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Exhibit 4.5
VOTING AGREEMENT
by and among
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.,
FBR TRS HOLDINGS, INC.,
FBR CAPITAL MARKETS CORPORATION,
FOREST HOLDINGS (ERISA) LLC,
and
FOREST HOLDINGS LLC
dated as of
July 20, 2006
TABLE OF CONTENTS
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Page
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ARTICLE 1
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DEFINITIONS
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Section 1.1
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Definitions
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1
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ARTICLE 2
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BOARD COMPOSITION
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Section 2.1
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Composition of the Board
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2
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Section 2.2
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Composition of Subsidiary Boards
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4
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Section 2.3
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Continuing Committee Representation
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4
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Section 2.4
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Scale-Back of Purchaser Board
Representation
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4
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Section 2.5
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Scale-Back of FBR TRS Board
Representation
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4
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Section 2.6
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Implementation
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5
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Section 2.7
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Observer Status
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5
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ARTICLE 3
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AFFILIATE TRANSACTIONS
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Section 3.1
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Affiliate Transactions
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6
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ARTICLE 4
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REPRESENTATIONS AND
WARRANTIES
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Section 4.1
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Representations and Warranties
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6
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ARTICLE 5
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MISCELLANEOUS
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Section 5.1
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Term
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7
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Section 5.2
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Counterparts
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7
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Section 5.3
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Governing Law
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7
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Section 5.4
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Entire Agreement
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7
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Section 5.5
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Specific Performance
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8
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Section 5.6
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Notices
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8
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Section 5.7
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Assignment, Transfers
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9
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Section 5.8
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Headings
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9
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Section 5.9
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Amendments and Waivers
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9
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Section 5.10
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Interpretation; Absence of Presumption
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9
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Page
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Severability
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10
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Jurisdiction
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10
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Waiver of Jury Trial.
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10
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Further Assurances
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10
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Recapitalization, Etc .
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10
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FBR Group Guarantee
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11
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FBR TRS Acknowledgment
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-ii-
THIS VOTING AGREEMENT (the " Agreement "),
dated as of July 20, 2006, is made by and among Friedman,
Billings, Ramsey Group, Inc., a Virginia corporation, (" FBR
Group "), FBR TRS Holdings, Inc., a Virginia corporation, ("
FBR TRS "), FBR Capital Markets Corporation, a Virginia
corporation, (" FBR " or the " Company "), Forest
Holdings (ERISA) LLC, a Delaware limited liability company, ("
Crestview ERISA ") and Forest Holdings LLC, a Delaware
limited liability company, (" Crestview LLC " and together
with Crestview ERISA, " Purchaser ").
RECITALS :
WHEREAS, FBR Group, FBR TRS, FBR and Purchaser entered into a
letter agreement on June 22, 2006, as amended on July 14,
2006, setting forth the principal terms and conditions pursuant to
which Purchaser would acquire shares of common stock of the Company
(" Shares ") concurrently with the 144A private placement of
Shares, and be granted options to acquire additional Shares (the "
Options ") from the Company, which letter agreement
contemplated that the parties thereto would further memorialize
their agreements with respect to such transactions in definitive
agreements;
WHEREAS, FBR and Purchaser entered into an Investment Agreement,
dated as of July 19, 2006, (the " Investment Agreement
") setting forth, inter alia , the terms and conditions
pursuant to which Purchaser is acquiring the Shares from the
Company and is being granted the Options;
WHEREAS, following consummation of the transactions contemplated
by the Investment Agreement, Purchaser will own a significant
percentage of the equity interests in the Company; and
WHEREAS, the parties hereto desire to enter into this Agreement
to provide for certain voting rights of the parties hereto in
accordance with Section 13.1-671 of the Virginia Stock
Corporation Act.
