EXHIBIT 10.15
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is made and entered into as of May 30,
1997, between Comerica Incorporated, a Delaware corporation and bank holding
company ("Buyer") and New Century Financial Corporation, a Delaware corporation
(the "Seller").
R E C I T A L S
WHEREAS, Seller desires to sell, and Buyer desires to acquire 545,000
shares of Common Stock of the Seller (the "Stock"), subject to the terms and
conditions of this Agreement and for the consideration described herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual promises contained
herein and intending to be legally bound the parties agree as follows:
ARTICLE I
PURCHASE & SALE
1.1 Sale of Stock. Subject to the terms and conditions of this
Agreement, Seller agrees to sell to Buyer the Stock and deliver the certificates
evidencing the Stock to Buyer at the closing of the transactions contemplated by
this Agreement (the "Closing"), which shall occur contemporaneously with the
execution and delivery of this Agreement.
1.2 Purchase Price and Number of Shares. Buyer agrees to acquire the
Stock at a purchase price (the "Purchase Price") of $7.50 per share of Stock.
1.3 Receipt of Purchase Price. Buyer hereby acknowledges receipt in
the sum of $4,087,500 as payment in full for the stock.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents, warrants and agrees:
2.1 Organization and Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Seller has all necessary corporate power and authority to execute
and deliver this Agreement and to perform its obligations hereunder. Seller has
all requisite corporate power and authority to lease, own and operate its
properties and assets and to carry on its business as now conducted.
2.2 Authorized Capital Stock. Effective as of the Closing or within
five (5) business days thereafter, the authorized capital stock of the Seller
consists, or will consist, of 45,000,000 shares of Common Stock, $0.01 par
value, and 7,500,000 shares of Preferred Stock, $0.01 par value, of which no
shares are, or will be, issued and outstanding. The issued shares of Common
Stock and the number of authorized and outstanding warrants and options after
the Closing and after the Seller's proposed initial public offering shall be as
set forth on Exhibit G hereto. The Stock has been duly authorized by all
necessary corporate action on the part of the Seller and, upon payment for and
delivery of the Stock in accordance with this Agreement, the Stock will be
validly issued, fully paid and non-assessable.
2.3 No Conflicts. The execution, delivery and performance of this
Agreement by Seller will not (i) violate any provision of Seller's charter
documents or bylaws, (ii) violate any statute or law or any judgment, decree,
order, regulation or rule of any court or governmental authority to which Seller
is bound or affected, (iii) result in the breach (or an event which, with notice
or lapse of time or both, would constitute a breach) under any term or provision
of, or constitute a default under, any agreement listed in an exhibit to
Seller's Registration Statement on Form S-1, as filed with the Securities and
Exchange Commission (the "SEC") on April 18, 1997 (the "Registration
Statement"), or (iv) violate any other agreement to which Seller is a party.
2.4 Authorization. The execution, delivery and performance of this
Agreement by Seller has been duly and validly authorized by the Board of
Directors and stockholders of Seller and by all other necessary corporate action
on the part of Seller. This Agreement constitutes the legally valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles
relating to or limiting creditors' rights generally.
2.5 Consents. All material consents or approvals of third parties
necessary for the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby by Seller have been
obtained.
2.6 Licenses and Permits. All licenses and permits necessary for the
conduct of Seller's business are in full force and effect to the extent material
to the conduct of Seller's business.
2.7 Compliance with Law. Seller is organized and has conducted
business in accordance with applicable laws in all
material respects and the practices of Seller are in compliance with all such
laws, to the extent applicable, in all material respects.
2.8 Legal Proceedings. There is no order or action pending, or, to
the best knowledge of Seller, threatened, against or affecting Seller or its
assets that if determined adversely would reasonably be expected to have a
material adverse effect on the Seller's business or on Seller's ability to
perform its obligations hereunder.
2.9 Tax Matters. Seller has timely filed, or will file, (or where
permitted or required, its direct or indirect parents have timely filed or will
file) all tax returns required of it and has paid all taxes due for all periods
or portions of periods ending on or before the Closing (except as provided in
the following sentence). Adequate provision has been made in the books and
records of Seller, and to the extent required by GAAP in the Financial
Statements for all taxes whether or not due and payable and whether or not
disputed to the extent not paid.
2.10 Performance of Obligations. Seller has performed in all
material respects all of the obligations required to be performed by it under
any covenant, contract, lease, indentures or other covenant to which it is a
party and is not in default or material breach of any term of the foregoing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents, warrants and agrees:
3.1 Organization and Related Matters. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has the necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
3.2 Consents and Authorization. All material consents or approvals
of third parties necessary for the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby by Buyer
have been obtained. The execution, delivery and performance of this Agreement
by Buyer has been duly and validly authorized by all necessary corporate action
on the part of Buyer. This Agreement constitutes the legally valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles
relating to or limiting creditors' rights generally.
