collateral; (F) to settle,
          compromise or adjust any suit, action or proceeding described in
          clause (E) above and, in connection therewith, to give such discharges
          or releases as the Agent may deem appropriate; and (G) generally, to
          sell, transfer, pledge and make any agreement with respect to or
          otherwise deal with any of the Collateral as fully and completely as
          though the Agent were the absolute owner thereof for all purposes, and
          to do, at the Agent's option and the Note Issuer's expense, at any
          time, and from time to time, all acts and things which the Agent deems
          necessary to protect, preserve or realize upon the Collateral and the
          Agent's Liens thereon and to effect the intent of this Note Purchase
          Agreement, all as fully and effectively as the Note Issuer might do.

The Note Issuer hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.

                                      -31-



     (b) The Note Issuer also authorizes the Agent, at any time and from time to
time, to execute, in connection with any sale provided for in Section 10 hereof,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.

     (c) The powers conferred on the Agent are solely to protect the Agent's
interests in the Collateral (for the benefit of the Agent, the Purchasers and
the Noteholders) and shall not impose any duty upon the Agent to exercise any
such powers. The Agent shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers, and except as otherwise
expressly provided in Section 5.07 hereof, neither the Agent nor any of its
officers, directors, or employees shall be responsible to the Note Issuer for
any act or failure to act hereunder, except as expressly provided in Section 11.

     (d) The foregoing provisions of this Section 5.04, as between the Note
Issuer and the Agent, shall not be affected by but are without prejudice to the
separate arrangements between the Agent and each of the Purchasers and
Noteholders regarding the circumstances in which the Agent may act or refrain
from acting with or without notice to or the consent of the Purchasers or the
Noteholders or any of them.

     5.05 Performance by Agent of Note Issuer's Obligations. If the Note Issuer
          -------------------------------------------------
fails to perform or comply with any of its agreements contained in the Note
Documents and the Agent may itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the expenses of the Agent
incurred in connection with such performance or compliance, together with
interest thereon at a rate per annum equal to the Post-Default Rate, shall be
payable by the Note Issuer to the Agent on demand and shall constitute Secured
Obligations.

     5.06 Proceeds. If a Default shall occur and be continuing, (a) all proceeds
          --------
of Collateral received by the Note Issuer consisting of cash, checks and other
near-cash shall be held by the Note Issuer in trust for the Agent, for the
benefit of the Purchaser and the Noteholders, segregated from other funds of the
Note Issuer, and shall forthwith upon receipt by the Note Issuer be turned over
to the Agent for allocation by it as provided herein in the exact form received
by the Note Issuer (duly endorsed by the Note Issuer to the Agent and (b) any
and all such proceeds received by the Agent (whether from the Note Issuer or
otherwise) will be held by the Agent as collateral security for, and, if an
Event of Default has occurred and is continuing, then or at any time thereafter
may be applied by the Agent against, the Secured Obligations (whether matured or
unmatured), such application to be in the order of priority specified in Section
10.07.

For purposes hereof, proceeds shall include, but not be limited to, all
principal and interest payments, all prepayments and payoffs, insurance claims,
condemnation awards, sale proceeds, real estate owned rents and any other income
and all other amounts received with respect to the Collateral.

     5.07 Limitation on Duties Regarding Preservation of Collateral. The Agent's
          ---------------------------------------------------------
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Uniform Commercial Code
or otherwise, shall be to deal with it in the same manner as the Agent deals
with similar property for its own account. Neither

                                      -32-



the Agent nor any of its directors, officers or employees shall be liable for
failure to demand, collect or realize upon all or any part of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of the Note Issuer or otherwise.

     5.08 Powers Coupled with an Interest. All authorizations and agencies
          -------------------------------
herein contained with respect to the Collateral are irrevocable and are powers
coupled with an interest.


     5.09 Release of Security Interest. Upon termination of this Note Purchase
          ----------------------------
Agreement and payment to the Agent, the Purchasers and the Noteholders of all
Secured Obligations and the performance of all obligations under the Note
Documents the Agent shall release its security interest in any remaining
Collateral provided that if any payment, or any part thereof, or any of the
Secured Obligations is rescinded or must otherwise be restored or returned by
the Agent, any Purchaser or any Noteholder upon the insolvency, bankruptcy,
dissolution, liquidation or similar reorganization of the Note Issuer, or upon
or as a result of the appointment of a receiver, intervenor or conservator of,
or a trustee or similar officer for the Note Issuer or any substantial part of
its Property, or otherwise, this Note Purchase Agreement, all rights hereunder
and the Liens created hereby shall continue to be effective, or be reinstated,
as though such payments had not been made.

     Section 6. Conditions Precedent.
                --------------------

     6.01 Initial Note Purchase. The obligation of UBS Warburg, as the sole
          ---------------------
initial Purchaser, to make its initial purchase of any Note hereunder is subject
to the satisfaction, immediately prior to or concurrently with the making of
such Note Purchase, of the condition precedent that the Agent shall have
received all of the following items, each of which shall be satisfactory to the
Agent and its counsel in form and substance:

     (a)  Note Documents.  The Note Documents, duly completed and executed.
          --------------

     (i)  Note.  The initial Note, duly completed and executed;
          ----

     (ii) Loan Purchase Agreement. The Loan Purchase Agreement, duly executed
          -----------------------
     and delivered by the Seller, New Century Financial, and the Note Issuer;
     and

     (iii) Custodial Agreement. The Custodial Agreement, in the form of the
           -------------------
     attached Exhibit B, duly executed and delivered by the Note Issuer, the
              ---------
     Seller, the Custodian, the Disbursement Agent and the Agent.

     (b) Trust and Administration Documents. Certified copies of the Trust
         ----------------------------------
Agreement and the Administration Agreement and of all documents evidencing the
power and authority of the Note Issuer with respect to the execution, delivery
and performance of the Note Documents and the consummation of the transactions
contemplated hereby, and the power and authority of the Owner Trustee and the
Administrator to act as such and, where applicable, to act on behalf of the Note
Issuer, pursuant to the Trust Agreement, the Administration Agreement, this
Agreement and the other Note Documents (and each of the Agent, the Purchasers
and the Noteholders may conclusively rely on such certificate until it receives
notice in writing from the Note Issuer to the contrary);

                                      -33-



     (c) Legal Opinions. Legal opinions of counsel to the Note Issuer, internal
         --------------
counsel to the New Century Parties, substantially in the forms attached hereto
as Exhibit C or otherwise in form and substance satisfactory to the Agent, a
   ---------
legal opinion of Dewey Ballantine LLP, relating to certain true sale and
securities law matters, and a legal opinion of counsel to the Owner Trustee;

     (d) Trust Receipt and Mortgage Loan Schedule and Exception Report. A Trust
         --------------------------------------------------------------
Receipt, substantially in the form of Annex 2 of the Custodial Agreement, dated
                                      -------
the Effective Date, from the Custodian, duly completed, with a Mortgage Loan
Schedule or, in relation to any Wet-Ink Mortgage Loans, a detailed listing
thereof, and Exception Report attached thereto;

     (e) Consents and Waivers. Any and all irrevocable consents and waivers
         --------------------
required under the Existing Financing Documents;

     (f) Existing Financing Documents. Copies of the Existing Financing
         ----------------------------
Documents, certified to be true and complete copies thereof by a Responsible
Officer of the Seller;

     (g) Facility Fee. The facility fee, as contemplated by Section 4.04 shall
         ------------
be paid with respect to the first year;

     (h) Servicing Agreement. A Servicing Agreement related to the Mortgage
         -------------------
Loans pledged to the Agent (for the benefit of the Agent, the Purchasers and the
Noteholders) hereunder; and

     (i) Other Documents. Such other documents as the Agent or the initial
         ---------------
Purchaser may reasonably request.

     6.02 Initial and Subsequent Note Purchases. The obligation of each
          -------------------------------------
Purchaser to purchase Notes from the Note Issuer (including the Note to be sold
on the initial Note Purchase Date) on any Business Day is subject to the
satisfaction of the following further conditions precedent, both immediately
prior to the making of the proposed Note Purchase and also after giving effect
thereto and to the intended use of the proceeds thereof:

     (a) no Default or Event of Default shall have occurred and be continuing;

     (b) both immediately prior to each Note Purchase and also after giving
effect thereto and to the intended use of the proceeds thereof, the
representations and warranties made by the Note Issuer in Section 7 and in
Schedule 1 to the Loan Purchase Agreement, and elsewhere in each of the Note
Documents, shall be true, correct and complete on and as of the date of the
making of such Note Purchase in all material respects (in the case of the
representations and warranties in Section 7.10 and in Schedule 1 to the Loan
Purchase Agreement, solely with respect to Mortgage Loans included in the
Borrowing Base) with the same force and effect as if made on and as of such date
(or, if any such representation or warranty is expressly stated to have been
made as of a specific date, as of such specific date). The Agent shall have
received a certificate signed by a Designated Agent of the Note Issuer
certifying as to the truth, accuracy and completeness of the above, which
certificate shall specifically include a statement that the Note Issuer is in
compliance with all governmental

                                      -34-



licenses and authorizations and, if relevant under applicable law, is
qualified to do business and in good standing in all required jurisdictions;

     (c) the aggregate outstanding principal amount of the Notes shall not
exceed the Borrowing Base;

     (d) subject to the Agent's right to perform one or more Due Diligence
Reviews pursuant to Section 13.14 hereof, the Agent shall have completed its due
diligence review of the Mortgage Documents for each Mortgage Loan and such other
documents, records, agreements, instruments, Mortgage Properties or information
relating to such Mortgage Loans as the Agent in its sole discretion deems
appropriate to review and such review shall be satisfactory to the Agent in its
sole discretion; provided that the Agent shall not exercise its rights under
Section 13.14 hereof prior to the requested Note Purchase Date;

     (e) the Agent shall have received from the Custodian a Mortgage Loan
Schedule and Exception Report with Exceptions (if there are any Exceptions) as
are acceptable to the Agent in its sole discretion in respect of Eligible
Mortgage Loans to be included in the Borrowing Base on such Business Day;

     (f) the Agent shall have received from the Note Issuer a Warehouse Lender's
Release Letter substantially in the form of Exhibit E-2 hereto (or such other
                                            -----------
form acceptable to the Agent) or a Note Issuer's Release Letter substantially in
the form of Exhibit E-1 hereto (or such other form acceptable to the Agent)
            -----------
covering each Mortgage Loan which is not a Wet-Ink Mortgage Loan to be included
in the Borrowing Base;

     (g) all previously billed fees and expenses of counsel to the Agent as
contemplated by Section 13.03 have been paid, which amount, at the Agent's
option after discussion with the Note Issuer, may be netted from the proceeds of
any Note Purchase to be paid under this Note Purchase Agreement;

     (h) with respect to any Mortgage Loan which has been registered under the
MERS(R) system, the Agent shall have received (i) evidence satisfactory to the
Agent that the Agent (for the Purchasers and Noteholders) has been identified as
the "interim funder" on the MERS(R) System and (ii) an Electronic Agent
Agreement in form and substance satisfactory to the Agent;

     (i) with respect to any Note Purchase for which the Borrowing Base includes
any Wet-Ink Mortgage Loan:

     (x) at least one Business Day prior to the related Note Purchase Date, the
     Agent shall have received notice of the Estimated Note Issuance Proceeds;

     (y) on or prior to the related Note Purchase Date, the Agent shall have
     received the related Wet-Funding Schedule.

