Exhibit 10.3
 
REGISTRATION RIGHTS AGREEMENT
dated as of September 21, 2007
between
FIRST ALBANY COMPANIES INC.
and
MATLINPATTERSON FA ACQUISITION LLC
 

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REGISTRATION RIGHTS AGREEMENT
     Registration Rights Agreement (this “Agreement”) dated as of September 21,
2007 by and among FIRST ALBANY COMPANIES INC., a New York corporation (the
“Company”), MATLINPATTERSON FA ACQUISITION LLC, a Delaware limited liability
company (the “Principal Investor”), and the other Persons who have executed this
Agreement as “Other Investors” (the “Other Investors” and, together with the
Principal Investor, the “Investors”).
RECITALS
     WHEREAS, pursuant to that certain Investment Agreement dated as of May 14,
2007, by and between the Company and the Principal Investor (the “Investment
Agreement”) and to which the Other Investors have become parties by execution of
joinder agreements, the Company has issued to the Investors shares (the
“Shares”) of the Common Stock (as defined below) and has agreed to enter into
this Agreement to provide the Investors with certain registration rights in
respect of such shares; and
     WHEREAS, the parties hereto hereby desire to set forth the Company’s
obligations to cause the registration of the Registrable Securities (as defined
below) pursuant to the Securities Act (as defined below) and applicable state
securities laws;
     NOW, THEREFORE, in consideration of the purchase by the Investors of the
Shares pursuant to the Investment Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
     Section 1. Definitions and Usage.
          As used in this Agreement:
          1.1. Definitions.
          “Agent” means the principal placement agent on an agented placement of
Registrable Securities.
          “Commission” shall mean the Securities and Exchange Commission.
          “Common Stock” shall mean (i) the common stock, par value $.01 per
share, of the Company, and (ii) shares of capital stock of the Company issued by
the Company in respect of or in exchange for shares of such common stock in
connection with any stock dividend or distribution, stock split-up,
recapitalization, recombination or exchange by the Company generally of shares
of such common stock.
          “Continuously Effective”, with respect to a specified registration
statement, shall mean that it shall not cease to be effective and available for
Transfers of

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Registrable Securities thereunder for longer than either (i) any thirty
(30) consecutive business days, or (ii) an aggregate of sixty (60) business days
during any twelve (12) month period.
          “Demand Registration” shall have the meaning set forth in
Section 2.1(i).
          “Demanding Holders” shall have the meaning set forth in
Section 2.1(i).
          “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
          “Holder” shall mean any Investor and any Transferee of any Registrable
Securities from a Holder, to the extent that such Transferee shall have been
assigned rights under this Agreement in accordance with Section 8, in each case
at such times as such Person shall own any Registrable Securities.
          “Initial Public Offering” means first offering of shares of Common
Stock registered pursuant to the Securities Act.
          “Initiating Substantial Holder” shall have the meaning set forth in
Section 2.2.
          “Investment Agreement” shall have the meaning set forth in the
Recitals.
          “Majority Selling Holders” means those Selling Holders whose
Registrable Securities included in such registration represent a majority of the
Registrable Securities of all Selling Holders included therein.
          “Person” shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
          “Piggyback Registration” shall have the meaning set forth in
Section 3.
          “Register”, “registered”, and “registration” shall refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering by the Commission of effectiveness of such registration statement or
document.
          “Registrable Securities” shall mean, subject to Section 8 and
Section 10.3: (i) the Shares owned by Holders on the date hereof, (ii) any
shares of Common Stock or other securities issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange by the
Company generally for, or in replacement by the Company generally of, such
Shares (or other Registrable Securities); and (iii) any securities issued in
exchange for Shares (or other Registrable Securities) in any merger or
reorganization of the Company; provided, however, that Registrable Securities
shall not include any securities which have theretofore been registered and sold
pursuant to the Securities Act or which have been sold to the public pursuant to
Rule 144 or

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any similar rule promulgated by the Commission pursuant to the Securities Act,
and, provided, further, the Company shall have no obligation under Sections 2
and 3 to register any Registrable Securities of a Holder if the Company shall
deliver to such Holder requesting such registration an opinion of counsel
reasonably satisfactory to such Holder and its counsel to the effect that the
proposed sale or disposition of all of the Registrable Securities for which
registration was requested does not require registration under the Securities
Act for a sale or disposition in a single public sale, and offers to remove any
and all legends restricting transfer from the certificates evidencing such
Registrable Securities. For purposes of this Agreement, a Person will be deemed
to be a holder of Registrable Securities whenever such Person has the
then-existing right to acquire such Registrable Securities (by conversion,
purchase or otherwise), whether or not such acquisition has actually been
effected.
          “Registrable Securities then outstanding” shall mean, with respect to
a specified determination date, the Registrable Securities owned by all Holders
on such date.
          “Registration Expenses” shall have the meaning set forth in
Section 6.1.
          “Securities Act” shall mean the Securities Act of 1933, as amended.
          “Selling Holders” shall mean, with respect to a specified registration
pursuant to this Agreement, Holders whose Registrable Securities are included in
such registration.
          “Shares” shall have the meaning set forth in the Recitals.
          “Shelf Registration” shall have the meaning set forth in Section 2.2.
          “Substantial Holder” shall mean any Holder that owned on the date of
this Agreement 25% or more of the Registrable Securities then outstanding and
such Transferee, if any, to whom such Person Transfers Registrable Securities
and assigns such Substantial Holder’s rights as a Substantial Holder as
permitted by Section 8.
          “Transfer” shall mean and include the act of selling, giving,
transferring, creating a trust (voting or otherwise), assigning or otherwise
disposing of (other than pledging, hypothecating or otherwise transferring as
security) (and correlative words shall have correlative meanings); provided,
however, that any transfer or other disposition upon foreclosure or other
exercise of remedies of a secured creditor after an event of default under or
with respect to a pledge, hypothecation or other transfer as security shall
constitute a “Transfer”.
          “Underwriters’ Representative” shall mean the managing underwriter,
or, in the case of a co-managed underwriting, the managing underwriter
designated as the Underwriters’ Representative by the co-managers.
          “Violation” shall have the meaning set forth in Section 7.1.

