-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lz4EZUkLeQaZdTDkjpgXK9PmIwRdJNXfK+CpXhxuWu4gUaLQ+U5NrTngSTFNgkkE XHRgS3sAQxfEdgBRVpZ31A== 0001024739-98-000008.txt : 19980108 0001024739-98-000008.hdr.sgml : 19980108 ACCESSION NUMBER: 0001024739-98-000008 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19980107 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FRIEDMAN BILLINGS RAMSEY GROUP INC CENTRAL INDEX KEY: 0001048750 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 541870360 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-52165 FILM NUMBER: 98502301 BUSINESS ADDRESS: STREET 1: 1001 19TH STREET N. CITY: ARLINGTON STATE: VA ZIP: 22209 BUSINESS PHONE: 7033129744 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PNC INVESTMENT CORP CENTRAL INDEX KEY: 0000905582 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 222 DELAWARE AVNUE CITY: WILMINGTON STATE: DE ZIP: 19899 BUSINESS PHONE: 2155855350 MAIL ADDRESS: STREET 1: 222 DELAWARE AVNUE CITY: WILMINGTON STATE: DE ZIP: 19899 SC 13D 1 SCHEDULE 13D ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Schedule 13D Under the Securities Exchange Act of 1934 Friedman, Billings, Ramsey Group, Inc. -------------------------------------- (Name of Issuer) Class A Common Stock ------------------------------ (Title of Class of Securities) 358433 10 0 -------------- (CUSIP Number) John F. Fulgoney, Esquire PNC Bank Corp. 249 Fifth Avenue Pittsburgh, Pennsylvania 15222 (412) 762-1408 ------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 29, 1997 ----------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /. Check the following box if a fee is being paid with the statement /X /. ================================================================================ CUSIP No. 358433 10 0 SCHEDULE 13D 1. Name of Reporting Person: PNC Investment Corp. I.R.S. Identification No. 51-0206717 2. Check the Appropriate Box if a Member of a Group* (a) / / (b) / / 3. SEC Use Only 4. Source of Funds: WC 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant To Items 2(d) or 2(e) / / 6. Citizenship or Place of Organization: Delaware Number of 7. Sole Voting Power: 2,451,421 Shares Beneficially 8. Shared Voting Power: 0 Owned by Each 9. Sole Dispositive Power: 2,451,421 Reporting Person 10. Shared Dispositive Power: 0 With 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 2,451,421 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares / / 13. Percent of Class Represented by Amount in Row 11: 18.2% 14. Type of Reporting Person: CO Item 1. Security and Issuer. The title of the class of equity securities to which this Schedule 13D relates is the class A common stock, par value $.01 per share, of Friedman, Billings, Ramsey Group, Inc. ("FBR Common Stock"). The address of the principal executive offices of Friedman, Billings, Ramsey Group, Inc. ("FBR") is Potomac Tower, 1001 Nineteenth Street North, Arlington, Virginia 22209. Item 2. Identity and Background. This statement is filed on behalf of PNC Investment Corp. ("PNCIC"). PNCIC is a Delaware corporation with its principal executive offices at 222 Delaware Avenue, Wilmington, Delaware 19899. PNCIC is a wholly-owned subsidiary of PNC Holding Corp. ("PNCHC"), which is a Delaware corporation and a wholly-owned subsidiary of PNC Bank Corp. ("PNC"), a Pennsylvania corporation registered as a bank holding company under the Bank Holding Company Act of 1956, as amended. PNCIC holds certain investments on behalf of PNC. PNCHC is the holding company for certain of PNC's nonbank subsidiaries and PNC is principally engaged in the business of managing and controlling banks and activities closely related to banking. PNCHC's principal executive offices are located at 222 Delaware Avenue, Wilmington, Delaware 19899. PNC's principal executive offices are located at 249 Fifth Avenue, Pittsburgh, Pennsylvania 15222. PNCIC, PNCHC and PNC are referred to herein as the "PNC Entities." Filed as Schedules I and II to this Schedule 13D are lists of the executive officers and directors of PNCIC and PNC, respectively, containing the following information with respect to each such person: (a) name, (b) business address and (c) present principal occupation or employment, and the name and, if different from such person's business address, the address of any corporation or other organization in which such employment is conducted. Each person listed in Schedules I and II is a United States citizen, except that Mr. Wehmeier is a citizen of the Federal Republic of Germany. During the past five years, none of the PNC Entities nor, to the best of PNCIC's knowledge, any person named in Schedule I or Schedule II (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration. Pursuant to an Agreement dated October 29, 1997 ("Investment Agreement"), PNC agreed to purchase from certain FBR shareholders for cash a number of shares of FBR Common Stock equal to 4.9% of the total number of shares of FBR Common Stock and FBR's class B common stock outstanding upon consummation of FBR's initial public offering (the FBR Common Stock and Class B common stock being referred to collectively as "FBR Capital Stock"). PNC has assigned the Investment Agreement to PNCIC. The purchase of such shares (2,451,421 in number) was consummated by PNCIC on December 29, 1997 at a price of $19.20 per share upon consummation of FBR's initial public offering. The aggregate amount of funds required to purchase the shares was $47,067,283. PNCIC's source of funds was working capital. Item 4. Purpose of Transactions. Contemporaneously with the execution of the Investment Agreement, PNC and FBR entered into a non-binding Memorandum of Understanding ("MOU") pursuant to which FBR and PNC intend to establish an ongoing strategic business relationship with respect to selected capital markets and related activities. The MOU provides a framework pursuant to which FBR and PNC will work together on an arms-length basis to refer potential business to each other. Specifically, FBR will be the exclusive independent broker-dealer to which PNC refers underwriting and high-yield business that is not conducted by PNC. Upon the receipt by PNC of full "tier 2" powers, FBR will cooperate with PNC's "section 20" securities affiliate to include PNC as a co-lead underwriter or co-placement agent on such referred business. FBR will also work with PNC to provide enhanced derivatives, asset securitization, bridge lending and other bank financing products to FBR's clients. FBR and PNC will explore both the possibility of forming bridge and/or equity and venture capital funds to serve the common needs of their respective client bases and potential strategic relationships in other business lines, including merger and acquisition advisory services, merchant banking and venture capital activities, asset management and real estate advisory services. PNC entered into the Investment Agreement in conjunction with the MOU. See also the description in Item 6 hereof of certain other provisions of the Investment Agreement. PNC intends to continue to evaluate its investment in, and relationship with, FBR. PNC or its affiliates may purchase additional shares of FBR Common Stock in open market or private transactions and may dispose of shares of FBR Common Stock, subject to applicable legal and regulatory requirements. Except as otherwise set forth in Items 4, 5 and 6 hereof, none of the PNC Entities currently has any plans or proposals which relate to or would result in (i) the acquisition by any person of additional securities of FBR, or the disposition of securities of FBR; (ii) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving FBR or any of its subsidiaries; (iii) a sale or transfer of a material amount of assets of FBR or any of its subsidiaries; (iv) any change in the present Board of Directors or management of FBR, including any change in the number or term of FBR directors or the filling of any existing vacancies on the Board of Directors of FBR; (v) any material change in the present capitalization or dividend policy of FBR; (vi) any other material change in the business or corporate structure of FBR; (vii) changes in FBR's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of FBR by any person; (viii) causing a class of securities of FBR to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (ix) a class of equity securities of FBR becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (x) any action similar to any of those enumerated above. Item 5. Interest in Securities of the Issuer. The 2,451,421 shares of FBR Common Stock acquired by PNCIC on December 29, 1997 as described in Item 3 hereof represent approximately 18.2% of the 13,451,421 shares of FBR Common Stock issued and outstanding upon completion of FBR's initial public offering according to FBR's prospectus dated December 22, 1997. Such shares represent approximately 4.9% of the total number of outstanding shares of FBR Capital Stock. Except as otherwise described herein, none of the PNC Entities nor, to the best of PNCIC's knowledge, any of the persons listed on Schedule I or II hereto, beneficially owns any shares of FBR Common Stock. Other than as stated above, no transactions in FBR Common stock were effected during the past 60 days by any of the PNC Entities or, to the best of PNCIC's knowledge, by any of the persons listed on Schedule I or II hereto. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Set forth below is a description of selected provisions of the Investment Agreement. Such description is qualified in its entirety by reference to the copy of the Investment Agreement filed as an Exhibit hereto, which is incorporated by reference herein and made a part hereof to the same extent as though set forth herein in full. In addition to the purchase of FBR Common Stock contemplated by Item 3 hereof, the Investment Agreement requires PNC to purchase additional shares of FBR Common Stock upon exercise of the underwriters' overallotment option related to FBR's initial public offering so as to maintain ownership of 4.9% of the total number of outstanding shares of FBR Capital Stock. The maximum number of additional shares that PNC may be required to purchase under this arrangement is 73,500. The purchase price per share would be $19.20. The underwriters' overallotment option expires on January 22, 1998. The Investment Agreement provides PNC with certain registration rights with respect to the shares of FBR Common Stock acquired thereunder. PNC will be able to exercise one "demand" registration right any time following June 27, 1998, thereby requiring FBR to file a registration statement with the Securities and Exchange Commission to register some or all of PNC's shares of FBR Common Stock under the Securities Act of 1933, as amended ("1933 Act"). In addition, PNC may, at any time following June 27, 1998, exercise up to two "piggyback" registration rights, thereby requiring FBR to register some or all of PNC's shares of FBR Common Stock in any registration statement filed by FBR under the 1933 Act for the sale of FBR Common Stock by either FBR or a third party. Item 7. Material to be Filed as Exhibits. 1. Agreement, dated as of October 29, 1997, between PNC and FBR. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: January 7, 1998 PNC INVESTMENT CORP. By /s/ R. Haunschild ---------------------------- R. Haunschild SCHEDULE I Following is a list of the executive officers and directors of PNC Investment Corp. as of January 5, 1998: Executive Officers: Name Office - ---- ------ Richard C. Caldwell Chairman Robert L. Haunschild President and Treasurer Mr. Caldwell's business address is 1600 Market Street, Philadelphia, Pennsylvania 19103. Mr. Haunschild's business address is PNC Bank Corp., 249 Fifth Avenue, Pittsburgh, Pennsylvania 15222. Directors: Name and Occupation Business Address - ------------------- ---------------- Richard C. Caldwell 1600 Market Street Executive Vice President Philadelphia, PA 19103 PNC Bank Corp. Walter E. Gregg, Jr. 249 Fifth Avenue Senior Executive Vice President Pittsburgh, PA 15222 PNC Bank Corp. Thomas H. O'Brien 249 Fifth Avenue Chairman and Chief Executive Officer Pittsburgh, PA 15222 PNC Bank Corp. Maria C. Schaffer 222 Delaware Avenue Vice President Wilmington, DE 19899 PNC Bank, Delaware I-1 SCHEDULE II Following is a list of the executive officers and directors of PNC Bank Corp. ("PNC") as of January 5, 1998: Executive Officers: Name Office - ---- ------ Thomas H. O'Brien Chairman and Chief Executive Officer James E. Rohr President Richard C. Caldwell Executive Vice President Walter E. Gregg, Jr. Senior Executive Vice President Frederick J. Gronbacher Executive Vice President Robert L. Haunschild Senior Vice President and Chief Financial Officer William J. Johns Senior Vice President and Chief Accounting Officer Ralph S. Michael, III Executive Vice President Thomas E. Paisley Senior Vice President and Chairman, Corporate Credit Policy Helen P. Pudlin Senior Vice President and General Counsel Bruce E. Robbins Executive Vice President The business address for each executive officer is PNC Bank Corp., 249 Fifth Avenue, Pittsburgh, Pennsylvania 15222, except that Mr. Caldwell's business address is 1600 Market Street, Philadelphia, Pennsylvania 19103. II-1 Directors: Name and Occupation Business Address - ------------------- ---------------- Paul W. Chellgren P.O. Box 391 Chairman and Chief Executive Officer Ashland, KY 41114 Ashland, Inc. Robert N. Clay Three Chimneys Farm President and Chief Executive Officer Versailles, KY 40383 Clay Holding Company George A. Davidson, Jr. CNG Tower, 625 Liberty Avenue Chairman and Chief Executive Officer Pittsburgh, PA 15222-3199 Consolidated Natural Gas Company David F. Girard-diCarlo One Logan Square Managing Partner Philadelphia, PA 19103 Blank Rome Comisky & McCauley C. G. Grefenstette 2000 Grant Building Chairman Pittsburgh, PA 15219 The Hillman Company William R. Johnson 600 Grant Street President and Chief Operating Officer Pittsburgh, PA 15219-2857 H. J. Heinz Company Bruce C. Lindsay 