3.3 No Conflicts. The execution, delivery and performance of this
Agreement by Buyer will not (i) violate any provision in the Buyer's charter
documents or bylaws, (ii) result in the breach (or an event which, with notice
or lapse of time or both, would constitute a breach) under any term or provision
of, or constitute a default under, any material indenture, mortgage, deed of
trust or other agreement or arrangement to which Buyer is a party or by which it
is bound, or (iii) violate any statute or law or any judgment, decree, order,
regulation or rule of any court or governmental authority to which Buyer is
bound or affected.
3.4 Investment. Buyer is acquiring the Stock from Seller for Buyer's
own account, for investment purposes only and not with a view to or for sale in
connection with the distribution thereof.
3.5 Business Relationship. Buyer is generally familiar with the
business and affairs of Seller and has discussed with Seller and its plans,
operations and financial condition with one or more of the officers or directors
of Seller. Buyer has read and analyzed, and is familiar with the information
contained in, the Registration Statement, including all of the documents
incorporated therein by reference.
3.6 Qualified Institutional Buyer. Buyer represents that it is a
"qualified institutional buyer" (as such term is defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")).
3.7 Accredited Investor. Buyer represents that it is an "accredited
investor" (as such term is defined in Regulation D under the Act) and it is
knowledgeable, sophisticated and experienced in business and financial matters
and has previously invested in securities similar to the Stock being acquired
hereunder.
3.8 Disclosure. Seller has disclosed to Buyer that:
(i) the sale of the Stock has not been registered under the Act,
or qualified under the securities laws of any state and the Stock must be
held indefinitely unless a sale or transfer of the Stock is subsequently
registered under the Act and qualified under applicable state securities
laws or exemptions therefrom are available; and
(ii) any certificates representing the Stock will bear the
following legend restricting transfer:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, but are issued in reliance on the
representation that they are taken for investment and not for
redistribution. As a condition of any transfer hereof, the Company
may require
an opinion of counsel satisfactory to it that all statutory
registration provisions have been met or do not apply.
The Company is authorized to issue stock in one or more classes or
series. The Company will furnish without charge to any shareholder
who so requests a statement as to the powers, designations,
preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or
rights.
The shares of capital stock of the Company represented by this stock
certificate and the disposition thereof are subject to the terms of a
Shareholders Agreement dated as of November 22, 1995 (the
"Shareholders Agreement") by and among the Company and certain other
parties. A copy of the Shareholders Agreement is on file at the
principal office of the Company and may be inspected by the registered
owner of this stock certificate or a duly authorized representative of
such owner upon request during the Company's normal business hours."
3.9 Rule 144. Buyer understands that, in addition to the
restrictions described above: (i) the shares which constitute the Stock are
restricted securities within the meaning of Rule 144 promulgated under the Act;
(ii) exemption from registration under Rule 144 will not be available in any
event for at least one year from the date of sale of the Stock to Buyer, and
even then, Rule 144 will not be available unless: (a) a public trading market
then exists for the Common Stock of Seller, (b) adequate information concerning
Seller is then available to the public, and (c) the other terms and conditions
of Rule 144 are met; and (iii) any unregistered sale of the Stock may be made by
Buyer only in accordance with the terms and conditions of Rule 144.
3.10 Discharge of Implied Warranties. Buyer represents to Seller that
Buyer has performed extensive due diligence and investigations with respect to
Seller with the intention of forming its own conclusions regarding the condition
(financial and otherwise), value, property, liabilities, contracts,
contingencies, prospects, risks and other incidents of the business of Seller in
response to the parties' express intention and agreement that as of the Closing,
the sale hereunder shall be without representation and warranty of any kind
(express or implied) regarding the Seller or the Stock, except as set forth in
Section 2 hereof. Buyer will rely solely on its own business judgment and
investigations with respect to Seller and the Stock. Buyer expressly
acknowledges and agrees that Seller has not provided any further representations
or warranties (express or implied) to Buyer.
ARTICLE IV
COVENANT OF BUYER
Upon request of the underwriters of the Offering, Buyer agrees to
execute and deliver a 180-day Lock-Up Agreement in substantially the form of
Exhibit A hereto.
ARTICLE V
DOCUMENTS DELIVERED CONTEMPORANEOUSLY WITH PURCHASE
5.1 The parties have executed and delivered the following agreements
on the date hereof;
1. Letter of Intent providing for the negotiation, execution and
delivery of the following documents in substantially the form set forth in
Exhibit B:
(a) Sub-Servicing Agreement with respect to the time period prior to
Seller's sale of loans in the secondary market;
(b) Sub-Servicing Agreement with respect to the time period after
Seller's securitization of loans or sale of loans on a servicing-
retained basis;
(c) Service Provider Agreement regarding loan referrals from Buyer's
bank and mortgage branches; and
(d) A Service Provider Agreement regarding loan referrals resulting
from Buyer's consumer loan portfolio.
