BROADPOINT SECURITIES GROUP, INC. PREEMPTIVE RIGHTS AGREEMENT
EXHIBIT 10.4
Execution Copy
This
PREEMPTIVE RIGHTS AGREEMENT (the “Agreement”) is made
as of the 27th day of
June, 2008, by and between Broadpoint Securities Group, Inc., a New York
corporation (the “Company”), and MAST
Credit Opportunities I Master Fund Limited (the “Investor”). In
consideration of the premises and mutual covenants contained herein, the parties
hereby agree as follows:
1. Definitions. For purposes of this
Agreement:
1.1. The term
“Affiliate” has
the meaning set forth in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, as in effect as on the date hereof.
1.2. The term
“Business Day”
means any day other than a Saturday, Sunday or a day on which banking
institutions in the State of New York are authorized by law or executive order
to close.
1.3. The term
“Capital Stock”
shall mean the Common Stock and the preferred stock, par value $0.01 per share,
of the Company.
1.4. The term
“Common Stock”
shall mean shares of the Company’s common stock, par value $0.01 per
share.
1.5. The term
“Current Market
Price” means, as of the date of determination, (a) the average of the
daily Fair Market Value under clause (i) or (ii) of the definition thereof of
the Common Stock during the immediately preceding thirty (30) trading days
ending on such date, and (b) if the Common Stock is not then listed or admitted
to trading on any national securities exchange or quoted in the over-the-counter
market, then the Fair Market Value under clause (iii) of the definition thereof
on such date.
1.6. The term
“Derivative
Securities” means any securities or rights convertible into, or
exercisable or exchangeable for (in each case, directly or indirectly), Common
Stock, including options and warrants.
1.7. The term
“Equity
Securities” means Capital Stock and all warrants, options or other rights
to acquire Capital Stock, including any debt security that is convertible into,
or exchangeable for, Capital Stock.
1.8. The term
“Fair Market
Value” shall mean, as of the date of determination: (i) if the Common
Stock is listed on a national securities exchange or admitted to unlisted
trading privileges on such exchange, the Fair Market Value shall be the last
reported sale price of the Common Stock on such exchange or market system on the
last Business Day prior to the date of the Offer Notice or, if no such sale is
made on such day, the average closing bid and asked price for such day on such
exchange or market system; (ii) if the Common Stock is not listed or admitted to
unlisted trading privileges, the Fair Market Value shall be the mean of the last
reported bid and asked prices reported by Pink Sheets or other similar over the
counter quotation service, on the last Business Day prior to the date of the
Offer Notice; or (iii) if the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported, the
Fair Market Value shall be an amount determined mutually by (x) a majority of
the members of the Board of Directors of the Company, and (y) the
Investor. If the Board of Directors and the Investor shall fail to
agree within five (5) Business Days, the Fair Market Value shall be an amount
determined, at the Company’s expense, by an independent nationally recognized
investment banking firm chosen by the Board of Directors and reasonably
acceptable to the Investor. Any determination of the Fair Market
Value by an appraiser shall be based on a valuation of the Company as an
entirety without regard to any discount for minority interests or disparate
voting rights among classes of capital stock.
1.9. The term
“New
Securities” shall mean Equity Securities of the Company, whether now
authorized or not, or rights, options, or warrants to purchase said Equity
Securities, or securities of any type whatsoever that are, or may become,
convertible into or exchangeable into or exercisable for said Equity Securities
(collectively “New
Securities”).
1.10. The term
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
2. Right of First
Offer. Subject to the terms and conditions specified in this
Section 2, in
the event the Company proposes to offer or sell any New Securities below the
Current Market Price, the Company shall first make an offering of such New
Securities to the Investor in accordance with the provisions of this Section 2; provided, however, that nothing
in this Section 2 shall prevent the Company from offering or selling any New
Securities to Matlin Xxxxxxxxx provided that the Investor is allowed to
participate in such offering in accordance with Section 2(b) .
(a) The
Company shall deliver a notice, in accordance with the provisions of Section 3.5 hereof,
(the “Offer
Notice”) to the Investor stating (i) its bona fide intention to offer
such New Securities, (ii) the number of such New Securities to be offered,
and (iii) the price and terms, if any, upon which it proposes to offer such
New Securities.
