Exhibit 10.1
STOCK REPURCHASE
AGREEMENT
THIS STOCK REPURCHASE AGREEMENT
(this “ Agreement ”) is dated as of May 18,
2009, and is by and among FBR CAPITAL MARKETS CORPORATION, a
corporation organized under the laws of the Commonwealth of
Virginia (the “ Company ”), FBR TRS HOLDINGS,
INC., a corporation organized under the laws of the Commonwealth of
Virginia (“ Seller ”), and FRIEDMAN, BILLINGS,
RAMSEY GROUP, INC. (d/b/a ARLINGTON ASSET INVESTMENT CORP.), a
corporation organized under the laws of the Commonwealth of
Virginia (“ Group ”). The Company, Seller, and
Group are sometimes referred to herein individually as a “
Party ” and collectively as the “ Parties
.”
RECITALS
WHEREAS, Seller, which is a direct,
wholly-owned subsidiary of Group, is the record holder of
33,333,049 shares of the Company’s common stock, par value
$0.001 per share (the “ Common Stock ”);
and
WHEREAS, each of Seller and Group
desires for Seller to sell and transfer to the Company, and the
Company desires to purchase from Seller, 16,667,000 shares of
Common Stock (the “ Shares ”), all as more fully
set forth in this Agreement.
NOW, THEREFORE, in consideration of
the premises and the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties
hereby agree as follows:
AGREEMENT
ARTICLE I
DEFINITIONS
Section 1.1 Definitions .
Among other defined terms contained in this Agreement, as used in
this Agreement, the following terms shall have the meanings
ascribed thereto:
“ Affiliate ”
shall mean, with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control
with, such party. The term “control” (including, with
correlative meaning, the terms “controlling”,
“controlled by”, and “under common control
with”), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or
otherwise.
“ Amended and Restated
Voting Agreement ” shall mean that certain Amended and
Restated Voting Agreement substantially in the form attached hereto
as Exhibit A , with any changes to the form agreed to by
Group and the Company.
“ Assignment and Assumption
Agreement ” shall mean that certain Assignment and
Assumption Agreement substantially in the form attached hereto as
Exhibit B , with any changes to the form agreed to by Group
and the Company.
“ Domain Name
Assignment ” shall mean that certain Domain Name
Assignment substantially in the form attached hereto as Exhibit
C , with any changes to the form agreed to by Group and the
Company.
“ Encumbrances ”
shall mean all liens, claims, charges, assessments, options,
security interests, proxies, agreements to vote and other legal and
equitable encumbrances.
“ Escrow Agreement
” shall mean that certain Escrow Agreement substantially in
the form attached hereto as Exhibit D , with any changes to
the form agreed to by Group and the Company.
“ Exchange Act ”
shall mean the Securities Exchange Act of 1934, as
amended.
“ Governmental
Authority ” shall mean any court, government (federal,
state, local or foreign), department, commission, board, bureau,
agency, official or other regulatory, administrative or
governmental body.
“ Person ” shall
mean any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization or Governmental Authority.
“ Registration Expenses
” shall mean any and all expenses incident to the Follow-on
Offering (as defined herein) and the performance of or compliance
with Section 6.2(b) of this Agreement, including,
without limitation: (a) all Securities and Exchange
Commission, securities exchange, FINRA registration, listing,
inclusion and filing fees, (b) all fees and expenses incurred
in connection with compliance with international, federal or state
securities or blue sky laws (including, without limitation, any
registration, listing and filing fees and reasonable fees and
disbursements of counsel in connection with blue sky qualification
of any of the Remaining Shares and the preparation of a blue sky
memorandum and compliance with the rules of FINRA), (c) all
expenses in preparing or assisting in preparing, word processing,
duplicating, printing, delivering and distributing any registration
statement, any prospectus, any amendments or supplements thereto,
any underwriting agreements, securities sales agreements,
certificates and any other documents relating to the Follow-on
Offering and the performance under and compliance with
Section 6.2(b) of this Agreement, (d) the fees and
disbursements of counsel for the Company and of the independent
public accountants of the Company (including, without limitation,
the expenses of any special audit and “cold comfort”
letters required by or incident to such performance), and
(e) any fees and disbursements customarily paid in issues and
sales of securities (including the fees and expenses of any experts
retained by the Company in connection with any registration
statement); provided , however , that Registration
Expenses shall exclude (i) brokers’ or
underwriters’ discounts and commissions, if any, relating to
the sale or disposition of any of the shares to be sold by or on
behalf of Group in the Follow-on Offering and any Remaining Shares,
and (ii) the fees and disbursements of counsel for Group or
any selling securityholder.