2. The First Amendment to Shareholders' Agreement substantially in
the form of Exhibit D (it has been acknowledged by the parties that the
Shareholders Agreement will be terminated upon the closing of Seller's
contemplated initial public offering);
3. A Registration Rights Agreement substantially in the form of
Exhibit C hereto;
4. A letter agreement(with respect to the waiver of preemptive
rights and related matters) by the stockholders of Seller substantially in the
form of Exhibit E;
5. Additional representation by Seller. Seller hereby represents
and warrants to Buyer that:
(a) Stockholders of Seller holding not less than ninety percent
(90%) of the 4,922,144 outstanding warrants to purchase shares of Seller's
Common Stock have elected to exercise such warrants for cash or on a
cashless basis in accordance with the terms thereof; and
(b) Stockholders of Seller holding not less than ninety percent (90%)
of the 5,820,000 outstanding shares of Series A and Series B Preferred
Stock of the Seller shall have elected to convert such preferred shares
into Common Stock of the Seller.
ARTICLE VI
CONVENANT OF SELLER
On the date hereof, Seller has issued a warrant to Buyer for 100,000
shares of Seller's Common Stock. Seller shall issue to Buyer additional
warrants to purchase the number of additional shares of Seller's Common Stock
indicated below, such warrants to be in substantially the form attached hereto
as Exhibit F, upon the occurrence of the following events:
(i) 50,000 shares upon the commencement of servicing operations
pursuant to the Sub-Servicing Agreements contemplated by the Letter of Intent
(provided, however, that the grant of such warrants shall not be deferred if
Buyer is prepared to commence servicing operations but such commencement is
delayed beyond September 30, 1997 because Seller is not prepared to commence
servicing operations)
(ii) 50,000 shares after one (1) year of operations under the Sub-
Servicing Agreements contemplated by the Letter of Intent; provided that at the
end of such year Buyer is not in material default under or in material breach of
the terms of such Sub-Servicing Agreements after having had an opportunity to
cure;
(iii) 25,000 shares upon the funding by Seller of an aggregate of
$10.0 million of loans resulting from the First Service Provider Agreement
referred to in the Letter of Intent;
(iv) 25,000 shares upon the execution by Buyer and the funding by
Seller of an aggregate of $10.0 million of loans resulting from the Second
Service Provider Agreement referred to in the Letter of Intent; and
(v) 83,333 shares upon the agreement of Buyer and Seller to one or
more additional strategic relationships between Buyer and Seller, such agreement
to be based upon one or more proposals to be made by Buyer, which proposals
shall not be unreasonably declined by Seller.
The Purchase Price for shares purchased under the foregoing warrants
shall be equal to the greater of (A) $7.50 per share or, (B) if Seller completes
an initial public offering of its Common Stock within six months after the
Closing, the initial public offering price. The five year exercise period for
all of the foregoing warrants shall commence on the date of the Closing and each
such warrant shall vest whether or not already awarded in
three equal installments on December 31, 1997, 1998 and 1999, respectively,
subject to satisfaction (but not conditioned by) of the performance events
specified above and subject to acceleration under the circumstances set forth in
the form of warrant attached hereto as Exhibit F.
ARTICLE VII
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ARTICLE VIII
GENERAL
8.1 No Brokers or Finders. Seller and Buyer each represent to the
other that, except for Seller's retention of Xxxxxxxxxx Securities, no agent,
broker, finder or investment or commercial banker, or other firms engaged by or
acting on behalf of either Buyer, Seller or any of their affiliates in
connection with the negotiation, execution or performance of this Agreement or
the transactions contemplated by this Agreement, is or will be entitled to any
broker's or finder's or similar fees or other commissions as a result of this
Agreement or such transactions, and that Seller shall pay the fees of Xxxxxxxxxx
Securities.
8.2 Amendments; Waivers. This Agreement and any schedule or exhibit
attached hereto may be amended only by agreement in writing of Buyer and Seller.
No waiver of any provision nor consent to any exception to the terms of this
Agreement or any agreement contemplated hereby shall be effective unless in
writing and signed by the party to be bound and then only to the specific
purpose, extent and instance so provided.
8.3 Schedules; Exhibits; Integration. Each schedule delivered
pursuant to the terms of this Agreement shall be in writing and shall constitute
a part of this Agreement, although schedules need not be attached to each copy
of this Agreement. This Agreement, together with such schedules and the
exhibits attached hereto, constitutes the entire agreement among the parties
pertaining to the subject matter hereof and supersedes all prior agreements and
understandings of the parties in connection therewith.