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          1.2. Usage.
          (i) References to a Person are also references to its assigns and
successors in interest (by means of merger, consolidation or sale of all or
substantially all the assets of such Person or otherwise, as the case may be).
          (ii) References to Registrable Securities “owned” or “held” by a
Holder shall include Registrable Securities beneficially owned by such Person
but which are held of record in the name of a nominee, trustee, custodian, or
other agent, but shall exclude shares of Common Stock held by a Holder in a
fiduciary capacity for customers of such Person.
          (iii) References to a document are to it as amended, waived and
otherwise modified from time to time and references to a statute or other
governmental rule are to it as amended and otherwise modified from time to time
(and references to any provision thereof shall include references to any
successor provision).
          (iv) References to Sections or to Schedules or Exhibits are to
sections hereof or schedules or exhibits hereto, unless the context otherwise
requires.
          (v) The definitions set forth herein are equally applicable both to
the singular and plural forms and the feminine, masculine and neuter forms of
the terms defined.
          (vi) The term “including” and correlative terms shall be deemed to be
followed by “without limitation” whether or not followed by such words or words
of like import.
          (vii) The term “hereof” and similar terms refer to this Agreement as a
whole.
          (viii) The “date of” any notice or request given pursuant to this
Agreement shall be determined in accordance with Section 13.
     Section 2. Demand Registration.
          2.1.
          (i) If one or more Holders that own an aggregate of 51% or more of the
Registrable Securities then outstanding (the “Demanding Holders”) shall at any
time make a written request to the Company, the Company shall cause there to be
filed with the Commission a registration statement meeting the requirements of
the Securities Act (a “Demand Registration”), and each Demanding Holder shall be
entitled to have included therein (subject to Section 2.7) all or such number of
such Demanding Holder’s Registered Shares, as the Demanding Holder shall report
in writing; provided, however, that no request may be made pursuant to this
Section 2.1 if within six (6) months prior to the date of such request a Demand
Registration Statement pursuant to this Section 2.1 shall have been declared
effective by the Commission. Any request made pursuant to this Section 2.1 shall
be addressed to the attention of the Secretary of the Company, and shall specify
the number of Registrable Securities to be

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registered, the intended methods of disposition thereof and that the request is
for a Demand Registration pursuant to this Section 2.1(i).
          (ii) The Company shall be entitled to postpone for up to one hundred
twenty (120) days the filing of any Demand Registration statement otherwise
required to be prepared and filed pursuant to this Section 2.1, if the Board
determines, in its good faith reasonable judgment (with the concurrence of the
managing underwriter, if any), that such registration and the Transfer or
Registrable Securities contemplated thereby would materially interfere with, or
require premature disclosure of, any financing, acquisition or reorganization
involving the Company or any of its wholly owned subsidiaries and the Company
promptly gives the Demanding Holders notice of such determination; provided,
however, that the Company shall not have postponed pursuant to this
Section 2.1(ii) the filing of any other Demand Registration statement otherwise
required to be prepared and filed pursuant to this Section 2.1 during the
24 month period ended on the date of the relevant request pursuant to
Section 2.1(i).
          (iii) Whenever the Company shall have received a demand pursuant to
Section 2.1(i) to effect the registration of any Registrable Shares, the Company
shall promptly give written notice of such proposed registration to all Holders.
Any such Holder may, within twenty (20) days after receipt of such notice,
request in writing that all of such Holder’s Registrable Shares, or any portion
thereof designated by such Holder, be included in the registration.
          2.2. On or after the date of this Agreement each Substantial Holder
that shall make a written request to the Company (the “Initiating Substantial
Holder”), shall be entitled to have all or any number of such Initiating
Substantial Holder’s Registrable Securities included in a registration with the
Commission in accordance with the Securities Act for an offering on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act (a “Shelf
Registration”). Any request made pursuant to this Section 2.2 shall be addressed
to the attention of the Secretary of the Company, and shall specify the number
of Registrable Securities to be registered, the intended methods of disposition
thereof and that the request is for a Shelf Registration pursuant to this
Section 2.2.
          2.3. Following receipt of a request for a Demand Registration or a
Shelf Registration, the Company shall:
          (i) File the registration statement with the Commission as promptly as
practicable, and shall use the Company’s best efforts to have the registration
declared effective under the Securities Act as soon as reasonably practicable,
in each instance giving due regard to the need to prepare current financial
statements, conduct due diligence and complete other actions that are reasonably
necessary to effect a registered public offering.
          (ii) Use the Company’s best efforts to keep the relevant registration
statement Continuously Effective (x) if a Demand Registration, for up to two
hundred seventy (270) days or until such earlier date as of which all the
Registrable Securities under the Demand Registration statement shall have been
disposed of in the manner described in the Registration Statement, and (y) if a
Shelf Registration, for three years. Notwithstanding the foregoing, if for