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“ Registration Rights
Agreement ” shall mean that certain Registration Rights
Agreement, dated as of January 26, 2009, by and between the
Company and Group.
“ Related Agreements
” shall mean the Amended and Restated Voting Agreement, the
Assignment and Assumption Agreement, the Domain Name Assignment,
the Escrow Agreement, the Trademark and Copyright Assignment,
Trademark License Agreement, and the Transition Services
Agreement.
“ Remaining Shares
” shall mean (a) 16,666,049 shares of Common Stock
beneficially owned by Group immediately after the Closing, plus
(b) any shares of capital stock of the Company that are issued
in any reclassification, share combination, share subdivision,
share dividend, share exchange, merger, consolidation or similar
transaction or event in respect of the shares described in clause
(a).
“ Trademark and Copyright
Assignment ” shall mean that certain Trademark and
Copyright Assignment substantially in the form attached hereto as
Exhibit E , with any changes to the form agreed to by Group
and the Company.
“ Trademark License
Agreement ” shall mean that certain Trademark License
Agreement substantially in the form attached hereto as Exhibit
F , with any changes to the form agreed to by Group and the
Company.
“ Transition Services
Agreement ” shall mean that certain Transition Services
Agreement substantially in the form attached hereto as Exhibit
G , with any changes to the form agreed to by Group and the
Company.
ARTICLE II
PURCHASE AND SALE OF
SHARES
Section 2.1 Purchase and Sale of
Shares . Upon the terms and subject to the conditions set forth
herein, at the Closing, Seller shall sell, transfer, assign, convey
and deliver to the Company, and the Company shall purchase, acquire
and accept from Seller, the Shares, free and clear of all
Encumbrances other than Encumbrances created by the Company or this
Agreement.
Section 2.2 Purchase Price .
Upon the terms and subject to the conditions set forth herein, as
payment in full for the Shares being purchased hereunder, at the
Closing, the Company shall pay to Seller $4.35 per share (the
“ Per Share Price ”), representing an aggregate
purchase price for the Shares of $72,501,450 (the “
Purchase Price ”).
ARTICLE III
CLOSING
Section 3.1 Closing
.
(a) Subject to the terms and
conditions of this Agreement, the closing of the purchase and sale
of the Shares contemplated hereby (the “ Closing
”) shall take place at the
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offices of the
Company at 1001 Nineteenth Street North, Arlington, Virginia 22209,
at or about 9:00 a.m., local time, on a business day that is not
later than the 10 th business day following the date
of this Agreement, such date to be determined by Seller who shall
give the Company notice thereof no later than 5:00 p.m. on the
business day prior to the date of Closing, or at such other
location, date and time as the Parties may mutually
agree.
(b) Notwithstanding and not in lieu
of any other legal rights that a Party may have against any other
Party, in the event that a Party fails to perform its obligations
pursuant to the terms of this Agreement at the Closing, such
defaulting Party shall be responsible for all reasonable
out-of-pocket expenses incurred by the non-defaulting Parties
incurred or payable in connection with this Agreement, the Related
Agreements, and the transactions contemplated hereby or thereby,
including the fees and disbursements of legal counsel and financial
advisors to the non-defaulting Parties.
Section 3.2 Payment of the
Purchase Price . Upon the terms and subject to the conditions
of this Agreement, at the Closing, the Company shall pay the
Purchase Price to Seller by wire transfer of immediately available
funds to the account designated by Seller on Exhibit H
.
Section 3.3 Delivery of the
Shares . Upon the terms and subject to the conditions of this
Agreement, at the Closing, Seller shall transfer ownership of the
Shares to the Company, which shall be effected by execution by
Group, Seller, and the Company of a share transfer instruction
letter to American Stock Transfer and Trust Company substantially
in the form of Exhibit I .
