EXHIBIT 99.3
SHAREHOLDER AGREEMENT
SHAREHOLDER AGREEMENT, dated as of November 24, 1998, between U.S.
Bancorp, a Delaware corporation ("Purchaser"), and [shareholder]
("Shareholder").
WHEREAS, Purchaser and New Century Financial Corporation, a Delaware
corporation (the "Company"), are entering into a Preferred Stock Purchase
Agreement, dated the date hereof (the "Purchase Agreement"), which provides for
the purchase of shares of the Company's Series 1998A Convertible Preferred Stock
by the Purchaser;
WHEREAS, Shareholder is the beneficial owner of certain shares of the
outstanding common stock, par value $.01 per share, of the Company (the "Common
Stock") as described herein; and
WHEREAS, as a condition to the willingness of Purchaser and the
Company to enter into the Purchase Agreement, Shareholder has agreed to certain
restrictions on his ability to sell the shares of Common Stock owned by him as
of the date hereof and any shares acquired by Shareholder after the date hereof
(including any shares acquired pursuant to the exercise of any rights to
purchase or otherwise acquire shares) (the "Shares") as provided in this
Agreement.
NOW THEREFORE, the parties hereby agree as follows:
1. RIGHT OF FIRST REFUSAL.
(a) If, after the date hereof, Shareholder should decide to sell,
transfer or otherwise dispose of any or all of the Shares (other than any
Permitted Transfers as defined in Section 3), Shareholder shall first offer to
sell such Shares to the Purchaser upon substantially the same terms and
conditions as Shareholder is proposing to sell such Shares to others.
(b) In the event that Shareholder is required to make an offer of
Shares to the Purchaser pursuant to this Agreement, Shareholder shall give the
Purchaser written notice of such offer, indicating the estimated price and the
general terms upon which Shareholder proposes to sell the Shares (the "Sale
Notice"). The Purchaser shall have ten business days from the date of receipt
of any Sale Notice to subscribe for the purchase of such Shares for the price
and upon the general terms specified in the Sale Notice by giving written notice
to Shareholder. The closing of the sale of the Shares to the Purchaser shall
take place within the later of (i) ten business days after the delivery of such
notice to Shareholder, or (ii) three business days after all necessary
regulatory or governmental filings, authorizations or approvals, if any,
required to consummate such purchase shall have been duly made or obtained and
all statutory waiting periods in respect thereof shall have expired; PROVIDED
THAT, if such closing has not occurred
within 90 days after the date of delivery of Purchaser's notice to the
Shareholder, the Shareholder shall have the right to sell such Shares without
regard to the limitations of paragraph (c) below. The Purchaser agrees that
it will use all reasonable efforts to make any such filing and obtain any
such authorization or approval as promptly as practicable. In the event that
making such filing or obtaining such authorization or approval takes more
than 60 days after the delivery of such notice to Shareholder, the Purchaser
will use reasonable efforts to arrange for a six-month line of credit for the
Shareholder.
(c) In the event that the Purchaser fails to subscribe for the
purchase of all of the Shares offered to it pursuant to this Agreement within
ten business days after the date of receipt of a Sale Notice, Shareholder
shall have 120 days thereafter to sell the Shares at a price which is not
less than 95% of the price specified in the Sale Notice and upon terms
otherwise no more favorable to the purchasers thereof than the terms
specified in the Sale Notice. In the event Shareholder has not sold the
Shares within such 120 day period, Shareholder shall not thereafter sell any
Shares without first offering such Shares to the Purchaser as required by
this Agreement.
2. NO PRECLUSIVE AGREEMENTS. The Shareholder shall not enter
into any agreement or understanding with any Person (as defined in Section
5), including any voting, lock-up or option agreement, the effect of which
would be inconsistent with or violate the provisions and agreements contained
in Section 5 or would preclude the Purchaser from exercising its rights
pursuant to Section 5.
3. PERMITTED TRANSFERS. "Permitted Transfers" mean (a) any transfer
of Shares by gift or otherwise not for value if, at or before the transfer,
the transferee executes an instrument (i) acknowledging that the Shares being
acquired are subject to the provisions of this Agreement, and (ii) agreeing to
be bound by the terms and conditions of this Agreement with respect to the
Shares, (b) any sale of Shares by a pledgee or by Shareholder after a default in
an obligation secured by a bona fide pledge of the Shares by Shareholder as
security for a loan (including a margin loan), (c) any transfer by Shareholder
to Shareholder's spouse in conjunction with any consent decree or other
settlement order relating to Shareholder's pending divorce proceeding and (d)
sales of Shares in accordance with Rule 144 promulgated under the Securities Act
of 1933, or any successor rule ("Rule 144 Sales"), not to exceed in the
aggregate during any 365-day period 0.50% of the shares of Common Stock
outstanding at the beginning of the calendar year of such sale, provided that no
Trigger Date (as defined in Section 5) has occurred within the nine-month period
prior to any such Rule 144 Sale and provided further that prior to each such
Rule 144 Sale (x) Shareholder shall have given Purchaser notice (the "144 Sale
Notice") in accordance with the special notice provisions of Section 14 hereof
of his intention to sell Shares in accordance with this Section 3(d) (which 144
Sale Notice shall include the number of Shares (the "144 Shares") that
Shareholder intends to sell and Shareholder's offer to sell such 144 Shares to
Purchaser at the price determined pursuant to this Section 3(d)) and (y) prior
to the expiration of the Acceptance Window (as defined in the next sentence),
Purchaser has not communicated (by phone or by facsimile) its agreement to
purchase the 144 Shares from Shareholder. For purposes of this Section 3(d),
the Acceptance Window shall end at 3:30 p.m.