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any reason the effectiveness of a registration pursuant to this Section 2 is
suspended or, in the case of a Demand Registration, postponed as permitted by
Section 2.1(ii), the foregoing period shall be extended by the aggregate number
of days of such suspension or postponement.
          2.4. The Company shall be obligated to effect no more than three
Demand Registrations and such number of Shelf Registrations as may be necessary
to provide each and every Substantial Holder with the right to request one Shelf
Registration. For purposes of the preceding sentence, registration shall not be
deemed to have been effected (i) unless a registration statement with respect
thereto has become effective, (ii) if after such registration statement has
become effective, such registration or the related offer, sale or distribution
of Registrable Securities thereunder is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason not attributable to the Selling Holders and such
interference is not thereafter eliminated, or (iii) if the conditions to closing
specified in the underwriting agreement, if any, entered into in connection with
such registration are not satisfied or waived, other than by reason of a failure
on the part of the Selling Holders. If the Company shall have complied with its
obligations under this Agreement, a right to demand a registration pursuant to
this Section 2 shall be deemed to have been satisfied (i) if a Demand
Registration, upon the earlier of (x) the date as of which all of the
Registrable Securities included therein shall have been disposed of pursuant to
the Registration Statement, and (y) the date as of which such Demand
Registration shall have been Continuously Effective for a period of two hundred
seventy (270) days, and (ii) if a Shelf Registration, upon the effective date of
a Shelf Registration, provided no stop order or similar order, or proceedings
for such an order, is thereafter entered or initiated.
          2.5. A registration pursuant to this Section 2 shall be on Form S-3
and permit the disposition of the Registrable Securities in accordance with the
intended method or methods of disposition specified in the request pursuant to
Section 2.1(i) or Section 2.2, respectively. The Company agrees to file all
reports required to be filed by the Company with the Commission in a timely
manner so as to remain eligible or become eligible, as the case may be, and
thereafter to maintain its eligibility, for the use of Form S-3. If the Company
is not eligible at any time after the date hereof to use Form S-3, in order to
fulfill its obligations under Section 2(i) the Company shall file a Registration
Statement on Form S-1 or other appropriate form and not later than five
(5) business days after the Company first meets the registration eligibility and
transaction requirements for the use of Form S-3 for registration of the offer
and sale by the Investors, the Company shall file a Registration Statement on
Form S-3 with respect to the Registrable Securities covered by the Registration
Statement on Form S-1 or other form filed pursuant to Section 2(i) (and include
in such Registration Statement on Form S-3 the information required by Rule 429
under the Securities Act) or convert the Registration Statement on Form S-1 or
other form, whichever is applicable, filed pursuant to Section 2(i) to a Form
S-3 pursuant to Rule 429 under the Securities Act and cause such Registration
Statement (or such amendment) to be declared effective no later than ninety
(90) days after the date of filing of such Registration Statement (or
amendment). Notwithstanding the foregoing, the Company shall use its
commercially reasonable efforts to meet the requirements of Form S-3 for so long
as any Registrable Securities remain outstanding and under no circumstances
shall the Company be obligated to file a Registration State on any form other
than Form S-3 to fulfill ist obligations under Section 2.2.

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          2.6. If any registration pursuant to Section 2 involves an
underwritten offering (whether on a “firm”, “best efforts” or “all reasonable
efforts” basis or otherwise), or an agented offering, the Majority Selling
Holders, or the Initiating Substantial Holder, as the case may be, shall have
the right to select the underwriter or underwriters and manager or managers to
administer such underwritten offering or the placement agent or agents for such
agented offering; provided, however, that each Person so selected shall be
reasonably acceptable to the Company.
          2.7. Whenever the Company shall effect a registration pursuant to this
Section 2 in connection with an underwritten offering by one or more Selling
Holders of Registrable Securities: (i) if such Selling Holders have requested
the inclusion therein of more than one class of Registrable Securities, and the
Underwriters’ Representative or Agent advises each such Selling Holder in
writing that, in its opinion, the inclusion of more than one class of
Registrable Securities would adversely affect such offering, the Demanding
Holders holding at least a majority of the Registrable Securities proposed to be
sold therein by them, shall decide which class of Registrable Securities shall
be included therein in such offering and the related registration, and the other
class shall be excluded; and (ii) if the Underwriters’ Representative or Agent
advises each such Selling Holder in writing that, in its opinion, the amount of
securities requested to be included in such offering (whether by Selling Holders
or others) exceeds the amount which can be sold in such offering within a price
range acceptable to the Majority Selling Holders, securities shall be included
in such offering and the related registration, to the extent of the amount which
can be sold within such price range, and on a pro rata basis among all Selling
Holders.
     Section 3. Piggyback Registration.
          3.1. If at any time the Company proposes to register (including for
this purpose a registration effected by the Company for shareholders of the
Company other than the Holders) securities under the Securities Act in
connection with the public offering solely for cash on Form S-1, S-2 or S-3 (or
any replacement or successor forms), the Company shall promptly give each Holder
of Registrable Securities written notice of such registration (a “Piggyback
Registration”). Upon the written request of each Holder given within twenty
(20) days following the date of such notice, the Company shall cause to be
included in such registration statement and use its best efforts to be
registered under the Securities Act all the Registrable Securities that each
such Holder shall have requested to be registered. The Company shall have the
absolute right to withdraw or cease to prepare or file any registration
statement for any offering referred to in this Section 3 without any obligation
or liability to any Holder.
          3.2. If the Underwriters’ Representative or Agent shall advise the
Company in writing (with a copy to each Selling Holder) that, in its opinion,
the amount of Registrable Securities requested to be included in such
registration would materially adversely affect such offering, or the timing
thereof, then the Company will include in such registration, to the extent of
the amount and class which the Company is so advised can be sold without such
material adverse effect in such offering: First, all securities proposed to be
sold by the Company for its own account; second, the Registrable Securities
requested to be included in such registration by Holders pursuant to this
Section 3, and all other securities being registered pursuant to the exercise of
contractual rights comparable to the rights granted in this Section 3,