Section 3.4 Closing Conditions
and Deliveries .
(a) The obligations of the Company
to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment, at or prior to the Closing, of each
of the following conditions, any of which may be waived in writing
by the Company in its sole discretion:
(i) The Shares shall have been
delivered to the Company in accordance with Section 3.3
.
(ii) The representations and
warranties of Seller and Group contained in this Agreement shall be
true and correct both when made and as of the Closing, or, in the
case of representations and warranties that are made as of a
specified date, such representations and warranties shall be true
and correct as of such specified date. Each of Seller and Group
shall have performed all covenants and agreements required by this
Agreement to be performed by it prior to or at the
Closing.
(iii) The Company shall have
received copies of each of the Related Agreements to which it is a
party duly executed by each other party thereto.
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(iv) The Company shall have received
the executed share transfer instruction letter referred to in
Section 3.3 executed by Seller and Group.
(b) The obligations of Seller and
Group to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions, any of which may be waived in
writing by Group in its sole discretion:
(i) The Company shall have paid the
Purchase Price to Seller in accordance with Section 3.2
.
(ii) The representations and
warranties of the Company contained in this Agreement shall be true
and correct both when made and as of the Closing, or, in the case
of representations and warranties that are made as of a specified
date, such representations and warranties shall be true and correct
as of such specified date. The Company shall have performed all
covenants and agreements required by this Agreement to be performed
by it prior to or at the Closing.
(iii) Seller and Group shall have
received copies of each of the Related Agreements to which either
is a party duly executed by each other party thereto.
(iv) Seller and Group shall have
received the executed share transfer instruction letter referred to
in Section 3.3 executed by the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
SELLER AND GROUP
Seller and Group hereby jointly and
severally represent and warrant to the Company, as of the date of
this Agreement and as of the Closing, as follows:
Section 4.1 Existence; Good
Standing . Each of Seller and Group is a corporation duly
organized, validly existing, and in good standing under the laws of
the Commonwealth of Virginia.
Section 4.2 Authority . Each
of Seller and Group has the requisite corporate power and authority
to execute and deliver this Agreement and to perform all of the
obligations to be performed by each of them hereunder. This
Agreement has been duly authorized, executed and delivered by each
of Seller and Group, and it represents the legal, valid and binding
obligation of each of them enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, receivership,
conservatorship, and other laws relating to and affecting
creditors’ rights generally and by general equity
principles.
Section 4.3 Title to Shares .
Seller is the sole record holder of the Shares, free and clear of
all Encumbrances, and the delivery of the Shares to the Company
pursuant to the transactions contemplated by this Agreement will
transfer and convey good and valid title
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thereto to the Company, free and clear of all
Encumbrances other than Encumbrances created by the Company or this
Agreement.
Section 4.4 No Approvals . No
consent, approval, authorization or order of, or filing with, any
Governmental Authority or any court is required to be obtained or
made by either Seller or Group for the consummation of the
transactions contemplated by this Agreement. Group, in its capacity
as sole shareholder of Seller, and acting through its Board of
Directors, has adopted resolutions approving of Seller entering
into this Agreement.
Section 4.5 No Conflicts .
Neither the execution, delivery and performance of this Agreement
by Seller or Group, nor the compliance with or fulfillment of the
terms, conditions and provisions hereof by Seller or Group, shall
conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an
event creating rights of acceleration, termination or cancellation
or a loss of rights under, or result in the creation or imposition
of any Encumbrance upon any of the Shares, under (a) the
articles of incorporation or by-laws of Seller or Group,
respectively, (b) any material note, instrument, agreement,
mortgage, lease, license, franchise, permit or other material
authorization, right, restriction or obligation to which Seller or
Group, respectively, is a party or the Shares are subject or by
which Seller or Group, respectively, is bound, (c) any court
order to which Seller or Group is a party or any of the Shares are
subject or by which Seller or Group is bound, or (d) any
requirements of laws, rules or regulations affecting Seller or
Group, or the Shares or otherwise applicable to the transactions
contemplated by this Agreement.