8.4 Further Assurances. Each party agrees to cooperate fully with
the other party and to execute and deliver such further instruments,
certificates, agreements and other documents and take such other actions as may
be necessary or appropriate to consummate or implement the transactions
contemplated hereby or to evidence such events or matters.
8.5 Governing Law. This Agreement and the legal relations between
the parties shall be governed by and construed in accordance with the laws of
the State of California applicable to
contracts made and performed in such State and without regard to conflicts of
law doctrines, except to the extent that certain matters are preempted by
federal law or are governed by the law of the jurisdiction of organization of
the respective parties. Any court action arising out of this Agreement shall be
brought in any court of competent jurisdiction within the State of California,
County of Orange.
8.6 No Assignment. Neither this Agreement nor any rights or
obligations under it are assignable.
8.7 Headings. The descriptive headings of the Articles, Sections and
subsections of this Agreement are for convenience only and do not constitute a
part of this Agreement.
8.8 Counterparts. This Agreement and any amendment hereto or any
other agreement (or document) delivered pursuant hereto may be executed in one
or more counterparts and by different parties in separate counterparts. All of
such counterparts shall constitute one and the same agreement (or other
document) and shall become effective (unless otherwise provided therein) when
one or more counterparts have been signed by each party and delivered to the
other party.
8.9 Publicity and Reports. For a period of three (3) months after
the date hereof, Seller and Buyer shall coordinate all publicity relating to the
transactions contemplated by this Agreement and no party shall issue any press
release, publicity statement or other public notice relating to this Agreement,
or the transactions contemplated by this Agreement, without obtaining the prior
consent of Seller and Buyer and their respective counsel, except to the extent
that either party and its counsel in good faith conclude a particular action is
required under federal securities or other applicable law.
8.10 Parties in Interest. This Agreement shall be binding upon and
inure to the benefit of each party, and nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement. Nothing in this
Agreement is intended to relieve or discharge the obligation of any third person
to any party to this Agreement.
8.11 Notices. Any notice or other communication hereunder must be
given in writing and (a) delivered in person, (b) transmitted by telex, telefax
or telecommunications mechanism or (c) mailed by certified or registered mail,
postage prepaid, receipt requested as follows:
If to Buyer, addressed to:
Comerica, Incorporated
Comerica Tower at One Detroit
000 Xxxxxxxx, XX 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile Number: (000) 000-0000
Attn: Xxxx X. Xxxxxxx, Assistant Secretary
With a copy to:
Comerica Incorporated
0000 Xxxxxx Xxxx
M/C 7132
Xxxxxx Xxxxx, Xxxxxxxx 00000
Facsimile Number: 000-000-0000
Attn: Xxxx X. Xxxxxxxx, Executive Vice President
If to Seller, addressed to:
New Century Financial Corporation
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile Number: (000) 000-0000
Attn: Xxxx X. Xxxxxxx, President
With a copy to:
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx, Esq.
or to such other address or to such other person as either party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective (i) if given by telecommunication, when
transmitted to the applicable number so specified in (or pursuant to) this
Section 7.11 and an appropriate answer back is received, (ii) if given by mail,
three days after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when actually received at such address.
8.12 Expenses and Attorneys Fees. Seller and Buyer shall each pay
their own expenses incident to the negotiation, preparation and performance of
this Agreement and the transactions contemplated hereby, including but not
limited to the fees, expenses and disbursements of their respective accountants
and counsel.
8.13 Survival. The representations and warranties contained in or
made pursuant to this Agreement shall expire on the first anniversary of the
Closing.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officers as of the day and year
first above written.
BUYER:
COMERICA INCORPORATED,
a Delaware corporation
By: /s/ XXXX X. XXXXXXX
____________________________
Name: Xxxx X. Xxxxxxx
Its: First Vice President
and Assistant Secretary
SELLER:
NEW CENTURY FINANCIAL CORPORATION,
a Delaware corporation
By: /s/ XXXXXX X. XXXX
____________________________
Name: Xxxxxx X. Xxxx
Its: Chairman & CEO
Exhibits
EXHIBIT A Form of Lock-Up Agreement
EXHIBIT B Letter of Intent regarding the following:
(a) Subservicing Agreement with respect to the time period prior
to Seller's sale of loans in the secondary market;
(b) Subservicing Agreement with respect to the time period after
Seller's securitization of loans or sale of loans on a servicing
retained basis;
(c) Service Provider Agreement regarding loan referrals from
Buyer's bank and mortgage branches; and
(d) Service Provider Agreement regarding loan referrals resulting
from Buyer's consumer loan portfolio
EXHIBIT C Form of Registration Rights Agreement
EXHIBIT D Form of First Amendment to Stockholders' Agreement
EXHIBIT E Form of Waiver of Preemptive Rights
EXHIBIT F Form of Warrant
EXHIBIT G Schedule of Outstanding Shares, Options and Warrants
