EXHIBIT 1.2
8,050,000 Shares
FLAGSTAR BANCORP, INC.
Common Stock
Form of
Custody Agreement for Selling Stockholder
-----------------------------------------
_________ __, 1997
[Name and Address of Custodian]
Dear Sirs:
There are delivered herewith to you as custodian (i) certificates (the
"Certificates") representing ______ shares of Common Stock, par value $0.01 per
share (the "Common Stock"), of Flagstar Bancorp, Inc., a Michigan corporation
(the "Company"), which the undersigned wishes to sell (the "Offered Stock"), as
set forth in the fourth paragraph of this Custody Agreement, and (ii) stock
powers (the "Stock Powers") duly executed in blank by the undersigned with
respect to the Offered Stock with signatures guaranteed by a national bank or a
member firm of the New York Stock Exchange, Inc. The Certificates are to be
held by you as custodian for the account of the undersigned and are to be
disposed of by you in accordance with this Custody Agreement.
Prior to the execution and delivery of this Custody Agreement, the
undersigned has executed a Power of Attorney (the "Power of Attorney")
authorizing the attorneys-in-fact or any of them (the "Attorneys-in-Fact") to
act on [his/her] behalf in connection with the sale of up to the number of
shares of Common Stock indicated below to be sold by the undersigned and for
that purpose to, inter alia, (i) execute and deliver this Custody Agreement and
(ii) enter into an Underwriting Agreement (the "Underwriting Agreement") among
the Company, Flagstar Bank, FSB, certain stockholders of the Company (including
the undersigned, the "Selling Stockholders"), and Xxxxxx Brothers Inc.,
PaineWebber Incorporated and Xxxxx & Co. (collectively, the "Representatives"),
as representatives of the Underwriters, relating to a proposed public offering
of up to 8,050,000 shares of Common Stock. Unless otherwise defined herein,
terms defined in the Power of Attorney are used herein as defined therein.
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The following Certificates for Common Stock are enclosed herewith:
Number of shares
of Common Stock
Serial Number represented by
of Certificate each Certificate
---------------- -----------------
---------------- -----------------
---------------- -----------------
---------------- -----------------
---------------- -----------------
---------------- -----------------
Total...........
=================
You are authorized and directed to hold the Certificates and the Stock Powers
in your custody, and (i) to cause the number of shares of [Stockholder Name]
Stock which are to be sold by the undersigned pursuant to the Underwriting
Agreement to be transferred on the books of the Company into such names as the
Attorneys-in-Fact shall have instructed you, (ii) to cause to be issued, against
surrender of the certificates representing such shares of [Stockholder Name]
Stock, new certificates for such shares of Common Stock registered in such names
and in such denominations as the Attorneys-in-Fact shall have instructed you,
(iii) to purchase all stock transfer tax stamps necessary, if any, in connection
with the transfer of such shares and upon the instructions of the Attorneys-in-
Fact, and (iv) to deliver such new certificates to the Representatives for the
accounts of the several Underwriters, as the case may be, pursuant to the
Underwriting Agreement, against payment to the Company therefor, on behalf of
the undersigned, in accordance with the Underwriting Agreement. The Attorneys-
in-Fact will notify you, at least two full business days prior to each Delivery
Date (as defined in the Underwriting Agreement), of the names and denominations
in which the new certificates are to be issued pursuant to this paragraph.
On or after each Delivery Date, the Custodian shall, as instructed by the
Attorneys-in-Fact, return to the undersigned certificates representing the
number of shares of Common Stock, if any, deposited herewith, which are in
excess of the number of shares sold by the undersigned pursuant to the
Underwriting Agreement, as instructed by the Attorneys-in-Fact. Any new
certificates representing such excess number of shares of Common Stock shall
bear such restrictive legends, if any, that were borne by the Certificates
representing the Common Stock delivered herewith.
The authority granted and conferred hereby is subject to and in consideration
of the interests of the Company, the Underwriters and the other Selling
Stockholders. Accordingly,
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the Certificates deposited herewith and this Custody Agreement and your
authority hereunder are subject to said interests, and this Custody Agreement
and your authority hereunder are irrevocable by the undersigned and shall not be
terminated or affected by any act of the signatory or, to the extent permitted
by applicable law, whether by the subsequent death, incapacity, disability or
incompetence, liquidation or dissolution of the Selling Stockholder, or by the
occurrence of any other event or events, and, if after the execution hereof any
such event or events shall occur before the completion of the transactions
contemplated by the Underwriting Agreement and this Custody Agreement, you are
nevertheless authorized and directed to deal with the Certificates deposited
hereunder in accordance with the terms and conditions hereof, as if such event
or events had not occurred, regardless of whether or not you shall have received
notice thereof.
Notwithstanding the foregoing, if the First Delivery Date under the
Underwriting Agreement shall not have occurred prior to _______ __, 1997 or if
the Underwriting Agreement is earlier terminated pursuant to its terms, then,
from and after such date, the undersigned shall have the power to terminate this
Custody Agreement by giving written notice to the Custodian that this Custody
Agreement has been terminated, subject, however, to all lawful action taken by
the Custodian pursuant to this Custody Agreement prior to the actual receipt of
such notice.
Until payment of the purchase price for the shares of Common Stock to be sold
by the undersigned pursuant to the Underwriting Agreement has been made in the
amount and form provided herein and in the Underwriting Agreement, the
undersigned shall remain the owner of the shares of Common Stock represented by
the Certificates deposited herewith and shall have the right to vote such shares
and to receive all dividends and distributions thereon (if any).
You shall be entitled to act and rely upon any statement, request, notice or
instructions respecting this Custody Agreement given to you by the Attorneys-in-
Fact.