Section 4.6 Material Non-Public
Information . Each of Seller and Group acknowledges that the
Company and its Affiliates, officers and directors, may possess
material non-public information not known to Seller or Group
regarding or relating to the Company, including, but not limited
to, information concerning the business, financial condition,
results of operations, prospects or other plans of the Company, and
that neither Seller nor Group has received or requested any such
information, and each agrees that neither the Company nor its
Affiliates, officers or directors shall have any liability
whatsoever to Seller or Group with respect to the nondisclosure of
any such material non-public information, whether before or after
the date of this Agreement.
Section 4.7 Value of the
Shares . Each of Seller and Group acknowledges and confirms
that it is aware that the closing sale price of the Common Stock,
as reported by the NASDAQ Stock Market (the “ Stock
Price ”), has fluctuated since Seller purchased the
Shares and is likely to continue to fluctuate after the date of
this Agreement, including possible material increases to such Stock
Price. Each of Seller and Group further acknowledges and confirms
that it is aware that future changes and developments in
(a) the Company’s business and financial condition and
operating results, (b) the industries in which the Company
competes, and (c) overall market and economic conditions, may
have a favorable impact on the value of the Common Stock after the
sale by Seller of the Shares to the Company pursuant to the terms
of this Agreement. Each of Seller and Group has determined to
forego the possibility of any such future increases in value to
obtain the consideration being paid pursuant hereto for its
investment with respect to the Shares. Each of Seller and Group
acknowledges that the
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Company has not made any representation to it
about the advisability of this decision or the potential future
value of the Shares being sold by Seller.
Section 4.8 Tax Matters .
Each of Seller and Group has had opportunity to review with its own
tax advisors the federal, state and local tax consequences of the
sale of the Shares held by Seller to the Company and the
transactions contemplated by this Agreement. Each of Seller and
Group is relying solely on itself and its respective advisors and
not on any statements or representations of the Company other than
those that may be explicitly contained herein. Each of Seller and
Group understands that it (and not the Company) shall be
responsible for its own tax liability, if any, that may arise as a
result of the transactions contemplated by this
Agreement.
Section 4.9 Finders or
Brokers . Except for UBS Securities LLC, whose fees and
expenses shall be paid by Seller and/or Group, neither Seller nor
Group has agreed to pay any fee or commission to any agent, broker,
finder, investment banker, or other Person for or on account of
services rendered as a broker or finder or other similar services
in connection with this Agreement or the transactions contemplated
hereby and that would give rise to any valid claim against the
Company for any brokerage commission, finder’s fee,
investment banking fee, or similar payment.
Section 4.10 No Other
Representations or Warranties . Seller and Group each
acknowledges and agrees that neither of them is relying upon any
representations or warranties of the Company, express or implied,
except those contained herein, and Seller and Group each
specifically does not request, desire or require the Company to
make any other representations or warranties whatsoever with
respect to the Company and/or the Shares or any other matter with
respect to any of the transactions contemplated hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
The Company hereby represents and
warrants to Seller and Group, as of the date of this Agreement and
as of the Closing, as follows:
Section 5.1 Existence; Good
Standing . The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the Commonwealth
of Virginia.
Section 5.2 Authority . The
Company has the requisite corporate power and authority to execute
and deliver this Agreement and to perform all of the obligations to
be performed by it hereunder. This Agreement has been duly
authorized, executed and delivered by the Company and it represents
the legal, valid and binding obligation of the Company enforceable
in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship, and other laws relating to and
affecting creditors’ rights generally and by general equity
principles.
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Section 5.3 No Approvals . No
consent, approval, authorization or order of, or filing with, any
Governmental Authority or any court is required to be obtained or
made by the Company for the consummation of the transactions
contemplated by this Agreement.
Section 5.4 No Conflicts .
Neither the execution, delivery and performance of this Agreement
by the Company, nor the compliance with or fulfillment of the
terms, conditions and provisions hereof by the Company, shall
conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an
event creating rights of acceleration, termination or cancellation
or a loss of rights under (a) the articles of incorporation or
by-laws of the Company, (b) any material note, instrument,
agreement, mortgage, lease, license, franchise, permit or other
material authorization, right, restriction or obligation to which
the Company is a party or by which the Company is bound,
(c) any court order to which the Company is a party or by
which the Company is bound, or (d) any requirements of laws,
rules or regulations affecting the Company or otherwise
