PLACEMENT AGENT AGREEMENT
EXHIBIT 10.2
Execution
Copy
This
Placement Agent Agreement, dated as of April 30, 2008 (the “Agreement”),
among BROADPOINT CAPITAL, INC. (f/k/a FIRST ALBANY CAPITAL INC.)
(“Broadpoint”), a New York corporation, and FA TECHNOLOGY HOLDING, LLC, a
Delaware limited liability company (“Fund Sponsor”).
WHEREAS,
Fund Sponsor expects to begin fundraising for a new venture capital fund, FA
Technology Ventures III, L.P. (the “Fund”) and to offer, sell and issue limited
partner interests in the Fund (“Interests”), as described in the Fund’s
Confidential Private Placement Memorandum dated October, 2007 (the
“Memorandum”), and to sell Interests to eligible persons as described in
the Memorandum and the Fund’s subscription documents;
WHEREAS,
this Agreement is being entered into pursuant to Section 4 of the Transition
Agreement dated as of April 30, 2008 among Broadpoint Securities Group, Inc.,
Fund Sponsor, FA Technology Ventures Corporation and certain other
parties;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
herein and other good and valuable consideration, the value of which is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment
of Placement Agent.
(a) The
Fund
Sponsor hereby appoints Broadpoint as the Fund’s non-exclusive placement agent
to privately solicit offers for the purchase of Interests from persons with
which Broadpoint and/or its affiliates have pre-existing
relationships.
(b) Prior
to
soliciting such offers, Broadpoint will present the Fund Sponsor with a list
of
the target investors to be solicited (the “Target List”), which Target
List shall be subject to the approval of the Fund Sponsor. Any
investor on the Target List approved by the Fund Sponsor shall be referred
to
herein as a Target Investor.
(c) Notwithstanding
any provision to the contrary herein, the General Partner of the Fund may,
at
its sole discretion, reject any subscription for Interests in whole or in part
at any time prior to acceptance.
(d) With
respect to the solicitation of offers from Target Investors to purchase
Interests, the Fund Sponsor and Broadpoint agree as follows:
(i) It
being
acknowledged that Broadpoint has already approved the form of base offering
memorandum that the Fund Sponsor proposes to use in soliciting offers to invest
in the Fund, the Fund Sponsor and Broadpoint shall each have the right to
approve in advance any changes to such base offering memorandum to be
distributed to Target Investors, as well as any form of supplemental offering
memorandum or other offering materials distributed to the Target Investors;
provided, however, that any such changes, supplements or other
materials shall be deemed to be approved by Broadpoint unless Broadpoint objects
within 10 days of delivery of such materials and, provided,
further, that due diligence material provided to Target Investors,
are
not subject to prior approval by Broadpoint;
(ii) Broadpoint
and the Fund Sponsor acknowledge and agree that the Interests have not been
and
will not be registered under the 1933 Act. Neither the Fund Sponsor
nor Broadpoint, nor their affiliates nor any person acting on behalf of the
Fund
Sponsor or Broadpoint or their affiliates has offered or sold, or will offer
or
sell, any Interests, by any form of general solicitation or general advertising,
including any advertisement, article, notice or other communication published
in
any newspaper, magazine or similar media or broadcast over television or radio,
or any seminar or meeting whose attendees have been invited by any general
solicitation or advertising; and
(iii) Broadpoint
and the Fund Sponsor acknowledge that no action has been or will be taken that
would permit a public offering of the Interests in any jurisdiction in which
action for that purpose is required. Broadpoint and the Fund Sponsor
agree that they will comply with all applicable laws and regulations, make
or
obtain all necessary filings, consents and approvals, and take such other
actions as may be required to permit offers and sales of the Interests in each
jurisdiction in which they offer any Interests or distribute the Memorandum
or
any other sales literature relating to the Interests, in each case at the Fund’s
expense.
(e) Broadpoint
acknowledges that it is not authorized to give any information or to make any
representation relating to the Fund or the Interests, other than those contained
in the Memorandum and any sales literature provided by the Fund
Sponsor.
(f) Applications
of Target Investors to subscribe for Interests shall be made in writing (by
letter or facsimile) to the Fund by completing a subscription document or form,
the original of which shall be delivered to the Fund, or in such other manner
as
may be prescribed by the Fund Sponsor from time to time.
(g) The
amount of effort to be expended by Broadpoint pursuant to this Agreement in
soliciting offers from Target Investors to subscribe for Interests shall be
solely within the discretion of Broadpoint. The Fund Sponsor shall
have no claim against Broadpoint if Broadpoint elects not to include on the
list
of Target Investors one or more persons with which Broadpoint or its affiliates
have relationships that might be suitable investors in the Fund, if Broadpoint
fails to make any efforts or makes only limited efforts to solicit offers to
subscribe for Interests from any Target Investors on such list or if any efforts
made by Broadpoint to solicit such offers are unsuccessful.
(h) Broadpoint
will have a reasonable basis to believe immediately prior to making any offer
or
sale of Interests to any Target Investor that such Target Investor (i) is an
“accredited investor,” as that term is defined in Rule 501(a) of Regulation D
under the Securities Act of 1933, as amended, (ii) is a “qualified purchaser,”
as such term is defined in Section 2(a)(51) under the Investment Company Act
of
1940, as amended, and (iii) meets such other eligibility criteria as are set
forth in the Memorandum.”
(i) Broadpoint
will not negotiate on behalf of Fund Sponsor in any negotiations between Fund
Sponsor and any of the Target Investors. Broadpoint shall provide
commercially reasonable assistance to the Fund Sponsor and the Fund to obtain
and provide information required to be included in any securities law filings
required to be made by the Fund or the Fund Sponsor with any governmental
authority. The Fund Sponsor shall be solely responsible for the
proper and timely preparation and filing of such securities law
filings.
2. Suspension
of Offering.
The
provisions of this Agreement relating to the solicitation of offers from Target
Investors to purchase Interests may be suspended or terminated at any time
by
the Fund Sponsor or Broadpoint upon the giving of written notice of such
suspension or termination to the other parties hereto. Without
limiting the generality of the foregoing, if Broadpoint gives the Fund Sponsors
written notice that it is suspending the solicitation of offers from one or
more
of the Target Investors identified in that notice, the Fund Sponsors shall
promptly cease all efforts to solicit offers from such Target Investors to
purchase Interests. In the event of any suspension or termination
prior to the occurrence of the initial closing of any sale of Interests, no
party shall have any further obligations to any other party hereto pursuant
to
the terms of this Agreement. In the event of any suspension or
termination by Broadpoint with respect to one or more Target Investors, the
Fund
Sponsors agree not to make any further efforts to solicit offers from such
Target Investors to purchase Interests. The representations,
warranties and indemnity provisions of this Agreement shall survive any
termination or suspension of this Agreement.
3. Indemnification.
(a) The
Fund
Sponsor agrees to indemnify and hold harmless Broadpoint, and its officers,
directors, controlling persons, employees and “affiliates” (as defined in
Section 3(b) below, and, together with such officers, directors, controlling
persons, and employees, “Related Persons”) from and against any loss,
liability, damage, cost and expense (including attorneys’ and accountants’ fees
and expenses incurred in investigating or defending any demands, claims or
lawsuits), including, without limitation, any demands, claims or lawsuits
initiated by a Target Investor (or assignee thereof), actually and reasonably
incurred arising from (i) any act, omission, activity or conduct undertaken
pursuant to this Agreement by or on behalf of the Fund or Fund Sponsor, (ii)
a
breach by the Fund Sponsor of any representation, warranty or agreement in
this
Agreement or a breach by or on behalf of the Fund Sponsor of any applicable
laws
or regulations, or (iii) any actual or alleged misstatement of material fact
in
the Memorandum or the Fund’s other offering materials provided by the Fund
Sponsor or omission from the Memorandum or the Fund’s other offering materials
of any statements necessary to make the statement made therein, in light of
the
circumstances under which they were made, not misleading; provided, in
the case of clauses (i) and (ii) above, that the act, omission, activity or
conduct that was the basis for such loss, liability, damage, cost or expense
was
not adjudicated to be the result of willful misconduct or gross negligence
on
the part of the indemnified party or its Related Persons.
