Exhibit
10.2
STOCK PURCHASE
AGREEMENT
STOCK PURCHASE
AGREEMENT (this “Agreement”) made as of this ___ day of
October, 2009 among Enterprise Acquisition Corp., a Delaware
corporation (“Buyer” or “Enterprise”), the
signatory on the execution page hereof (“Seller”) and
solely for the purposes of Sections 4(d), 7 and 8(a) hereof, Marc
H. Bell (“Bell”) and Daniel C. Staton
(“Staton” and together with Bell, the
“Insiders”) and solely for the purposes of Sections
8(a) and 8(b) hereof, ARMOUR Residential REIT, Inc.
(“ARMOUR”).
WHEREAS, Buyer was
organized for the purpose of acquiring, through a merger, capital
stock exchange, asset acquisition or other similar business
combination, an operating business (“Business
Combination”); and
WHEREAS, Buyer
consummated an initial public offering in November 2007
(“IPO”) in connection with which it raised gross
proceeds of approximately $250 million, a significant portion of
which was placed in a trust account (the “Trust
Account”) maintained by Continental Stock Transfer and Trust
Company (“Continental”) pending the consummation of a
Business Combination, or the dissolution and liquidation of Buyer
in the event it is unable to consummate a Business Combination on
or prior to November 7, 2009; and
WHEREAS, Buyer has
entered into that certain Agreement and Plan of Merger, dated July
29, 2009, among Enterprise, ARMOUR, and ARMOUR Merger Sub Corp., a
Delaware corporation (“Merger Sub Corp.”) and a
wholly-owned subsidiary of ARMOUR (the “Merger
Agreement”), pursuant to which (i) Merger Sub Corp. will
merge with and into Enterprise with Enterprise surviving the merger
and becoming a wholly-owned subsidiary of ARMOUR and (ii) holders
of Enterprise securities at the time of merger will be security
holders of ARMOUR (the “Merger”); and
WHEREAS, the approval
of the Merger is contingent upon, among other things, the
affirmative vote of holders of a majority of the outstanding common
shares of Enterprise which are present and entitled to vote at the
special meeting called to approve the Merger; and
WHEREAS, pursuant to
certain provisions in Buyer’s certificate of incorporation, a
holder of shares of Buyer’s common stock issued in the IPO
may, if it votes against the Merger, demand that Buyer convert such
common shares into cash (“Conversion Rights”);
and
WHEREAS, the Merger
cannot be consummated if holders of 30% (or 50% in the event the
secondary charter proposal is approved at the Enterprise special
meeting of stockholders to vote upon the Merger) or more of
Enterprise common stock issued in the IPO exercise their Conversion
Rights; and
WHEREAS, Seller has
agreed to sell to Buyer and Buyer has agreed to purchase from
Seller the common shares set forth on the execution page of this
Agreement (“Shares”) for the purchase price per share
set forth therein (“Purchase Price Per Share”) and for
the aggregate purchase price set forth therein (“Aggregate
Purchase Price”) plus the fees set forth therein (the
“Fees”).
NOW, THEREFORE, for and
in consideration of the mutual covenants hereinafter set forth and
other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties hereby agree as
follows:
1.
Purchase
. Seller hereby
agrees to sell to Buyer and Buyer hereby agrees to (i) purchase
from Seller at the Closing (as defined in Section 4(c)) the Shares
at the Purchase Price Per Share, for the Aggregate Purchase Price
and (ii) pay the Fees to Seller at the Closing.
2.
Agreement not to
Convert .
In further consideration of the Aggregate Purchase Price and
the Fees, provided that the representations and warranties made by
Buyer in Section 6 hereof are true and correct on the date of the
stockholder meeting in connection with the approval of the Merger
with the same effect as though made on such date and Buyer has
complied in all material respects with its obligations set forth in
this Agreement through such date, Seller hereby agrees it has not
and will not exercise its Conversion Rights or, if it has already
exercised its Conversion Rights, it hereby withdraws and revokes
such exercise and will execute all necessary documents and take all
actions required in furtherance of such revocation.
3.
