Agreement for Forfeiture of Shareholder Rights and Warrants between U.S. Bancorp and New Century Financial Corporation

Summary

U.S. Bancorp and U.S. Bank National Association agree to forfeit all rights under certain shareholder agreements and warrants related to New Century Financial Corporation. This action is taken to ensure that New Century is not considered an affiliate of U.S. Bancorp under federal regulations. The agreement is effective immediately, with specific provisions of a prior warrant issuance agreement remaining in effect. New Century Financial Corporation acknowledges and accepts the forfeiture and cancellation of these rights and warrants.

EX-10.77 11 a2042227zex-10_77.txt EXHIBIT 10.77 EX-10.77 [Letterhead of US Bancorp.] January 12, 2001 New Century Financial Corporation 18400 Von Karman, Suite 1000 Irvine, California 92612 Attn: Stergios Theologides, Esq. Gentlemen: As you are aware, U.S. Bancorp has made every effort to structure its equity investment in New Century Financial Corporation in such a manner as to ensure that New Century would not be deemed to be an "affiliate" of U.S. Bancorp for purposes of Section 23A of the Federal Reserve Act. U.S. Bancorp has determined that it would be advisable to forfeit all of its rights under the Shareholder Agreements, each dated November 24, 1998, with Robert K. Cole, Edward F. Gotschall, Steve Holder and Brad A. Morrice (the "Shareholder Agreements") in order to clarify that New Century is not such an affiliate. U.S. Bank National Association has also determined that it would be advisable for this reason to forfeit all of its rights under the following warrants (collectively, the "Warrants"): (1) warrant to purchase 650,000 shares of Common Stock of New Century Financial Corporation dated April 28, 2000; (2) warrant to purchase 37,500 shares of Common Stock of New Century Financial Corporation dated April 28, 2000; (3) warrant to purchase 18,750 shares of Common Stock of New Century Financial Corporation dated July 18, 2000; (4) warrant to purchase 18,750 shares of Common Stock of New Century Financial Corporation dated October 30, 2000. Effective immediately, U.S. Bancorp and U.S. Bank National Association hereby forfeit all rights under and interests in the Shareholder Agreements and the Warrants, respectively. Please execute the acceptances below to confirm your acknowledgement of the foregoing with respect to the Shareholder Agreements and your acceptance and agreement as to the cancellation of the Warrants by the parties thereto. U.S. Bancorp will separately send a notice to each party to the Shareholder Agreements. It is understood and agreed, however, that Sections 4.2 and 4.3 of the Warrant Issuance Agreement dated as of April 28, 2000, among New Century Financial Corporation, U.S. Bancorp and U.S. Bank National Association, shall survive and not be affected by this letter. Very truly yours, U.S. BANCORP By /s/ Lee R. Mitau ----------------------------------- Lee R. Mitau Executive Vice President--Corporate Development and General Counsel Accepted and agreed this January 12, 2001 NEW CENTURY FINANCIAL CORPORATION By /s/ Brad A. Morrice ------------------------------