(b) As
used
in this Section 3 the term “affiliate” of a person shall
mean: (i) any natural person,
partnership, corporation, association, or other legal entity directly or
indirectly owning, controlling, or holding with power to vote 10% or more of
the
outstanding voting securities of such person; (ii) any partnership, corporation,
association, or other legal entity 10% or more of whose outstanding voting
securities are directly or indirectly owned, controlled, or held with power
to
vote by such person; (iii) any natural person, partnership, corporation,
association, or other legal entity directly or indirectly controlling,
controlled by, or under common control with, such person; or (iv) any officer,
director or partner of such person.
(c) In
case
any proceeding (including any governmental investigation) shall be instituted
involving a person in respect of which indemnity may be sought pursuant to
Section 3(a), the person seeking the indemnity (the “indemnified party”)
shall promptly notify the person against whom such indemnity may be sought
(the
“indemnifying party”) in writing; but the omission to so notify the
indemnifying party will not relieve the indemnifying party from any liability
which the indemnifying party may have to the indemnified party hereunder, except
where such omission has materially prejudiced the indemnifying
party. The indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party in connection with
any proceeding or related proceedings in the same jurisdiction may be liable
for
the fees and expense of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed as they are incurred. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent, the indemnifying party agrees
to indemnify the indemnified party from and against any loss or liability by
reason of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party
is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To
the
extent the indemnification provided for in Section 3(a) above is unavailable
to
an indemnified party in respect of any losses, liabilities, damages, costs
or
expenses referred to therein, then each indemnifying party under such paragraph
shall contribute to the amount paid or payable by such indemnified party as
a
result of such losses, liabilities, damages, costs or expenses in such
proportion as is appropriate to reflect the relative fault of the respective
parties, if any, as well as any other relevant equitable considerations in
connection with the acts, omissions, activity or conduct that resulted in such
losses, liabilities, damages, costs or expenses. If the loss, liability, damage,
cost or expense resulted from an untrue statement of material fact or the
omission to state a material fact, the relative fault of the respective parties
shall be determined by reference to, among other things, whether the untrue
statement of a material fact or the omission to state a material fact relates
to
information supplied by such parties and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The
Fund
Sponsor and Broadpoint agree that it would not be just or equitable if
contribution pursuant to paragraph (d) above were determined by equal and
ratable allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in such
paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in paragraph
(d) above shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party
in connection with investigating or defending any such action or claim. The
remedies provided for in this Section 3 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified
party
at law or in equity.
(f) The
indemnity and contribution provisions contained in this Section 3 and the
representations, warranties and other statements of the Fund Sponsor and
Broadpoint contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any of the respective parties or any
person controlling any of such parties or by or on behalf of these officers
or
directors or any person controlling any such parties and (iii) acceptance of
and
payment for any of the Interests.
(g) Any
indemnification or related obligations of the Fund Sponsor hereunder shall
be
paid solely from the assets of the Fund Sponsor, and not from the assets of
the
Fund.
4. Representations
and Warranties by Broadpoint. Broadpoint represents and warrants
to the Fund Sponsor as follows:
(a) Broadpoint
is a duly organized corporation, validly existing and in good standing under
the
laws of the State of New York, and is qualified to do business in each
jurisdiction in which the nature or conduct of its business requires such
qualification and where failure to be so qualified would materially adversely
affect Broadpoint’s ability to perform its obligations hereunder;
(b) This
Agreement has been duly executed and delivered by Broadpoint and constitutes
the
legal, valid and binding obligation of Broadpoint, enforceable against
Broadpoint in accordance with its terms;
(c) The
execution, delivery and performance of this Agreement, the incurrence of the
obligations set forth herein and the consummation of the transactions
contemplated herein will not constitute a breach of or default under any
instrument by which Broadpoint is bound or any order, rule or regulation
applicable to it or of any court or any governmental body or administrative
agency having jurisdiction over it.
