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EXHIBIT 1.3
1,495,000 Shares
FLAGSTAR BANCORP, INC.
Common Stock
Custody Agreement for Xxxxxx X. Xxxxxxx as Selling Shareholder
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December , 1998
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Registrar and Transfer Company
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Cranford, New Jersey
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Attention:
Dear Sirs:
Reference is hereby made to the proposed public offering of Common
Stock par value $.01 per share (the "Common Stock"), of Flagstar Bancorp, Inc.,
a Michigan corporation (the "Company") in which, among other things, the
undersigned will sell a portion of his shares of Common Stock, to the several
underwriters (the "Underwriters") represented by McDonald Investments, Inc.,
Xxxxx Capital Markets and Friedman, Billings, Xxxxxx & Co., Inc. (collectively,
the "Representatives").
There are delivered to you herewith as custodian, one or more
certificates (the "Certificates"), in negotiable form with signatures guaranteed
by a national bank or a member firm of the New York Stock Exchange, representing
the number of shares of Common Stock that the undersigned (the "Selling
Shareholder") wishes to sell (the "Offered Stock"), as set forth in the third
paragraph of this Custody Agreement. The Certificates are to be held by you as
custodian for the account of the Selling Shareholder and are to be disposed of
by you in accordance with this Custody Agreement.
The following Certificates for Common Stock are enclosed herewith:
Number of shares of
Common Stock to be
sold from
Number of shares of Certificates if less
Serial Number Common Stock than all shares
of represented by each represented thereby
Certificate Certificate are to be sold
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You are authorized and directed to hold the Certificates in your
custody and, on or immediately prior to the Closing Time (as defined in the
Underwriting Agreement) (i) to cause the number of shares of Common Stock which
are to be sold by the Selling Shareholder pursuant to the Underwriting Agreement
(the "Underwriting Agreement") among the Company, the Selling Shareholder and
the Underwriters, relating to a proposed public offering of shares of Common
Stock, to be transferred on the books of the Company into such names as the
Selling Shareholder shall have instructed you, (ii) to cause to be issued,
against surrender of the Certificates representing such shares, new certificates
for such shares of Common Stock registered in such names and in such
denominations as the Selling Shareholder shall have instructed you, (iii) to
purchase all stock transfer tax stamps necessary, if any, in connection with the
transfer of such shares, (iv) upon the instructions of the Selling Shareholder,
to deliver such new certificates of the Underwriters for the accounts of the
several Underwriters, as the case may be, pursuant to the Underwriting
Agreement, against payment therefor in accordance with the Underwriting
Agreement, and (v) to give receipt for such payment and to deposit the same to
your account as custodian ("Custodian Account"). The Selling Shareholder will
notify you, at least one full business day prior to the Closing Time, of the
names and denominations in which the new certificates are to be issued pursuant
to this paragraph.
Within one day after the Closing Time, you shall pay, in immediately
available funds, the amount in the Custodian Account to the Selling Shareholder
or to any representative duly authorized by the Selling Shareholder; provided,
however, that in connection with the payment of expenses for the Selling
Shareholder, you may either deduct payment for such expenses from the proceeds
in the Custodian Account before remitting such proceeds to the Selling
Shareholder, or you may xxxx the Selling Shareholder and the Selling Shareholder
agrees to pay you for such expenses. On or after the Closing Time, you shall
also, as instructed by the Selling Shareholder, return to the Selling
Shareholder new 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 Selling Shareholder pursuant to the Underwriting Agreement. The new
certificates representing such excess number of shares of Common Stock shall
bear such restrictive legends that were borne by the Certificates representing
the Common Stock delivered herewith.
If the sale of Common Stock contemplated by the Underwriting Agreement
shall not be completed prior to _______________, then, within three days after
receipt of written notice, you shall return to the Selling Shareholder the
Certificates deposited herewith.
The authority granted and conferred herein is subject to and in
consideration of the interests of the Company, the Underwriters and the Selling
Shareholder. Accordingly, the Certificates deposited herewith and this Custody
Agreement and your authority hereunder are subject to such interests, and this
Custody Agreement and your authority hereunder are irrevocable by the Selling
Shareholder and shall not be subject to termination by any acts of the Selling
Shareholder, or by operation of law (including the death or incapacity of the
Selling Shareholder) or by the occurrence of any other event, and, if, after the
execution hereof, any such event (including death or incapacity) shall occur
before the completion of the transactions contemplated by the Underwriting
Agreement and this Custody Agreement, then you are nevertheless authorized and
directed to deal with the Certificates deposited hereunder in
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accordance with the terms and conditions hereof, as if such event (including
death or incapacity) had not occurred, regardless of whether or not you shall
have received notice thereof.
Until payment of the purchase price for the shares of Common Stock to
be sold by the Selling Shareholder pursuant to the Underwriting Agreement has
been made to you in the amount and form provided in the Underwriting Agreement
by or for the account of the Underwriters, the Selling Shareholder 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
Selling Shareholder.
It is understood that you assume no responsibility or liability to any
person other than to deal with the Certificates deposited herewith and the
proceeds from the sale of the shares of Common Stock represented thereby in
accordance with the provisions hereof, and the Selling Shareholder agrees to
indemnify you (including the reasonable fees and expenses of counsel) 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 Selling Shareholder represents, warrants and agrees that such
Selling Shareholder has all power, authority and legal capacity necessary to
execute and deliver this Custody Agreement and the Underwriting Agreement, to
perform such Selling Shareholder's obligations hereunder and thereunder,
including the sale of the Offered Stock, and the Underwriters will, upon
delivery and payment for such shares, receive good and marketable title to such
shares, free and clear of any and all liens, claims, encumbrances, restrictions,
preemptive rights, and any other claims of any third party.
This Custody Agreement is for the benefit of, and may be relied upon
by, the Selling Shareholder, the Company and its counsel, the Underwriters, and
their agents and counsel, and the Custodian. This Custody Agreement is binding
upon the Selling Shareholder and the Custodian 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, remedy or claim 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 MICHIGAN.
The Selling Shareholder will provide you with such evidence of the
Selling Shareholder's authority as you may reasonably request.
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Please acknowledge your acceptance of this Custody Agreement as
custodian and receipt of the Certificates deposited herewith by executing and
returning to the Selling Shareholder the enclosed copy of this Custody Agreement
with the attached Acknowledgement and Receipt completed and executed at the
following address:
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Attention:
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Very truly yours,
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Xxxxxx X. Xxxxxxx
Dated: December , 1998
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ACKNOWLEDGMENT AND RECEIPT
Registrar and Transfer Company, as custodian, acknowledges acceptance
of the duties of custodian under the foregoing Custody Agreement and receipt of
the Certificates referred to in the second paragraph of such Custody Agreement.
Dated: December , 1998
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Registrar and Transfer Company
By:
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Title:
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