Exhibit 10.1
SUBSCRIPTION AGREEMENT
     THIS SUBSCRIPTION AGREEMENT (this “Agreement”) 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 the undersigned subscriber (the “Subscriber”) is made
effective as of the date on which the Company accepts this Agreement by
executing the acceptance form below.
     WHEREAS, the Company has entered into an Investment Agreement made as of
December 17, 2008 with MP Thrift Investments L.P., a Delaware limited
partnership (“MP Thrift”), pursuant to which MP Thrift agreed to purchase from
the Company 250,000 shares of a series of mandatory convertible participating
voting preferred stock, $0.01 par value per share, of the Company (the
“Convertible 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
(the “MP Thrift Investment Agreement”);
     WHEREAS, in order to induce MP Thrift to enter into the MP Thrift
Investment Agreement, the Subscribers have agreed to purchase shares of Common
Stock (the “Management Shares”) for an aggregate purchase price of not less than
$4 million and not more than $5 million at a price per Management Purchased
Share of $0.80 per share, provided, however, that if the Company does not have
sufficient shares of Common Stock available for issuance prior to an amendment
to the Company’s Amended and Restated Articles of Incorporation to increase the
number of authorized shares thereunder, then the Subscribers shall instead
purchase an equivalent number shares of Convertible Preferred Stock on an as
converted basis as would have been purchased if sufficient shares of Common
stock were available for issuance.
     SECTION 1. Subscription for the Management Shares. At the completion of the
purchase and sale of the Management Shares (the “Closing”), the Subscriber
hereby offers to purchase from the Company, upon the terms and conditions
hereinafter set forth,                      shares of Common Stock at a purchase
price of $.80 per share (the “Purchase Price”).
     SECTION 2. Acceptance of Subscriptions. Subscriber understands that the
Company may accept this offer for all or any portion of the aggregate principal
amount subscribed for herein or may reject this subscription without notice, in
full or in part, with or without cause. Subscriber understands that the
execution and delivery of this Agreement will not constitute an agreement
between Subscriber and the Company until this Agreement has been accepted by the
Company. The undersigned Subscriber will be notified of the acceptance of this
subscription, or its rejection, by the Company.
     SECTION 3. Delivery of the Shares at the Closing. At the Closing, the
Subscriber shall deliver, in immediately available funds, the full amount of the
Purchase Price for the Management Shares being subscribed for hereunder to an
account designated by the Company and the Company will
issue                      shares of Common Stock sold in the offering against

 

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receipt of subscription funds from Subscribers. Such shares will bear an
appropriate legend referring to the fact that the Management Shares 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. The Management Shares, along with a copy of this Agreement accepted
by the Company, will be delivered to Subscriber within five business days of the
Closing.
     SECTION 4. Representations, Warranties and Covenants of the Subscriber. The
Subscriber hereby represents and warrants to, and covenants with, the Company
that:
     4.1 Experience. (i) The Subscriber 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 Management 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 Management Shares and
has reviewed carefully the information provided by the Company to the Subscriber
in connection with this Agreement and the purchase of the Management Shares
hereunder, and has requested, received, reviewed and considered all information
it deems relevant in making an informed decision to purchase the Management
Shares; (ii) the Subscriber is acquiring the number of Management Shares set
forth in Section 2.1 above 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 Management Shares or any arrangement or understanding with any other
persons regarding the distribution of such Management Shares (this
representation and warranty not limiting the Subscriber’s right to sell pursuant
to the Registration Statement or in compliance with the Securities Act and the
rules and regulations promulgated thereunder (the “Rules and Regulations”)); and
(iii) the Subscriber 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 Management Shares, nor will
the Subscriber engage in any short sale that results in a disposition of any of
the Management Shares by the Subscriber, except in compliance with the
Securities Act and the Rules and Regulations and any applicable state securities
laws.
     4.2 Reliance on Exemptions. The Subscriber understands that the Management
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 Subscriber’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Subscriber set forth herein in order to determine the availability of such
exemptions and the eligibility of the Subscriber to acquire the Management
Shares.
     4.3 Investment Decision. The Subscriber understands that nothing in this
Agreement or any other materials presented to the Subscriber in connection with
the purchase and sale of the Management Shares, constitutes legal, tax or
investment advice. The Subscriber 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 Management Shares.
     4.4 Risk of Loss. The Subscriber understands that its investment in the
Management Shares involves a significant degree of risk, including a risk of
total loss of the Subscriber’s