1520 Locust Street Chairman and Managing Director Philadelphia, PA 19102 Brind-Lindsay & Co., Inc. Thomas Marshall 600 Grant Street Thomas Marshall Foundation Pittsburgh, PA 15219-2704 W. Craig McClelland 1600 Valley Road Chairman and Chief Executive Officer Wayne, NJ 07470 Union Camp Corporation Thomas H. O'Brien 249 Fifth Avenue Chairman and Chief Executive Officer Pittsburgh, PA 15222 PNC Bank Corp. Jane G. Pepper 100 N. 20th Street President Philadelphia, PA 19103-1495 Pennsylvania Horticultural Society Jackson H. Randolph 221 East Fourth Street Chairman Cincinnati, OH 45202 Cinergy Corp. II-2 James E. Rohr 249 Fifth Avenue President and Chief Executive Officer Pittsburgh, PA 15222 PNC Bank, N.A. Roderic H. Ross 1401 Walnut Street Chairman and Chief Executive Officer Philadelphia, PA 19102-3122 Keystone State Life Insurance Company Vincent A. Sarni One PPG Place Retired Chairman and Pittsburgh, PA 15272 Chief Executive Officer PPG Industries, Inc. Garry J. Scheuring Two Tower Center Retired Vice Chairman East Brunswick, NJ 08816-1100 PNC Bank Corp. Richard P. Simmons 1000 Six PPG Place Chairman, President and Chief Pittsburgh, PA 15222-5479 Executive Officer Allegheny Teledyne Incorporated Thomas J. Usher 600 Grant Street Chairman and Chief Executive Officer Pittsburgh, PA 15219-4776 USX Corporation Milton A. Washington 5604 Baum Boulevard President and Chief Executive Officer Pittsburgh, PA 15206 AHRCO Helge H. Wehmeier 100 Bayer Road President and Chief Executive Officer Pittsburgh, PA 15205-9741 Bayer Corporation II-3 EXHIBIT INDEX Location in Sequentially Numbered Copy ------------- Exhibit 1 Agreement, dated as of October 29, 1997, between PNC and FBR EX-1 2 AGREEMENT BETWEEN PNC AND FBR Exhibit 1 October 29, 1997 Friedman, Billings, Ramsey Group, Inc. 1001 19th Street North Arlington, VA 22209 Dear Sirs: The undersigned investor (the "Investor"), subject and pursuant to the terms and conditions set forth below, agrees to purchase from Friedman, Billings, Ramsey Group, Inc. (together with its successors, "FBR") and/or certain selling stockholders of FBR (the "Selling Stockholders"), and FBR, subject and pursuant to the terms and conditions set forth below, agrees on its behalf or on behalf of the Selling Stockholders to sell to such Investor, such number of shares (the "Offered Securities") of Class A Common Stock, par value $0.01 per share (the "Class A Common Stock"), of FBR as shall constitute 4.9% of the then total aggregate number of currently outstanding shares of Common Stock of FBR after giving effect to the issuance of any such primary shares (including any primary shares issued pursuant to the underwriters' over-allotment option). The purchase and sale of such shares shall occur substantially simultaneously with the closing of the initial public offering (including the underwriters' over-allotment option) (the "IPO") of shares of the Class A Common Stock as contemplated in the draft Registration Statement (and associated form of prospectus) on Form S-1 attached as Annex 1 hereto (the "Draft Registration Statement"). As used herein, the term "Common Stock" shall mean the Class A Common Stock, the Class B Common Stock"), par value $0.01 per share, of FBR (the "Class B Common Stock"), and any other classes of Common Stock as may be established prior to the consummation of the IPO. Substantially simultaneously with the execution of this Agreement, Investor and FBR are entering into a nonbinding memorandum of understanding relating to certain anticipated mutually beneficial business relationships which Investor and FBR hope to establish (a copy of which is attached hereto as Annex 2). 1. Representations and Warranties (a) Investor has received a copy of the Draft Registration Statement which for purposes of this Agreement shall constitute a private offering memorandum relating to the Offered Securities which the Investor agrees to purchase pursuant to Section 2 below and understands that no person has been authorized to give any information or to make any representations that were not contained in the Draft Registration Statement, and Investor has not relied on any such other information or representations in making a decision to purchase any of the Offered Securities. Investor understands that an investment in FBR involves a high degree of risk, including the risks set forth under the caption "RISK FACTORS" in the Draft Registration Statement. (b) Investor has been advised that (i) there will be restrictions on the transfer of the Offered Securities and (ii) there has been no prior trading market for the Offered Securities. (c) Investor has been advised that any and all certificates representing the Offered Securities shall bear the following legend, or one substantially similar thereto: The shares represented by this certificate were issued in a private placement preceding the initial public offering of the Corporation and have not been registered under the Securities Act of 1933, as amended, or under any state securities laws and may not be transferred, sold or otherwise disposed of except pursuant to an effective registration statement or pursuant to an exemption from registration, under the Securities Act and under any applicable state securities laws. (d) Investor agrees and understands that FBR shall remain free to revise the Draft Registration Statement and the proposed terms of the IPO (including, without limitation, the number of shares to be sold in the IPO, the proposed terms of the Restated Articles of Association of FBR and relative voting and other rights of the holders of the Class A Common Stock and Class B Common Stock and/or such other classes of capital stock of FBR as FBR may determine to establish) in FBR's sole discretion prior to the consummation of the IPO and/or to abandon the proposed IPO; provided, however, that Investor's obligations hereunder shall be conditioned on the aggregate number of shares of Common Stock sold on either a primary or secondary basis (or a combination thereof) in the IPO (excluding the Offered Securities) being not less than 5,000,000 shares of Class A Common Stock. Investor agrees and understands that by executing this Agreement it is agreeing to -2- purchase the Offered Securities on the terms that, except as set forth in Section 2, are offered to the public in the IPO, and that the sale of shares in the IPO will be based upon such disclosures as will be set forth in the final prospectus relating to the IPO. (e) Investor represents that it is a sophisticated institutional or corporate investor and is an "accredited investor" as defined in Rule 501 under the Securities Act of 1933 and that Investor has sufficient knowledge and experience in financial and business matters to make an informed investment decision based upon the information included in the Draft Registration Statement and this Agreement. Investor further represents that Investor can bear the economic risk of loss of the entire investment in the Offered Securities being purchased by such Investor; that Investor intends to purchase such Offered Securities for the account of the Investor and its affiliates and not, in whole or in part, for the account of any other person. (f) Investor represents that it is acquiring the Offered Securities solely for investment purposes and that it shall not exercise or attempt to exercise any controlling influence over the business or affairs of FBR or any of its subsidiaries. (g) The execution, delivery and performance by Investor of this Agreement have been duly authorized by all necessary action and this Agreement has been duly executed and delivered and, when executed and delivered by FBR, will constitute the legal, valid, binding and enforceable obligation of Investor, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). (h) The Investor is a corporation duly incorporated, validly existing and in good standing under the laws of Pennsylvania, with full power and authority (corporate and other) to perform its obligations under this Agreement. Investor does not require any consents or approvals of any governmental, regulatory or self-regulatory bodies (other than expiration of the waiting period pursuant to the Hart-Scott-Rodino Antitrust Improvement Act of 1972, as amended) to execute this Agreement and/or to perform its obligations hereunder. -3- (i) FBR represents and warrants to Investor that FBR and/or the Selling Stockholders, immediately prior to the consummation of the sale of the Offered Securities to the Investor, will have good and marketable title to such securities, free and clear of any liens, claims, charges, security interests or encumbrances of any kind and that the execution, delivery and performance by FBR of this Agreement have been duly authorized by all necessary action, and this Agreement has been duly executed and delivered by FBR and, when executed and delivered by the Investor, will constitute the legal, valid and binding obligation of FBR, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). 