EXHIBIT 10.1
EXECUTION COPY
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.
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“ 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
thereto to the Company, free and clear of all Encumbrances other
than Encumbrances created by the Company or this
Agreement.
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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 regulatio