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pro rata based on the estimated gross proceeds from the sale thereof; and third
all other securities requested to be included in such registration.
          3.3. Except as set forth in Section 3.2, each Holder shall be entitled
to have its Registrable Securities included in an unlimited number of Piggyback
Registrations pursuant to this Section 3.
          3.4. Registration Procedures. Whenever required under Section 2 or
Section 3 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as practicable.
          3.5. Prepare and file with the Commission a registration statement
with respect to such Registrable Securities and use the Company’s best efforts
to cause such registration statement to become effective; provided, however,
that before filing a registration statement or prospectus or any amendments or
supplements thereto, including documents incorporated by reference after the
initial filing of the registration statement and prior to effectiveness thereof,
the Company shall furnish to one firm of counsel for the Selling Holders
(selected by Majority Selling Holders or the Initiating Substantial Holder, as
the case may be) copies of all such documents in the form substantially as
proposed to be filed with the Commission at least four (4) business days prior
to filing for review and comment by such counsel.
          3.6. Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act and rules thereunder with respect to the
disposition of all securities covered by such registration statement. If the
registration is for an underwritten offering, the Company shall amend the
registration statement or supplement the prospectus whenever required by the
terms of the underwriting agreement entered into pursuant to Section 5.2.
Subject to Rule 415 under the Securities Act, if the registration statement is a
Shelf Registration, the Company shall amend the registration statement or
supplement the prospectus so that it will remain current and in compliance with
the requirements of the Securities Act for three years after its effective date,
and if during such period any event or development occurs as a result of which
the registration statement or prospectus contains a misstatement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, the Company shall
promptly notify each Selling Holder, amend the registration statement or
supplement the prospectus so that each will thereafter comply with the
Securities Act and furnish to each Selling Holder of Registrable Shares such
amended or supplemented prospectus, which each such Holder shall thereafter use
in the Transfer of Registrable Shares covered by such registration statement.
Pending such amendment or supplement each such Holder shall cease making offers
or Transfers of Registrable Shares pursuant to the prior prospectus. In the
event that any Registrable Securities included in a registration statement
subject to, or required by, this Agreement remain unsold at the end of the
period during which the Company is obligated to use its best efforts to maintain
the effectiveness of such registration statement, the Company may file a
post-effective amendment to the registration statement for the purpose of
removing such Securities from registered status.

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          3.7. Furnish to each Selling Holder of Registrable Securities, without
charge, such numbers of copies of the registration statement, any pre-effective
or post-effective amendment thereto, the prospectus, including each preliminary
prospectus and any amendments or supplements thereto, in each case in conformity
with the requirements of the Securities Act and the rules thereunder, and such
other related documents as any such Selling Holder may reasonably request in
order to facilitate the disposition of Registrable Securities owned by such
Selling Holder.
          3.8. Use the Company’s best efforts (i) to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such states or jurisdictions as shall be reasonably requested
by the Underwriters’ Representative or Agent (as applicable, or if inapplicable,
the Majority Selling Holders), and (ii) to obtain the withdrawal of any order
suspending the effectiveness of a registration statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of the offer
and transfer of any of the Registrable Securities in any jurisdiction, at the
earliest possible moment; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions.
          3.9. In the event of any underwritten or agented offering, enter into
and perform the Company’s obligations under an underwriting or agency agreement
(including indemnification and contribution obligations of underwriters or
agents), in usual and customary form, with the managing underwriter or
underwriters of or agents for such offering. The Company shall also cooperate
with the Majority Selling Holders or Initiating Substantial Holder, as the case
may be, and the Underwriters’ Representative or Agent for such offering in the
marketing of the Registrable Shares, including making available the Company’s
officers, accountants, counsel, premises, books and records for such purpose,
but the Company shall not be required to incur any material out-of-pocket
expense pursuant to this sentence.
          3.10. Promptly notify each Selling Holder of any stop order issued or
threatened to be issued by the Commission in connection therewith (and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.
          3.11. Make generally available to the Company’s security holders
copies of all periodic reports, proxy statements, and other information referred
to in Section 10.1 and an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act no later than ninety (90) days following the
end of the 12-month period beginning with the first month of the Company’s first
fiscal quarter commencing after the effective date of each registration
statement filed pursuant to this Agreement.
          3.12. Make available for inspection by any Selling Holder, any
underwriter participating in such offering and the representatives of such
Selling Holder and Underwriter (but not more than one firm of counsel to such
Selling Holders), all financial and other information as shall be reasonably
requested by them, and provide the Selling Holder, any underwriter participating
in such offering and the representatives of such Selling Holder and Underwriter
the opportunity to discuss the business affairs of the Company with its
principal