2. Subscription and Method of Payment. Investor hereby agrees to purchase the Offered Securities at a purchase price per share equal to (a) 96%, times (b) the price per share of such securities offered to the public in the IPO. FBR shall be responsible for the payment to Lazard Freres, LLC of the advisory fees due to them with respect to the Offered Securities. Such purchase shall occur substantially simultaneously with the completion of the sale of shares to the public in the IPO. The closing (the "Closing") of the purchase of the Offered Securities will be held at a time and place to be designated by FBR. Investor agrees to deliver payment for the Offered Securities at the Closing by wire transfer in Federal funds to such account or accounts as may be designated by FBR at least 24 hours prior to the Closing. 3. Miscellaneous. (a) The Investor agrees not to transfer or assign this Agreement, or any of the Investor's interest herein; provided that the Investor may assign its interest herein to its wholly-owned, direct or indirect, subsidiaries. (b) The Investor agrees that, until the earlier of (i) such date, if applicable, on which FBR expressly determines not to proceed forward with the IPO and (ii) March 30, 1998, the Investor may not terminate or revoke this Agreement or any agreement, offer or commitment of the Investor made hereunder, and this Agreement shall be binding upon the Investor's successors and assigns. This Agreement shall automatically terminate without liability of either party if FBR determines not to proceed with the IPO or -4- the IPO is not consummated by March 30, 1998 or there exists a final order, injunction or notice from a court or administrative agency of competent jurisdiction which prohibits consummation of the transactions contemplated herein. (c) This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and may be amended only by written execution by both parties. (d) THIS AGREEMENT SHALL BE ENFORCED, GOVERNED AND CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA. (e) Time is of the essence with respect to all provisions of this Agreement including, without limitation, the Investor's obligation to make payment as of the specified time on the Closing Date. (f) Execution. By executing this Agreement below, the Investor agrees to be bound by all of the terms, provisions, warranties and conditions contained herein. Upon acceptance by FBR, this Agreement shall be binding on both parties hereto. (g) Registration Rights. FBR shall, if requested by the Investor (a "Request"), within 120 days file a shelf registration statement on a form of general use under the Securities Act of 1933, as amended (the "Securities Act"), and shall use best efforts to have such registration statement declared effective in order to facilitate a sale of Class A Common Stock purchased pursuant hereto; provided, however, that the Investor may not make a Request prior to 180 days from and after the consummation of the IPO and may not make more than one Request, except that the Investor may make up to two Requests to participate in registration statement filed by FBR for the sale of Class A Common Stock by either FBR or a third party. FBR and Investor shall each pay one-half of the reasonable fees and expenses incurred in connection with any offering pursuant to such a requested registration statement (excluding any fees payable to or discounts received by any underwriters or placement agents) and shall provide one another customary indemnification with respect to any liability arising from the portions of such requested registration statement provided by the respective indemnifying party. -5- (h) In the event that FBR proposes to sell any Common Stock (other than a brokerage transaction in the ordinary course of business) to any U.S. bank or bank holding company (a U.S. Bank), other than Common Stock which such U.S. Bank will not beneficially own or Common Stock that FBR proposes to sell to a U.S. Bank as a purchaser in any underwritten public offering subsequent to the IPO (so long as such sale to such U.S. Bank does not exceed 1% of the total outstanding Common Stock of FBR following the closing of such underwritten offering), FBR shall provide notice to Investor of its intention and provide Investor the opportunity to sell any or all of its Class A Common Stock purchased pursuant hereto to such U.S. Bank. (i) Sections 2 and 3 of this Agreement shall survive the Closing of the purchase of the Class A Common Stock pursuant hereto. Section 1 of this Agreement shall not survive the Closing. Very truly yours, PNC BANK CORP. By: /s/ Walter E. Gregg, Jr. -------------------------- Title:________________________ Address:______________________ ______________________ Telephone:____________________ Facsimile:____________________ Accepted and agreed to this 29th day of October, 1997. FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. (a Virginia Corporation) By:/s/ Emanuel Friedman -------------------- Title:_________________ -----END PRIVACY-ENHANCED MESSAGE-----