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investment, and the Subscriber has full cognizance of and understands all of the
risk factors related to the Subscriber’s purchase of the Securities. The
Subscriber understands that the market price of the Common Stock has been
volatile, and that no representation is being made as to the future value of the
Management Shares.
     4.5 Legend. The Subscriber understands that, until such time as the
Registration Statement has been declared effective or the Management 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 Management Shares will bear a restrictive legend in substantially the
following form:
“THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION. THE SHARES MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE
SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE
OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT
REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”
     4.6 Transfer Restrictions. Consistent with the legend set forth in
Section 3.5, the Management Shares may only be disposed of in compliance with
state and federal securities laws.
     SECTION 5. Termination of the Offering. The offering of the Management
Shares can be terminated at any time by the Company regardless of whether this
Agreement has theretofore been accepted by the Company. In the event of
termination of this offering, the amount paid for the Management Shares
previously remitted by Subscriber, without interest thereon, will be promptly
refunded to Subscriber and this Agreement, and the parties’ obligations
hereunder, shall terminate.
     SECTION 6. Subscription Irrevocable. This Agreement and the subscription
for the Management Shares hereby shall be irrevocable after delivery to the
Company.
     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:

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  (a)   if to the Company, to:

Flagstar Bancorp, Inc.
5151 Corporate Drive,
Troy, Michigan 48098-2639
Attention: Mr. Paul Borja
Facsimile: (248) 312-6833
E-mail: paul.borja@flagstar.com

with a copy to:

Kutak Rock LLP
1101 Connecticut Avenue, N.W.
Suite 1000
Washington, DC 20036-4374
Attention: Jeremy Johnson, Esq.
Facsimile: (202) 828-2488
E-mail: jeremy.johnson@KutakRock.com

     or to such other person at such other place as the Company shall designate
to the Subscriber in writing; and
          (b) if to a Subscriber, at its address as set forth at the end of this
Agreement, 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 Subscribers.
Any amendment or waiver effected in accordance with this Section 7 shall be
binding upon each holder of any Management Shares purchased under this Agreement
at the time outstanding, each future holder of all such Management Shares, 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. The Company and the Subscribers each submit 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. The Company and the
Subscribers each irrevocably waive, to the fullest extent

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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 and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
     SECTION 12. Counterparts. 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 Subscribers make 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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     SECTION 15. Subscriber Information. As a material inducement to the Company
to issue a Management Share to Subscriber, Subscriber represents and warrants to
the Company that the following information is true and correct in all material
respects:

         
Name(s):
       
 
 
 
   
 
 
 
   
 
       
Tax Identification or
       
Social Security Number(s):
       
 
 
 
   
 
 
 
   
 
       
State of Formation or
       
Residency
       
 
 
 
   
Mailing Address:
       
 
 
 
   
 
 
 
   
 
 
 
   
Telephone:
  (     )    
 
 
 
   
Facsimile:
  (     )    
 
 
 
   
e-mail:
       
 
 
 
   

     The Management Shares should be issued in the following name or names:
     If in more than one name, title to the Units should be registered in such
names as:
     ___ Joint Tenants with Right of Survivorship

     ___ Tenants in Common
     ___ Husband and Wife, as Community Property

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     The undersigned certifies that the undersigned is:
     ___ An “accredited investor” because the undersigned:
     ___ is a natural person whose individual net worth, or joint net worth with
his or her spouse, exceeds $1,000,000; or
     ___ is a natural person who had an individual income in excess of $200,000
in each of the two (2) most recent years or joint income with his or her spouse
in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year; or
     ___ is a director or executive officer of the Company; or
     ___ is a corporation, partnership, limited liability company, Massachusetts
or similar business trust, organization described Section 501(c)(3) of the
Internal Revenue Code of 1986, or other form of business entity, that (i) has
not been formed for the specific purpose of acquiring Units and (ii) has total
assets in excess of $5,000,000; or
     ___ is a bank as defined in Section 3(a)(2) of the Act, or any savings and
loan association or other institution as defined in Section 3(a)(5)(A) of the
Act whether acting in its individual or fiduciary capacity; or
     ___ is a broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934; or
     ___ is an insurance company as defined in Section 2(13) of the Act; or
     ___ is an investment company registered under the Investment Company Act of
1940, a business development company as defined in Section 2(a)(48) of the
Investment Company Act of 1940, a private business development company as
defined in Section 202(a)(22) of the Investment Advisers Act of 1940, or a Small
Business Investment Company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of 1958; or
     ___ is an entity in which all of the equity owners are accredited
investors.
     ___ Not an “accredited investor.”

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FLAGSTAR BANCORP, INC.
Signature Page to Subscription Agreement

              Individuals:       Entities:    
 
           
 
           
 
     
 
   
Name of Individual (Please Print)
      Name of Entity (Please Print)    
 
           
 
           
 
     
 
   
Signature of Individual
      Name and Title of Officer (Please Print)    
 
           
 
           
 
     
 
   
Name of Individual (for joint tenants)
      Signature of Officer    
(Please Print)
           
 
           
 
           
 
           
Signature of Individual (for joint tenants)
           
 
           
Dated:                                         , 2008
      Dated:                                         , 2008    

ACCEPTANCE BY COMPANY
     This Agreement has been accepted by the Company as of the date set forth
below.

            ACCEPTED BY:

FLAGSTAR BANCORP, INC.
      By:           Title:          Date: