SECOND PURCHASE AGREEMENT
THIS SECOND
PURCHASE AGREEMENT (this “ Agreement ”) is
effective as of the 27th day of February, 2009, 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 MP Thrift Investments L.P., a Delaware limited
partnership (the “ Purchaser ”).
WHEREAS, the
Company entered into an Investment Agreement dated as of
December 17, 2008 with the Purchaser (the “
Investment Agreement ”), pursuant to which the
Purchaser purchased from the Company 250,000 shares of the
Company’s Convertible Participating Voting Preferred Stock,
Series B (the “ Series B 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;
WHEREAS, all
capitalized terms used in this Agreement, but which are not defined
herein, shall have the definition that is ascribed to them under
the Investment Agreement;
WHEREAS, in
connection with the issuance of the Series B Preferred Stock,
the Company entered into an Amendment and Waiver Agreement dated as
of January 30, 2009 with the Purchaser (the “ Closing
Agreement ”), pursuant to which, subject to the terms and
conditions set forth therein, the Company agreed to issue and sell,
and, the Purchaser agreed to purchase: (i) 50,000 shares of
the Company’s preferred stock with terms substantially
identical to the Series B Preferred Stock at a purchase price
of $1,000 per share, with each share convertible into Common Stock,
at the liquidation preference divided by $0.80 (the “
Conversion Shares ”), and (ii) $50 million of
trust preferred securities with a 10% coupon, both as described in
the Closing Agreement;
WHEREAS, in
connection with the Closing Agreement, the Company entered into a
Purchase Agreement dated as of February 17, 2009 with the
Purchaser, pursuant to which the Purchaser purchased from the
Company 25,000 shares of the Series B Preferred Stock, at a
purchase price of $1,000 per share, with each share convertible
into Common Stock, at the liquidation preference divided by
$0.80;
IN CONSIDERATION
of the mutual covenants contained in this Agreement, the Company
and the Purchaser agree as follows:
SECTION 1.
Agreement to Sell and Purchase the Shares . At the Closing
(as defined in Section 3), the Company will, subject to the
terms and conditions of this Agreement, issue and sell to the
Purchaser and the Purchaser will buy from the Company, upon the
terms and conditions hereinafter set forth, 25,000 shares of
Series B Preferred Stock (the “ Further Additional
Shares ”) at $1,000 per share (the “ Purchase
Price ”).
SECTION 2.
Delivery of the Shares at the Closing .
2.1 The completion
of the purchase and sale of the Further Additional Shares (the
“ Closing ”) shall occur on February 27,
2008 at the offices of Sullivan & Cromwell LLP located at 125
Broad Street, New York, New York 10004 or such other date or
location as agreed by the parties, but not prior to the date that
the conditions for Closing set forth below have been satisfied or
waived by the appropriate party (the “ Closing Date
”).
2.2 At the
Closing, the Purchaser shall deliver, in immediately available
funds, the full amount of the Purchase Price for the Further
Additional Shares being purchased hereunder to an account
designated by the Company and the Company shall deliver to the
Purchaser the Further Additional Shares evidenced by one or more
share certificates incorporating the terms set forth in the
certificate of designations of the Series B Preferred Stock
bearing an appropriate legend referring to the fact that the
Series B Preferred Stock 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 as more
further described in Section 3.5.
SECTION 3.
Representations, Warranties and Covenants of the Purchaser .
The Purchaser represents and warrants to, and covenants with, the
Company that:
3.1
Experience . (i) The Purchaser 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 Further Additional 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 Further Additional Shares and has reviewed
carefully the information provided by the Company to the Purchaser
in connection with this Agreement and the purchase of the Further
Additional Shares hereunder, and has requested, received, reviewed
and considered all information it deems relevant in making an
informed decision to purchase the Further Additional Shares;
(ii) the Purchaser is acquiring Further Additional Shares 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 Further Additional Shares or any arrangement or
understanding with any other persons regarding the distribution of
such Further Additional Shares (this representation and warranty
not limiting the Purchaser’s right to sell pursuant to a
registration statement or in compliance with the Securities Act and
the rules and regulations promulgated thereunder (the “
Rules and Regulations ”)); (iii) the Purchaser
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 Further
Additional Shares, nor will the Purchaser engage in any short sale
that results in a disposition of any of the Further Additional
Shares by the Purchaser, except in compliance with the Securities
Act and the Rules and Regulations and any applicable state
securities laws; (iv) the Purchaser is an “accredited
investor” within the meaning of Rule 501(a) of
Regulation D promulgated under the Securities Act.
3.2 Reliance on
Exemptions . The Purchaser understands that the Further
Additional 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
2
the Company is
relying upon the truth and accuracy of, and the Purchaser’s
compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth
herein in order to determine the availability of such exemptions
and the eligibility of the Purchaser to acquire the Further
Additional Shares.
3.3 Investment
Decision . The Purchaser understands that nothing in the
Agreement or any other materials presented to the Purchaser in
connection with the purchase and sale of the Further Additional
Shares, constitutes legal, tax or investment advice. The Purchaser
has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection
with its purchase of the Further Additional Shares.
3.4 Risk of
Loss . The Purchaser understands that its investment in the
Further Additional Shares involves a significant degree of risk,
including a risk of total loss of the Purchaser’s investment,
and the Purchaser has full cognizance of and understands all of the
risk factors related to the Purchaser’s purchase of the
Securities. The Purchaser understands that the market price of the
Common Stock into which the Further Additional Shares is
convertible has been volatile, and that n
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