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executives and independent public accountants who have certified the audited
financial statements included in such registration statement, in each case all
as necessary to enable them to exercise their due diligence responsibility under
the Securities Act; provided, however, that information that the Company
determines, in good faith, to be confidential and which the Company advises such
Person in writing, is confidential shall not be disclosed unless such Person
signs a confidentiality agreement reasonably satisfactory to the Company or the
related Selling Holder of Registrable Securities agrees to be responsible for
such Person’s breach of confidentiality on terms reasonably satisfactory to the
Company.
          3.13. Use the Company’s best efforts to obtain a so-called “comfort
letter” from its independent public accountants, and legal opinions of counsel
to the Company addressed to the Selling Holders, in customary form and covering
such matters of the type customarily covered by such letters, and in a form that
shall be reasonably satisfactory to Majority Selling Holders or the Initiating
Substantial Holder, as the case be. The Company shall furnish to each Selling
Holder a signed counterpart of any such comfort letter or legal opinion.
Delivery of any such opinion or comfort letter shall be subject to the recipient
furnishing such written representations or acknowledgements as are customarily
provided by selling shareholders who receive such comfort letters or opinions.
          3.14. Provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement.
          3.15. Use all reasonable efforts to cause the Registrable Securities
covered by such registration statement (i) if the Common Stock is then listed on
a securities exchange or included for quotation in a recognized trading market,
to continue to be so listed or included for a reasonable period of time after
the offering, and (ii) to be registered with or approved by such other United
States or state governmental agencies or authorities as may be necessary by
virtue of the business and operations of the Company to enable the Selling
Holders of Registrable Securities to consummate the disposition of such
Registrable Securities.
          3.16. Use the Company’s reasonable efforts to provide a CUSIP number
for the Registrable Securities prior to the effective date of the first
registration statement including Registrable Securities.
          3.17. Take such other actions as are reasonably requested in order to
expedite or facilitate the disposition of Registrable Securities included in
each such registration.
     Section 4. Holders’ Obligations. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
respect to the Registrable Securities of any Selling Holder of Registrable
Securities that such Selling Holder shall:
          4.1. Furnish to the Company such information regarding such Selling
Holder, the number of the Registrable Securities owned by it, and the intended
method of disposition of such securities as shall be required to effect the
registration of such Selling

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Holder’s Registrable Securities, and to cooperate with the Company in preparing
such registration;
          4.2. Agree to sell their Registrable Securities to the underwriters at
the same price and on substantially the same terms and conditions as the Company
or the other Persons on whose behalf the registration statement was being filed
have agreed to sell their securities, and to execute the underwriting agreement
agreed to by the Majority Selling Holders (in the case of a registration under
Section 2) or the Company and the Majority Selling Holders (in the case of a
registration under Section 3).
     Section 5. Expenses of Registration. Expenses in connection with
registrations pursuant to this Agreement shall be allocated and paid as follows:
          5.1. With respect to each Demand Registration and Shelf Registration,
the Company shall bear and pay all expenses incurred in connection with any
registration, filing, or qualification of Registrable Securities with respect to
such Demand Registrations for each Selling Holder (which right may be assigned
to any Person to whom Registrable Securities are Transferred as permitted by
Section 9), including all registration, filing and National Association of
Securities Dealers, Inc. fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the reasonable fees and disbursements
of counsel for the Company, and of the Company’s independent public accountants,
including the expenses of “cold comfort” letters required by or incident to such
performance and compliance, and the reasonable fees and disbursements of one
firm of counsel for the Selling Holders of Registrable Securities (selected by
Demanding Holders owning a majority of the Registrable Securities owned by
Demanding Holders to be included in a Demand Registration or by the Initiating
Substantial Holder, as the case may be) (the “Registration Expenses”), but
excluding underwriting discounts and commissions relating to Registrable
Securities (which shall be paid on a pro rata basis by the Selling Holders),
provided, however, that the Company shall not be required to pay for any
expenses of any registration proceeding begun pursuant to Section 2 if the
registration is subsequently withdrawn at the request of the Majority Selling
Holders (in which case all Selling Holders shall bear such expense), unless
Holders whose Registrable Securities constitute a majority of the Registrable
Securities then outstanding agree that such withdrawn registration shall
constitute one of the demand registrations under Section 2 hereof.
          5.2. The Company shall bear and pay all Registration Expenses incurred
in connection with any Piggyback Registrations pursuant to Section 3 for each
Selling Holder (which right may be Transferred to any Person to whom Registrable
Securities are Transferred as permitted by Section 9), but excluding
underwriting discounts and commissions relating to Registrable Securities (which
shall be paid on a pro rata basis by the Selling Holders of Registrable
Securities).
          5.3. Any failure of the Company to pay any Registration Expenses as
required by this Section 6 shall not relieve the Company of its obligations
under this Agreement.