     (j) in the sole determination of the Agent, exercised in good faith, none
of the following shall have occurred and/or be continuing:

                                      -35-



           (i) an event or events shall have occurred resulting in the effective
           absence of a "repo market" or comparable "lending market" for
           financing debt obligations secured by mortgage loans or securities or
           an event or events shall have occurred resulting in the UBS Warburg's
           not being able to finance any mortgage loans through the "repo
           market" or "lending market" with traditional counterparties at rates
           which would have been reasonable prior to the occurrence of such
           event or events;

           (ii) an event or events shall have occurred resulting in the
           effective absence of a "securities market" for securities backed by
           mortgage loans or an event or events shall have occurred resulting in
           UBS Warburg's not being able to sell securities backed by mortgage
           loans at prices which would have been reasonable prior to such event
           or events; or

           (iii) there shall have occurred a material adverse change in the
           "repo market" or comparable "lending market" or in the financial
           condition of UBS Warburg which affects (or can reasonably be expected
           to affect) materially and adversely the ability of UBS Warburg to
           fund purchases of Notes under this Note Purchase Agreement;

           (k) if the Custodian has determined the existence of any Fatal
Exceptions, the Agent shall have received from the Custodian the related Fatal
Exception Report, with respect of Mortgage Loans which are not eligible to be
included in the Borrowing Base hereunder on such Business Day;

           (l) the Note Issuer shall have taken such action as the Agent shall
have requested in order to perfect the security interests created pursuant to
this Note Purchase Agreement; and

           (m) the Note Purchase Period shall not have ended.

Each Request for a Note Purchase by the Note Issuer hereunder shall constitute a
certification by the Note Issuer that all the conditions set forth in this
Section 6 have been satisfied (both as of the date of such notice, request or
confirmation and as of the proposed Note Purchase Date).

           Section 7. Representations and Warranties. The Note Issuer represents
                      ------------------------------
and warrants to the Agent, the Purchasers and the Noteholders that throughout
the term of this Note Purchase Agreement:

           7.01 Existence. The Note Issuer (a) is a Delaware business trust duly
                ---------
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite power, and has all
governmental licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed to be
conducted, except where the lack of such licenses, authorizations, consents and
approvals would not be reasonably likely to have a Material Adverse Effect; and
(c) is qualified to do business and is in good standing in all other
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary, except where failure so to qualify would not be
reasonably likely (either individually or in the aggregate) to have a Material
Adverse Effect.

                                      -36-



           7.02 Financial Condition. The Note Issuer has heretofore furnished to
                -------------------
the Agent a copy of (a) the New Century Parties' consolidated balance sheets for
the fiscal year of New Century Parties ended December 31, 2001, and the related
consolidated statements of income and retained earnings and of cash flows for
the New Century Parties for such fiscal year, setting forth in each case in
comparative form the figures for the previous year, with the opinion thereon of
KPMG LLP. All such financial statements are complete and correct and fairly
present, in all material respects, the consolidated financial condition of the
New Century Parties, or affecting any of their Property and the consolidated
results of its operations as at such dates and for such fiscal periods, all in
accordance with GAAP applied on a consistent basis. Since December 31, 2000,
there has been no material adverse change in the consolidated business,
operations or financial condition of the New Century Parties taken as a whole
from that set forth in said financial statements.

           7.03 Litigation. There are no actions, suits, arbitrations,
                ----------
investigations (including, without limitation, to the best of the Note Issuer's
knowledge, any of the foregoing which are pending or threatened) or other legal
or arbitrable proceedings (individually and collectively, whether pending or
threatened, "Disputes") affecting the Note Issuer, its Affiliates or affecting
             --------
any of their Property before any Governmental Authority that question or
challenge the validity or enforceability of any of the Note Documents or any
action to be taken in connection with the transactions contemplated hereby; and
there are no other Disputes of any kind affecting the Note Issuer (other than
any that have been commenced or threatened by the Agent or by any Purchaser and
Noteholder and previously reported to the Agent). In addition, except as
identified on Schedule 3 hereto as existing on the date hereof, there is no
Dispute affecting any Affiliate of the Note Issuer that (i) is of a kind not
referred to in the preceding sentence, (ii) has arisen other than in the
ordinary course of business of such Affiliate, (iii) is reasonably likely to be
determined adversely to such Affiliate and (iv) if so determined, would be
reasonably likely, either individually or together with any other Dispute
covered by clauses (i) through (iii) of this sentence, to have a material
adverse effect on the ability of any such Affiliate to perform any of its
obligations under any of the Note Documents. Neither the Note Issuer nor any of
its Affiliates is (i) in violation of any applicable law which violation
materially adversely affects or may reasonably be expected to materially
adversely affect the business, operations, properties, assets or condition
(financial or otherwise) of the Note Issuer or such Affiliate, or (ii) subject
to or in default with respect to any final judgment, writ, injunction, decree,
rule or regulation of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which would have a material adverse effect on the business,
operations, properties, assets or condition (financial or otherwise) of the Note
Issuer or such Affiliate.

           7.04 No Breach. Neither (a) the execution and delivery of the Note
                ---------
Documents nor (b) the consummation of the transactions therein contemplated in
compliance with the terms and provisions thereof will (i) conflict with or
result in a breach of the organizational documents of the Note Issuer, or any
applicable law, rule or regulation, or any order, writ, injunction or decree of
any Governmental Authority, or any Servicing Agreement or other material
agreement or instrument to which the Note Issuer or any of its Affiliates is a
party or by which any of them or any of their Property is bound or to which any
of them is subject, (ii) constitute a default under any such material agreement
or instrument or result in the creation or imposition of any Lien (except for
the Liens created pursuant to this Note Purchase Agreement) upon any Property of

                                      -37-



the Note Issuer or any of its Affiliates pursuant to the terms of any such
agreement or instrument or (iii) constitute an event of default or an event
which, with the passage of time or expiration of any grace period, would
constitute an event of default under the Existing Financing Documents.

           7.05 Action. The Note Issuer has all necessary power, authority and
                ------
legal right to execute, deliver and perform its obligations under each of the
Note Documents; the execution, delivery and performance by the Note Issuer of
each of the Note Documents have been duly authorized by all necessary corporate
or other action on its part; and each Note Document has been duly and validly
executed and delivered by the Note Issuer and constitutes a legal, valid and
binding obligation of the Note Issuer, enforceable against the Note Issuer in
accordance with its terms, subject as to enforceability to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).

           7.06 Approvals. No authorizations, approvals or consents of, and no
                ---------
filings or registrations with, any Governmental Authority or any securities
exchange are necessary for the execution, delivery or performance by the Note
Issuer of the Note Documents or for the legality, validity or enforceability
thereof, except for filings and recordings in respect of the Liens created
pursuant to this Note Purchase Agreement.

           7.07 Margin Regulations. Neither the purchase of any note hereunder
                ------------------
nor the use of the proceeds thereof will violate or be inconsistent with the
provisions of Regulations T, U or X.

           7.08 Taxes. The Note Issuer and its Affiliates have filed all federal
                -----
income tax returns and all other material tax returns that are required to be
filed by them and have paid all taxes due pursuant to such returns or pursuant
to any assessment received by any of them, except for any such taxes as are
being appropriately contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves have been
established in conformity with GAAP. The charges, accruals and reserves on the
books of the Note Issuer and its Affiliates in respect of taxes and other
governmental charges are, in the opinion of the Note Issuer, adequate.

           7.09 Investment Company Act. Neither the Note Issuer nor any New
                ----------------------
Century Party is an "investment company", or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.

           7.10 Collateral; Collateral Security.
                -------------------------------

           (a) The Note Issuer has not assigned, pledged, or otherwise conveyed
or encumbered any Mortgage Loan or other Collateral to any other Person, and
immediately prior to the pledge of such Mortgage Loan or any other Collateral to
the Agent, for the benefit of the Agent, the Purchasers and the Noteholders, the
Note Issuer was the sole owner of such Mortgage Loan or such other Collateral
and had good and marketable title thereto, and had full right and authority to
pledge or assign the Mortgage Loan free and clear of all Liens, in each case
except for Liens previously released simultaneously with the Liens granted in
favor of the Agent hereunder.

                                      -38-



           (b) The provisions of this Note Purchase Agreement are effective to
create in favor of the Agent, for the benefit of the Agent, the Purchasers and
the Noteholders, a valid security interest in all right, title and interest of
the Note Issuer in, to and under the Collateral.

           (c) Upon receipt by the Custodian of each Mortgage Note, endorsed in
blank by a Designated Agent of the Note Issuer and the Assignment of Mortgage
related thereto, the Agent, for the benefit of the Agent, the Purchasers and the
Noteholders, shall have a fully perfected first priority security interest
therein, in the Mortgage Loan evidenced thereby and in the Note Issuer's
interest in the related Mortgaged Property.

           (d) Upon the filing of financing statements on Form UCC-1 naming the
Agent as "Secured Party" for the benefit of the Agent, the Purchasers and the
Noteholders, and the Note Issuer as "Debtor", and describing the Collateral, in
the jurisdictions and recording offices listed on Schedule 2 attached hereto,
the security interests granted hereunder in the Collateral will constitute fully
perfected first priority security interests under the Uniform Commercial Code in
all right, title and interest of the Note Issuer in, to and under such
Collateral which can be perfected by filing under the Uniform Commercial Code.

           7.11 Jurisdiction of Organization. On the Effective Date, the Note
                ----------------------------
Issuer's jurisdiction of organization is Delaware.

           7.12 Location of Books and Records. The location where the Note
                -----------------------------
Issuer keeps its books and records, including all computer tapes and records
relating to the Collateral, is the chief executive office of the Administrator,
which is located at 18400 Von Karman, Suite 1000, Irvine, California 92612.

           7.13 True and Complete Disclosure. The information, reports,
                ----------------------------
financial statements, exhibits and schedules furnished in writing by or at the
direction of the Note Issuer to the Agent in connection with the negotiation,
preparation or delivery of this Note Purchase Agreement and the other Note
Documents or included herein or therein or delivered pursuant hereto or thereto,
when taken as a whole, do not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements herein or
therein, in light of the circumstances under which they were made, not
materially misleading. All written information furnished after the date hereof
by or at the request of the Note Issuer or otherwise pursuant to this Agreement
to the Agent in connection with this Note Purchase Agreement and the other Note
Documents and the transactions contemplated hereby and thereby will be true,
complete and accurate in all material respects, or (in the case of projections)
based on reasonable estimates, on the date as of which such information is
stated or certified. The Administrator has certified to the Note Issuer that
there is no fact known to a Responsible Officer of the Administrator, after due
inquiry, that would reasonably be expected to have a Material Adverse Effect
that has not been disclosed herein, in the other Note Documents or in a report,
financial statement, exhibit, schedule, disclosure letter or other writing
furnished to the Agent for use in connection with the transactions contemplated
hereby or thereby.

           7.14 Tangible Net Worth. On the Effective Date, the Tangible Net
                ------------------
Worth of the Note Issuer is not less than zero.

                                      -39-



           7.15 ERISA. The Note Issuer does not make and has never made or been
                -----
required to make direct contributions to any Plan and has no Subsidiaries that
do so, have ever done so or been required to do so, and, to the knowledge of the
Note Issuer, each other Plan and each Multiemployer Plan (if any) is in
compliance in all material respects with, and has been administered in all
material respects in compliance with, the applicable provisions of ERISA, the
Code and any other federal or state law. To the knowledge of the Note Issuer, no
Reportable Event has occurred under any Plan or Multiemployer Plan which is
likely to result in the termination of such Plan for purposes of Title IV of
ERISA.