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions . Capitalized terms not
defined herein shall have their respective meanings specified in
the Investment Agreement. As used in this Agreement, the following
terms shall have the following respective meanings:
" Cause " shall mean the Director’s commission of a
felony or any other crime involving moral turpitude or of a
material dishonest act or fraud against the Company or any of its
Affiliates, or any act or omission by the Director that is the
result of misconduct or bad faith and that is, or may reasonably be
expected to be, materially injurious to the Company or any of its
Affiliates.
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" Director " shall mean a member of the
Board.
" FBR TRS Designees " shall have the meaning specified in
Section 2.1.
" Independent Directors " shall have the meaning
specified in Section 2.1.
" Original Shares " shall mean the number of Shares
acquired by Purchaser with the Invested Capital (including Shares
issued in respect of, in exchange for or in substitution of such
Shares by reason of any Reorganization).
" Purchaser Designees " shall have the meaning specified
in Section 2.1.
" Reorganization " shall mean any reorganization,
recapitalization, stock dividend, stock split or any similar change
in the capital structure of the Company.
ARTICLE 2
BOARD COMPOSITION
Section 2.1 Composition of the Board . Each of the
parties to this Agreement agrees that it and its Affiliates which
it controls will vote all of the Shares under its control to cause
the Board, effective from and after the Closing, to have the
following size and composition:
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(a)
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Initial Board . (i) The Board will
initially consist of nine Directors, who shall be nominated as
follows:
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(A)
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one Director shall be designated for election or
appointment, as applicable, by Crestview ERISA and one Director
shall be designated for election or appointment, as applicable, by
Crestview LLC (collectively, the " Purchaser Designees
");
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(B)
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three Directors shall be designated for election
or appointment, as applicable, by FBR TRS (the " FBR TRS
Designees "); and
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(C)
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four Directors who shall be independent within
the meaning of the rules promulgated by the SEC and the exchange(s)
on which the Shares are listed (the " Independent Directors
") shall be designated for election or appointment, as applicable,
by FBR TRS who shall be reasonably acceptable to
Purchaser.
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(ii)
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The Purchaser Designees and FBR TRS Designees
will be elected or appointed, as applicable, and seated as
Directors no later than the Closing, and the Independent Directors
shall be designated for appointment, and shall be appointed, to
fill the four vacancies existing on the Board
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(b) Removal and Replacement of Directors . Directors may
be removed from office and replaced as follows (it being understood
that the following shall be effected in a manner that is not in
violation of the Virginia Stock Corporation Act or the Articles of
Incorporation or Bylaws of the Company regarding removal of
directors. That is, removal of any director shall be subject to the
approval of the holders of a majority of the outstanding shares of
common stock of the Company):
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(i)
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Any party hereto may designate any or all of its
own designees for removal from the Board and may designate a
nominee for appointment to the Board to fill any vacancy resulting
from any such removal.
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(ii)
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For so long as Purchaser has the right to
designate one Director nominee for election or appointment, as
applicable, to the Board pursuant to this Article 2, FBR TRS may
not take any action to cause the removal of a Purchaser Designee
except for Cause and in that event the relevant Purchaser entity
may nominate a replacement for the Director so removed.
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(iii)
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FBR TRS shall have the right to designate for
removal any or all of the Independent Directors at any time and
shall have the right to designate an Independent Director nominee
to fill the vacancy resulting from any such removal;
provided that FBR TRS shall consult Purchaser with respect
to the selection of a replacement for any such Independent
Director.
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(iv)
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For so long as Purchaser has the right to
designate one Director nominee for election or appointment, as
applicable, to the Board pursuant to this Article 2, in the event
of a vacancy created by the departure (for any reason, including
death, disability, retirement, resignation or removal (with or
without cause)) of an Independent Director, FBR TRS shall have the
right to designate a replacement Independent Director who shall be
reasonably acceptable to Purchaser for appointment to fill the
vacancy resulting from such departure; provided that if FBR
TRS and Purchaser are unable to agree on the replacement
Independent Director (x) FBR TRS shall have the right to
designate the replacement Independent Director for appointment to
fill the vacancy resulting from such departure to serve until such
time as FBR TRS and Purchaser can agree on a permanent replacement
and (y) if FBR TRS and Purchaser are unable to agree on a
permanent replacement Independent Director within 45 days after the
creation of such vacancy, the remaining permanent Independent
Directors, if any, shall have the right to designate the permanent
replacement Independent Director for appointment to fill the
vacancy resulting from such departure after consultation with both
FBR TRS and Purchaser.