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     Section 6. Indemnification; Contribution. If any Registrable Securities are
included in a registration statement under this Agreement:
          6.1. To the extent permitted by applicable law, the Company shall
indemnify and hold harmless each Selling Holder, each Person, if any, who
controls such Selling Holder within the meaning of the Securities Act, and each
officer, director, partner, and employee of such Selling Holder and such
controlling Person, against any and all losses, claims, damages, liabilities and
expenses (joint or several), including attorneys’ fees and disbursements and
expenses of investigation, incurred by such party pursuant to any actual or
threatened action, suit, proceeding or investigation, or to which any of the
foregoing Persons may become subject under the Securities Act, the Exchange Act
or other federal or state laws, insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based upon any of the following
statements, omissions or violations (collectively a “Violation”):
          (i) Any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein, or any amendments or
supplements thereto; or
          (ii) The omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein not
misleading;
provided, however, that the indemnification required by this Section 7.1 shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or expense to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written information
furnished to the Company by the indemnified party expressly for use in
connection with such registration; provided, further, that the indemnity
agreement contained in this Section 7 shall not apply to any underwriter to the
extent that any such loss is based on or arises out of an untrue statement or
alleged untrue statement of a material fact, or an omission or alleged omission
to state a material fact, contained in or omitted from any preliminary
prospectus if the final prospectus shall correct such untrue statement or
alleged untrue statement, or such omission or alleged omission, and a copy of
the final prospectus has not been sent or given to such person at or prior to
the confirmation of sale to such person if such underwriter was under an
obligation to deliver such final prospectus and failed to do so. The Company
shall also indemnify underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, their
officers, directors, agents and employees and each person who controls such
persons (within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) to the same extent as provided above with respect to the
indemnification of the Selling Holders.

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          6.2. To the extent permitted by applicable law, each Selling Holder
shall indemnify and hold harmless the Company, each of its directors, each of
its officers who shall have signed the registration statement, each Person, if
any, who controls the Company within the meaning of the Securities Act, any
other Selling Holder, any controlling Person of any such other Selling Holder
and each officer, director, partner, and employee of such other Selling Holder
and such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint and several), including attorneys’ fees and
disbursements and expenses of investigation, incurred by such party pursuant to
any actual or threatened action, suit, proceeding or investigation, or to which
any of the foregoing Persons may otherwise become subject under the Securities
Act, the Exchange Act or other federal or state laws, insofar as such losses,
claims, damages, liabilities and expenses arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Selling Holder expressly for use in connection with such
registration; provided, however, that (x) the indemnification required by this
Section 7.2 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or expense if settlement is effected without the
consent of the relevant Selling Holder of Registrable Securities, which consent
shall not be unreasonably withheld, and (y) in no event shall the amount of any
indemnity under this Section 7.2 exceed the gross proceeds from the applicable
offering received by such Selling Holder.
          6.3. Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing for which such indemnified party
may make a claim under this Section 7, such indemnified party shall deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and disbursements and
expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time following the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Section 7 but shall not relieve the indemnifying party of any liability that it
may have to any indemnified party otherwise than pursuant to this Section 7. Any
fees and expenses incurred by the indemnified party (including any fees and
expenses incurred in connection with investigating or preparing to defend such
action or proceeding) shall be paid to the indemnified party, as incurred,
within thirty (30) days of written notice thereof to the indemnifying party
(regardless of whether it is ultimately determined that an indemnified party is
not entitled to indemnification hereunder). Any such indemnified party shall
have the right to employ separate counsel in any such action, claim or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be the expenses of such indemnified party unless (i) the
indemnifying party has agreed to pay such fees and expenses or (ii) the
indemnifying party shall have failed to promptly assume the defense of such
action, claim or proceeding or (iii) the named parties to any such action, claim
or proceeding

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(including any impleaded parties) include both such indemnified party and the
indemnifying party, and such indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it which are
different from or in addition to those available to the indemnifying party and
that the assertion of such defenses would create a conflict of interest such
that counsel employed by the indemnifying party could not faithfully represent
the indemnified party (in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action, claim or proceeding on behalf of
such indemnified party, it being understood, however, that the indemnifying
party shall not, in connection with any one such action, claim or proceeding or
separate but substantially similar or related actions, claims or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (together with appropriate local counsel) at any time
for all such indemnified parties, unless in the reasonable judgment of such
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such action,
claim or proceeding, in which event the indemnifying party shall be obligated to
pay the fees and expenses of such additional counsel or counsels). No
indemnifying party shall be liable to an indemnified party for any settlement of
any action, proceeding or claim without the written consent of the indemnifying
party, which consent shall not be unreasonably withheld.
          6.4. If the indemnification required by this Section 7 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to in this
Section 7:
          (i) The indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any Violation has been committed by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such Violation. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 7.1 and Section 7.2,
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
          (ii) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 7.4 were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in Section 7.4(i). No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

