Contract
Exhibit 10.3
THIS AMENDMENT AND WAIVER AGREEMENT, dated as of January 30, 2009 (this “Closing
Agreement”), by and between Flagstar Bancorp, Inc., a corporation organized under the laws of
the State of Michigan (the “Company”) and XX Xxxxxx Investments L.P. a Delaware limited
partnership (“Purchaser”, and together with the Company, the “Closing Parties”).
WHEREAS, the Closing Parties entered into that certain Investment Agreement, dated as of
December 17, 2008 (the “Original Agreement”);
WHEREAS, in accordance with Section 6.3 of the Original Agreement, the Closing Parties wish to
waive certain closing conditions as and to the extent provided in Section 2 of this Closing
Agreement (the “Waiver”);
WHEREAS, in accordance with Section 6.3 of the Original Agreement, the Closing Parties desire
to amend certain provisions of the Original Agreement as and to the extent provided in Sections 3
and 4 of this Closing Agreement; and
WHEREAS, in connection with the agreement to grant the Waiver, the Closing Parties have agreed
to the terms of Additional Capital (as defined below) on the terms set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the agreements herein contained, the
Closing Parties agree as follows:
1. Pursuant to Section 1.2(a), the Closing Parties agree that, subject to the satisfaction of
all conditions to Closing set forth in the Original Agreement or waiver thereof (as set forth
herein), the Closing Date shall be January 30, 2009.
2. The Closing Parties hereby waive compliance with the closing condition set forth in Section
1.2(c)(1)(B) of the Original Agreement, solely with respect to the timing (i.e., “prior to the
Closing Date”) of the receipt of proceeds of TARP Transaction, and hereby amend such section by
adding the words “or on” directly following the words “prior to”.
3. The Closing Parties hereby agree to replace the words “not more than $5 million” in Recital
G (Management Purchase) of the Original Agreement with “not more than approximately $5.32 million”.
4. The Closing Parties hereby agree to a delete the following consents and determinations from
the definition of Required Approval in the Original Agreement: (a) the Required Approval specified
in Company Disclosure Schedule 2.2(f)(k) to the Original
Agreement and (b) the written determination by each of the FDIC and the OTS as to “institution
affiliated party” status specified in Section 2.2(f) of the Original Agreement.
5. Subject to the terms and conditions set forth in the Original Agreement and subject to the
delivery of such certificates and customary subscription agreements and documentation as are
reasonably agreed by the Closing Parties, the Company shall issue additional securities and the
Purchaser (or its designee) shall purchase the additional securities (collectively, the “Additional
Capital”) on the following terms:
(a) No later than February 13, 2009, Purchaser will deliver $25,000,000 to the Company
and the Company will issue and deliver to the Purchaser 25,000 shares of preferred stock
with terms substantially identical to the Convertible Preferred Stock;
(b) At any time following the purchase described in clause (a) above, upon two weeks
prior notice by the Company to Purchaser (to be delivered no later than February 27, 2009),
Purchaser will deliver $25,000,000 to the Company and the Company will issue and deliver to
the Purchaser 25,000 shares of preferred stock with terms substantially identical to the
Convertible Preferred Stock; and
(c) At any time following the purchases described in clauses (a) and (b) above, upon
two weeks prior notice by the Company to Purchaser (to be delivered no later than March 13,
2009), Purchaser will deliver $50,000,000 to the Company and the Company will issue and
deliver to the Purchaser shares of trust preferred stock with an aggregate liquidation
preference of $50,000,000 and a dividend rate of 10%, and convertible, in whole or in part,
into Common Stock at the option of the Purchaser on April 1, 2010 at a conversion price
equal to 90% of the volume-weighted average price per share during the period from February
1, 2009 to April 1, 2010, subject to a minimum of $0.80 and a maximum of $2.00; Purchaser’s
conversion right shall lapse if not exercised on April 1, 2010, and such shares shall be
redeemable by the Company at any time after January 30, 2011.
6. The Closing Parties further agree that, until any required approval by Stockholders
pursuant to Section 312.03 of the NYSE Listed Company Manual is obtained, the voting rights of any
shares issued pursuant to Sections 5(b) and 5(c) above shall be capped such that the aggregate
voting rights of shares issued under Section 5 of this Closing Agreement is no greater than 4.9% on
an as converted basis.
7. Each party hereto represents and warrants that this Closing Agreement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance to its terms.
8. This Closing Agreement shall be governed by and construed in accordance with the laws of
the State of New York.
9. This Closing Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, and all of which shall constitute one and the same Closing Agreement.
10. Except to the extent expressly amended or waived by this Closing Agreement, all terms of
the Original Agreement shall remain in full force and effect without amendment, change or
modification.
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11. All references in the Original Agreement to “this Agreement”, “the Agreement”,
“hereunder”, “hereof”, “herein” or words of like import, and each reference to the Original
Agreement in any other agreements, documents or instruments executed and delivered pursuant to or
in connection with the Original Agreement shall be deemed to mean and be a reference to the
Original Agreement as amended or waived by this Closing Agreement.
12. Capitalized terms used but not otherwise defined herein shall have the respective
meanings set forth in the Original Agreement.
[The following page is a signature page.]
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IN WITNESS WHEREOF, this Closing Agreement has been duly executed and delivered by the duly
authorized officers of the parties hereto as of the date first herein above written.
| FLAGSTAR BANCORP, INC. |
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| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | EVP | |||
| XX XXXXXX INVESTMENTS L.P. |
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| By: | MP (Thrift) Global Partners III LLC, its General Partner |
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| /s/ Xxxxxx X. Xxxxx | ||||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | General Counsel | |||
