THIS SUBSCRIPTION
AGREEMENT (this “ Agreement ”) by and between
Flagstar Bancorp, Inc. (the “ Company ”), a
corporation organized under the laws of the State of Michigan, with
its principal offices at 5151 Corporate Drive, Troy, Michigan
48098-2639, and the undersigned subscriber (the “
Subscriber ”) is made effective as of the date on
which the Company accepts this Agreement by executing the
acceptance form below.
WHEREAS, the
Company has entered into an Investment Agreement made as of
December 17, 2008 with MP Thrift Investments L.P., a Delaware
limited partnership (“MP Thrift”), pursuant to which MP
Thrift agreed to purchase from the Company 250,000 shares of a
series of mandatory convertible participating voting preferred
stock, $0.01 par value per share, of the Company (the “
Convertible Preferred Stock ”), at a purchase price of
$1,000 per share, with each share convertible into common stock,
par value $0.01 per share, of the Company (the “ Common
Stock ”), at the liquidation preference divided by $0.80
(the “ MP Thrift Investment Agreement
”);
WHEREAS, in order
to induce MP Thrift to enter into the MP Thrift Investment
Agreement, the Subscribers have agreed to purchase shares of Common
Stock (the “ Management Shares ”) for an
aggregate purchase price of not less than $4 million and not
more than $5 million at a price per Management Purchased Share
of $0.80 per share, provided , however , that if the
Company does not have sufficient shares of Common Stock available
for issuance prior to an amendment to the Company’s Amended
and Restated Articles of Incorporation to increase the number of
authorized shares thereunder, then the Subscribers shall instead
purchase an equivalent number shares of Convertible Preferred Stock
on an as converted basis as would have been purchased if sufficient
shares of Common stock were available for issuance.
SECTION 1.
Subscription for the Management Shares . At the completion
of the purchase and sale of the Management Shares (the
“Closing”), the Subscriber hereby offers to purchase
from the Company, upon the terms and conditions hereinafter set
forth,
shares of Common Stock at a purchase price of $.80 per share
(the “ Purchase Price ”).
SECTION 2.
Acceptance of Subscriptions . Subscriber understands that
the Company may accept this offer for all or any portion of the
aggregate principal amount subscribed for herein or may reject this
subscription without notice, in full or in part, with or without
cause. Subscriber understands that the execution and delivery of
this Agreement will not constitute an agreement between Subscriber
and the Company until this Agreement has been accepted by the
Company. The undersigned Subscriber will be notified of the
acceptance of this subscription, or its rejection, by the
Company.
SECTION 3.
Delivery of the Shares at the Closing . At the Closing, the
Subscriber shall deliver, in immediately available funds, the full
amount of the Purchase Price for the Management Shares being
subscribed for hereunder to an account designated by the Company
and the Company will issue
shares of Common Stock sold in the offering
against
receipt of
subscription funds from Subscribers. Such shares will bear an
appropriate legend referring to the fact that the Management Shares
were sold in reliance upon the exemption from registration under
the Securities Act of 1933, as amended (the “ Securities
Act ”), provided by Section 4(2) thereof and
Rule 506 thereunder. The Management Shares, along with a copy
of this Agreement accepted by the Company, will be delivered to
Subscriber within five business days of the Closing.
SECTION 4.
Representations, Warranties and Covenants of the Subscriber
. The Subscriber hereby represents and warrants to, and covenants
with, the Company that:
4.1
Experience . (i) The Subscriber is knowledgeable,
sophisticated and experienced in financial and business matters, in
making, and is qualified to make, decisions with respect to
investments in shares representing an investment decision like that
involved in the purchase of the Management Shares, including
investments in securities issued by the Company and comparable
entities, has the ability to bear the economic risks of an
investment in the Management Shares and has reviewed carefully the
information provided by the Company to the Subscriber in connection
with this Agreement and the purchase of the Management Shares
hereunder, and has requested, received, reviewed and considered all
information it deems relevant in making an informed decision to
purchase the Management Shares; (ii) the Subscriber is
acquiring the number of Management Shares set forth in
Section 2.1 above in the ordinary course of its business and
for its own account for investment only and with no present
intention of distributing any of the Management Shares or any
arrangement or understanding with any other persons regarding the
distribution of such Management Shares (this representation and
warranty not limiting the Subscriber’s right to sell pursuant
to the Registration Statement or in compliance with the Securities
Act and the rules and regulations promulgated thereunder (the
“Rules and Regulations”)); and (iii) the
Subscriber will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the
Management Shares, nor will the Subscriber engage in any short sale
that results in a disposition of any of the Management Shares by
the Subscriber, except in compliance with the Securities Act and
the Rules and Regulations and any applicable state securities
laws.
4.2 Reliance on
Exemptions . The Subscriber understands that the Management
Shares are being offered and sold to it in reliance upon specific
exemptions from the registration requirements of the Securities
Act, the Rules and Regulations and state securities laws and that
the Company is relying upon the truth and accuracy of, and the
Subscriber’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the
Subscriber set forth herein in order to determine the availability
of such exemptions and the eligibility of the Subscriber to acquire
the Management Shares.
4.3 Investment
Decision . The Subscriber understands that nothing in this
Agreement or any other materials presented to the Subscriber in
connection with the purchase and sale of the Management Shares,
constitutes legal, tax or investment advice. The Subscriber has
consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or a
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