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          6.5. If indemnification is available under this Section 7, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in this Section 7 without regard to the relative fault of such
indemnifying party or indemnified party or any other equitable consideration
referred to in Section 7.4.
          6.6. The obligations of the Company and the Selling Holders of
Registrable Securities under this Section 7 shall survive the completion of any
offering of Registrable Securities pursuant to a registration statement under
this Agreement, and otherwise.
     Section 7. Transfer of Registration Rights. Rights with respect to
Registrable Securities may be Transferred as follows: (i) the rights of a
Substantial Holder to require a Shelf Registration pursuant to Section 2.2 may
be Transferred to any Person in connection with the Transfer to such Person by
such Substantial Holder of a number of Registrable Securities equal to 25% or
more of the Registrable Securities outstanding on the date of this Agreement,
and (ii) all other rights of a Holder with respect to Registrable Securities
pursuant to this Agreement may be Transferred by such Holder to any of its
Person in connection with the Transfer of Registrable Securities to such Person,
in all cases, if (x) any such Transferee that is not a party to this Agreement
shall have executed and delivered to the Secretary of the Company a properly
completed agreement substantially in the form of Exhibit A, and (y) the
Transferor shall have delivered to the Secretary of the Company, no later than
fifteen (15) days following the date of the Transfer, written notification of
such Transfer setting forth the name of the Transferor, name and address of the
Transferee, and the number of Registrable Securities which shall have been so
Transferred.
     Section 8. Holdback. Each Holder entitled pursuant to this Agreement to
have Registrable Securities included in a registration statement prepared
pursuant to this Agreement, if so requested by the Underwriters’ Representative
or Agent in connection with an offering of any Registrable Securities, shall not
effect any public sale or distribution of shares of Common Stock or any
securities convertible into or exchangeable or exercisable for shares of Common
Stock, including a sale pursuant to Rule 144 under the Securities Act (except as
part of such underwritten or agented registration), during the fifteen (15) day
period prior to, and during the ninety (90) day period beginning on, the date
such registration statement is declared effective under the Securities Act by
the Commission, provided that such Holder is timely notified of such effective
date in writing by the Company or such Underwriters’ Representative or Agent. In
order to enforce the foregoing covenant, the Company shall be entitled to impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder until the end of such period.
     Section 9. Covenants of the Company. The Company hereby agrees and
covenants as follows:
          9.1. The Company shall file as and when applicable, on a timely basis,
all reports required to be filed by it under the Exchange Act. If the Company is
not required to file reports pursuant to the Exchange Act, upon the request of
any Holder of Registrable Securities, the Company shall make publicly available
the information specified in subparagraph (c)(2) of Rule 144 of the Securities
Act, and take such further action as may be reasonably required from time to
time and as may be within the reasonable control of the Company, to

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enable the Holders to Transfer Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by Rule 144
under the Securities Act or any similar rule or regulation hereafter adopted by
the Commission.
          9.2.
          (i) The Company shall not, and shall permit its majority owned
subsidiaries to, effect any public sale or distribution of any shares of Common
Stock or any securities convertible into or exchangeable or exercisable for
shares of Common Stock, during the five (5) business days prior to, and during
the ninety (90) day period beginning on, the commencement of a public
distribution of the Registrable Securities pursuant to any registration
statement prepared pursuant to this Agreement (other than by the Company
pursuant to such registration if the registration is on Form S-4, Form S-8 or
any successor forms to such forms or pursuant to Section 3 or such other
registration rights agreements as may be approved in writing by the Majority
Selling Holders or the Initiating Substantial Holder, as the case may be).
          (ii) Any agreement entered into after the date of this Agreement
pursuant to which the Company or any of its majority owned subsidiaries issues
or agrees to issue any privately placed securities similar to any issue of the
Registrable Securities (other than (x) shares of Common Stock pursuant to a
stock incentive, stock option, stock bonus, stock purchase or other employee
benefit plan of the Company approved by its Board of Directors, and
(y) securities issued to Persons in exchange for ownership interests in any
Person in connection with a business combination in which the Company or any of
its majority owned subsidiaries is a party) shall contain a provision whereby
holders of such securities agree not to effect any public sale or distribution
of any such securities during the periods described in the first sentence of
Section 10.2(i), in each case including a sale pursuant to Rule 144 under the
Securities Act (unless such Person is prevented by applicable statute or
regulation from entering into such an agreement).
          9.3. The Company shall not grant to any Person (other than a Holder of
Registrable Securities) any registration rights with respect to securities of
the Company, or enter into any agreement, that would entitle the holder thereof
to have securities owned by it included in a Demand Registration or Shelf
Registration.
     Section 10. Amendment, Modification and Waivers; Further Assurances.
          (i) This Agreement may be amended with the consent of the Company and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall have obtained
the written consent of Holders owning Registrable Securities possessing a
majority in number of the Registrable Securities then outstanding to such
amendment, action or omission to act.
          (ii) No waiver of any terms or conditions of this Agreement shall
operate as a waiver of any other breach of such terms and conditions or any
other term or condition, nor shall any failure to enforce any provision hereof
operate as a waiver of such provision or of any other provision hereof. No
written waiver hereunder, unless it by its own terms explicitly provides to the
contrary, shall be construed to effect a continuing waiver of the