(b) By
written notification received by the Company, within twenty (20) calendar days
after mailing of the Offer Notice, (i) if Matlin Xxxxxxxxx does not elect to
participate in the offering, the Investor may elect to purchase or obtain, at
the price and on the terms specified in the Offer Notice, all such New
Securities, or (ii) if Matlin Xxxxxxxxx does elect to participate in the
offering, the Investor may elect to purchase up to that portion of such New
Securities which equals the proportion that the Common Stock issued and held, or
issuable (directly or indirectly) upon conversion and/or exercise, as
applicable, of any Derivative Securities then held, by the Investor bears to the
total Common Stock of the Company then outstanding (assuming full conversion
and/or exercise, as applicable, of all Derivative Securities held by
MatlinPatterson and the Investor).
(c) If all
New Securities referred to in the Offer Notice are not elected to be purchased
or obtained, the Company may, during the ninety (90) day period following the
expiration of the period provided in Section 2.1(b)
hereof, offer the remaining unsubscribed portion of such New Securities
(collectively, the “Refused Securities”)
to any person or persons at a price not less than, and upon the same terms and
conditions as, those specified in the Offer Notice. If the Company
does not enter into an agreement for the sale of the New Securities within such
period, or if such agreement is not consummated within thirty (30) days of the
execution thereof, the right provided hereunder shall be deemed to be revived
and such New Securities shall not be offered unless first reoffered to the
Investor in accordance with this Section
2.1.
(d) The right
of first offer in this Section 2 shall not
be applicable to: (i) Common Stock issued or deemed issued to employees or
directors of, or consultants to, the Company or any of its subsidiaries pursuant
to a plan, agreement, or arrangement approved by the Board of Directors of the
Company; (ii) the issuance of securities pursuant to the conversion or exercise
of convertible or exercisable securities outstanding on the date hereof; (iii)
securities issued in connection with any stock split or stock dividend of the
Company; or (iv) the issuance of securities in connection with a bona fide
business acquisition of or by the Company, whether by merger, consolidation,
sale of assets, sale or exchange of stock or otherwise.
3. Miscellaneous.
3.1. Termination. This
Agreement shall terminate upon the earlier to occur of (i) a
Liquidation Event, as such term is defined in the Company’s Certificate of
Designations, Relative Rights, Preferences and Limitations of Series B Mandatory
Redeemable Preferred Stock, or (ii) such time the Warrant has expired, been
canceled or exercised in full.
3.2. Transfers, Successors and
Assigns. The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, except as expressly provided in this
Agreement.
3.3. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
3.4. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. This Agreement may also be executed and delivered by
facsimile signature and in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
3.5. Notices. All notices
and other communications given or made pursuant to this Agreement shall be in
writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified, (b) when sent by confirmed electronic mail
or facsimile if sent during normal business hours of the recipient, and if not
so confirmed, then on the next business day, (c) five (5) days after having been
sent by registered or certified mail, return receipt requested, postage prepaid,
or (d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of
receipt. All communications shall be sent to the respective parties
at their address as set forth below:
(i) All
correspondence to the Company shall be addressed as follows:
Xxx Xxxx Xxxxx, 00xx
Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax:
(000) 000-0000
Attention: General
Counsel
with a copy by fax or messenger or
courier to:
Xxxxxx/Wink LLP
0 Xxxx Xxxxx, 00xx xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxx,
Esq.
(ii) All
correspondence to Mast shall be addressed as follows:
If to Mast before September 15,
2008, at the following address:
MAST Credit Opportunities I Master Fund Limited
c/o MAST Capital Management, LLC
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Fax: (000) 000-0000
If to Mast after September 15,
2008, at the following address:
MAST
Credit Opportunities I Master Fund Limited
c/o MAST
Capital Management, LLC
000
Xxxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Xxxx X. Xxxxxxxx
with
a copy by fax or messenger or courier to:
Xxxxx
Xxxx LLP
Bay
Colony Corporate Center
0000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Xxxxx X. Xxxxxxxx, Esq.
Fax:
(000) 000-0000
3.6. Amendments and Waivers. Any term
of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Investor. No waivers of or exceptions to any term, condition or
provision of this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition
or provision.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
By: /s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
Chief Financial Officer
Mast
Credit Opportunities I Master Fund Limited
By: /s/
Xxxxxxxxxxx X. Xxxxxxx
Name:
Xxxxxxxxxxx X. Xxxxxxx
Title:
Partner
