PURCHASE AGREEMENT
Exhibit 10.1
THIS PURCHASE AGREEMENT (this “Agreement”) is effective as of the 17th 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 0000 Xxxxxxxxx
Xxxxx, Xxxx, Xxxxxxxx 00000-0000 and XX Xxxxxx 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.
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 “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 Additional Shares (the “Closing”)
shall occur on February 17, 2008 at the offices of Xxxxxxxx & Xxxxxxxx LLP located at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 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 Additional Shares being purchased hereunder to an
account designated by the Company and the Company shall deliver to the Purchaser the
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
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 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 Additional Shares hereunder, and has requested, received,
reviewed and considered all information it deems relevant in making an informed decision to
purchase the Additional Shares; (ii) the Purchaser is acquiring 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 Additional Shares or any arrangement or understanding with any other
persons regarding the distribution of such 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 Additional Shares, nor will the Purchaser engage in any short sale
that results in a disposition of any of the 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 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
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 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
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 Additional Shares.
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3.4 Risk of Loss. The Purchaser understands that its investment in the 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 Additional Shares is convertible has been volatile, and
that no representation is being made as to the future value of the Additional Shares.
3.5 Legend. The Purchaser understands that, until such time as a registration
statement has been declared effective or the Additional Shares may be sold pursuant to Rule 144
under the Securities Act without any restriction as to the number of securities as of a particular
date that can then be immediately sold, the Additional Shares will bear a restrictive legend in
substantially the following form:
“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT
RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER AND OTHER
RESTRICTIONS SET FORTH IN AN INVESTMENT AGREEMENT, DATED AS OF DECEMBER 17, 2008,
COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE ISSUER.”
3.6 Transfer Restrictions. Consistent with the legend set forth in Section 3.5, the
Additional Shares may only be disposed of in compliance with state and federal securities laws and
the transfer and other restrictions set forth in the Investment Agreement as if they were
“Securities” thereunder.
SECTION 4. Representations, Warranties and Covenants of the Company. The Company
represents and warrants to, and covenants with, the Purchaser that:
4.1 Organization and Standing. The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of Michigan.
4.2 Execution and Delivery; Enforceability. The execution, delivery and performance of
this Agreement by the Company and the consummation of the transactions contemplated hereby have
been duly authorized by the Board of Directors. This Agreement has been duly and validly executed
and delivered by the Company and, assuming due authorization, execution and delivery by Purchaser,
is a valid and binding obligation of the Company enforceable against the Company in accordance with
its terms (except as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating
to or affecting creditors’ rights or by general equity principles). No
other corporate proceedings are necessary for the execution and delivery by the Company of
this Agreement, the performance by it of its obligations hereunder or the consummation by it of the
transactions contemplated hereby, subject, in the case of the authorization of the Conversion
Shares, to receipt of the Stockholder Approvals identified in the Certificate of Designations.
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4.3 Due Authorization. The Additional Shares have been duly authorized and, when
issued and delivered against receipt of consideration therefore as provided in this Agreement, will
be validly issued, fully paid and non-assessable, will not be issued in violation of or subject to
preemptive rights of any other stockholder of the Company and will not result in the violation or
triggering of any price-based antidilution adjustments under any agreement to which the Company is
a party. The voting rights of the holders of the Additional Shares will be enforceable in
accordance with the terms of the Certificate of Designations. The Certificate of Designations has
been filed with the Secretary of State of the state of Michigan and, as of the Closing Date, will
be in full force and effect and enforceable against the Company in accordance with its terms.
4.4 Governmental Consents. No consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental agency or body is required for
the execution and delivery of this Agreement or the consummation of the transactions contemplated
by this Agreement, except for compliance with the Blue Sky laws and federal securities laws
applicable to the offering of the Shares and such consents, approvals, authorizations or other
orders as have been obtained and are in full force and effect.
4.5 No Conflicts. Neither the execution and delivery by the Company of this
Agreement, nor the consummation of the transactions contemplated hereby, nor compliance by the
Company with any of the provisions hereof (including, without limitation, the conversion provisions
of the Convertible Preferred Stock), will (A) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of, or result in the loss of any
benefit or creation of any right on the part of any third party under, or accelerate the
performance required by, or result in a right of termination or acceleration of, or result in the
creation of any liens, charges, adverse rights or claims, pledges, covenants, title defects,
security interests and other encumbrances of any kind upon any of the material properties or assets
of the Company or any Subsidiary under any of the terms, conditions or provisions of (i) subject in
the case of the authorization and issuance of the Conversion Shares to receipt of the approval by
the Company’s stockholders of the Stockholder Proposals, its Certificate of Incorporation or bylaws
(or similar governing documents) or the certificate of incorporation, charter, bylaws or other
governing instrument of any Subsidiary or (ii) any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which the Company or any Subsidiary
is a party or by which it may be bound, or to which the Company or any Subsidiary or any of the
properties or assets of the Company or any Subsidiary may be subject, or (B) violate any law,
statute, ordinance, rule, regulation, permit, concession, grant, franchise or any judgment, ruling,
order, writ, injunction or decree applicable to the Company or any Subsidiary or any of their
respective properties or assets.