No Right to
Additional Shares . In connection with the
Merger, Enterprise’s stockholders of record are entitled to
receive one share of ARMOUR common stock for each share of
Enterprise common stock owned immediately prior to the consummation
of the Merger (the “Exchange”). Although Seller
will be a stockholder of record immediately prior to the Merger,
Seller hereby acknowledges that Seller irrevocably waives any
right, title or interest it may have in receiving any such ARMOUR
common stock distributed pursuant to the Exchange. Seller
hereby acknowledges that by virtue of the sale hereunder and
receipt of payment by Seller of the Aggregate Purchase Price,
Seller will not become a stockholder of ARMOUR. Additionally,
each of Buyer and Seller hereby agree and acknowledge that this
provision is material to this Agreement and a significant
consideration in Buyer’s willingness to enter into this
Agreement. Notwithstanding the foregoing, such waiver shall
not be effective in the event that Seller does not timely receive
the Aggregate Purchase Price and the Fees pursuant to the terms of
this Agreement.
4.
Closing
Matters .
(a)
Within one business day
of the date of this Agreement, Buyer shall send the notice attached
as Annex 1 hereto to Continental.
(b)
Prior to the Closing,
Seller shall deliver or cause to be delivered to Buyer appropriate
instructions for book entry transfers of ownership of the Shares
from Seller to Buyer.
(c)
The closing of the
purchase and sale of the Shares (“Closing”) will occur
on the date on which Buyer’s Trust Account is liquidated in
connection with the consummation of the Merger, which consummation
shall occur no later than 11:59 p.m. eastern standard time on the
seventh day following Seller’s acquisition of the Shares from
Buyer’s stockholders (the “Closing Date”).
At the Closing, Buyer shall pay Seller the Aggregate Purchase
Price and the Fees by wire transfer from Enterprise’s Trust
Account of immediately available funds in accordance with the
Irrevocable Instructions attached as Annex I hereto to an account
specified by Seller and Seller shall deliver the Shares immediately
thereafter to Buyer electronically using the Depository Trust
Company’s DWAC (Deposit/Withdrawal at Custodian) System to an
account specified by Buyer. It shall be a condition to the
obligation of Buyer on the one hand and Seller on the other hand,
to consummate the transfer of the Shares contemplated hereunder
that the other party’s representations and warranties are
true and correct on the Closing Date with the same effect as though
made on such date, unless waived in writing by the party to whom
such representations and warranties are made.
(d)
In the event that the
Merger is not consummated by midnight on November 7, 2009 and Buyer
has not dissolved and liquidated its assets and paid Seller the
liquidation value of its Shares by November 7, 2009, then Buyer
shall pay to Seller in immediately available funds, until Buyer
liquidates and distributes its assets to its stockholders, an
amount equal to the lesser of (i) 4.0% of the Purchase Price Per
Share per month (pro-rated on a daily basis based on the date when
payment is required and the date such payment is made) or (ii) the
highest lawful rate, for each Share held by Seller from the date
such payment was required to be made through the date such payment
is actually made. Buyer agrees to promptly dissolve and
liquidate and distribute its assets in accordance with Delaware law
if the Merger is not consummated by 11:59 p.m. eastern standard
time on October 30, 2009.
(e)
In the event that the
Merger is consummated and Seller has not received the Aggregate
Purchase Price and the Fees by the seventh day following
Seller’s acquisition of the Shares from Buyer’s
Stockholders, then Buyer shall pay to Seller in immediately
available funds an amount equal to the lesser of (i) 4.0% of the
Purchase Price Per Share per month (pro-rated on a daily basis
based on the date when payment is required and the date such
payment is made) or (ii) the highest lawful rate, for each Share
held by Seller from the date such payment was required to be made
through the date such payment is actually made.
5.
Representations and
Warranties of the Seller . Seller makes the following
representations and warranties to and for the benefit of Buyer on
the date hereof and on the Closing.
(a)
Sophisticated
Seller .
Seller is sophisticated in financial matters and is able to
evaluate the risks and benefits attendant to the sale of Shares to
Buyer.
(b)
Independent
Investigation . Seller, in making the
decision to sell the Shares to Buyer, has not relied upon any oral
or written representations or assurances from Buyer or any of its
officers, directors or employees or any other representatives or
agents of Buyer, except as are contained in this Agreement.
Seller has had access to all of the filings made by
Enterprise with the SEC, pursuant to the Securities Exchange Act of
1934 (the “Exchange Act”) and the Securities Act of
1933, as amended (the “Securities Act”) in each case to
the extent available publicly via the SEC’s Electronic Data
Gathering, Analysis and Retrieval system.