           Section 8. Covenants of the Note Issuer. The Note Issuer covenants
                      ----------------------------
and agrees with the Agent, the Purchasers and the Noteholders that, so long as
any Note is outstanding and until payment in full of all Secured Obligations:

           8.01 Litigation. The Note Issuer will promptly, and in any event
                ----------
within ten (10) days after service of process on any of the following, give to
the Agent, the Purchasers and the Noteholders notice of (A) all litigation,
actions, suits, arbitrations, investigations (including, without limitation, any
of the foregoing which are pending or threatened) or other legal or arbitrable
proceedings affecting the Note Issuer or any of its property and (B) all
litigation, actions, suits, arbitrations, investigations (including, without
limitation, any of the foregoing which are pending or threatened) or other legal
or arbitrable proceedings affecting any of the Note Issuer's Affiliates or
affecting any of the Note Issuer's Affiliates' Property before any Governmental
Authority that (i) questions or challenges the validity or enforceability of any
of the Note Documents or any action to be taken in connection with the
transactions contemplated hereby or thereby, (ii) makes a claim or claims in an
aggregate amount greater than $50,000.00, or (iii) which, individually or in the
aggregate is reasonably likely to be determined adversely to any such Affiliate
and, if so determined, would be reasonably likely to have a Material Adverse
Effect or (iv) requires filing with the Securities and Exchange Commission in
accordance with the 1934 Act and any rules thereunder.

           8.02 Existence, etc.  The Note Issuer will:
                ---------------

           (a) preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises (provided that nothing in this
Section 8.02(a) shall prohibit any transaction expressly permitted under Section
8.03 hereof), unless the failure to do so will not have a Material Adverse
Effect;

           (b) comply with the requirements of all applicable laws, rules,
regulations and orders of Governmental Authorities (including, without
limitation, all environmental laws) if failure to comply with such requirements
would be reasonably likely (either individually or in the aggregate) to have a
Material Adverse Effect;

           (c) keep adequate records and books of account, in which complete
entries will be made in accordance with GAAP consistently applied;

           (d) not move its registered office from the address referred to in
Section 7.11 or change its jurisdiction of organization from the jurisdiction
referred to in Section 7.11 unless it shall have provided the Agent thirty (30)
days' prior written notice of such change; and give the

                                      -40



Agent at least thirty (30) days' prior written notice of any change by the
Administrator of the location of its books and records from the address referred
to in Section 7.12 (or any other address previously identified by notice given
to the Agent pursuant to this Section 8.02(d);

          (e) pay and discharge all taxes, assessments and governmental charges
or levies imposed on it or on its income or profits or on any of its Property
prior to the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested in good faith
and by proper proceedings and against which adequate reserves are being
maintained in conformity with GAAP; provided that this shall not include the
payment of any Mortgagor or Mortgaged Property taxes, assessments, governmental
charges or levies subject to the servicing standards set forth in Section 13.13
hereof; and

          (f) upon reasonable notice, permit representatives of the Agent
(accompanied by representatives of any Purchaser or Noteholder who desire to do
so), during normal business hours, to examine, copy and make extracts from its
books and records, to inspect any of its Properties, and to discuss its business
and affairs with its officers, all to the extent reasonably requested by the
Agent (or the accompanying Purchaser or Noteholder).

          8.03  Prohibition of Fundamental Changes. The Note Issuer shall not
                ----------------------------------
enter into any transaction of merger or consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or
dissolution), become a corporation or otherwise reorganize itself; or sell all
or substantially all of its assets, if after giving effect to any of the
foregoing, a Default or Event of Default would exist hereunder.

          8.04  Borrowing Base Deficiency. If at any time there exists a
                -------------------------
Borrowing Base Deficiency the Note Issuer shall cure same in accordance with
Section 3.12 hereof.

          8.05  Notices. The Note Issuer shall give notice to the Agent, the
                -------
Purchaser and the Noteholders:

          (a) promptly upon receipt of notice or knowledge of the occurrence of
any Default or Event of Default;

          (b) with respect to any Mortgage Loan pledged hereunder, promptly upon
receipt of notice or knowledge that the underlying Mortgaged Property has been
damaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado
or other casualty, or otherwise damaged so as to affect adversely the Collateral
Value of such pledged Mortgage Loan;

          (c) promptly upon receipt of notice or knowledge of (i) any default
related to any Collateral, (ii) any Lien or security interest (other than
security interests created hereby or by the other Note Documents) on, or claim
asserted against, any of the Collateral or (iii) any event or change in
circumstances which could reasonably be expected to have a Material Adverse
Effect;

          (d) promptly upon any material change in the market value of any or
all of the Note Issuer's assets;

          (e) promptly upon notice or knowledge of the occurrence of any event
(other than a Reportable Event) described in Section 9(o) hereof without regard
to its materiality; and

                                      -41-



          (f) no later than five Business Days after the end of each month, of
all amounts borrowed under the Existing Financing Documents during such month,
in the form of a daily tabulation of all such amounts borrowed;

          (g) upon any material amendment to the Existing Financing Documents,
any decrease in the gross amount available to be borrowed thereunder, or any
change in custodian or custodial arrangements relating thereto; and

          (h) promptly upon the occurrence of any default or event of default
under the Existing Financing Documents.

          Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Administrator setting forth details of
the occurrence referred to therein and stating what action the Note Issuer has
taken or proposes to take with respect thereto (and each such statement shall
for all purposes hereof constitute a statement of the Note Issuer for which it
is responsible).

          8.06  Reports. The Note Issuer shall provide each of the Agent, each
                -------
Purchaser and each Noteholder with a copy of each statement and report produced
by the Servicer pursuant to Section 5.02 of the Servicing Agreement and each
statement and report produced by the Administrator pursuant to the
Administration Agreement.

          Within ninety (90) days after the end of each calendar year, the Note
Issuer will be required to furnish to each Person who at any time during the
calendar year was a Noteholder or a Purchaser, if requested in writing by such
Person, a statement containing the aggregate amount of interest, the aggregate
amount of fees and the aggregate amount of principal, in each case paid to such
Person, for such calendar year or the applicable portion thereof during which
such Person was a Purchaser or a Noteholder. Such obligation will be deemed to
have been satisfied to the extent that substantially comparable information is
provided pursuant to any requirements of the Code as are from time to time in
force.

          The Note Issuer shall also provide the Agent, each Purchaser and each
Noteholder such other information within its control as may be reasonably
requested.

          8.07  Transactions with Affiliates. The Note Issuer will not enter
                ----------------------------
into any transaction, including without limitation any purchase, sale, lease or
exchange of property or the rendering of any service (other than the services
contemplated in the Administration Agreement and the Servicing Agreement), with
any Affiliate unless such transaction is (a) otherwise permitted under this Note
Purchase Agreement (including purchases under the Loan Purchase Agreement and
sales under Takeout Commitments) at prices that it reasonably determines to be
on an arm's-length basis, of loans that are not, or thereupon cease to be,
included in the Borrowing Base), (b) in the ordinary course of the Note Issuer's
business and (c) upon fair and reasonable terms no less favorable to the Note
Issuer than it would obtain in a comparable arm's length transaction with a
Person which is not an Affiliate, or make a payment that is not otherwise
permitted by this Section 8.07 to any Affiliate.

          8.08  Limitation on Liens. The Note Issuer will defend the Collateral
                -------------------
against, and will take such other action as is necessary to remove, any Lien,
security interest or claim on

                                      -42-



or to the Collateral, other than the security interests created under this Note
Purchase Agreement, and the Note Issuer will defend the right, title and
interest of the Agent, the Purchasers and the Noteholders in and to any of the
Collateral against the claims and demands of all persons whomsoever.

          8.09  Limitation on Guarantees and Other Indebtedness. The Note Issuer
                -----------------------------------------------
shall not create, incur, assume or suffer to exist any Guarantees on behalf of
any Affiliate or any other entity. The Note Issuer shall incur no Indebtedness,
other than the Indebtedness evidenced by this Note Purchase Agreement and the
Notes.

          8.10  Limitation on Distributions. The Note Issuer shall not make any
                ---------------------------
payment on account of, or set apart assets for, a sinking or other analogous
fund for the purchase, redemption, defeasance, retirement or other acquisition
of any interest in or obligation of the Note Issuer, whether now or hereafter
outstanding, either directly or indirectly, whether in cash, property or
securities or in obligations of the Note Issuer, except (a) as permitted or
required in the Note Documents to the parties thereto or as contemplated in the
Trust Agreement, the Servicing Agreement and the Administration Agreement as in
effect on the date hereof (or as amended with the prior written signed consent
of the Agent, the Purchasers and the Noteholders after the date hereof) and (b)
at any other time when no Borrowing Base Deficiency exists, or would result,
from such distribution.

          8.11  Maintenance of Tangible Net Worth. The Note Issuer shall not
                ---------------------------------
permit its Tangible Net Worth at any time to be less than $1.00.

          8.12  Servicer; Servicing Tape. The Note Issuer shall provide to the
                ------------------------
Agent on the fifth Business Day of each month a computer readable file
containing servicing information, including without limitation those fields
specified by the Agent from time to time, on a loan-by-loan basis and in the
aggregate, with respect to the Mortgage Loans serviced by any Servicer. The Note
Issuer shall not cause the Mortgage Loans to be serviced by any servicer other
than the Servicer or a sub-servicer expressly approved in writing by the Agent.

          8.13  Maintenance of Liquidity. The Note Issuer shall ensure that, as
                ------------------------
of the end of each calendar month, it has Cash Equivalents in an amount of not
less than $1.00 that are unencumbered except for the Liens granted hereunder.

          8.14  Required Filings. The Note Issuer shall promptly provide the
                ----------------
Agent with copies of all documents which the Note Issuer or any Affiliate of the
Note Issuer is required to file with the Securities and Exchange Commission or
any Governmental Authority which may be substituted therefor in accordance with
the 1934 Act or any rules thereunder; provided that the Note Issuer shall not be
required to provide the Agent with filings of a standard nature relating to the
issuance of securities under a REMIC or similar pass-through trust.

          8.15  No Adverse Selection. The Note Issuer shall not select the
                --------------------
Collateral in a manner so as to adversely affect the interests of the Agent, the
Purchasers and the Noteholders.

          8.16  Remittance of Prepayments. The Note Issuer shall remit, with
                -------------------------
sufficient detail to enable the Agent, the Purchasers and the Noteholders to
appropriately identify the Mortgage Loan to which any amount remitted applies,
to the Agent on each Thursday (or the

                                      -43-



next Business Day if such Thursday is not a Business Day) all principal
prepayments that the Note Issuer has received during the previous week.
Prepayments of a Loan pursuant to this Section 8.16 shall not be subject to any
prior notice requirement or a Breakage Fee. Notwithstanding anything herein to
the contrary, the Note Issuer shall remit to the Agent, with sufficient detail
to enable the Agent, the Purchasers and the Noteholders to appropriately
identify the Mortgage Loan to which any amount remitted applies, any prepayments
of a Mortgage Loan as a result of the Mortgagor's right of recession immediately
upon receipt.

          8.17  Wet Funding Schedules. The Note Issuer shall cause each Wet
                ---------------------
Funding Schedule delivered by the Note Issuer to the Agent to contain a correct
and complete duplicate of all Wire issuance instructions delivered by the Seller
to the Custodian and the Disbursement Agent.

