REGISTRATION RIGHTS AGREEMENT dated as of September 21, 2007 between FIRST ALBANY COMPANIES INC. and MATLINPATTERSON FA ACQUISITION LLC
Exhibit 10.3
dated as of September 21, 2007
between
and
MATLINPATTERSON FA ACQUISITION LLC
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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
X-0, X-0 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.
- 12 -
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.
- 14 -
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
- 15 -
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
X-0, Xxxx X-0 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
- 16 -
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
- 17 -
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]
- 18 -
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/ Xxxxx XxXxxxxxx | |||||
| Name: Xxxxx XxXxxxxxx | ||||||
| Title: President and Chief Executive Officer | ||||||
| The Principal Investor: | ||||||
| MATLINPATTERSION FA ACQUISITION LLC | ||||||
| By: | /s/ Xxxxxx X. Xxxxx | |||||
| Name: Xxxxxx X. Xxxxx | ||||||
| Title: Secretary | ||||||
| The Other Investors: | ||||||
| /s/ Xxxxxx X. Fine | ||||||
| XXXXXX X. FINE | ||||||
| /s/ Xxxxxx X. Xxxxxxxxxx | ||||||
| XXXXXX X. XXXXXXXXXX | ||||||
- 19 -
EXHIBIT A
to
Registration
Rights Agreement
to
Registration
Rights Agreement
AGREEMENT TO BE BOUND
BY THE REGISTRATION RIGHTS AGREEMENT
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
Address for Notices:
1. The Company.
First Albany Companies Inc.
000 Xxxxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
000 Xxxxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
2. The Principal Investor.
MatlinPatterson FA Acquisition LLC
c/o MatlinPatterson Global Advisers LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
c/o MatlinPatterson Global Advisers LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
3. The Other Investors.
Xxxxxx X. Fine
00 Xxxxxxxx Xxxxx
Xxxxx xxxxx, XX 00000
00 Xxxxxxxx Xxxxx
Xxxxx xxxxx, XX 00000
Xxxxxx X. Xxxxxxxxxx
00 Xxxxx Xx., Xxx 0X
Xxx Xxxx, XX 00000
00 Xxxxx Xx., Xxx 0X
Xxx Xxxx, XX 00000
A-2