(d) Broadpoint
has all licenses and registrations necessary under applicable federal and state
laws, rules and regulations, including the rules and regulation of any
self-regulatory organization with competent jurisdiction, to provide the
services required to be provided by Broadpoint hereunder. Broadpoint
shall promptly notify the Fund Sponsor in the event that Broadpoint ceases
to
have any such required license or registration and shall thereupon promptly
suspend any further solicitations of Target Investors hereunder, in which event
Broadpoint shall only be entitled to earn additional carried interest pursuant
to Section 7 of that certain Transition Agreement between Broadpoint and the
Fund Sponsor executed on the date hereof with respect to Target Investors who
have been solicited by Broadpoint prior to such suspension;
(e) In
connection with Broadpoint’s acting as Placement Agent, Broadpoint shall remain
in compliance in all material respects at all times with all applicable
securities laws, and all other applicable laws, rules and regulations of any
jurisdictions in which Broadpoint solicits offers to purchase Interests;
and
(f) The
foregoing representations and warranties shall be continuing during the term
of
this Agreement and if at any time any event shall occur which would make any
of
the foregoing incomplete or inaccurate, Broadpoint shall promptly notify the
Fund Sponsor of the occurrence of such event.
5. Representations
and Warranties of the Fund Sponsor. The Fund Sponsor represents
and warrants to Broadpoint as follows:
(a) The
Fund
Sponsor is duly organized, validly existing and in good standing under the
laws
of the state of Delaware and in good standing as a foreign limited liability
company in each other jurisdiction in which the nature or conduct of its
business requires such qualification and the failure to so qualify would
materially adversely affect its ability to perform its obligations hereunder
or
as described in the Memorandum;
(b) The
Fund
Sponsor has all federal and state governmental, regulatory and exchange
approvals and licenses, and has effected all filings and registrations with
federal and state governmental and regulatory agencies required to conduct
its
business and to act as described in the Memorandum or required to perform its
obligations as described under this Agreement, and the performance of such
obligations will not contravene or result in a breach of any provision of the
constituent documents of any of the Fund Sponsor;
(c) This
Agreement has been duly executed and delivered by or on behalf of the Fund
Sponsor and constitutes the legal, valid, and binding obligation of the Fund
Sponsor, enforceable against the Fund Sponsor in accordance with its
terms;
(d) The
Fund
Sponsor shall file or cause to be filed any necessary regulatory filings with
respect to the Fund at the expense of the Fund, including filing Form D with
the
Securities and Exchange Commission and any state securities laws or “blue sky”
filings;
(e) Since
the
date as of which information is given in the Memorandum, except as may otherwise
be stated in or contemplated by the Memorandum, there has not been any material
adverse change in the condition (financial or otherwise), business or prospects
of the Fund, whether or not arising in the ordinary course of
business;
(f) Other
than as disclosed in the Memorandum, there is not pending or, to the best of
any
of the Fund Sponsor’s knowledge, threatened any action, suit or proceeding
before or by any court or other governmental body to which the Fund Sponsor
is a
party, or to which any of the assets of the Fund Sponsor is subject, which
might
reasonably be expected to result in any material adverse change in the condition
(financial or otherwise), business or prospects of the Fund
Sponsor;
(g) The
execution and delivery of this Agreement, the incurrence of the obligations
herein set forth and the consummation of the transactions contemplated herein
and in the Memorandum will not constitute a breach of, or default under, any
instrument by which the Fund Sponsor is bound or any order, rule or regulation
applicable to any of the Fund Sponsor of any court or any governmental body
or
administrative agency having jurisdiction over the Fund Sponsor;
and
(h) The
foregoing representations and warranties shall be continuing during the term
of
this Agreement and if at any time any event shall occur which would make any
of
the foregoing incomplete or inaccurate, the Fund Sponsor shall promptly notify
Broadpoint of the occurrence of such event.