          8.18  Servicing Agreements. The Note Issuer shall not enter into a
                --------------------
servicing agreement other than the Servicing Agreement with respect to any
Mortgage Loans included in the Borrowing Base in connection with any Note
Purchase without the prior signed written consent of the Agent, which may be
withheld in its sole discretion.

          Section 9. Events of Default. Each of the following events shall
                     -----------------
constitute an event of default (an "Event of Default") hereunder:
                                    ----------------

          (a) the Note Issuer shall default in the payment of any principal of
or interest on any Note when due (whether at stated maturity, upon acceleration
or at mandatory prepayment) or the Seller shall default in the payment of any
amount payable under Section 4.01(a) of the Loan Purchase Agreement as and when
due thereunder; or

          (b) the Note Issuer shall default in the payment of any other amount
payable by it hereunder or under any other Note Document after notification by
the Agent of such default, and such default shall have continued unremedied for
one (1) Business Day; or

          (c) any representation, warranty or certification made or deemed made
herein or in any other Note Document by the Note Issuer or the Seller or any
certificate furnished to the Agent or any Purchaser or Noteholder pursuant to
the provisions hereof or thereof shall prove to have been false or misleading in
any material respect as of the time made or furnished (other than the
representations and warranties set forth in Schedule 1 to the Loan Purchase
Agreement, which shall be considered solely for the purpose of determining the
Collateral Value of the Mortgage Loans; unless (i) the Note Issuer or the Seller
shall have made any such representations and warranties with knowledge that they
were materially false or misleading at the time made or (ii) any such
representations and warranties have been determined by the Agent in its sole
discretion to be materially false or misleading on a regular basis); or

          (d) the Note Issuer shall fail to comply with any of the requirements
of Section 8.02(a), Section 8.03 through 8.13 and 8.15 through 8.18 hereof; or
the Note Issuer shall otherwise fail to comply with any of the requirements of
Section 8.02 (b) through (f) and 8.14 hereof and such default shall continue
unremedied for a period of five (5) Business Days; or the Note Issuer or the
Seller shall fail to observe or perform any other covenant or agreement

                                      -44-



contained in this Note Purchase Agreement or any other Note Document and such
failure to observe or perform shall continue unremedied for a period of five (5)
Business Days; or

          (e) a final judgment or judgments for the payment of money (i) in any
amount shall be rendered against the Note Issuer or (ii) in excess of the
greater of (x) $500,000 or (y) any greater level applicable to such judgments as
may cause an "event of default" under any Other Financing Document, but in no
event greater than $5,000,000 in the aggregate shall be rendered against the
Seller or any of the Note Issuer's or the Seller's Affiliates by one or more
courts, administrative tribunals or other bodies having jurisdiction and the
same shall not be satisfied, discharged (or provision shall not be made for such
discharge) or bonded, or a stay of execution thereof shall not be procured,
within thirty (30) days from the date of entry thereof or such other date as set
forth therein, and the Note Issuer or any such Affiliate shall not, within said
period of thirty (30) days, or such longer period during which execution of the
same shall have been stayed or bonded, appeal therefrom and cause the execution
thereof to be stayed during such appeal; or

          (f) the Note Issuer or the Seller shall admit in writing its inability
to pay its debts as such debts become due; or

          (g) the Note Issuer, the Seller or any of the Note Issuer's or the
Seller's Affiliates shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee, examiner or liquidator
or the like of itself or of all or a substantial part of its property, (ii) make
a general assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code, (iv) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement or winding-up, or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code or (vi) take any corporate or other
action for the purpose of effecting any of the foregoing; or

          (h) a proceeding or case shall be commenced, without the application
or consent of the Note Issuer or the Seller or any of the Note Issuer's or the
Seller's Affiliates in any court of competent jurisdiction, seeking (i) the
reorganization, liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of the Note Issuer's or the Seller's or any of the
Note Issuer's or Seller's Affiliates debts, (ii) the appointment of, or the
taking of possession by, a receiver, custodian, trustee, examiner, liquidator or
the like of the Note Issuer or the Seller or any of the Note Issuer's or the
Seller's Affiliates or of all or any substantial part of its property, or (iii)
similar relief in respect of the Note Issuer or the Seller or any such Affiliate
under any law relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or composition or adjustment of debts,
and, in the case of the Seller or any Affiliate of the Seller other than the
Note Issuer, such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be entered
and continue unstayed and in effect, for a period of forty-five (45) or more
days; or an order for relief against the Note Issuer, the Seller or any of the
Note Issuer's or the Seller's Affiliates shall be entered in an involuntary case
under the Bankruptcy Code; or

          (i) the Custodial Agreement, the Administration Agreement, the
Servicing Agreement or any Note Document shall for whatever reason be terminated
without the prior

                                      -45-



signed written consent of the Agent, the Purchasers and the Noteholders or cease
to be in full force and effect, or the enforceability thereof shall be contested
by the Note Issuer or any New Century Party; or

     (j) the Note Issuer shall grant, or suffer to exist, any Lien on any
Collateral except the Liens contemplated hereby; or the Liens contemplated by
the Note Documents shall cease to be first priority perfected Liens on the
Collateral in favor of the Agent, for the benefit of the Agent, the Purchasers
and the Noteholders or shall be Liens in favor of any Person other than the
Agent, for the benefit of the Agent, the Purchasers and the Noteholders; or

     (k) the Note Issuer, the Seller or any of the Note Issuer's Affiliates
shall be in default under any material note, indenture, loan, guaranty, swap
agreement or any other contract to which it is a party, which default (i)
involves the failure to pay a matured obligation in excess of the greater of (x)
$1.00 or (y) any greater level applicable to such defaults as may cause an
"event of default" under any Other Financing Document, but in no event greater
than $500,000, or (ii) permits the acceleration of the maturity of obligations
in excess of, or in the case of any swap agreement or other contract, permits
its early termination, close-out or liquidation, by any other party to or
beneficiary of such note, indenture, loan agreement, guaranty, swap agreement or
other contract, in any case if the aggregate amount of the obligations
accelerated or due or that may become due as a result of the early termination,
close-out or liquidation, exceeds the greater of (x) $1.00 or (y) any greater
level applicable to such defaults as may cause an "event of default" under any
Other Financing Document but in no event greater than $500,000; provided that
with respect to any of the foregoing related to an equipment financing lease
transaction, the Note Issuer shall not be in default hereunder if the Note
Issuer, the Seller or relevant Affiliate is negotiating in good faith with the
related creditor for a period not in excess of 60 days; or

     (l) [Reserved];

     (m) the discovery by the Agent or any Purchaser or Noteholder of a
previously undisclosed condition or event which existed at or prior to the
execution hereof and which the Majority Investors, in their sole discretion,
exercised in good faith, determine materially and adversely affects: either (x)
the condition (financial or otherwise) of the Note Issuer, any New Century Party
or the Note Issuer's or any New Century Party's Affiliates; or (y) the ability
of the Note Issuer to fulfill its respective obligations under this Note
Purchase Agreement; or

     (n) Mortgage Loans totaling more than 10% of the aggregate principal
balance of the portfolio of Mortgage Loans serviced by the Servicer for the Note
Issuer shall be more than thirty (30) days delinquent; or

     (o) (1) any Person shall engage in any "prohibited transaction" (as defined
in Section 406 of ERISA or Section 4975 of the Internal Revenue Code) involving
any Plan, (2) any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan, (3) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or institution of
proceedings is, in the reasonable opinion of the Agent, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, and, in the case of
a Reportable Event, the continuance

                                      -46-



of such Reportable Event unremedied for ten (10) days after notice of such
Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA is given or
the continuance of such proceedings for ten (10) days after commencement
thereof, as the case may be, (4) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (5) any withdrawal liability to a Multiemployer
Plan shall be incurred by the Note Issuer, the Seller or any of the Seller's or
the Note Issuer's Affiliates or (6) any other event or condition shall occur or
exist; and in each case in clauses (1) through (6) above, such event of
condition, together with all other such events or conditions, if any, is likely
to subject the Note Issuer, the Seller or any of the Seller's or the Note
Issuer's Affiliates to any tax, penalty or other liabilities in the aggregate
material in relation to the business, operations, property or financial or other
condition of the Note Issuer, any New Century Party or any of the Note Issuer's
or New Century Party's Affiliates; or

          (p) the occurrence of any event of default or event which, solely with
the passage of time and which is not amenable to cure, would constitute an event
of default under the Existing Financing Documents; or

          (q) the declaration of any event of default of the Servicer under the
Servicing Agreement.

          Section 10. Remedies Upon Default.
                      ---------------------

          10.01  Acceleration of Principal. An Event of Default shall be deemed
                 -------------------------
to be continuing unless expressly waived by the Majority Investors in writing.
Upon the occurrence of one or more Events of Default hereunder, the Purchaser's
several obligations to make further Note Purchases shall automatically terminate
without further action by any Person. Upon the occurrence of one or more Events
of Default other than those referred to in Section 9(g) or 9(h), the Agent may
and, upon instructions from the Majority Investors, shall, immediately declare
the principal amount of the Notes then outstanding to be immediately due and
payable, together with all interest thereon and fees and expenses accruing under
this Note Purchase Agreement (including any Facility Fee, whether or not yet due
and payable). Upon the occurrence of an Event of Default referred to in Sections
9(g) or 9(h), such amounts shall immediately and automatically become due and
payable without any further action by any Person. Upon such declaration or such
automatic acceleration, the balance then outstanding on each Note shall become
immediately due and payable, without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the Note
Issuer.

          10.02  Possession of Files Relating to the Collateral. Upon the
                 ----------------------------------------------
occurrence of one or more Events of Default, the Agent shall have the right to
obtain physical possession of the servicing records and all other files of the
Note Issuer (whether maintained by it or by the Servicer) relating to the
Collateral and all documents relating to the Collateral which are then or may
thereafter come in to the possession of the Note Issuer or any third party
acting for the Note Issuer and the Note Issuer shall deliver to the Agent such
assignments as the Agent shall request. The Agent, the Purchasers and the
Noteholders shall be entitled to specific performance of all agreements of the
Note Issuer contained in this Note Purchase Agreement.

          10.03  Action Regarding Collateral. After an Event of Default (and
                 ---------------------------
following the expiration of any applicable cure period), the Agent may exercise,
in addition to all other rights

                                      -47-



and remedies granted to it in this Note Purchase Agreement and in any other
instrument or agreement securing, evidencing or relating to the Secured
Obligations, all rights and remedies of a secured party under the Uniform
Commercial Code. Without limiting the generality of the foregoing, the Agent,
without demand of performance or other demand or notice (except as specifically
provided herein) of any kind to the Note Issuer, or any other Person, all of
which are hereby expressly waived, may forthwith apply the cash, if any, then
held by it as part of the Collateral to the payment of any of the Secured
Obligations. If it is not holding any cash as part of the Collateral or the cash
so applied is not sufficient to pay in full all of the Secured Obligations, the
Agent may thereafter collect, receive, appropriate, retain, and realize upon any
of the Collateral. The Agent may forthwith sell, assign, give an option or
options to purchase, contract to sell, or otherwise dispose of and deliver any
of the Collateral in one or more parcels at such public or private sale or
sales, at such place or places, at such price or prices, and upon such other
terms and conditions as the Agent may deem best for the interests of the Agent,
the Purchasers and the Noteholders. The Agent shall in any event act in all
respects in a commercially reasonable manner. These dispositions may be for cash
or on credit or for future delivery without assumption of any credit risk. In
any of these dispositions the Agent, the Purchasers and the Noteholders may
purchase all or any part of the Collateral free from any claim or right of any
kind, including any equity or rights of redemption, of the Note Issuer, which
right or equity is hereby waived or released. In any of these dispositions the
Agent may deliver, assign, and transfer to the transferee the Collateral so
sold. Each transferee upon any transfer or other disposition shall hold the
property absolutely free from any claim or right of any kind, including any
equity or rights of redemption, of the Note Issuer. The Note Issuer agrees that
the Agent need give only such notice of the time and place of any public or
private sale (including any adjourned private sale) or other intended
disposition as may be required by market conditions and standards of commercial
reasonableness and that the Agent need not in any event give more than five (5)
Business Days' notice that the sale or disposition is to take place. The Note
Issuer further agrees, at the Agent's request, to assemble the Collateral and
make it available to the Agent at places which the Agent shall reasonably
select, whether at the Note Issuer's, the Servicer's, or the Custodian's
premises or elsewhere.