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provisions being waived and no such waiver in any instance shall constitute a
waiver in any other instance or for any other purpose or impair the right of the
party against whom such waiver is claimed in all other instances or for all
other purposes to require full compliance with such provision.
          (iii) Each of the parties hereto shall execute all such further
instruments and documents and take all such further action as any other party
hereto may reasonably require in order to effectuate the terms and purposes of
this Agreement.
     Section 11. Assignment; Benefit. This Agreement and all of the provisions
hereof shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, assigns, executors, administrators or
successors; provided, however, that except as specifically provided herein with
respect to certain matters, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned or delegated by the Company
without the prior written consent of Holders owning Registrable Securities
possessing a majority in number of the Registrable Securities outstanding on the
date as of which such delegation or assignment is to become effective. A Holder
may Transfer its rights hereunder to a successor in interest to the Registrable
Securities owned by such assignor only as permitted by Section 8.
     Section 12. Miscellaneous.
          12.1. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING REGARD TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF.
          12.2. Notices. All notices and requests given pursuant to this
Agreement shall be in writing and shall be made by hand-delivery, first-class
mail (registered or certified, return receipt requested), confirmed facsimile or
overnight air courier guaranteeing next business day delivery to the relevant
address specified on Schedule 1 to this Agreement or in the relevant agreement
in the form of Exhibit A whereby such party became bound by the provisions of
this Agreement. Except as otherwise provided in this Agreement, the date of each
such notice and request shall be deemed to be, and the date on which each such
notice and request shall be deemed given shall be: at the time delivered, if
personally delivered or mailed; when receipt is acknowledged, if sent by
facsimile; and the next business day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next business day delivery.
          12.3. Entire Agreement; Integration. This Agreement supersedes all
prior agreements between or among any of the parties hereto with respect to the
subject matter contained herein and therein, and such agreements embody the
entire understanding among the parties relating to such subject matter.
          12.4. Injunctive Relief. Each of the parties hereto acknowledges that
in the event of a breach by any of them of any material provision of this
Agreement, the aggrieved party may be without an adequate remedy at law. Each of
the parties therefore agrees that in the event of such a breach hereof the
aggrieved party may elect to institute and prosecute proceedings in any court of
competent jurisdiction to enforce specific performance or to enjoin

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the continuing breach hereof. By seeking or obtaining any such relief, the
aggrieved party shall not be precluded from seeking or obtaining any other
relief to which it may be entitled.
          12.5. Section Headings. Section headings are for convenience of
reference only and shall not affect the meaning of any provision of this
Agreement.
          12.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which shall
together constitute one and the same instrument. All signatures need not be on
the same counterpart.
          12.7. Severability. If any provision of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall not affect
the validity and enforceability of the remaining provisions of this Agreement,
unless the result thereof would be unreasonable, in which case the parties
hereto shall negotiate in good faith as to appropriate amendments hereto.
          12.8. Filing. A copy of this Agreement and of all amendments thereto
shall be filed at the principal executive office of the Company with the
corporate recorder of the Company.
          12.9. Termination. This Agreement may be terminated at any time by a
written instrument signed by the parties hereto. Unless sooner terminated in
accordance with the preceding sentence, this Agreement (other than Section 7
hereof) shall terminate in its entirety on such date as there shall be no
Registrable Securities outstanding, provided that any shares of Common Stock
previously subject to this Agreement shall not be Registrable Securities
following the sale of any such shares in an offering registered pursuant to this
Agreement.
          12.10. Attorneys’ Fees. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys’ fees (including any fees incurred in any appeal) in
addition to its costs and expenses and any other available remedy.
          12.11. No Third Party Beneficiaries. Nothing herein expressed or
implied is intended to confer upon any person, other than the parties hereto or
their respective permitted assigns, successors, heirs and legal representatives,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
[The rest of this page has been intentionally left blank]

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     IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first written above.

                  The Company:    
 
                FIRST ALBANY COMPANIES INC.    
 
           
 
  By:   /s/ Peter McNierney    
 
                Name: Peter McNierney         Title: President and Chief
Executive Officer    
 
                The Principal Investor:    
 
                MATLINPATTERSION FA ACQUISITION LLC    
 
           
 
  By:   /s/ Robert H. Weiss    
 
                Name: Robert H. Weiss         Title: Secretary    
 
                The Other Investors:    
 
                /s/ Robert M. Fine                   ROBERT M. FINE    
 
                /s/ Robert M. Tirschwell                   ROBERT M. TIRSCHWELL
   

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EXHIBIT A
to
Registration
Rights Agreement
AGREEMENT TO BE BOUND
BY THE REGISTRATION RIGHTS AGREEMENT
     The undersigned, being the transferee of                      shares of the
common stock, $.01 par value per share [or describe other capital stock received
in exchange for such common stock] (the “Registrable Securities”), of First
Albany Companies, Inc., a New York corporation (the “Company”), as a condition
to the receipt of such Registrable Securities, acknowledges that matters
pertaining to the registration of such Registrable Securities is governed by the
Registration Rights Agreement dated as of September 21, 2007 initially among the
Company and the Holders referred to therein (the “Agreement”), and the
undersigned hereby (1) acknowledges receipt of a copy of the Agreement, and
(2) agrees to be bound as a Holder by the terms of the Agreement, as the same
has been or may be amended from time to time.
     Agreed to this           day of                                         ,
                                         .

         
 
       
 
       
 
       
 
    *  
 
       
 
       
 
    *  
 
       

 

*   Include address for notices.

A-1

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SCHEDULE 1
to
Registration Rights Agreement
Address for Notices:
1. The Company.
First Albany Companies Inc.
677 Broadway
Albany, NY 12207
Attention: General Counsel
Facsimile: (518) 447-8606
2. The Principal Investor.
MatlinPatterson FA Acquisition LLC
c/o MatlinPatterson Global Advisers LLC
520 Madison Avenue, 35th Floor
New York, New York 10022
Attention: General Counsel
Fax: (212) 651-4011
3. The Other Investors.
Robert M. Fine
21 Harriman Drive
Sands point, NY  11050
Robert M. Tirschwell
39 Worth St., Apt 5W
New York, NY   10013

A-2