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SECTION 5. Registration Rights. The Purchaser shall have the right to have the
Additional Shares (including the Conversion Shares) registered for resale under the Securities Act,
and related indemnification rights, as set forth in Section 4.7 of the Investment Agreement,
as if the Additional Shares (including the Conversion Shares) were “Registrable Securities”
thereunder.
SECTION 6. New York Stock Exchange Listing. The Company shall promptly use its
reasonable best efforts to cause the Conversion Shares to be approved for listing of the New York
Stock Exchange or such other nationally recognized securities exchange on which the Common Stock
may be listed, subject to official notice of issuance.
SECTION 7. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed by first-class registered or certified airmail,
e-mail, confirmed facsimile or nationally recognized overnight express courier postage prepaid, and
shall be deemed given when so mailed and shall be delivered as addressed as follows:
| (a) | if to the Company, to: |
| Flagstar Bancorp, Inc. 0000 Xxxxxxxxx Xxxxx, Xxxx, Xxxxxxxx 00000-0000 Attention: Xx. Xxxx Xxxxx Facsimile: (000) 000-0000 E-mail: xxxx.xxxxx@xxxxxxxx.xxx |
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| with a copy to: |
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| Xxxxx Xxxx LLP 0000 Xxxxxxxxxxx Xxxxxx, X.X. Xxxxx 0000 Xxxxxxxxxx, XX 00000-0000 Attention: Xxxxxx Xxxxxxx, Esq. Facsimile: (000) 000-0000 E-mail: xxxxxx.xxxxxxx@XxxxxXxxx.xxx |
or to such other person at such other place as the Company shall designate to the Purchaser in
writing; and
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| (b) | if to a Purchaser, to: |
| XX Xxxxxx Investments L.P. 000 Xxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxx X. Xxxxx, General Counsel Facsimile: (000) 000-0000 |
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| with a copy to: |
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| Xxxxxxxx & Xxxxxxxx LLP 000 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxxxx X. Xxxxx, Esq. Xxxxxx X. Xxxxxx, Esq. Facsimile: (000) 000-0000 |
or at such other address or addresses as may have been furnished to the Company in writing.
SECTION 8. Changes. This Agreement may not be modified or amended except pursuant to
an instrument in writing signed by the Company and the Purchaser. Any amendment or waiver effected
in accordance with this Section 6 shall be binding upon the Purchaser and the Company.
SECTION 9. Headings. The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of this Agreement.
SECTION 10. Severability. In case any provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or impaired thereby.
SECTION 11. Governing Law; Venue. This Agreement is to be construed in accordance
with and governed by the federal law of the United States of America and the internal laws of the
State of New York without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of New York to the rights
and duties of the parties, except that the parties hereto intend that the provisions of Sections
5-1401 and 5-1402 of the New York general obligations law shall apply to this Agreement. Each of
the Company and the Purchaser submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York State court sitting in New
York City for purposes of all legal proceedings arising out of or relating to this Agreement and
the transactions contemplated hereby. Each of the Company and the Purchaser irrevocably waives, to
the fullest extent permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court
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and any claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
SECTION 12. Counterparts; Facsimile. This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which, when taken together, shall constitute
but one instrument, and shall become effective when one or more counterparts have been signed by
each party hereto and delivered to the other parties. Facsimile signatures shall be deemed
original signatures.
SECTION 13. Entire Agreement. This Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the Company nor the
Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters.
Each party expressly represents and warrants that it is not relying on any oral or written
representations, warranties, covenants or agreements outside of this Agreement.
SECTION 14. Further Assurances. Each party agrees to cooperate fully with the other
parties and to execute such further instruments, documents and agreements and to give such further
written assurance as may be reasonably requested by any other party to evidence and reflect the
transactions described herein and contemplated hereby and to carry into effect the intents and
purposes of this Agreement.
[Remainder of Page Left Intentionally Blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized representatives as of the day and year first 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 | ||||
| /s/ Xxxxxx X. Xxxxx | ||||
| Name: Xxxxxx X. Xxxxx | ||||
| Title: General Counsel | ||||
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