2
(c)
Authority
. This Agreement
has been validly authorized, executed and delivered by Seller and,
assuming the due authorization, execution and delivery thereof by
Buyer, is a valid and binding agreement enforceable in accordance
with its terms, subject to the general principles of equity and to
bankruptcy or other laws affecting the enforcement of
creditors’ rights generally. The execution, delivery
and performance of this Agreement by Seller does not and will not
conflict with, violate or cause a breach of, constitute a default
under, or result in a violation of (i) any agreement, contract or
instrument to which Seller is a party which would prevent Seller
from performing its obligations hereunder or (ii) any law, statute,
rule or regulation to which Seller is subject.
(d)
No Legal Advice from
Buyer .
Seller acknowledges that it has had the opportunity to
review this Agreement and the transactions contemplated by this
Agreement with Seller’s own legal counsel and investment and
tax advisors. Seller is not relying on any statements or
representations of Buyer or any of its representatives or agents
for legal, tax or investment advice with respect to this Agreement
or the transactions contemplated by the Agreement.
(e)
Ownership of
Shares .
Seller is the legal and beneficial owner of the Shares and,
to its knowledge, will transfer to Buyer on the Closing Date good
title to the Shares free and clear of any liens, claims, security
interests, options, charges or any other encumbrance whatsoever,
except as otherwise agreed to in writing to Buyer. Buyer
acknowledges that the Shares may be transferred without the right
to vote them at the meeting of stockholders to approve the
Acquisition.
(f)
Number of
Shares .
The Shares being transferred pursuant to this Agreement
represent all the common stock owned by Seller as of the date
hereof.
(g)
Aggregate Purchase
Price Negotiated . Seller represents that both
the amount of Securities and the Aggregate Purchase Price were
negotiated figures by the parties and that the terms and conditions
by the parties of this Agreement may differ from arrangements
entered into with other holders of Buyer’s common
stock.
6.
Representations,
Warranties and Covenants of Buyer . Buyer makes the following
representations, warranties and covenants to and for the benefit of
Seller on the date hereof and on the Closing.
(a)
Sophisticated
Buyer .
Buyer is sophisticated in financial matters and is able to
evaluate the risks and benefits attendant to the purchase of Shares
from Seller.
(b)
Independent
Investigation . Buyer, in making the
decision to purchase the Shares from Seller, has not relied upon
any oral or written representations or assurances from Seller or
any of its officers, directors, partners or employees or any other
representatives or agents of Seller, except as are contained in
this Agreement.
(c)
Authority
. This Agreement
has been validly authorized, executed and delivered by Buyer and
assuming the due authorization, execution and delivery thereof by
Seller, is a valid and binding agreement of Buyer enforceable
against Buyer in accordance with its terms, subject to the general
principles of equity and to bankruptcy or other laws affecting the
enforcement of creditors’ rights generally. The
execution, delivery and performance of this Agreement by Buyer does
not and will not conflict with, violate or cause a breach of,
constitute a default under, or result in a violation of (i) any
agreement, contract or instrument to which Buyer is a party which
would prevent Buyer from performing its obligations hereunder or
(ii) any law, statute, rule or regulation to which Buyer is
subject.
(d)
No Legal Advice from
Seller .
Buyer acknowledges that it has had the opportunity to review
this Agreement and the transactions contemplated by this Agreement
with Buyer’s own legal counsel and investment and tax
advisors. Buyer is relying solely on such counsel and
advisors and not on any statements or representations of Seller or
any of its representatives or agents for legal, tax or investment
advice with respect to this Agreement or the transactions
contemplated by this Agreement.
(e)
Organization
. Buyer has been
duly organized and is validly existing under the laws of its
jurisdiction of organization, with all requisite power and
authority to enter into this Agreement, to carry out the provisions
and conditions hereof, and to consummate the transactions
contemplated hereby.
(f)
Liabilities . Buyer (i) has no
liabilities, obligations, guarantees or commitments of any nature
whatsoever, asserted or unasserted, known or unknown, absolute or
contingent, accrued or unaccrued, matured or unmatured or otherwise
(“Liabilities”) other than those reflected on the
Schedule of Liabilities attached hereto, and (ii) has no
outstanding Liabilities that are not subject to an effective waiver
of claims against the Trust Account, except those Liabilities set
forth on such Schedule of Liabilities and indicated as
“unwaived,&rdquo