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Central Time on the day of receipt by Purchaser of the 144 Sale Notice unless
such 144 Sale Notice was received after 2:00 p.m. Central Time on a business
day or was received on a non-business day, in which case the Acceptance
Window would end at 8:30 a.m. Central Time on the next business day following
receipt by Purchaser of the 144 Sale Notice. If Purchaser timely agrees to
purchase the 144 Shares, the purchase shall close by wire transfer of same
day funds within three business days of such agreement to purchase, and the
purchase price per share shall be the most recent sale price on the Nasdaq
market prior to time at which Purchaser communicated its acceptance to
Shareholder.
4. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER. Shareholder
represents and warrants to Purchaser that:
(a) this Agreement has been duly executed and delivered by
Shareholder and constitutes a valid and legally binding obligation of
Shareholder enforceable in accordance with its terms;
(b) Shareholder is not subject to or obligated under any provision of
(i) any contract, (ii) any license, franchise or permit or (iii) any law,
regulation, order, judgment or decree which would be breached or violated by his
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby;
(c) no authorization, consent or approval of, or any filing with, any
public body or authority is necessary for consummation by him of the
transactions contemplated by this Agreement;
(d) as of the date of this Agreement, the Shares consist of
_________ shares of Common Stock (including _______ shares of Common Stock which
represent shares that would be acquired by Shareholder if all of the rights to
purchase or otherwise acquire shares of Common Stock held by Shareholder on the
date hereof were exercised); and
(e) except as set forth on Schedule 1 hereto on the date hereof
Shareholder has, and he will have at the time of any purchase by Purchaser of
the Shares, good and marketable title to the Shares free and clear of all
claims, liens, charges, encumbrances and security interests.
5. VOTING AGREEMENT. The Shareholder hereby agrees that, if a
Trigger Date (as defined herein) occurs on or before December 31, 2002, in
connection with the Acquisition Transaction relating to the Trigger Date, he
shall vote (or cause to be voted) at any meeting of the holders of the Common
Stock, however called, or in connection with any written consent of the
holders of the Common Stock, the Shares held of record by him or with respect
to which he has or shares the power to vote, whether now owned or hereafter
acquired, (i) in favor of approval of a Purchaser Transaction (as defined
herein) and any actions required in furtherance thereof and hereof; and (ii)
except as otherwise agreed to in writing in advance by Purchaser, against (A)
any action or agreement that is intended, or could reasonably be expected, to
impede, interfere with,
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delay, postpone, or materially adversely affect a Purchaser Transaction; (B)
any Competing Transaction; (C) any change in a majority of the persons who
constitute the board of directors of the Company; or (D) any change in the
capitalization of the Company or any amendment of the Company's Certificate
of Incorporation or Bylaws. Such Shareholder shall not enter into any
agreement or understanding with any Person (as defined herein) the effect of
which would be inconsistent with or violate the provisions and agreements
contained in this Section 5. Notwithstanding the foregoing, the Shareholder
shall have the right to vote at any meeting of the Board of Directors of the
Company (or by written consent of the directors) in his capacity as a
director of the Company in his sole discretion and to comply with his
fiduciary duties as a director of the Company under applicable law.
For purposes of this Agreement, the following terms shall have the
following respective meanings:
"ACQUISITION TRANSACTION" shall mean any of the following actions: (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company; or (B) a sale, lease or transfer of
a material amount of assets of the Company, or a reorganization,
recapitalization, dissolution or liquidation of the Company.
"COMPETING TRANSACTION" shall mean an Acquisition Transaction involving any
Person other than Purchaser or an affiliate of Purchaser.
"PERSON" shall mean an individual, corporation, partnership, joint venture,
association, trust, unincorporated organization or other entity.
"PURCHASER TRANSACTION" shall mean an Acquisition Transaction by Purchaser
or an affiliate of Purchaser.
"TRIGGER DATE" shall mean the date the Company receives a BONA FIDE
proposal regarding an Acquisition Transaction (a "Proposal"), unless, within
15 days of the date Purchaser is notified in writing of all material terms of
such Proposal, the Purchaser has failed to make an offer that is similar to,
and on terms no less favorable to the Company and its shareholders than, such
Proposal. Notwithstanding the foregoing, a Trigger Event shall not be deemed
to have occurred if: (i) prior to the date of a definitive agreement with
respect to a Purchaser Transaction, the terms of the Proposal are improved or
a new proposal regarding an Acquisition Transaction that is financially
superior to such original proposal (a "Superior Proposal") is received by the
Company and the Purchaser fails to match such improved terms or such
Superior Proposal within five business days of Purchaser's receipt of written
notice of all material terms thereof; or (ii) the Purchaser withdraws its
offer.