          The Agent shall not be obligated to consummate any sale pursuant to
any notice of sale. The Agent may, without notice or publication, adjourn any
public or private sale or cause it to be adjourned from time to time by
announcement at the time and place fixed for the sale. The sale may then be made
at any time or place to which it was adjourned. If any of the Collateral is sold
on credit or for future delivery, the Collateral so sold may be retained by the
Agent until the selling price is paid by the purchaser. The Agent, the
Purchasers and the Noteholders shall not incur any liability if the purchaser
fails to take up and pay for the Collateral so sold and, in that case, the
Collateral may again be sold upon appropriate notice. The Agent may, instead of
exercising the power of sale, proceed by a suit at law or in equity to foreclose
its security interest and sell any of the Collateral under a judgment or decree
of a court of competent jurisdiction.

          10.04 Deficiency. If the proceeds of sale, collection, foreclosure, or
                ----------
other realization on the Collateral are insufficient to cover the costs and
expenses (including the fees and disbursements of any attorneys employed by the
Agent to collect such deficiency) of such realizing on the Collateral and the
payment in full of the Secured Obligations, the Note Issuer shall remain liable
for any deficiency (plus accrued interest thereon as contemplated pursuant to

                                      -48-



Section 3.11(b) hereof) and the New Century Parties shall remain jointly and
severally liable as contemplated pursuant to, and as limited by, Section 4.01(a)
of the Loan Purchase Agreement.

          10.05  Private Sale. The Agent, the Purchasers and the Noteholders
                 ------------
shall incur no liability as a result of the sale of any of the Collateral at any
private sale. The Agent shall in any event act in a commercially reasonable
manner. The Note Issuer hereby waives (a) any claims against the Agent, the
Purchasers and the Noteholders arising because the price at which the Collateral
may have been sold at a private sale was less than the price that might have
been obtained at a public sale or was less than the aggregate amount of the
Secured Obligations, even if the Agent accepts the first offer received and does
not offer the Collateral to more than one offeree and (b) all rights of
redemption, stay, or appraisal which it has under any rule of law or (to the
extent permitted) statute whether now existing or hereafter adopted.

          10.06  Default Rate of Interest. To the extent permitted by applicable
                 ------------------------
law, the Note Issuer shall be liable to the Agent, the Purchasers and the
Noteholders for interest at the Default Rate on any amounts owing by the Note
Issuer hereunder from the date such amounts became due and payable hereunder
until such amounts are (i) paid in full by the Note Issuer or (ii) satisfied in
full by the exercise of the Agent's rights hereunder.

          10.07  Application of Proceeds. The proceeds of any sale or other
                 -----------------------
realization of any of the Collateral, and any other cash at the time held by the
Agent under this Note Purchase Agreement, shall be applied by the Agent in the
following order of priority:

                 First, to the payment of the costs and expenses of the sale and
     all expenses (including the reasonable fees and expenses of counsel),
     liabilities, advances made or incurred by the Agent and every other kind of
     expense incurred incidental to the care or safekeeping of any of the
     Collateral or in any way relating to the Collateral.

                 Second, to the payment of all accrued interest under any Note
     due or past due.

                 Third, to the payment of principal upon all of any Note due or
     past due.

                 Fourth, to the payment of all fees payable under Section
     3.11(d) and all Facility Fees due or past due.

                 Fifth, to the payment of all other amounts owing under this
     Note Purchase Agreement.

                 Sixth, to the payment of all other amounts owed by the Note
     Issuer to the Agent, any Purchaser or any Noteholder or any Affiliate of
     any of them under any of the other Note Documents.

                 Seventh, to the payment of any remaining Secured Obligations.

                 Eighth, to the Owner Trustee payment of all amounts owed by the
     Note Issuer to the Owner Trustee pursuant to the Transaction Documents.

                                      -49-



                 Ninth, after all of the foregoing shall have been paid in full
     and this Note Purchase Agreement shall have been terminated, to the payment
     to the Note Issuer, or to such other Person as a court of competent
     jurisdiction may direct, of any surplus then remaining from the proceeds
     and other cash.

          10.08  Payments on Collateral to the Note Issuer. Upon the occurrence
                 -----------------------------------------
and during the continuance of an Event of Default (or, if the due date for
payment of the principal of the Notes has been accelerated as contemplated in
Section 10.01, regardless of whether the underlying Event of Default is
thereafter continuing) all rights of the Note Issuer to receive any payments
from the Collateral that it would otherwise be authorized to receive shall
cease, and, subject to the Eighth paragraph on application of proceeds in
Section 10.07 hereof, those rights shall become vested in the Agent. The Agent
shall then have the sole right to receive and hold those payments. Any payments
that are received by the Note Issuer contrary to these provisions shall be
received in trust for the benefit of the Agent (for the Agent, the Purchasers
and the Noteholders), shall be segregated from other funds of the Note Issuer,
and shall be promptly paid to the Agent.

          10.09  Cross-Collateralization; Right of Set-Off. If an Event of
                 -----------------------------------------
Default has occurred and either is continuing or has led to an acceleration
under Section 10.01, or if any amount payable hereunder or under any of the
other Note Documents on the Termination Date (or any earlier Maturity Date) is
not paid as and when due, the Agent and each of the Purchasers and the
Noteholders may each, in its sole discretion, proceed, without prior notice to
the Note Issuer (any such notice being expressly waived by the Note Issuer to
the extent permitted by applicable law) against any assets held by it under this
Note Purchase Agreement or any other agreement between it and the Note Issuer
and shall have a right of set-off against, and a right to appropriate and apply,
such amount any and all monies and other property of the Note Issuer, including
any and all deposits (general or special, time or demand, provisional or final),
in any currency, and any and all other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, and in each case at any time held or owing by the Agent,
such Purchaser or Noteholder. Each of the Agent and each Purchaser and
Noteholder agrees promptly to notify the Note Issuer after any such set-off and
application made by it; provided that the failure to give such notice shall not
affect the validity of such set-off and application. In addition, the Agent may,
in its sole discretion upon the occurrence and during the continuation of an
event of default under any other agreement giving rise to Secured Obligations,
proceed against any Collateral and each of the Agent, the Purchasers and the
Noteholders shall have a right to set-off against any Secured Obligations any
amounts (including, without limitation, any rebate of Facility Fee) owed by it
to the Note Issuer under this Note Purchase Agreement.

          10.10  Interest Rate Protection Agreements. If a Default shall occur
                 -----------------------------------
and be continuing, the Agent (on behalf of the Noteholders) may, at its option
(exercised in good faith) and shall, if so directed by the Majority Noteholders,
enter into one or more Interest Rate Protection Agreements covering all or a
portion of the Mortgage Loans pledged hereunder, and provided such Interest Rate
Protection Agreement is commercially reasonable given then-current market
conditions, the Note Issuer shall be responsible for all damages, judgments,
costs and expenses of any kind which may be imposed on, incurred by or asserted
against the Agent (or

                                      -50-



any Noteholder) relating to or arising out of such Interest Rate Protection
Agreements; including without limitation any losses resulting from such Interest
Rate Protection Agreements.

          Section 11. No Duty of Agent. The powers conferred on the Agent
                      ----------------
hereunder are solely to protect the Agent's interests, and those of the
Purchasers and the Noteholders, in the Collateral and shall not impose any duty
upon any of them to exercise or direct the Agent to exercise any such powers.
The Agent shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers, and none of the Agent, any Purchaser or
any Noteholder or any of the officers, directors, employees or agents of any of
them shall be responsible to the Note Issuer or any other Person for any act or
failure to act hereunder relating to the Collateral, except, in the case of the
Agent, as specified in Section 5.07.

          Section 12. The Agent
                      ---------

          12.01 Appointment of Agent. Each Purchaser and Noteholder hereby
                --------------------
irrevocably designates and appoints UBS Warburg as the Agent for such Purchaser
and Noteholder under this Note Purchase Agreement and each other Note Document
and irrevocably authorizes UBS Warburg as the Agent to take such action on its
behalf under the provisions of this Note Purchase Agreement, the other Note
Documents and all ancillary documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this Note
Purchase Agreement, the other Note Documents and all ancillary documents
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Note Purchase
Agreement, any other Note Document or otherwise, the Agent shall not have any
duties or responsibilities except those expressly set forth herein and in the
other Note Documents, or any fiduciary relationship with any Purchaser or
Noteholder and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Note Purchase Agreement, any
other Note Document or any ancillary document or otherwise exist against the
Agent. Further, without limiting any of the foregoing, each Purchaser and
Noteholder hereby confirms its irrevocable authorization to the Agent to execute
all such the acknowledgments and consents as may be required or deemed by the
Agent to be desirable in the exercise of its functions in connection with the
Collateral and ratifies such action by the Agent.

          12.02 Delegation. The Agent may execute any of its duties under
                ----------
this Note Purchase Agreement, the other Note Documents and all ancillary
documents by or through agents or attorneys-in-fact and shall be entitled to the
advice of counsel concerning all matters pertaining to such duties or functions.

          12.03 Exculpatory Provisions. Neither the Agent nor any of the
                ----------------------
officers, directors, employees, agents, or attorneys-in-fact of the Agent shall
be (i) liable to any Purchaser or Noteholder for any action lawfully taken or
omitted to be taken by such Person under or in connection with any Note Document
or ancillary document (except for such Person's own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction), or (ii)
responsible in any manner to any of the Purchasers or Noteholders for any
recitals, statements, representations or warranties made by the Note Issuer, the
Seller or any agent of the Note Issuer, or any officer or representative of any
of them, contained in any Note Document or ancillary document or certificate,
report, statement or other document referred to or provided for

                                      -51-



in, or received by the Agent under or in connection with, any Note Document or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any Note Document or Collateral or ancillary document or for any
failure of the Note Issuer or the Seller to perform its obligations thereunder.
The Agent shall not be under any obligation to any Purchaser or Noteholder to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Note Purchase Agreement or any
other Note Document or ancillary document or to inspect the properties, books or
records of the Note Issuer, the Seller, the Servicer, the Administrator, the
Custodian or any other Person.