6. Representations
and Warranties Regarding Fund. The Fund Sponsor represents and
warrants to Broadpoint as follows:
(a) When
formed, the Fund will be duly established and validly existing in its
jurisdiction of formation with full power and authority to conduct business
within the limits of the Fund’s organizational documents as contemplated by and
reflected in the Memorandum;
(b) The
Interests when issued as described in the Fund’s organizational documents will
be validly issued and the holders thereof will be entitled to the rights of
subscribers therefor subject to the restrictions and conditions contained in
the
Fund’s organizational documents; and
(c) The
foregoing representations and warranties shall be continuing during the term
of
this Agreement and if at any time any event shall occur which would make any
of
the foregoing incomplete or inaccurate, the Fund Sponsor shall promptly notify
Broadpoint of the occurrence of such event.
7. Fund
General Partner. Promptly following the formation of the general
partner of the Fund (the “General Partner”), the Fund Sponsor shall cause the
General Partner to execute a joinder to this Agreement solely for the purpose
of
(x) the General Partner making the representations and warranties set forth
in
Section 6, (y) the General Partner becoming jointly and severally liable with
the Fund Sponsor to Broadpoint and the Related Persons for the indemnification
obligations of the Fund Sponsor under Section 3 (z) the General Partner
representing, by execution of such joinder, that (1) the General Partner is
duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation, (2) the General Partner has full power and
authority to execute and deliver such joinder and to perform its obligations
under this Agreement and (3) the performance by the General Partner of its
obligations under this Agreement will not conflict with or result in a breach
of
any of the terms or provisions of, or in the imposition of any lien, charge
or
encumbrance upon any of the property or assets of the General Partner pursuant
to the terms of any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which any of the property or assets of the General
Partner are subject, nor will any such action or performance result in a
violation of the provisions of the General Partner’s organizational documents or
any law, statute, order, rule or regulation of any court or governmental
authority or body having jurisdiction over the General Partner.
8. Placement
Fees. The Transition Agreement describes certain consideration
payable to Broadpoint or its affiliates in connection with the actions
contemplated by this Agreement. Other than as described in the
Transition Agreement, Broadpoint and its affiliates shall not be entitled to
receive any compensation or reimbursement of expenses in connection with the
activities contemplated by this Agreement.
9. Notices. All
statements, requests, and notices hereunder shall be in writing or by telegram
if promptly confirmed in writing, and shall be sufficient in all respects if
delivered or sent by registered mail:
If
to
Broadpoint:
Broadpoint
Capital, Inc.
Xxx
Xxxx
Xxxxx, 00xx
Xxxxx,
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
General Counsel
If
to the
Fund Sponsor:
FA
Technology Holding, LLC
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx,
XX 00000-0000
Attn:
Chief Financial Officer
10. Binding
Effect. This Agreement shall be binding upon, and inure solely to
the benefit of Broadpoint, the Fund Sponsor and its respective successors and
assigns, and no other person shall acquire or have any rights under or by virtue
of this Agreement; provided that, no party may assign its rights and
obligations hereunder without first receiving the written consent of the other
party hereto. No Target Investor shall be deemed a successor or
assign by reason merely of any purchase of Interests of the Fund.
11. Amendment. This
Agreement may not be amended except by the express written consent of the
parties hereto.
12. Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York. If any action or
proceeding shall be brought by a party to this Agreement or to enforce any
right
or remedy under this Agreement, each party hereto hereby consents and will
submit to the jurisdiction of the courts of the State of New York or any Federal
court sitting in the County, City and State of New York. Any action
or proceeding brought by any party to this Agreement to enforce any right,
assert any claim or obtain any relief whatsoever in connection with this
Agreement shall be brought by such party exclusively in the courts of the State
of New York or any Federal court sitting in the County, City and State of New
York.
13. Counterparts. This
Agreement may be executed by any one or more of the parties hereto in any number
of counterparts (including by way of facsimile), each of which shall be deemed
to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective officers thereunto as of the date first written
above.
BROADPOINT
CAPITAL, INC.
By:
/s/
Xxx Xxxxxxxxxxxx
Name:
Xxx
Fensterstcok
Title: Chief
Executive Officer
FA
TECHNOLOGY HOLDING, LLC
By:
/s/
Xxxxxxx X. Xxxxxxx
Name:
Xxxxxxx X. Xxxxxxx
Title: Member