6. IRREVOCABLE PROXY. The Shareholder agrees that he will,
promptly following any Trigger Date, execute and deliver, or cause to be
executed and delivered, an irrevocable proxy, in form and substance
reasonably satisfactory to Purchaser, appointing
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Purchaser or any designee of Purchaser as such Shareholder's agent, attorney
and proxy, to vote (or cause to be voted) the Shares held of record by him or
with respect to which he has the power to vote, whether now owned or
hereafter acquired, in the manner provided in Section 5, and to execute and
deliver, or cause to be executed and delivered such additional or further
transfers, assignments, endorsements, consents and other instruments as the
Purchaser may reasonably request for the purpose of effectively carrying out
the transactions contemplated by Section 5 and to vest the power to vote the
Shares as contemplated by Section 5.
7. TERM. This Agreement shall terminate on the earlier of December
31, 2002 or the date on which all of Purchaser's rights under Section 8.4 of the
Purchase Agreement have terminated; provided that if a Trigger Date has occurred
prior to December 31, 2002, the Shareholder's agreement in Section 5 shall
survive with respect to such Trigger Date.
8. CAPACITY. The parties hereby agree that Shareholder is executing
this Agreement solely in his individual capacity. Nothing contained in this
Agreement shall limit or otherwise affect Shareholder's conduct or exercise of
his fiduciary duties as a director of the Company.
9. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which will be an original and all of which taken together
shall constitute one and the same agreement, and any party hereto may execute
this Agreement by signing any such counterpart.
10. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law but if any provision of this Agreement is held to be
invalid, illegal or unenforceable under any applicable law or rule, the
validity, legality and enforceability of the other provisions of this Agreement
will not be affected or impaired thereby.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives and, to the extent permitted by paragraph 12, successors and
assigns.
12. ASSIGNMENT. This Agreement and the rights and obligations of the
parties hereunder shall not be assignable, in whole or in part, by either party
without the prior written consent of the other party.
13. MODIFICATION, AMENDMENT, WAIVER OR TERMINATION. No provision of
this Agreement may be modified, amended, waived or terminated except by an
instrument in writing signed by the parties to this Agreement. No course of
dealing between the parties will modify, amend, waive or terminate any provision
of this Agreement or any rights or obligations of any party under or by reason
of this Agreement.
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14. NOTICES. Except for notices to be given in connection with a
Rule 144 Sale in accordance with Section 3(d) herein, all notices, consents,
requests, instructions, approvals or other communications provided for herein
shall be in writing and delivered by personal delivery, overnight courier, mail,
or electronic facsimile addressed to the receiving party at the address set
forth herein. All such communications shall be effective when received.
NOTICES TO THE PURCHASER: WITH A COPY TO:
------------------------- ---------------
U.S. Bancorp Xxxxxx & Xxxxxxx LLP
000 Xxxxxx Xxxxxx Xxxxx 000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000 Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx X. Mitau, Esq. Attention: Xxxxxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
NOTICES TO SHAREHOLDER: WITH A COPY TO:
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[shareholder] O'Melveny & Xxxxx LLP
c/o New Century Financial Corporation 000 Xxxxxxx Xxxxxx Drive, 17th Floor
00000 Xxx Xxxxxx, Xxxxx 0000 Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Xxxxxx, Xxxxxxxxxx 00000 Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopy: 000-000-0000 Telecopy: 000-000-0000
Any party may change the address set forth above by notice to each other
party given as provided herein.
Any Rule 144 Sale Notice required to be given to Purchaser must be given by
a live telephone communication (I.E., not by voice-mail) directly to one of the
following persons or to such other persons as may be designated in writing from
time to time by Purchaser:
Xxx Xxxxxx, Telephone (000) 000-0000
Xxxxx Xxxxxxxx, Telephone (000) 000-0000
15. GOVERNING LAW. All matters relating to the interpretation,
construction, validity and enforcement of this Agreement shall be governed by
the internal laws of the state of Delaware, without giving effect to any choice
of law provisions thereof.
16. THIRD-PARTY BENEFIT. Nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights, remedies,
obligations or liabilities of any nature whatsoever.
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17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding
any investigation made by either of the parties hereto and notwithstanding
the Closing or any actions taken after the execution hereof, the
representations and warranties made in this Agreement shall survive for the
term of this Agreement.
18. REMEDIES. The parties agree that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that
any party may, in its discretion, apply to any court of law or equity of
competent jurisdiction for specific performance and injunctive relief in
order to enforce or prevent any violations this Agreement, and any party
against whom such proceeding is brought hereby waives the claim or defense
that such party has an adequate remedy at law and agrees not to raise the
defense that the other party has an adequate remedy at law.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
U.S. BANCORP
By
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Its
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SHAREHOLDER
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