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Section 2.2 Composition of Subsidiary
Boards . Each of the parties to this Agreement agrees that, for
so long as Purchaser has the right to designate one Director
nominee for election or appointment, as applicable, to the Board
pursuant to this Article 2, Purchaser shall have the right to
designate one of the Purchaser Designees (or another representative
reasonably acceptable to FBR TRS) for election or appointment, as
applicable, to the board of directors of each Subsidiary of the
Company other than the direct and indirect Subsidiaries of the
Company that are registered investment advisers; provided
that to the extent that applicable Law does not permit such
Purchaser Designee (or other representative reasonably acceptable
to FBR TRS) to serve as a member of any such Subsidiary board of
directors, such Purchaser Designee shall be entitled to observer
status on such board of directors. The Company hereby agrees to
take such action (and to cause its officers and Subsidiaries to
take such action), including but not limited to voting its shares
of capital stock in each of its Subsidiaries, as shall be necessary
in order to carry out the intents and purposes of this
Section 2.2.
Section 2.3 Continuing Committee Representation .
Each of the parties to this Agreement agrees that, for so long as
Purchaser has the right to designate one Director nominee for
election or appointment, as applicable, to the Board pursuant to
this Article 2, each Committee of the Board, to the extent
permitted by applicable Law (including the rules of the exchange on
which the Shares are listed), shall have as a member at least one
Purchaser Designee and one FBR TRS Designee; provided that
to the extent such applicable Law does not permit such designee(s)
to be full members of such Committees, such designee(s) shall be
entitled to observer status on such Committees.
Section 2.4 Scale-Back of Purchaser Board
Representation . Each of the parties to this Agreement agrees
that:
(a) From the time that (1) Purchaser and its Affiliates who
become parties to this Agreement cease to own at least 66
2 /
3 % of the Original Shares,
Crestview LLC shall no longer be entitled to designate a nominee
for election or appointment to the Board and (2) Purchaser and
its Affiliates who become parties to this Agreement cease to own at
least 33 1
/ 3 % of
the number of Original Shares, Crestview ERISA shall no longer be
entitled to designate a nominee for election or appointment to the
Board, and upon either of the foregoing, the applicable Purchaser
Designee shall be replaced by an additional Independent Director
nominee designated for election or appointment to the Board by FBR
TRS who shall be, in the case of clause (1) above only,
reasonably acceptable to Purchaser.
(b) From and after such time as Purchaser and its Affiliates
cease to own at least 66 2
/ 3 % of
the Original Shares, Purchaser shall have no further approval
rights with respect to Independent Directors.
Section 2.5 Scale-Back of FBR TRS Board
Representation . Each of the parties to this Agreement agrees
that:
(a) If FBR TRS sells, transfers or otherwise disposes of greater
than 50% of its Shares (measured as of the Closing but including
Shares issued in respect of, in exchange for or in substitution of
such Shares by reason of any Reorganization), FBR TRS shall no
longer have the rights described in Section 2.1 above to
select nominees for election or appointment to the Board as
Independent Directors.
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(b) FBR TRS shall retain the right to designate
for election or appointment to the Board the three FBR TRS
Designees unless both (i) FBR TRS sells, transfers or
otherwise disposes of greater than 50% of its Shares (measured as
of the Closing but including Shares issued in respect of, in
exchange for or in substitution of such Shares by reason of any
Reorganization) and (ii) none of Eric F. Billings, Richard J.
Hendrix or J. Rock Tonkel, Jr. remains with the Company in a senior
executive position.
Section&
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