          12.04 Reliance. The Agent shall be entitled to rely, and shall be
                --------
fully protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Note Issuer, the Agent, the Owner Trustee, the
Servicer and the Administrator), independent accountants and other experts
selected by the Agent. The Agent shall be fully justified in failing or refusing
to take any action under this Note Purchase Agreement, the other Note Documents
and all ancillary documents unless it shall first receive such advice or
concurrence of the Purchasers and the Noteholders (or the percentage of them
required hereunder or under another Note Document for the purpose (the "Required
Investors"), as it deems appropriate or it shall first be indemnified to its
satisfaction by the Purchasers and the Noteholders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Note Purchase Agreement, the other Note
Documents and all ancillary documents in accordance with a request of the
Required Investors, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Purchasers and Noteholders.

          12.05 Notice of Default. In no circumstance will the Agent be deemed
                -----------------
to have knowledge or notice of any Default or Event of Default or any duty or
responsibility relating thereto. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
the Agent has received written notice from the Note Issuer, the Seller, the
Owner Trustee, the Administrator, a Purchaser or Noteholder describing such
Default or Event of Default. In the event that the Agent receives such a notice,
the Agent shall promptly give notice thereof to the Purchasers and the
Noteholders. The Agent shall (subject to Section 12.04) take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Investors; provided that unless and until the Agent shall have
received such direction, the Agent may in the interim (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable and in the best
interests of the Purchasers and the Noteholders.

          12.06 Non-Reliance on the Agents. Each Purchaser and Noteholder
                --------------------------
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents or attorneys-in-fact has made any representations
or warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of the Note Issuer or of any matter relating to any
Mortgage Loan or other Collateral, shall be deemed to constitute any
representation or warranty by the Agent to any Purchaser or Noteholder. Each
Purchaser and Noteholder

                                      -52-



represents to the Agent and each other Purchaser and Noteholder that it has,
independently and without reliance upon the Agent or any other Purchaser or
Noteholder and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Note Issuer, the Seller and all other matters relevant to the Note Documents,
the Collateral and the transactions contemplated hereby or thereby and made its
own decision to enter into this Note Purchase Agreement or take any interest in
a Note. Each Purchaser and Noteholder also represents that it will,
independently and without reliance upon the Agent or any other Purchaser or
Noteholder and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking, or voting on the taking or omission of
any, action under or related to this Note Purchase Agreement or any other Note
Document, the Collateral or such transactions, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition or creditworthiness of the Note Issuer and the New
Century Parties. The Agent, however, shall provide the Purchasers and the
Noteholders with copies of all financial statements and projections which come
into the possession of the Agent in its capacity as such pursuant to the Note
Documents and copies of all other documents delivered to the Agent hereunder or
under any other Note Document which such Purchaser or Noteholder may request, at
the cost and expense of such Purchaser or Noteholder.

          12.07 Indemnification by Purchasers. (a) Each of the Purchasers
                -----------------------------
agrees to indemnify the Agent in its capacity as such (to the extent not
reimbursed by the Note Issuer and without limiting the obligation of the Note
Issuer to do so), from and against any and all Costs referred to in Section
13.03(a) hereof and any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements referred
to in any other subsection of Section 13.03. The agreements in this provision
shall survive the payment of the Secured Obligations and the termination of this
Note Purchase Agreement.

          (b) The Agent will use its reasonable business judgment in handling
the Collateral and in the enforcement of its rights hereunder and realization
upon the Collateral but shall not be liable to the Purchasers or the Noteholders
or any other Person for any action taken or omitted to be taken in good faith or
on the written advice of counsel or otherwise as contemplated in Paragraph 12.03
hereof. Each of the Purchasers and Noteholders expressly releases the Agent from
any and all liability and responsibility (express or implied), for any loss,
depreciation of or delay in collecting or failing to realize on any Collateral,
the Secured Obligations or any credit support therefor (including the
obligations of the New Century Parties in Section 4.01(a) of the Loan Purchase
Agreement) and for any mistake, omission or error in judgment in passing upon or
accepting any Collateral or in making (or in failing to make) examinations or
audits or for granting indulgences or extensions to the Note Issuer or the
Seller, any account debtor or any guarantor in respect of any of the Collateral,
other than resulting from the Agent's gross negligence or willful misconduct, as
finally determined by a court of competent jurisdiction.

          12.08 The Agent in its Individual Capacity. The Agent may make loans
                ------------------------------------
to, and generally engage in any kind of business with the Note Issuer and the
New Century Parties and their Affiliates as though it were not the Agent
hereunder, and it shall have no duty to account to any Purchaser or Noteholder
therefor.

                                      -53-



          12.09 Successor Agent. The Agent may resign upon 30 days' notice to
                ---------------
the Purchasers and Noteholders and such resignation shall be effective upon the
appointment of a successor Agent acting in the same capacity. If the Agent shall
resign, the Purchasers and the Noteholders shall appoint a successor Agent,
whereupon such successor Agent shall succeed to the rights, powers and duties of
the Agent, and the term "Agent" shall mean such successor Agent effective upon
its appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act or deed on the part of such
former Agent or any of the parties to this Note Purchase Agreement. After any
retiring Agent's resignation hereunder, the provisions of this Section 12 and of
Section 13 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Agent.

          12.10 Arrangements Requiring Consent of Purchasers and Noteholders;
                -------------------------------------------------------------
Agent's Discretion. Notwithstanding anything contained in this Note Purchase
- ------------------
Agreement to the contrary, the Agent shall not, without the prior written
consent of all Purchasers and Noteholders, agree to any extension of the
Termination Date. In all other respects the Agent is authorized by each of the
Purchasers and Noteholders to take such actions or omit such actions under this
Note Purchase Agreement and any other Note Document upon the direction or
consent of the percentage of Purchasers, Noteholders or Purchasers and
Noteholders (where applicable, with the vote of the Agent itself) as is
contemplated in this Note Purchase Agreement or such other Note Document and, in
all other cases, as the Agent, in its reasonable discretion, deems to be
advisable and in the best interest of the Purchasers and the Noteholders and,
where it is affected, the Agent itself. Notwithstanding any provision to the
contrary contained in this Note Purchase Agreement, each Purchaser and
Noteholder hereby authorizes the Agent to take such actions or fail to take such
actions as it, in its reasonable discretion, deems to be advisable and in the
best interest of the Purchasers and the Noteholders and, where it is affected,
the Agent itself in connection with (a) the exercise of (i) any and all rights
and remedies under this Note Purchase Agreement and any other Note Document or
related document (including but not limited to the exercise of rights and
remedies under Section 10 hereof), and (ii) its discretion in determining
compliance with the eligibility requirements of Mortgage Loans and establishing
their Collateral Value, and/or (b) curing any ambiguity, defect or inconsistency
in the terms of this Note Purchase Agreement or any other Note Document.

          12.11 Nonconsenting Purchasers and Noteholders. In the event any
                ----------------------------------------
Purchaser's or Noteholder's consent is sought pursuant to the provisions of this
Note Purchase Agreement or any other Note Document and such Purchaser or
Noteholder does not respond to the relevant request for such consent within ten
(10) days after such request is made to such Purchaser or Noteholder, such
failure to respond shall be deemed a consent. In addition, in the event that any
Noteholder declines to give its consent to any such request, it is hereby
mutually agreed that the any Purchaser or other Noteholder shall have the right
(but not the obligation) to purchase such Noteholder's Notes for the full
principal amount thereof together with accrued interest thereon to the date of
such purchase.

          12.12 Refund of Payments. If the Agent is required at any time to
                ------------------
rebate or otherwise return to the Note Issuer or the Seller or to a trustee,
receiver, liquidator, custodian or other similar official any portion of the
payments received by the Agent for distribution hereunder in respect of any of
the Secured Obligations as result of a bankruptcy or similar

                                      -54-



proceeding with respect to the Note issuer, the Seller or any other Person or
otherwise, then each Purchaser and Noteholder shall, on demand of the Agent,
forthwith return to the Agent its ratable share of any such payments made to
such Purchaser or Noteholder by the Agent, together with its ratable share of
interest and/or penalties, if any, payable by the Agent, the Purchasers or the
Noteholders, as the case may be. This provision shall survive the termination of
this Note Purchase Agreement.

          12.13 Relationship. The Obligors acknowledge that the relationship
                ------------
between and among the Agent and the Purchasers and Noteholders shall not be
construed as giving rise to or constituting a joint venture, and the Purchasers
and Noteholders confirm that neither the Agent nor any other Purchaser or
Noteholder is a partner or joint venturer with any other party to this Note
Purchase Agreement or any of the other Note Documents.

          12.14 Purchaser Funding to the Agent. Unless the Agent shall have been
                ------------------------------
notified in writing by any Purchaser prior to the time for any Note Purchase
that such Purchaser will not make the amount which would constitute the purchase
price of the Notes to be purchased by it in that Note Purchase available to the
Agent as required herein on the relevant Note Purchase Date, the Agent may
assume that such Purchaser will make such amount available to the Agent on the
Note Purchase Date and, notwithstanding anything to the contrary elsewhere in
this Note Purchase Agreement, the Agent may, in reliance upon such assumption,
make available to the Note Issuer (as provided herein) a corresponding amount. A
certificate of the Agent submitted to any Purchaser with respect to any amount
owing under this subsection shall be conclusive, absent manifest error. If such
Purchaser's share of the amount made available by the Agent on account of the
purchase price of the Notes included in such Note Purchase is not in fact made
available to the Agent by such Purchaser on the Note Purchase Date, the Agent
shall be entitled to recover such amount with interest thereon at the rate per
annum applicable to the Notes hereunder, on demand, from the Note Issuer without
prejudice to any rights which the Agent or the Note Issuer may have against such
Purchaser hereunder. Nothing contained in this subsection shall relieve any
Purchaser which has failed to make available the purchase price of any Notes to
be purchased by it hereunder from its obligation to do so in accordance with the
terms hereof. Nothing contained herein shall be deemed to obligate the Agent to
make available to the Note Issuer the full amount of the purchase price of the
Notes to be included in a Note Purchase when the Agent has any notice (written
or otherwise) that any of the Purchasers will not advance its ratable portion
thereof.

          12.15 Sharing. (a) If any Purchaser or Noteholder obtains payment in
                -------
respect of any Note or fees or other amount owing to it under this Note Purchase
Agreement or any other Note Document through the exercise of a right of set-off,
banker's lien or counterclaim, or by any other means, in excess of its pro rata
share of the payments at the time owing to all the Purchasers or Noteholders, as
applicable, such Purchaser or Noteholder shall promptly, by way of assignment or
participation, purchase from the other Purchasers or Noteholders, as applicable,
an interest (an "Interest") in the commitment to purchase Notes hereunder of
such Purchaser, or in the Notes of such Noteholder, in such amounts, and shall
make such other adjustments from time to time, as shall be equitable so that all
the Purchasers and Noteholders share such payment in accordance with their
respective ratable shares as provided for in this Note Purchase Agreement. If
payment to a Purchaser or Noteholder obtained by it through the exercise of a
right of setoff, banker's lien, counterclaim or other event as described above
is rescinded or must

                                      -55-



otherwise be restored, each Purchaser and Noteholder that has shared the benefit
of such payment shall, by repurchase of the Interest theretofore sold, return
its share of that benefit (together with its share of any accrued interest
payable with respect thereto) to each Purchaser and Noteholder whose payment has
been rescinded or otherwise restored. All purchases and repurchases of Interests
contemplated in this provision shall be communicated by the relevant Purchasers
and Noteholders by notice to the Agent and the Note Issuer but no such purchase
or repurchase shall require the prior notice or consent of the Note Issuer,
notwithstanding anything to the contrary elsewhere in this Note Purchase
Agreement. Unless and until notified to the contrary, each of the Notes Issuer,
the New Century Parties and the Servicer shall be entitled to rely on the
assumption that the Agent represents all Purchasers and Noteholders.