It is understood that you assume no responsibility or liability to any person
or undertake to take any action other than as set forth herein, and the
undersigned agrees to indemnify you and to hold you harmless with respect to
anything done by you in good faith in accordance with the foregoing instructions
and agrees that you may consult with counsel of your own choice (who may be
counsel for the Company) and that you shall have full and complete authorization
and protection for any action taken or suffered by you hereunder in good faith
and in accordance with the opinion of such counsel.
The undersigned represents, warrants and agrees that he has full right, power
and authority to execute and deliver this Custody Agreement, the Power of
Attorney and the Underwriting Agreement, and to sell the Offered Stock pursuant
to this Custody Agreement and the Underwriting Agreement, and upon payment for
and delivery of the Offered Stock in the manner provided in the Underwriting
Agreement, the Underwriters will acquire all rights of the undersigned in the
Offered Stock and also will acquire their interest in the Offered Stock free of
any adverse claim (within the meaning of the Uniform Commercial Code as in
effect in the State of New York), assuming that the Underwriters purchase the
Offered Stock in good faith and without notice of any adverse claim.
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This Custody Agreement is for the benefit of, and may be relied upon by, the
undersigned, the Company and its counsel, the Representatives and the
Underwriters and their agents and counsel, and the Custodian. This Custody
Agreement is binding upon the undersigned, the Custodian and the Company and
their respective successors and assigns. Nothing in this Custody Agreement is
intended or shall be construed to give any person other than the persons
mentioned in the preceding two sentences any legal or equitable rights, remedies
or claims under or in respect of this Custody Agreement or any provision
contained herein.
THIS CUSTODY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
The undersigned will provide you with such evidence of the undersigned's
authority as you may reasonably request.
Please acknowledge your acceptance of this Custody Agreement as custodian and
receipt of the Certificates and the Stock Powers deposited herewith by executing
and returning to the undersigned the enclosed copy of this Custody Agreement
with the attached Acknowledgment and Receipt completed and executed at the
following address:
________________________________________________
________________________________________________
________________________________________________
Attn: ___________________________________________
Dated: ___________ __, 1997
Very truly yours,
____________________________________
[Name of Selling Stockholder]
ACKNOWLEDGEMENT AND RECEIPT
[Name], [title] of [name of Custodian], as custodian, acknowledges acceptance
of the duties of custodian under the foregoing Custody Agreement and receipt of
the Certificates and the Stock Powers referred to therein.
Dated: ________ __, 1997
____________________________________
[Name of Custodian],
as Custodian
ACKNOWLEDGEMENT AND RECEIPT
Flagstar Bancorp, Inc. acknowledges acceptance of the duties conferred upon it
in the foregoing Custody Agreement. [NECESSARY IN THE ABSENCE OF PRE-OFFERING
STOCK OPTIONS?]
Dated: _________ __, 1997
FLAGSTAR BANCORP, INC.
By_________________________________
Title:
DEFINITIONS
The term "associate," as used throughout the Power of Attorney, means (a) any
corporation or organization (other than the Company or any of its subsidiaries)
of which you are an officer, director or partner or of which you are, directly
or indirectly, the beneficial owner of 10% or more of any class of equity
securities, (b) any trust or other estate in which you have a substantial
beneficial interest or as to which you serve as trustee or in a similar
capacity, (c) your spouse, (d) any relative of your spouse or any relative of
yours who has the same home as you or who is a director or officer or key
executive of the Company or any of its subsidiaries, or (e) any partner,
syndicate member or person with whom you have agreed to act in concert with
respect to the acquisition, holding, voting or disposition of shares of the
Company's securities.
The term "material," when used in the Power of Attorney to qualify a
requirement for the furnishing of information as to any subject, limits the
information required to those matters as to which there is a substantial
likelihood that a reasonable investor would attach importance in determining
whether to purchase the Common Stock of the Company.
The term "material relationship" has not been defined by the Securities and
Exchange Commission. However, the Commission has indicated that it will
probably construe as a "material relationship" any relationship which tends to
prevent arms-length bargaining in dealings with a company, whether arising from
a close business connection or family relationship, a relationship of control or
otherwise. It seems prudent, therefore to consider that you would have such a
relationship, for example, with any organization of which you are an officer,
director, trustee or partner or in which you own, directly or indirectly, 10% or
more of the outstanding voting stock, or in which you have some other
substantial interest, and with any person or organization with whom you have, or
with whom any relative or spouse (or any other person or organization as to
which you have any of the foregoing other relationships) has, a contractual
relationship.
The term "beneficially," when used in connection with the ownership of
securities, means (a) any interest in a security which entitles you to any of
the rights or benefits of ownership even though you may not be the owner of
record or (b) securities owned by you directly or indirectly, including those
held by you for your own benefit (regardless of how registered) and securities
held by others for your benefit (regardless of how registered), such as by
custodians, brokers, nominees, pledges, etc., and including securities held by
an estate or trust in which you have an interest as legatee or beneficiary,
securities owned by a partnership of which you are a partner, securities held by
a personal holding company of which you are a stockholder, etc., and securities
held in the name of your spouse, minor children and any relative (sharing the
same home). A "beneficial owner" of a security includes any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares:
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(1) Voting power which includes the power to vote, or to direct the
voting of, such security; and/or
(2) Investment power which includes the power to dispose, or to
direct the disposition of such security.
A person is also deemed to be the beneficial owner of a security, if that person
has the right to acquire beneficial ownership of such security, as defined in
the preceding sentence at any time within sixty days, including but not limited
to, any right to acquire:
(i) through the exercise of any option, warrant or right; or
(ii) through the conversion of a security; or
(iii) pursuant to the power to revoke a trust, discretionary account,
or similar arrangement.