          (b)   The Note Issuer agrees that any Purchaser or Noteholder so
purchasing such an Interest by way of participation may, to the fullest extent
permitted by law, exercise all rights of payment, including setoff, banker's
lien or counterclaim, with respect to such Interest as fully as if such
Purchaser or Noteholder were a holder of the relevant Notes or portion of
selling Purchaser's right to receive fees relating to its Commitment Percentage.
Except as otherwise expressly provided in this Note Purchase Agreement, if any
Purchaser or Noteholder shall fail to remit to any other Purchaser or Noteholder
an amount payable by such Purchaser or Noteholder as described in Section
12.15(a) on the date when such amount is due, such payments shall be made
together with interest thereon for each date from the date such amount is due
until the date such amount is paid to such other Purchaser or Noteholder, at a
rate per annum equal to the Federal Funds Rate. If under any applicable
bankruptcy, insolvency or other similar law, any Purchaser or Noteholder
receives a secured claim in lieu of a setoff to which Section 12.15(a) applies,
such Purchaser or Noteholder shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Purchasers and Noteholders under this Section 12.15 to share in the
benefits of any recovery on such secured claim.

          12.16 Remittance of Payments by the Agent. Subject to Section 10.07 on
                -----------------------------------
the application of proceeds in the circumstances there specified, the Agent
shall, after receipt of any principal, interest and fees payable under this Note
Purchase Agreement or the Notes, promptly remit to the Purchasers and the
Noteholders: (a) their respective pro rata portions of all fees, (b) interest
computed at the rate and as provided for in this Note Purchase Agreement on all
outstanding Notes, and (c) their respective pro rata portions of all principal
paid on the Notes. At the request of any Purchaser or Noteholder, the Agent will
also supply to the Purchasers and the Noteholders from time to time a statement
in reasonable detail of the amounts distributed by the Agent hereunder to the
Purchasers and the Noteholders since the last such statement (if any).

          Section 13. Miscellaneous.
                      -------------

          13.01 Waiver. No failure on the part of the Agent, any Purchaser or
                ------
any Noteholder to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power or privilege under any Note Document shall
operate as a waiver thereof, nor shall any single or partial exercise by any of
them of any right, power or privilege under any Note Document preclude any other
or further exercise thereof by the same or any other Person or the exercise of
any other right, power or privilege. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.

                                      -56-



          13.02 Notices. Except as otherwise expressly permitted by this Note
                -------
Purchase Agreement, all notices, requests and other communications provided for
herein and under the Custodial Agreement (including without limitation any
modifications of, or waivers, requests or consents under, this Note Purchase
Agreement) shall be given or made in writing (including without limitation by
telex or telecopy) delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof or thereof) or,
in the case of a Noteholder, at its address as identified by notice to the Note
Issuer for recording in the Note Register; or, as to any party, at such other
address as shall be designated by such party in a written notice to the party
giving the notice. Except as otherwise provided in this Note Purchase Agreement
and except for notices given under Section 3 (which shall be effective only on
receipt), all such communications shall be deemed to have been duly given when
transmitted by telex or telecopy or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid.

          13.03 Indemnification and Expenses.
                ----------------------------

          (a) The Note Issuer agrees to hold the Agent, the Purchasers, the
Noteholders, the Owner Trustee and their respective Affiliates and officers,
directors, employees, agents and advisors (each an "Indemnified Party") harmless
                                                    -----------------
from and indemnify any Indemnified Party against all liabilities, losses,
damages, judgments, costs and expenses of any kind (including, without
limitation, the reasonable fees and the expenses of counsel) which may be
imposed on, incurred by or assessed against such Indemnified Party
(collectively, the "Costs") relating to or arising out of a third-party claim
                    -----
(including, without limitation, a claim brought by a Noteholder or a Purchaser
against the Agent, or by the Agent against a Noteholder or a Purchaser)
involving this Note Purchase Agreement, any Note, any other Note Document or any
transaction contemplated hereby or thereby, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this Note
Purchase Agreement, any Note, any other Note Document or any transaction
contemplated hereby or thereby, that, in each case results from anything other
than any Indemnified Party's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction. Without limiting the generality
of the foregoing, the Note Issuer agrees to hold any Indemnified Party harmless
from and indemnify such Indemnified Party against all Costs with respect to all
Mortgage Loans relating to or arising out of any violation or alleged violation
of any securities law, environmental law, rule or regulation or any consumer
credit laws, including without limitation the Truth in Lending Act and/or the
Real Estate Settlement Procedures Act, that, in each case, results from anything
other than such Indemnified Party's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction. In any suit, proceeding
or action brought by an Indemnified Party in connection with any Mortgage Loan
for any sum owing thereunder, or to enforce any provisions of any Mortgage Loan,
the Note Issuer will save, indemnify and hold such Indemnified Party harmless
from and against all expense, loss or damage suffered by reason of any defense,
set-off, counterclaim, recoupment or reduction or liability whatsoever of the
account debtor or obligor thereunder, arising out of a breach by the Note Issuer
of any obligation thereunder or arising out of any other agreement, indebtedness
or liability at any time owing to or in favor of such account debtor or obligor
or its successors from the Note Issuer.

          (b) The Note Issuer also agrees to reimburse an Indemnified Party as
and when billed by such Indemnified Party for all such Indemnified Party's costs
and expenses incurred in

                                      -57-



connection with the enforcement or the preservation of such Indemnified Party's
rights under this Note Purchase Agreement, any Note, any other Note Document or
any transaction contemplated hereby or thereby, including without limitation the
reasonable fees and expenses of its counsel. The Note Issuer may offer to assume
the defense of any action brought against any Indemnified Party, provided that
the counsel proposed to handle the defense be satisfactory to such Indemnified
Party in its sole discretion. If the Indemnified Party agrees to such an
arrangement, then the Note Issuer shall not be liable for any separate counsel
for such Indemnified Party. In no event will an Indemnified Party be liable for
a settlement effected without its prior consent. The Note Issuer hereby
acknowledges that, notwithstanding the fact that each Note is secured by the
Collateral, the obligation of the Note Issuer under each Note is a recourse
obligation of the Note Issuer.

          (c) The Note Issuer agrees to pay as and when billed by the Agent all
of the out-of-pocket costs and expenses (including reasonable fees and expenses
of counsel) incurred by the Agent in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Note Purchase Agreement, any Note, any other Note Document or any other
documents prepared in connection herewith or therewith. The Note Issuer agrees
to pay as and when billed by the Agent all of the out-of-pocket costs and
expenses incurred in connection with the consummation and administration of the
transactions contemplated hereby and thereby including without limitation (i)
all the fees, disbursements and expenses of counsel to the Agent and (ii) all
the due diligence, inspection, testing and review costs and expenses incurred by
the Agent with respect to Collateral under this Note Purchase Agreement,
including, but not limited to, those costs and expenses incurred by the Agent
pursuant to Sections 13.03(a) and 13.14 hereof provided, however, that such fees
of counsel for the Agent in connection with the establishment of the facilities
contemplated by this Note Purchase Agreement shall not in the aggregate exceed
$75,000, plus expenses such as UCC, typing, xerox, Federal Express, etc.

          13.04 Amendments. Except as otherwise expressly provided in this Note
                ----------
Purchase Agreement, any provision of this Note Purchase Agreement may be
modified or supplemented only by an instrument in writing (which may be in
counterparts) signed by the Note Issuer and the Agent, the Purchasers and the
Noteholders. Notwithstanding the foregoing, if under this Note Purchase
Agreement any matter requires only the vote, consent or direction of the
Majority Investors, the Majority Purchasers or the Majority Noteholders, any
amendment hereto to memorialize or give effect to such vote, consent or
direction shall be effective if reflected in a writing or counterparts of a
writing signed by the Note Issuer, the Agent and, as applicable, the Majority
Investors, the Majority Purchasers or the Majority Noteholders; and in any such
case, such amendment shall be binding on all parties hereto. No modification or
amendment of this Note Purchase Agreement may, without the consent of all the
Purchasers and the Noteholder of each outstanding Note affected thereby (i)
change the Maturity Date or the Payment Date of any principal of or interest on
the Note, (ii) reduce the aggregate principal balance of, or interest on, the
Notes, (iii) change the coin or currency in which the Notes or any interest
thereon is payable, (iv) impair the right to institute suit for the enforcement
of any payment on or with respect to the Notes after the Maturity Date, (v)
reduce the percentage of the aggregate principal balance of the Notes, the
consent of the Noteholders of which is required for modification or amendment of
this Note Purchase Agreement or for waiver of compliance with certain provisions
of this Note Purchase Agreement or for waiver of certain defaults, (vi) reduce

                                      -58-



the requirements contained in the Note Purchase Agreement for voting, (vii)
change any obligation of the Note Issuer to maintain an office or agency in the
places and for the purposes required by the Note Purchase Agreement, (viii)
modify any of the provisions of this Note Purchase Agreement regarding payments
on the Notes or (ix) deprive any Purchaser or Noteholder of the benefit of the
security interest in the Collateral as provided in this Note Purchase Agreement.

          13.05 Successors and Assigns. This Note Purchase Agreement shall be
                ----------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. The Note Issuer may not assign or otherwise
transfer any of its rights or obligations under this Note Purchase Agreement
without the prior signed written consent of the Agent, the Purchasers and the
Noteholders. The Purchasers and Noteholders may assign their rights and
obligations hereunder and under the Notes as contemplated in Section 3.01(a)
hereof. Each Noteholder becomes a party hereto and bound hereby by virtue of its
becoming the holder of a Note, without need to execute a counterpart of this
Agreement.

          13.06 Survival. The obligations of the Note Issuer under Sections
                --------
4.03, 13.03 and 13.14 hereof shall survive the payment of all amounts payable
under the Notes and the termination of this Note Purchase Agreement. In
addition, each representation and warranty made or deemed to be made by a
Request for Note Purchase, herein or pursuant hereto shall survive the making of
such representation and warranty, and the Purchasers shall not be deemed to have
waived, by reason of purchasing any Notes, any Default or Event of Default that
may arise because any such representation or warranty shall have proved to be
false or misleading, notwithstanding that any Purchaser or Noteholder or the
Agent may have had notice or knowledge or reason to believe that such
representation or warranty was false or misleading at the time such purchase was
made.

          13.07 Captions. The table of contents and captions and section
                --------
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this Note
Purchase Agreement.

          13.08 Counterparts. This Note Purchase Agreement may be executed in
                ------------
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties hereto may execute this Note
Purchase Agreement by signing any such counterpart.

          13.09 Note Purchase Agreement Constitutes Security Agreement;
                -------------------------------------------------------
Governing Law. This Note Purchase Agreement shall be governed by New York law
- -------------
without reference to choice of law doctrine, and shall constitute a security
agreement within the meaning of the Uniform Commercial Code.

          13.10 Submission To Jurisdiction; Waivers. The Note Issuer hereby
                -----------------------------------
irrevocably and unconditionally:

          (A) TO THE EXTENT PERMITTED BY LAW, SUBMITS FOR ITSELF AND ITS
PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS NOTE PURCHASE
AGREEMENT, EACH NOTE AND THE OTHER NOTE

                                      -59-



DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE PERSONAL JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

          (B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;

          (C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE AGENT
SHALL HAVE BEEN NOTIFIED; AND

          (D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION.

          13.11 Acknowledgments. The Note Issuer hereby acknowledges that:
                ---------------

          (a) it has been advised by counsel in the negotiation, execution and
delivery of this Note Purchase Agreement, the Note and the other Note Documents;

          (b) the Agent, the Purchasers and the Noteholders have no fiduciary
relationship to the Note Issuer, and the relationship between the Note Issuer
and the Agent, the Purchasers and the Noteholders is solely that of debtor and
creditor; and

          (c) no joint venture exists between or among any of the Agent, the
Purchasers, the Noteholders and the Note Issuer.

          13.12 Hypothecation or Pledge of Mortgage Loans. The Agent shall have
                -----------------------------------------
free and unrestricted use of all Collateral and nothing in this Note Purchase
Agreement shall preclude the Agent from engaging in repurchase transactions with
the Collateral or otherwise pledging, repledging, transferring, hypothecating,
or rehypothecating the Collateral, for the benefit of the Agent, the Purchasers
and the Noteholders (as those benefits may be allocated among them by separate
agreement or, so long as there is only a single Noteholder, for its sole
benefit). Nothing contained in this Note Purchase Agreement shall obligate the
Agent to segregate any Collateral delivered to the Agent by or on behalf of the
Note Issuer.

          13.13 Servicing and Administration. The Mortgage Loans shall be
                ----------------------------
serviced in accordance with the provisions of the Servicing Agreement. The Note
Issuer shall be

                                      -60-



administered pursuant to the Administration Agreement, and the activities of the
Note Issuer hereunder shall be performed on behalf of the Note Issuer by the
Administrator.

          13.14 Periodic Due Diligence Review. The Note Issuer acknowledges that
                -----------------------------
the Agent has the right to perform continuing due diligence reviews with respect
to the Mortgage Loans (and in doing so may be accompanied by representatives of
any Purchaser or Noteholder), for purposes of verifying compliance with the
representations, warranties and specifications made hereunder, or otherwise, and
the Note Issuer agrees that upon reasonable (but no less than one (1) Business
Day's) prior notice to the Note Issuer, the Agent or its authorized
representatives (so accompanied, if applicable) will be permitted during normal
business hours to examine, inspect, and make copies and extracts of, the
Mortgage Files and any and all documents, records, agreements, instruments or
information relating to such Mortgage Loans in the possession or under the
control of the Note Issuer or any of its agents and/or the Custodian. The Note
Issuer also shall make available to the Agent a knowledgeable financial or
accounting officer of the Administrator or another agent of the Note Issuer for
the purpose of answering questions respecting the Mortgage Files and the
Mortgage Loans. Without limiting the generality of the foregoing, the Note
Issuer acknowledges that the Purchasers may purchase Notes from the Note Issuer
based solely upon the information provided by the Note Issuer to the Agent in
the Mortgage Loan Tape and the representations, warranties and covenants
contained herein, and that the Agent, at its option or upon direction of the
Majority Purchasers, the Majority Noteholders or the Majority Investors, has the
right at any time to conduct a partial or complete due diligence review on some
or all of the Mortgage Loans securing the Notes, including without limitation
ordering new credit reports (to the extent permitted by applicable law) and new
appraisals on the related Mortgaged Properties and otherwise re-generating the
information used to originate such Mortgage Loan. A Purchaser may underwrite a
Mortgage Loans itself or engage a mutually agreed upon third party underwriter
to perform such underwriting. The Note Issuer agrees to cooperate with the Agent
and the Purchasers and any third party underwriter in connection with such
underwriting, including, but not limited to, providing the Agent, each relevant
Purchaser and any third party underwriter with access to any and all documents,
records, agreements, instruments or information relating to such Mortgage Loans
in the possession, or under the control, of the Note Issuer or any of its
agents. The Note Issuer further agrees that the Note Issuer shall reimburse the
Agent and the Purchasers as and when billed for any reasonable out-of-pocket
costs and expenses incurred by the Agent or such Purchaser in connection with
its activities pursuant to this Section 12.14 within 30 days of receipt of an
invoice therefor.

          13.15 No Recourse. It is expressly understood and agreed by the
                -----------
parties hereto that (a) this Note Purchase Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally but solely as
trustee of the Note Issuer, in the exercise of the powers and authority
conferred and vested in it, (b) each of the representations, undertakings and
agreements herein made on the part of the Note Issuer is made and intended not
as personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose of binding only the Note
Issuer, (c) nothing herein contained shall be construed as creating any
liability on Wilmington Trust Company, individually or personally, to perform
any covenant either expressed or implied contained herein, all such liability,
if any, being expressly waived by the parties hereto and by any Person claiming
by, through or under the parties hereto and (d) under no circumstances shall
Wilmington Trust Company be

                                      -61-



personally liable for the payment of any indebtedness or expenses of the Note
Issuer or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Note Issuer under this Note
Purchase Agreement or any other related documents.

          13.16 Termination. (a) In the event any materially adverse change in
                -----------
the Property, business, financial condition or business prospects of the Note
Issuer, a New Century Party or the Note Issuer's or any New Century Party's
Affiliates shall occur, in each case as determined by the Majority Investors in
their sole discretion exercised in good faith, or any other condition shall
exist which, in the Majority Investors' sole discretion, exercised in good
faith, constitutes a material impairment of the Note Issuer's ability to perform
its obligations under this Note Purchase Agreement, the Loan Purchase Agreement,
the Note or any other Note Document or in the ability of any New Century Party
to perform its obligations under Section 4.01(a) of the Loan Purchase Agreement,
then upon five (5) days' prior written notice to the Note Issuer by the Majority
Investors (any such notice, a "MAC Notice"), the Purchasers' several obligations
                               ----------
to make further Note Purchases shall terminate without further action by any
Person.

          (b) Upon receipt of a MAC Notice, the Note Issuer shall use its best
efforts to effect a complete refinancing of this facility not later than the
10th Business Day following receipt of the MAC Notice and, if such refinancing
shall not have occurred by such date, then the Agent shall have the immediate
right to take the actions provided in Sections 10.02 through 10.10 hereof, with
similar effect as though an Event of Default had occurred.

          (c) Upon the Agent's delivery of a MAC Notice, the Agent shall, within
five (5) Business Days, refund to the Note Issuer in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, the Unearned
Portion of the Facility Fee (as defined below). The "Unearned Portion of the
Facility Fee" shall be calculated by multiplying the Facility Fee paid by the
Note Issuer for the then current term of the facility by a fraction, the
numerator of which is the number of days remaining in the current term of the
facility and the denominator of which is the total number of days in the current
term of the facility. For example, if the Termination Date occurs on the 100th
day of the second year of the term, then the Unearned Portion of the Facility
Fee would be equal to $724,043.70 (i.e., $1,000,000 multiplied by 265 divided by
366). As a further example, if the Termination Date were extended for 180 days
in exchange for a $500,000 Facility Fee pursuant to Section 4.04 hereof, and if
the Termination Date occurred on the 60th day of the extension period, then the
Unearned Portion of the Facility Fee would be equal to $164,383.55 (i.e.,
$500,000 multiplied by 120 divided by 180). Each Purchaser shall pay to the
Agent within five (5) Business Days following the Termination Date an amount
equal the Unearned Portion of the Facility Fee multiplied by their respective
Commitment Percentage for the term covered by the Unearned Portion of the
Facility Fee.

                            [SIGNATURE PAGES FOLLOW]

                                      -62-



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

                                 NOTE ISSUER
                                 -----------

                                 NEW CENTURY FUNDING I

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

                                 By:      /s/ Anita E. Daliago
                                     -------------------------------------------
                                     Name:
                                     Title: Senior Financial Services Officer

                                 Address for Notices:
                                 -------------------


                                 New Century Funding I
                                 c/o Wilmington Trust Company
                                 Rodney Square North
                                 1100 North Market Street
                                 Wilmington, Delaware 19890
                                 Attention: Corporate Trust Administration
                                 Telecopy No.: 302-636-4140 or 302-636-4141
                                 Telephone No.: 302-651-1000

                                 With a copy to:

                                 New Century Funding I
                                 c/o New Century Mortgage Corporation
                                 18400 Von Karman, Suite 1000
                                 Irvine, California 92612
                                 Attention: Stergios Theologides, Esq.
                                 Telecopier No: (949) 840-7033
                                 Telephone No: (949) 863-7243

                                      -63-



                                 AGENT
                                 -----


                                 UBS WARBURG REAL ESTATE SECURITIES INC.

                                 By: /s/ George MonGlaracina
                                    -------------------------------------
                                    Name:  George MonGlaracina
                                    Title: Executive Director

                                 By: /s/ Juliet F. Buck
                                    -------------------------------------
                                    Name: Juliet F. Buck
                                    Title: Director

                                 Address for Notices:
                                 -------------------


                                 1285 Avenue of the Americas
                                 New York, New York 10019
                                 Attention: Robert Carpenter
                                            George Mangiaracina
                                 Telecopier No: (212) 713-9597
                                 Telephone No: (212) 713-2000


                                 PURCHASER
                                 ---------


                                 UBS WARBURG REAL ESTATE SECURITIES INC.


                                 By: /s/ George MonGlaracina
                                    -------------------------------------
                                    Name:  George MonGlaracina
                                    Title: Executive Director

                                 By: /s/ Juliet F. Buck
                                    -------------------------------------
                                    Name:  Juliet F. Buck
                                    Title: Director

                                      -64-



                                 Address for Notices:
                                 -------------------


                                 1285 Avenue of the Americas
                                 New York, New York 10019
                                 Attention: Robert Carpenter
                                            George Mangiaracina
                                 Telecopier No: (212) 713-9597
                                 Telephone No: (212-713-2000







       [Signature page for Committed Note Purchase and Security Agreement]

                                      -65-

EX-99.6

                                                                    EXHIBIT 99.6

May 13, 2002

Edwin D. Jenkins
Mortgage Banking Services Division
Mail Station EP-MN-M5MB
225 South Sixth Street
Minneapolis, Minnesota 55402

     Re:   Waiver and Consent

Dear Mr. Jenkins:

     Pursuant to Section 5.3 of the Subordinated Loan Agreement between U.S.
Bank National Association and New Century Mortgage Corporation ("NCMC") dated as
of April 28, 2000, and as amended from time to time, NCMC is prohibited from
incurring any Warehouse Debt. NCMC is currently negotiating with UBS Warburg
Real Estate Securities, Inc. ("UBS") and Bank of America, N.A. ("BofA") to enter
into separate credit facilities with total borrowing bases of $400 million and
$500 million, respectively, with the documentation for those facilities to be
dated on or about May 10 and May 13, 2002, respectively.

     Therefore, we respectfully request your waiver of the aforementioned
Section 5.3 with respect to the aforementioned facilities. Please acknowledge
this waiver as provided below and return a copy of this letter to me by
facsimile as soon as possible. Upon your acknowledgment of this waiver, the
Note (as defined in the Subordinated Loan Agreement) shall hereby be amended by
changing the Maturity Date thereof from December 31, 2003 to May 22, 2002.

                                           Sincerely,

                                           /s/ KEVIN CLOYD
                                           -------------------------
                                           Kevin Cloyd
                                           Senior Vice President

ACKNOWLEDGED AND AGREED:

U.S. BANK NATIONAL ASSOCIATION

By:   /s/ EDWIN D. JENKINS
      ----------------------------
      Name:  Edwin D. Jenkins
      Title: Senior Vice President